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| 8-K - 8-K - PINNACLE FINANCIAL PARTNERS INC | a2018q2pnfpearningsrelease.htm |
FOR IMMEDIATE RELEASE
MEDIA CONTACT: | Joe Bass, 615-743-8219 | |
FINANCIAL CONTACT: | Harold Carpenter, 615-744-3742 | |
WEBSITE: | www.pnfp.com | |
PNFP REPORTS DILUTED EPS OF $1.12, ROAA OF 1.50 PERCENT AND ROTCE OF 18.01 PERCENT FOR 2Q 2018
Excl. merger-related charges, diluted EPS was $1.15, ROAA was 1.54 percent and ROTCE was 18.45 percent for 2Q 2018
NASHVILLE, TN, July 17, 2018 - Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.12 for the quarter ended June 30, 2018, compared to net income per diluted common share of $0.80 for the quarter ended June 30, 2017, an increase of 40.0 percent. Net income per diluted common share was $2.20 for the six months ended June 30, 2018, compared to net income per diluted common share of $1.62 for the six months ended June 30, 2017, an increase of 35.8 percent.
Excluding pre-tax merger-related charges of $2.9 million, net income per diluted common share was $1.15 for the three months ended June 30, 2018, compared to net income per diluted common share of $0.84 for the three months ended June 30, 2017, excluding pre-tax merger-related charges of $3.2 million, an increase of 36.9 percent. Net income per diluted common share was $2.28 for the six months ended June 30, 2018, excluding pre-tax merger-related charges of $8.3 million, compared to net income per diluted common share of $1.67 for the six months ended June 30, 2017, excluding pre-tax merger-related charges of $3.9 million, an increase of 36.5 percent.
"We are experiencing phenomenal growth in 2018," said M. Terry Turner, Pinnacle's president and chief executive officer. "As we considered our merger with Bank of North Carolina last year, we were confident that we could meaningfully increase the core earnings capacity of our firm even prior to considering tax reform. Nearly 35 percent earnings growth after merger-related charges in the second quarter of this year versus the same quarter last year provides compelling evidence of our associates' ability to integrate a sizable merger in a short period of time while continuing to rapidly expand the legacy Tennessee franchise.
"Furthermore, we continue to attract successful, experienced bankers to our ranks. We recruited a total of 39 revenue producers across all markets in the second quarter, a strong predictor of our continued future growth. Our significant investment in promoting our distinctive culture across the entire franchise is reaping great rewards, as 16 of these revenue producers were hired in the Carolinas and Virginia, six of whom are in the C&I segment."
GROWING THE CORE EARNINGS CAPACITY OF THE FIRM:
• | Loans at June 30, 2018 were a record $17.04 billion, an increase of $716.8 million from March 31, 2018 and $2.28 billion from June 30, 2017, reflecting year-over-year growth of 15.5 percent. Annualized organic loan growth during the second quarter of 2018 was 17.6 percent. |
◦ | Average loans were $16.73 billion for the three months ended June 30, 2018, up $772.3 million from the $15.96 billion for the three months ended March 31, 2018, an annualized growth rate of 19.4 percent. |
◦ | At June 30, 2018, the remaining discount associated with fair value accounting adjustments on acquired loans was $132.1 million, compared to $148.9 million at March 31, 2018. |
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• | Deposits at June 30, 2018 were a record $17.86 billion, an increase of $1.35 billion from March 31, 2018 and $2.10 billion from June 30, 2017, reflecting year-over-year growth of 13.3 percent. |
◦ | Average deposits were $16.95 billion for the three months ended June 30, 2018, up $668.8 million from the $16.28 billion for the three months ended March 31, 2018. |
◦ | Core deposits were $15.40 billion at June 30, 2018, compared to $14.75 billion at March 31, 2018 and $14.46 billion at June 30, 2017. The annualized growth rate of core deposits in the second quarter of 2018 was 17.7 percent, which effectively matched the annualized growth rate of loans in the second quarter. Core deposit amounts have been restated in both the current and previous quarters for the recent regulatory changes for treatment of reciprocal deposits. |
• | Revenues for the quarter ended June 30, 2018 were $230.2 million, an increase of $11.5 million from the $218.7 million recognized in the first quarter of 2018 and $88.5 million from the quarter ended June 30, 2017. That is a year-over-year growth rate of 62.5 percent and an annualized rate of growth of 21.1 percent in the second quarter of this year. |
◦ | Revenue per fully diluted share was $2.97 for the three months ended June 30, 2018, compared to $2.83 for the first quarter of 2018 and $2.64 for the second quarter of 2017. |
"Our model of hiring experienced bankers to produce outsized loan and deposit growth continues to work extremely well," Turner said. "Loan growth continues to be exceptional for our firm, up nearly 18 percent on an annualized basis in the second quarter. Importantly, we are also pleased that approximately 57 percent of our loan growth was in our primary loan growth segments, C&I and owner-occupied commercial real estate. I am also pleased to report that core deposits also showed strong growth during the second quarter, also up nearly 18 percent on an annualized basis."
FOCUSING ON PROFITABILITY:
• | Return on average assets was 1.50 percent for the second quarter of 2018, compared to 1.53 percent for the first quarter of 2018 and 1.30 percent for the second quarter last year. Second quarter 2018 return on average tangible assets amounted to 1.63 percent, compared to 1.67 percent for the first quarter of 2018 and 1.38 percent for the second quarter last year. |
◦ | Excluding the aforementioned merger-related charges, return on average assets was 1.54 percent for the second quarter of 2018, compared to 1.60 percent for the first quarter of 2018 and 1.35 percent for the second quarter of 2017. Likewise, excluding these merger-related charges, the firm’s return on average tangible assets was 1.67 percent for the second quarter of 2018, compared to 1.74 percent for first quarter of 2018 and 1.44 for the second quarter of 2017. |
• | Return on average common equity for the second quarter of 2018 amounted to 9.18 percent, compared to 9.07 percent for the first quarter of 2018 and 8.40 percent for the second quarter last year. Second quarter 2018 return on average tangible common equity amounted to 18.01 percent, compared to 18.12 percent for the first quarter of 2018 and 13.58 percent for the second quarter last year. |
◦ | Excluding the aforementioned merger-related charges, return on average tangible common equity amounted to 18.45 percent for the second quarter of 2018, compared to 18.98 percent for the first quarter of 2018 and 14.19 percent for the second quarter of 2017. |
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"Our profitability metrics were strong again in the second quarter," said Harold R. Carpenter, Pinnacle's chief financial officer. "We have long targeted top-quartile results, which we believe will lead to top-quartile share price performance. We believe our firm has enjoyed a reputation as a high-performing, high-growth firm for many years. Excluding merger-related charges, these strong profitability metrics, such as a return on average assets of 1.54 percent and a return on average tangible common equity of 18.45 percent for the second quarter of 2018, confirm the original deal rationale and demonstrate our ability to profitably integrate a large bank. That said, we believe we continue to have runway to grow our franchise rapidly in our existing markets without the need for acquisitions to facilitate growth."
