Pinnacle Financial Partners(US:PNFP)2024-10-16 17:55Financial Data and Key Metrics Changes - In Q3 2024, loans increased by $539 million or 6.4% linked quarter annualized, with C&I and owner-occupied commercial real estate loans growing approximately $706 million or 17% linked quarter annualized [19] - Earning assets rose by 12% linked quarter annualized, and core deposits increased by 9% annualized [5] - The company expects net interest income growth for 2024 to be in the range of 7% to 8% [23] Business Line Data and Key Metrics Changes - The wealth management unit has shown strong performance, with fee revenues expected to grow from 23% to 26% over the previous year [28] - Deposit growth, excluding brokered deposits, was $887 million in Q3, with noninterest-bearing deposits showing positive performance [21] - The company has successfully transitioned to indexed deposit products, with nearly 50% of deposits now indexed to fed funds [21] Market Data and Key Metrics Changes - The company has a strong market share in Nashville, Tennessee, with approximately 50% more shares than the next closest competitor [9] - In the Carolinas and Virginia, since the acquisition of BNC in 2017, the company has achieved a 10% loan CAGR and a 14% deposit CAGR [11] - The competitive landscape in the Southeast is favorable, with the company consistently taking market share from vulnerable competitors [7][8] Company Strategy and Development Direction - The company focuses on organic growth through hiring top bankers and leveraging a consistent, repeatable model rather than pursuing acquisitions [41][42] - The strategy includes expanding into new markets while maintaining a strong culture and employee engagement [55][56] - The company aims to achieve top quartile revenue and earnings growth, with a focus on maintaining a strong client experience [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment improving post-election and with potential rate cuts, which could enhance borrowing confidence [19][23] - The company believes its growth model is resilient and not solely dependent on economic conditions, as it has consistently attracted and retained talent [18][57] - Management remains cautious about the commercial real estate sector but expects continued strong performance in its portfolio [27][26] Other Important Information - The company has narrowed its guidance for charge-offs to a range of 21 to 23 basis points for 2024, indicating confidence in credit quality [24] - The hiring pipeline remains strong, with 37 new revenue producers added in Q3, contributing to future growth potential [29] Q&A Session Summary Question: Margin expectations for Q4 - Management expects margins to be flattish due to ongoing rate cuts but anticipates net interest income growth [35][36] Question: DDA growth and seasonality - Management acknowledges seasonality in DDA growth but believes their strategy of attracting full client relationships will yield positive results [38][39] Question: M&A strategy - Management indicates that while they have had success with M&A in the past, they are unlikely to pursue further acquisitions due to their ability to grow organically [41][42] Question: BHG revenue growth expectations - Management anticipates mid-single to high-single-digit revenue growth for BHG in 2025, pending further analysis [43] Question: Hiring and loan/deposit growth - Management believes that new hires will continue to bring significant loan and deposit volumes, maintaining their growth trajectory [60][61]