NASHVILLE, Tenn. – Pinnacle Financial Partners, Inc. (NASDAQ:) reported a decrease in first-quarter earnings with a net income per diluted common share of $1.57 for the quarter ended March 31, 2024.
This represents a 10.8% decline from the $1.76 reported in the same period last year. Despite this dip, the earnings per share (EPS) slightly exceeded analyst expectations by $0.03. The company’s revenue saw a year-over-year increase of 6.6%, reaching $428.14 million and surpassing the consensus estimate of $420.72 million.
The firm’s allowance for credit losses grew to 1.12% of total loans as of March 31, 2024, up from 1.08% at the end of the previous quarter. This increase is attributed to the need for additional reserves due to the incremental weakness of a previously disclosed problem borrower and to better navigate the credit implications of a sustained higher interest rate environment.
The company also recognized an $11.8 million mortgage servicing asset related to its Freddie Mac Small Business Lending (SBL) platform and increased its other noninterest expense by $7.3 million for an FDIC special assessment.
Pinnacle’s President and CEO, M. Terry Turner, commented on the economic challenges, “Inflation appears to be more difficult to tame than the Fed had predicted.” He emphasized the company’s focus on strengthening the balance sheet and growing earnings, regardless of economic conditions. Turner also highlighted the firm’s successful business model and its ability to attract top talent, as evidenced by its high ranking on FORTUNE’s list of the 100 Best Companies to Work For in the United States.
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Total assets as of March 31, 2024, were $48.9 billion, marking an 8.4% increase from the previous year and a 7.8% linked-quarter annualized increase. Loan growth for the first quarter was primarily driven by the commercial and industrial and owner-occupied commercial real estate categories, which align with the firm’s focus areas.
Looking ahead, Pinnacle is maintaining its expense outlook for the year at $950 million to $975 million, excluding any further FDIC special assessments. The company’s leadership remains committed to long-term sustainable growth in loans, deposits, and earnings, despite current economic volatility.
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