OTHER HIGHLIGHTS:
• | Revenues |
◦ | Net interest income for the quarter ended June 30, 2018 was $182.2 million, compared to $174.5 million for the first quarter of 2018 and $106.6 million for the second quarter of 2017. That represents an annualized organic growth rate of 17.9 percent between the first and second quarter of 2018. |
▪ | Net interest margin was 3.69 percent for the second quarter of 2018, compared to 3.77 percent for the first quarter of 2018 and 3.68 for the second quarter of 2017. |
▪ | Included in net interest income for the second quarter of 2018 was $16.1 million of discount accretion associated with fair value adjustments, compared to $15.4 million of discount accretion recognized in the first quarter of 2018. |
◦ | Noninterest income for the quarter ended June 30, 2018 was $47.9 million, compared to $44.2 million for the first quarter of 2018 and $35.1 million for the second quarter of 2017, up 34.1 percent on an annualized basis. |
▪ | Wealth management revenues, which include investment, trust and insurance services, were $10.5 million for the quarter ended June 30, 2018, compared to $11.3 million for the first quarter of 2018 and $6.2 million for the second quarter of 2017. The quarter-over-quarter decrease was primarily attributable to $1.0 million of nonrecurring insurance revenues for favorable claims experience that were received in the first quarter of 2018. |
▪ | Income from the firm's investment in Bankers Healthcare Group, Inc. (BHG) was $9.7 million for the quarter ended June 30, 2018, compared to $9.4 million for the quarter ended March 31, 2018 and $8.8 million for the quarter ended June 30, 2017. Income from the firm's investment in BHG grew 10.7 percent for the quarter ended June 30, 2018, compared to the quarter ended June 30, 2017. |
"We are reporting an annualized growth rate in net interest income of almost 18 percent and an annualized growth rate of 29 percent in fees for the second quarter of 2018," Carpenter said. "Loan yields improved this quarter by approximately 13 basis points, comparing the second quarter to the first quarter. Deposit rates increased by 18 basis points over that same period, which contributed to the decrease in the net interest margin this quarter. Though our margins narrowed in the quarter, we continue to work to maintain our margins and will also remain focused on attracting revenue producers and their clients at a remarkable pace. Since June 30, 2017, which was shortly following the closing of the BNC merger, our loans have increased organically $2.3 billion, and our deposits have increased $2.1 billion. We are on a pace to exceed those numbers for the year ending Dec. 31, 2018.
"Given our high level of profitability and the opportunity we have for organic growth in all our markets, we will be focused primarily on growing revenue and earnings. Accordingly, we are willing to accept volatility in certain financial metrics, such as increased funding costs, at a time when our efficiency ratio or other metrics are improving. We intend to continue adding revenue producers, pricing competitively, growing earning assets and producing outsized earnings growth. As the industry may be heading
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into a period of low single-digit loan and deposit growth, we believe our proven ability to take market share from vulnerable competitors is distinctive and makes us less dependent upon market conditions to grow our balance sheet and net interest income. In summary, our focus is on gathering more clients in order to grow the core earnings capacity of this firm reliably over the long-haul."
• | Noninterest expense and taxes |
◦ | Noninterest expense for the quarter ended June 30, 2018 was $110.9 million, compared to $108.6 million in the first quarter of 2018 and $71.8 million in the second quarter of 2017, reflecting a year-over-year increase of 54.5 percent. |
▪ | Salaries and employee benefits were $64.1 million in the second quarter of 2018, compared to $63.7 million in the first quarter of 2018 and $43.7 million in the second quarter of last year, reflecting a year-over-year increase of 46.8 percent. |
• | Included in salaries and employee benefits are costs related to the firm’s annual cash incentive plan. Incentive costs for this plan amounted to $6.9 million in the second quarter of 2018, compared to $5.7 million in the first quarter of 2018 and $5.4 million in the second quarter of last year. |
▪ | The efficiency ratio for the second quarter of 2018 decreased to 48.2 percent, compared to 49.7 percent for the first quarter of 2018. The ratio of noninterest expenses to average assets decreased to 1.91 percent for the second quarter of 2018 from 1.98 percent in the first quarter of 2018. |
• | Excluding merger-related charges and other real estate owned (ORE) expense, the efficiency ratio was 46.6 percent for the second quarter of 2018, compared to 47.6 percent for the first quarter of 2018, and the ratio of noninterest expense to average assets was 1.85 percent for the second quarter of 2018, compared to 1.90 percent for the first quarter of 2018. |
▪ | The effective tax rate for the second quarter of 2018 was 20.9 percent, compared to 19.0 percent for the first quarter of 2018 and 31.7 percent for the second quarter of 2017. The Tax Cuts and Jobs Act reduced the aggregate blended federal and state statutory income tax rate for Pinnacle from 39.23 percent to 26.14 percent. |
• | Included in income tax expense for the three months ended June 30, 2018 was a discrete item in the amount of $72,000 related to the application of FASB Accounting Standards Update (ASU) 2016-09, Stock Compensation Improvements to Employee Share-Based Payment Activity compared to $2.7 million for the three months ended March 31, 2018 and $789,000 for the three months ended June 30, 2017. |
• | Inclusive of all of these matters, the firm anticipates an effective tax rate of between 21.0 and 22.0 percent for calendar year 2018. |
"We continue to be pleased with expense management across our franchise," Carpenter said. "Both the efficiency ratio and the expense to asset ratio continued to improve even while hiring a relatively larger number of great bankers. One of the variables that increases the volatility of our expense base is the impact of our corporate-wide incentive programs. At the end of the first quarter of 2018, we were accruing annual cash incentives at approximately 75 percent of our target award value. We have increased that percentage to approximately 80 percent of our target award as of June 30, 2018. Our ability to maintain our
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incentive accrual at 80 percent or increase it will depend on our ability to generate the revenue and EPS necessary to fund such awards."
