Pinnacle Financial Partners Reports Strong Q3 Earnings, Asset Growth, and Increased Loan Portfolio

Pinnacle Financial Partners, Inc. reported significant financial developments in its latest 10-Q filing for the quarter ending September 30, 2024. The company experienced a notable increase in total assets, which rose to $50.7 billion from $48.0 billion at the end of 2023. Total loans also increased to $34.3 billion, up from $32.7 billion, reflecting a growth of approximately 5.0%. Total deposits reached $41.0 billion, marking a 6.3% increase from $38.5 billion.

For the three months ended September 30, 2024, Pinnacle Financial reported net interest income of $351.5 million, a 10.8% increase from $317.2 million in the same period of 2023. The net interest margin improved to 3.22%, compared to 3.06% a year earlier. Interest income from loans, including fees, also rose to $570.5 million, up from $509.0 million in the prior year. However, net income for the quarter was $146.7 million, a 10.6% increase from $132.6 million in Q3 2023, while net income for the nine months ended September 30, 2024, decreased to $323.8 million from $467.2 million in the same period of 2023.

Noninterest income for the three months ended September 30, 2024, increased by 26.9% to $115.2 million, driven by higher service charges on deposit accounts and investment services income. However, for the nine-month period, noninterest income decreased by 26.7% to $259.6 million, primarily due to significant losses on the sale of available-for-sale securities.

Total noninterest expenses rose by 21.4% for the nine months ended September 30, 2024, totaling $773.1 million, largely attributed to increased salaries and employee benefits, which grew by $57.9 million due to a rise in full-time equivalent associates. The efficiency ratio deteriorated to 61.3% from 49.0% in the prior year, reflecting the impact of rising expenses.

Pinnacle Financial's allowance for credit losses increased to $391.5 million, representing 1.14% of total loans, up from 1.08% at the end of 2023. The company reported net charge-offs of $57.5 million for the nine months ended September 30, 2024, compared to $35.2 million in the same period of 2023.

Strategically, Pinnacle Financial has maintained a focus on managing its loan portfolio, with commercial loans representing approximately 80% of total loans. The company has also executed a credit default swap with a notional amount of $86.5 million to manage risk associated with its loan portfolio. Additionally, Pinnacle Financial has authorized a share repurchase program for up to $125 million, effective through March 31, 2025, although no shares were repurchased during the reporting period.