• | Asset quality |
◦ | Nonperforming assets decreased to 0.53 percent of total loans and ORE at June 30, 2018, compared to 0.58 percent at March 31, 2018 and 0.44 percent at June 30, 2017. Nonperforming assets were $91.1 million at June 30, 2018, compared to $94.7 million at March 31, 2018 and $65.4 million at June 30, 2017. |
◦ | The allowance for loan losses represented 0.44 percent of total loans at June 30, 2018 compared to 0.43 percent March 31, 2018 and 0.42 percent at June 30, 2017. |
▪ | The ratio of the allowance for loan losses to nonperforming loans was 106.7 percent at June 30, 2018, compared to 100.0 percent at March 31, 2018 and 154.0 percent at June 30, 2017. At June 30, 2018, purchase credit impaired loans of $12.7 million, which were recorded at fair value upon acquisition, represented 17.9 percent of our nonperforming loans. |
▪ | Net charge-offs were $3.9 million for the quarter ended June 30, 2018, compared to $4.0 million for the quarter ended March 31, 2018 and $3.2 million for the quarter ended June 30, 2017. Annualized net charge-offs as a percentage of average loans for both the quarters ended June 30, 2018 and March 31, 2018 were 0.10 percent, compared to 0.17 percent for the second quarter of 2017. |
▪ | Provision for loan losses was $9.4 million in the second quarter of 2018, compared to $6.9 million in the first quarter of 2018 and $6.8 million in the second quarter of 2017. |
"Overall, asset quality for our firm remains exceptional," Carpenter said. "As we had projected last quarter, our commercial real estate to total risk-based capital ratio decreased during the second quarter of 2018 and was 304.3 percent at June 30, 2018. We continue to believe this ratio will fall back within our long-term operating range of less than 300 percent of total risk-based capital during the last half of 2018. Additionally, the ratio of construction loans to total risk-based capital also decreased to 94.6 percent at June 30, 2018. Our position on these two ratios remains consistent. Should the commercial real estate to total risk-based capital ratio exceed 300 percent or the construction loans to total risk-based capital ratio exceed 100 percent, we intend to work those ratios to below the 100/300 thresholds over an appropriate time period. We do not intend to allow those ratios to remain permanently in excess of those thresholds."
BOARD OF DIRECTORS DECLARES DIVIDEND
On July 17, 2018, Pinnacle’s Board of Directors approved a quarterly cash dividend of $0.14 per common share to be paid on Aug. 31, 2018 to common shareholders of record as of the close of business on Aug. 3, 2018. The amount and timing of any future dividend payments to common shareholders will be subject to the discretion of Pinnacle’s Board of Directors.
WEBCAST AND CONFERENCE CALL INFORMATION
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Pinnacle will host a webcast and conference call at 8:30 a.m. (CDT) on July 18, 2018 to discuss second quarter 2018 results and other matters. To access the call for audio only, please call 1-877-602-7944. For the presentation and streaming audio, please access the webcast on the investor relations page of Pinnacle's website at www.pnfp.com.
For those unable to participate in the webcast, it will be archived on the investor relations page of Pinnacle's website at www.pnfp.com for 90 days following the presentation.
Pinnacle Financial Partners provides a full range of banking, investment, trust, mortgage and insurance products and services designed for businesses and their owners and individuals interested in a comprehensive relationship with their financial institution. The firm earned a place on FORTUNE’s 2017 and 2018 lists of the 100 Best Companies to Work For in the U.S., and American Banker recognized Pinnacle as the sixth-best bank to work for in 2017.
The firm began operations in a single location in downtown Nashville, TN in October 2000 and has since grown to approximately $24.0 billion in assets as of June 30, 2018. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 11 primarily urban markets in Tennessee, the Carolinas and Virginia.
Additional information concerning Pinnacle, which is included in the NASDAQ Financial-100 Index, can be accessed at www.pnfp.com.
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Forward-Looking Statements
All statements, other than statements of historical fact, included in this press release, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "expect," "anticipate," "intend," "should," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: (i) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (ii) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits; (iii) the inability of Pinnacle Financial, or entities in which it has significant investments, like BHG, to maintain the historical growth rate of its, or such entities', loan portfolio; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower-quality assets; (vi) the impact of competition with other financial institutions, including pricing pressures (including those resulting from the Tax Cuts and Jobs Act) and the resulting impact on Pinnacle Financial’s results, including as a result of compression to net interest margin; (vii) greater than anticipated adverse conditions in the national or local economies including in Pinnacle Financial's markets throughout Tennessee, North Carolina, South Carolina and Virginia, particularly in commercial and residential real estate markets; (viii) fluctuations or unanticipated changes in interest rates on loans or deposits or that affect the yield curve; (ix) the results of regulatory examinations; (x) a merger or acquisition; (xi) risks of expansion into new geographic or product markets; (xii) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including intangible assets; (xiii) reduced ability to attract additional financial advisors (or failure of such advisors to cause their clients to switch to Pinnacle Bank), to retain financial advisors (including as a result of the competitive environment resulting from the Tax Cuts and Jobs Act) or otherwise to attract customers from other financial institutions; (xiv) further deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xv) inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies, required capital maintenance levels or regulatory requests or directives, particularly if Pinnacle Financial's level of applicable commercial real estate loans continues to exceed percentage levels of total capital in guidelines recommended by its regulators; (xvi) risks associated with litigation, including the applicability of insurance coverage; (xvii) the risk of successful integration of the businesses Pinnacle Financial has recently acquired with its business; (xviii) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xix) the vulnerability of Pinnacle Bank's network and online banking portals, and the systems of parties with whom Pinnacle Financial contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (xx) the possibility of increased compliance costs as a result of increased regulatory oversight, including oversight of companies in which Pinnacle Financial or Pinnacle Bank have significant investments, like BHG, and the development of additional banking products for Pinnacle Bank's corporate and consumer clients; (xxi) the risks associated with Pinnacle Financial and Pinnacle Bank being a minority investor in BHG, including the risk that the owners of a majority of the equity interests in BHG decide to sell the company if not prohibited from doing so by Pinnacle Financial or Pinnacle Bank; (xxii) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (xxiii) disruption from Pinnacle Financial's merger with BNC with customers, suppliers, employee or other business partners relationships; (xxiv) the risk of successful integration of Pinnacle Financial's and BNC's businesses; (xxv) the risk that the integration of Pinnacle
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Financial's and BNC's operations will be more costly or difficult than expected; (xxvi) the availability and access to capital; (xxvii) adverse results (including costs, fines, reputational harm, inability to obtain necessary approvals and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions; and (xxviii) general competitive, economic, political and market conditions. Additional factors which could affect the forward looking statements can be found in Pinnacle Financial's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the SEC and available on the SEC's website at http://www.sec.gov. Pinnacle Financial disclaims any obligation to update or revise any forward-looking statements contained in this press release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Matters
This release contains certain non-GAAP financial measures, including, without limitation, revenues per diluted share, earnings per diluted share, efficiency ratio, noninterest expense and the ratio of noninterest expense to average assets and noninterest expense to the sum of net interest income and noninterest income, in each case excluding the impact of expenses related to other real estate owned, gains or losses on sale of investments, the revaluation of Pinnacle Financial’s deferred tax assets and other matters for the accounting periods presented. This release also includes non-GAAP financial measures which exclude expenses associated with Pinnacle Bank's mergers with CapitalMark Bank & Trust, Magna Bank, Avenue Financial Holdings, Inc. and BNC, as well as Pinnacle Financial's and its bank subsidiary's investments in BHG. This release may also contain certain other non-GAAP capital ratios and performance measures. These non-GAAP financial measures exclude the impact of goodwill and core deposit intangibles associated with Pinnacle Financial's acquisitions of BNC, Avenue, Magna Bank, CapitalMark Bank & Trust, Mid-America Bancshares, Inc., Cavalry Bancorp, Inc. and other acquisitions which collectively are less material to the non-GAAP measure. The presentation of the non-GAAP financial information is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Because non-GAAP financial measures presented in this release are not measurements determined in accordance with GAAP and are susceptible to varying calculations, these non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures presented by other companies.
Pinnacle Financial believes that these non-GAAP financial measures facilitate making period-to-period comparisons and are meaningful indications of its operating performance. In addition, because intangible assets such as goodwill and the core deposit intangible, and the other items excluded each vary extensively from company to company, Pinnacle Financial believes that the presentation of this information allows investors to more easily compare Pinnacle Financial's results to the results of other companies. Pinnacle Financial's management utilizes this non-GAAP financial information to compare Pinnacle Financial's operating performance for 2018 versus certain periods in 2017 and to internally prepared projections.
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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | |||||||||
CONSOLIDATED BALANCE SHEETS – UNAUDITED | |||||||||
(dollars in thousands) | |||||||||
June 30, 2018 | December 31, 2017 | June 30, 2017 | |||||||
ASSETS | |||||||||
Cash and noninterest-bearing due from banks | $ | 193,962 | $ | 176,553 | $ | 121,804 | |||
Interest-bearing due from banks | 423,498 | 496,911 | 416,981 | ||||||
Federal funds sold and other | 29,463 | 106,132 | — | ||||||
Cash and cash equivalents | 646,923 | 779,596 | 538,785 | ||||||
Securities available-for-sale, at fair value | 2,960,128 | 2,515,283 | 2,427,034 | ||||||
Securities held-to-maturity (fair value of $15.3 million, $20.8 million, and $21.3 million at June 30, 2018, Dec. 31, 2017, and June 30, 2017, respectively) | 15,341 | 20,762 | 21,163 | ||||||
Consumer loans held-for-sale | 108,592 | 103,729 | 90,275 | ||||||
Commercial loans held-for-sale | 21,277 | 25,456 | 11,368 | ||||||
Loans | 17,042,853 | 15,633,116 | 14,758,765 | ||||||
Less allowance for loan losses | (75,670 | ) | (67,240 | ) | (61,945 | ) | |||
Loans, net | 16,967,183 | 15,565,876 | 14,696,820 | ||||||
Premises and equipment, net | 269,876 | 266,014 | 258,037 | ||||||
Equity method investment | 217,283 | 221,667 | 207,021 | ||||||
Accrued interest receivable | 65,175 | 57,440 | 48,418 | ||||||
Goodwill | 1,807,121 | 1,808,002 | 1,800,742 | ||||||
Core deposits and other intangible assets | 51,353 | 56,710 | 60,964 | ||||||
Other real estate owned | 19,785 | 27,831 | 24,806 | ||||||
Other assets | 838,333 | 757,334 | 700,721 | ||||||
Total assets | $ | 23,988,370 | $ | 22,205,700 | $ | 20,886,154 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Deposits: | |||||||||
Noninterest-bearing | $ | 4,361,414 | $ | 4,381,386 | $ | 3,893,603 | |||
Interest-bearing | 2,939,833 | 2,987,291 | 2,602,527 | ||||||
Savings and money market accounts | 7,129,335 | 6,548,964 | 6,820,024 | ||||||
Time | 3,426,836 | 2,534,061 | 2,441,320 | ||||||
Total deposits | 17,857,418 | 16,451,702 | 15,757,474 | ||||||
Securities sold under agreements to repurchase | 128,739 | 135,262 | 205,008 | ||||||
Federal Home Loan Bank advances | 1,581,867 | 1,319,909 | 725,231 | ||||||
Subordinated debt and other borrowings | 465,433 | 465,505 | 465,419 | ||||||
Accrued interest payable | 15,604 | 10,480 | 7,631 | ||||||
Other liabilities | 112,632 | 114,890 | 110,064 | ||||||
Total liabilities | 20,161,693 | 18,497,748 | 17,270,827 | ||||||
Preferred stock, no par value; 10.0 million shares authorized; no shares issued and outstanding | — | — | — | ||||||
Common stock, par value $1.00; 180.0 million shares and 90.0 million shares authorized; 77.9 million, 77.7 million shares and 77.6 million shares issued and outstanding at June 30, 2018, Dec. 31, 2017 and June 30, 2017, respectively | 77,855 | 77,740 | 77,646 | ||||||
Additional paid-in capital | 3,119,461 | 3,115,304 | 3,100,155 | ||||||
Retained earnings | 667,594 | 519,144 | 449,762 | ||||||
Accumulated other comprehensive loss, net of taxes | (38,233 | ) | (4,236 | ) | (12,236 | ) | |||
Total stockholders' equity | 3,826,677 | 3,707,952 | 3,615,327 | ||||||
Total liabilities and stockholders' equity | $ | 23,988,370 | $ | 22,205,700 | $ | 20,886,154 | |||
This information is preliminary and based on company data available at the time of the presentation. | |||||||||
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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED | |||||||||||||||
(dollars in thousands, except for per share data) | Three Months Ended | Six Months Ended | |||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | |||||||||||
Interest income: | |||||||||||||||
Loans, including fees | $ | 208,758 | $ | 191,214 | $ | 112,320 | $ | 399,972 | $ | 205,538 | |||||
Securities | |||||||||||||||
Taxable | 11,748 | 11,222 | 8,265 | 22,970 | 14,698 | ||||||||||
Tax-exempt | 8,350 | 7,285 | 2,235 | 15,635 | 3,913 | ||||||||||
Federal funds sold and other | 2,128 | 1,807 | 923 | 3,935 | 1,737 | ||||||||||
Total interest income | 230,984 | 211,528 | 123,743 | 442,512 | 225,886 | ||||||||||
Interest expense: | |||||||||||||||
Deposits | 32,767 | 23,981 | 10,994 | 56,748 | 19,113 | ||||||||||
Securities sold under agreements to repurchase | 143 | 130 | 79 | 273 | 128 | ||||||||||
Federal Home Loan Bank advances and other borrowings | 15,838 | 12,946 | 6,043 | 28,784 | 11,251 | ||||||||||
Total interest expense | 48,748 | 37,057 | 17,116 | 85,805 | 30,492 | ||||||||||
Net interest income | 182,236 | 174,471 | 106,627 | 356,707 | 195,394 | ||||||||||
Provision for loan losses | 9,402 | 6,931 | 6,812 | 16,333 | 10,463 | ||||||||||
Net interest income after provision for loan losses | 172,834 | 167,540 | 99,815 | 340,374 | 184,931 | ||||||||||
Noninterest income: | |||||||||||||||
Service charges on deposit accounts | 6,065 | 5,820 | 4,179 | 11,885 | 8,034 | ||||||||||
Investment services | 4,906 | 5,107 | 3,110 | 10,013 | 5,932 | ||||||||||
Insurance sales commissions | 2,048 | 3,119 | 1,461 | 5,167 | 3,320 | ||||||||||
Gains on mortgage loans sold, net | 3,777 | 3,744 | 4,668 | 7,521 | 8,822 | ||||||||||
Investment gains on sales, net | — | 30 | — | 30 | — | ||||||||||
Trust fees | 3,564 | 3,117 | 1,677 | 6,681 | 3,382 | ||||||||||
Income from equity method investment | 9,690 | 9,360 | 8,755 | 19,050 | 16,578 | ||||||||||
Other noninterest income | 17,889 | 13,886 | 11,207 | 31,775 | 19,370 | ||||||||||
Total noninterest income | 47,939 | 44,183 | 35,057 | 92,122 | 65,438 | ||||||||||
Noninterest expense: | |||||||||||||||
Salaries and employee benefits | 64,112 | 63,719 | 43,674 | 127,831 | 82,028 | ||||||||||
Equipment and occupancy | 18,208 | 17,743 | 10,713 | 35,951 | 20,387 | ||||||||||
Other real estate, net | 819 | (794 | ) | 63 | 25 | 315 | |||||||||
Marketing and other business development | 2,544 | 2,247 | 2,127 | 4,791 | 4,006 | ||||||||||
Postage and supplies | 2,291 | 2,039 | 1,122 | 4,330 | 2,319 | ||||||||||
Amortization of intangibles | 2,659 | 2,698 | 1,472 | 5,357 | 2,668 | ||||||||||
Merger-related expenses | 2,906 | 5,353 | 3,221 | 8,259 | 3,893 | ||||||||||
Other noninterest expense | 17,369 | 15,575 | 9,406 | 32,944 | 18,235 | ||||||||||
Total noninterest expense | 110,908 | 108,580 | 71,798 | 219,488 | 133,851 | ||||||||||
Income before income taxes | 109,865 | 103,143 | 63,074 | 213,008 | 116,518 | ||||||||||
Income tax expense | 23,000 | 19,633 | 19,988 | 42,633 | 33,779 | ||||||||||
Net income | $ | 86,865 | $ | 83,510 | $ | 43,086 | $ | 170,375 | $ | 82,739 | |||||
Per share information: | |||||||||||||||
Basic net income per common share | $ | 1.13 | $ | 1.08 | $ | 0.81 | $ | 2.21 | $ | 1.64 | |||||
Diluted net income per common share | $ | 1.12 | $ | 1.08 | $ | 0.80 | $ | 2.20 | $ | 1.62 | |||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 77,123,854 | 77,077,957 | 53,097,776 | 77,101,816 | 50,574,079 | ||||||||||
Diluted | 77,468,082 | 77,365,664 | 53,665,925 | 77,417,930 | 51,105,996 | ||||||||||
This information is preliminary and based on company data available at the time of the presentation. | |||||||||||||||
10
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | |||||||||||||
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED | |||||||||||||
(dollars in thousands) | June | March | December | September | June | March | |||||||
2018 | 2018 | 2017 | 2017 | 2017 | 2017 | ||||||||
Balance sheet data, at quarter end: | |||||||||||||
Commercial and industrial loans | $ | 4,821,299 | 4,490,886 | 4,141,341 | 3,971,227 | 3,688,357 | 2,980,840 | ||||||
Commercial real estate - owner occupied | 2,504,891 | 2,427,946 | 2,460,015 | 2,433,762 | 2,368,641 | 1,399,512 | |||||||
Commercial real estate - investment | 3,822,182 | 3,714,854 | 3,564,048 | 3,398,381 | 3,357,120 | 1,386,398 | |||||||
Commercial real estate - multifamily and other | 697,566 | 651,488 | 645,547 | 617,899 | 661,611 | 395,674 | |||||||
Consumer real estate - mortgage loans | 2,699,399 | 2,580,766 | 2,561,214 | 2,541,180 | 2,552,927 | 1,196,375 | |||||||
Construction and land development loans | 2,133,646 | 2,095,875 | 1,908,288 | 1,939,809 | 1,772,799 | 1,015,127 | |||||||
Consumer and other | 363,870 | 364,202 | 352,663 | 357,528 | 357,310 | 268,106 | |||||||
Total loans | 17,042,853 | 16,326,017 | 15,633,116 | 15,259,786 | 14,758,765 | 8,642,032 | |||||||
Allowance for loan losses | (75,670 | ) | (70,204 | ) | (67,240 | ) | (65,159 | ) | (61,944 | ) | (58,350 | ) | |
Securities | 2,975,469 | 2,981,301 | 2,536,046 | 2,901,029 | 2,448,198 | 1,604,774 | |||||||
Total assets | 23,988,370 | 22,935,174 | 22,205,700 | 21,790,371 | 20,886,154 | 11,724,601 | |||||||
Noninterest-bearing deposits | 4,361,414 | 4,274,213 | 4,381,386 | 4,099,086 | 3,893,603 | 2,508,680 | |||||||
Total deposits | 17,857,418 | 16,502,909 | 16,451,702 | 15,789,585 | 15,757,475 | 9,280,597 | |||||||
Securities sold under agreements to repurchase | 128,739 | 131,863 | 135,262 | 129,557 | 205,008 | 71,157 | |||||||
FHLB advances | 1,581,867 | 1,976,881 | 1,319,909 | 1,623,947 | 725,230 | 181,264 | |||||||
Subordinated debt and other borrowings | 465,433 | 465,550 | 465,505 | 465,461 | 465,419 | 350,849 | |||||||
Total stockholders' equity | 3,826,677 | 3,749,303 | 3,707,952 | 3,673,349 | 3,615,327 | 1,723,075 | |||||||
Balance sheet data, quarterly averages: | |||||||||||||
Total loans | $ | 16,729,734 | 15,957,466 | 15,520,255 | 15,016,642 | 9,817,139 | 8,558,267 | ||||||
Securities | 2,970,267 | 2,829,604 | 2,850,322 | 2,741,493 | 1,798,334 | 1,440,917 | |||||||
Total earning assets | 20,142,402 | 19,122,163 | 18,809,744 | 18,137,904 | 11,885,118 | 10,261,974 | |||||||
Total assets | 23,236,945 | 22,204,599 | 21,933,500 | 21,211,459 | 13,335,359 | 11,421,654 | |||||||
Noninterest-bearing deposits | 4,270,459 | 4,304,186 | 4,165,876 | 3,953,855 | 2,746,499 | 2,434,875 | |||||||
Total deposits | 16,949,374 | 16,280,581 | 16,091,700 | 15,828,480 | 10,394,267 | 9,099,472 | |||||||
Securities sold under agreements to repurchase | 123,447 | 129,969 | 134,983 | 160,726 | 99,763 | 79,681 | |||||||
FHLB advances | 1,884,828 | 1,584,281 | 1,465,145 | 1,059,032 | 399,083 | 212,951 | |||||||
Subordinated debt and other borrowings | 474,328 | 471,029 | 477,103 | 473,805 | 375,249 | 355,082 | |||||||
Total stockholders' equity | 3,795,963 | 3,732,633 | 3,706,741 | 3,655,029 | 2,057,505 | 1,657,072 | |||||||
Statement of operations data, for the three months ended: | |||||||||||||
Interest income | $ | 230,984 | 211,528 | 208,085 | 202,167 | 123,743 | 102,143 | ||||||
Interest expense | 48,748 | 37,057 | 33,354 | 28,985 | 17,116 | 13,376 | |||||||
Net interest income | 182,236 | 174,471 | 174,731 | 173,182 | 106,627 | 88,767 | |||||||
Provision for loan losses | 9,402 | 6,931 | 6,281 | 6,920 | 6,812 | 3,651 | |||||||
Net interest income after provision for loan losses | 172,834 | 167,540 | 168,450 | 166,262 | 99,815 | 85,116 | |||||||
Noninterest income | 47,939 | 44,183 | 36,488 | 42,977 | 35,057 | 30,382 | |||||||
Noninterest expense | 110,908 | 108,580 | 122,973 | 109,736 | 71,798 | 62,054 | |||||||
Income before taxes | 109,865 | 103,143 | 81,965 | 99,503 | 63,074 | 53,444 | |||||||
Income tax expense | 23,000 | 19,633 | 55,167 | 35,060 | 19,988 | 13,791 | |||||||
Net income | $ | 86,865 | 83,510 | 26,798 | 64,443 | 43,086 | 39,653 | ||||||
Profitability and other ratios: | |||||||||||||
Return on avg. assets (1) | 1.50 | % | 1.53 | % | 0.48 | % | 1.21 | % | 1.30 | % | 1.41 | % | |
Return on avg. common equity (1) | 9.18 | % | 9.07 | % | 2.87 | % | 6.99 | % | 8.40 | % | 9.70 | % | |
Return on avg. tangible common equity (1) | 18.01 | % | 18.12 | % | 5.76 | % | 14.25 | % | 13.58 | % | 14.74 | % | |
Dividend payout ratio (16) | 16.57 | % | 18.36 | % | 20.00 | % | 17.34 | % | 18.01 | % | 18.67 | % | |
Net interest margin (1) (2) | 3.69 | % | 3.77 | % | 3.76 | % | 3.87 | % | 3.68 | % | 3.60 | % | |
Noninterest income to total revenue (3) | 20.83 | % | 20.21 | % | 17.27 | % | 19.88 | % | 24.74 | % | 25.50 | % | |
Noninterest income to avg. assets (1) | 0.83 | % | 0.81 | % | 0.66 | % | 0.80 | % | 1.05 | % | 1.08 | % | |
Noninterest exp. to avg. assets (1) | 1.91 | % | 1.98 | % | 2.22 | % | 2.05 | % | 2.16 | % | 2.20 | % | |
Noninterest expense (excluding ORE expenses and merger-related charges) to avg. assets (1) | 1.85 | % | 1.90 | % | 1.87 | % | 1.88 | % | 2.06 | % | 2.17 | % | |
Efficiency ratio (4) | 48.18 | % | 49.66 | % | 58.22 | % | 50.77 | % | 50.67 | % | 52.08 | % | |
Loans to deposits | 95.44 | % | 98.93 | % | 95.02 | % | 96.64 | % | 93.66 | % | 93.12 | % | |
Securities to total assets | 12.40 | % | 13.00 | % | 11.42 | % | 13.31 | % | 11.72 | % | 13.69 | % | |
This information is preliminary and based on company data available at the time of the presentation. | |||||||||||||
11
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | |||||||||||||||||
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED | |||||||||||||||||
(dollars in thousands) | Three months ended | Three months ended | |||||||||||||||
June 30, 2018 | June 30, 2017 | ||||||||||||||||
Average Balances | Interest | Rates/ Yields | Average Balances | Interest | Rates/ Yields | ||||||||||||
Interest-earning assets | |||||||||||||||||
Loans (1) | $ | 16,729,734 | $ | 208,758 | 5.04 | % | $ | 9,817,139 | $ | 112,320 | 4.66 | % | |||||
Securities | |||||||||||||||||
Taxable | 1,792,845 | 11,748 | 2.63 | % | 1,487,806 | 8,265 | 2.23 | % | |||||||||
Tax-exempt (2) | 1,177,422 | 8,350 | 3.34 | % | 310,528 | 2,235 | 3.87 | % | |||||||||
Federal funds sold and other | 442,401 | 2,128 | 1.93 | % | 269,645 | 923 | 1.37 | % | |||||||||
Total interest-earning assets | 20,142,402 | $ | 230,984 | 4.66 | % | 11,885,118 | $ | 123,743 | 4.21 | % | |||||||
Nonearning assets | |||||||||||||||||
Intangible assets | 1,860,868 | 784,603 | |||||||||||||||
Other nonearning assets | 1,233,675 | 665,638 | |||||||||||||||
Total assets | $ | 23,236,945 | $ | 13,335,359 | |||||||||||||
Interest-bearing liabilities | |||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||
Interest bearing demand deposits | $ | 805,798 | $ | 2,135 | 1.06 | % | $ | 528,059 | $ | 846 | 0.64 | % | |||||
Interest checking | 2,232,908 | 4,260 | 0.77 | % | 1,507,548 | 1,681 | 0.45 | % | |||||||||
Savings and money market | 6,739,430 | 16,165 | 0.96 | % | 4,470,577 | 5,997 | 0.54 | % | |||||||||
Time | 2,900,779 | 10,207 | 1.41 | % | 1,141,584 | 2,470 | 0.87 | % | |||||||||
Total interest-bearing deposits | 12,678,915 | 32,767 | 1.04 | % | 7,647,768 | 10,994 | 0.58 | % | |||||||||
Securities sold under agreements to repurchase | 123,447 | 144 | 0.47 | % | 99,763 | 79 | 0.32 | % | |||||||||
Federal Home Loan Bank advances | 1,884,828 | 9,690 | 2.06 | % | 399,083 | 1,485 | 1.49 | % | |||||||||
Subordinated debt and other borrowings | 474,328 | 6,147 | 5.20 | % | 375,249 | 4,558 | 4.87 | % | |||||||||
Total interest-bearing liabilities | 15,161,518 | 48,748 | 1.29 | % | 8,521,863 | 17,116 | 0.81 | % | |||||||||
Noninterest-bearing deposits | 4,270,459 | — | — | 2,746,499 | — | — | |||||||||||
Total deposits and interest-bearing liabilities | 19,431,977 | $ | 48,748 | 1.01 | % | 11,268,362 | $ | 17,116 | 0.61 | % | |||||||
Other liabilities | 9,005 | 9,492 | |||||||||||||||
Stockholders' equity | 3,795,963 | 2,057,505 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 23,236,945 | $ | 13,335,359 | |||||||||||||
Net interest income | $ | 182,236 | $ | 106,627 | |||||||||||||
Net interest spread (3) | 3.37 | % | 3.40 | % | |||||||||||||
Net interest margin (4) | 3.69 | % | 3.68 | % | |||||||||||||
(1) Average balances of nonperforming loans are included in the above amounts. | |||||||||||||||||
(2) Yields computed on tax-exempt instruments on a tax equivalent basis. | |||||||||||||||||
(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the quarter ended June 30, 2018 would have been 3.66% compared to a net interest spread of 3.60% for the quarter ended June 30, 2017. | |||||||||||||||||
(4) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period. | |||||||||||||||||
This information is preliminary and based on company data available at the time of the presentation. | |||||||||||||||||
12
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | |||||||||||||||||
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED | |||||||||||||||||
(dollars in thousands) | Six months ended | Six months ended | |||||||||||||||
June 30, 2018 | June 30, 2017 | ||||||||||||||||
Average Balances | Interest | Rates/ Yields | Average Balances | Interest | Rates/ Yields | ||||||||||||
Interest-earning assets | |||||||||||||||||
Loans (1) | $ | 16,345,734 | $ | 399,972 | 4.98 | % | $ | 9,191,181 | $ | 205,538 | 4.58 | % | |||||
Securities | |||||||||||||||||
Taxable | 1,793,619 | 22,970 | 2.58 | % | 1,346,093 | 14,698 | 2.20 | % | |||||||||
Tax-exempt (2) | 1,106,705 | 15,635 | 3.33 | % | 274,519 | 3,913 | 3.85 | % | |||||||||
Federal funds sold and other | 389,043 | 3,935 | 2.04 | % | 266,533 | 1,737 | 1.31 | % | |||||||||
Total interest-earning assets | 19,635,101 | $ | 442,512 | 4.61 | % | 11,078,326 | $ | 225,886 | 4.14 | % | |||||||
Nonearning assets | |||||||||||||||||
Intangible assets | 1,862,294 | 676,015 | |||||||||||||||
Other nonearning assets | 1,226,229 | 629,450 | |||||||||||||||
Total assets | $ | 22,723,624 | $ | 12,383,791 | |||||||||||||
Interest-bearing liabilities | |||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||
Interest bearing demand deposits | $ | 790,426 | $ | 3,917 | 1.00 | % | $ | 522,577 | $ | 1,499 | 0.58 | % | |||||
Interest checking | 2,215,902 | 7,592 | 0.69 | % | 1,454,714 | 2,907 | 0.40 | % | |||||||||
Savings and money market | 6,597,734 | 28,153 | 0.86 | % | 4,187,024 | 10,450 | 0.50 | % | |||||||||
Time | 2,725,534 | 17,086 | 1.26 | % | 994,583 | 4,257 | 0.86 | % | |||||||||
Total interest-bearing deposits | 12,329,596 | 56,748 | 0.93 | % | 7,158,898 | 19,113 | 0.54 | % | |||||||||
Securities sold under agreements to repurchase | 126,690 | 273 | 0.43 | % | 89,777 | 128 | 0.29 | % | |||||||||
Federal Home Loan Bank advances | 1,735,385 | 16,697 | 1.94 | % | 306,531 | 2,389 | 1.57 | % | |||||||||
Subordinated debt and other borrowings | 475,066 | 12,087 | 5.13 | % | 371,222 | 8,862 | 4.81 | % | |||||||||
Total interest-bearing liabilities | 14,666,737 | 85,805 | 1.18 | % | 7,926,428 | 30,492 | 0.78 | % | |||||||||
Noninterest-bearing deposits | 4,287,229 | — | — | 2,591,548 | — | — | |||||||||||
Total deposits and interest-bearing liabilities | 18,953,966 | $ | 85,805 | 0.91 | % | 10,517,976 | $ | 30,492 | 0.58 | % | |||||||
Other liabilities | 5,185 | 7,419 | |||||||||||||||
Stockholders' equity | 3,764,473 | 1,858,396 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 22,723,624 | $ | 12,383,791 | |||||||||||||
Net interest income | $ | 356,707 | $ | 195,394 | |||||||||||||
Net interest spread (3) | 3.43 | % | 3.37 | % | |||||||||||||
Net interest margin (4) | 3.73 | % | 3.64 | % | |||||||||||||
(1) Average balances of nonperforming loans are included in the above amounts. | |||||||||||||||||
(2) Yields computed on tax-exempt instruments on a tax equivalent basis. | |||||||||||||||||
(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the six months ended June 30, 2018 would have been 3.70% compared to a net interest spread of 3.72% for the six months ended June 30, 2017. | |||||||||||||||||
(4) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period. | |||||||||||||||||
This information is preliminary and based on company data available at the time of the presentation. | |||||||||||||||||
13
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | ||||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED | ||||||||||||||||||
(dollars in thousands) | June | March | December | September | June | March | ||||||||||||
2018 | 2018 | 2017 | 2017 | 2017 | 2017 | |||||||||||||
Asset quality information and ratios: | ||||||||||||||||||
Nonperforming assets: | ||||||||||||||||||
Nonaccrual loans | $ | 70,887 | 70,202 | 57,455 | 53,414 | 40,217 | 25,051 | |||||||||||
Other real estate (ORE) and other nonperforming assets (NPAs) | 20,229 | 24,533 | 28,028 | 24,682 | 25,153 | 6,235 | ||||||||||||
Total nonperforming assets | $ | 91,116 | $ | 94,735 | $ | 85,483 | $ | 78,096 | $ | 65,370 | $ | 31,286 | ||||||
Past due loans over 90 days and still accruing interest | $ | 1,572 | 1,131 | 4,139 | 3,010 | 1,691 | 1,110 | |||||||||||
Accruing troubled debt restructurings (5) | $ | 5,647 | 6,115 | 6,612 | 15,157 | 14,248 | 14,591 | |||||||||||
Accruing purchase credit impaired loans | $ | 22,993 | 24,398 | 26,719 | 29,254 | 34,874 | — | |||||||||||
Net loan charge-offs | $ | 3,936 | 3,967 | 4,200 | 3,705 | 3,218 | 4,282 | |||||||||||
Allowance for loan losses to nonaccrual loans | 106.7 | % | 100.0 | % | 117.0 | % | 122.0 | % | 154.0 | % | 232.9 | % | ||||||
As a percentage of total loans: | ||||||||||||||||||
Past due accruing loans over 30 days | 0.23 | % | 0.24 | % | 0.38 | % | 0.24 | % | 0.20 | % | 0.17 | % | ||||||
Potential problem loans (6) | 1.00 | % | 0.97 | % | 1.05 | % | 0.97 | % | 1.26 | % | 1.27 | % | ||||||
Allowance for loan losses | 0.44 | % | 0.43 | % | 0.43 | % | 0.43 | % | 0.42 | % | 0.68 | % | ||||||
Nonperforming assets to total loans, ORE and other NPAs | 0.53 | % | 0.58 | % | 0.55 | % | 0.51 | % | 0.44 | % | 0.36 | % | ||||||
Nonperforming assets to total assets | 0.38 | % | 0.41 | % | 0.38 | % | 0.36 | % | 0.31 | % | 0.27 | % | ||||||
Classified asset ratio (Pinnacle Bank) (8) | 12.6 | % | 12.6 | % | 12.9 | % | 12.7 | % | 14.2 | % | 12.9 | % | ||||||
Annualized net loan charge-offs to avg. loans (7) | 0.10 | % | 0.10 | % | 0.13 | % | 0.14 | % | 0.17 | % | 0.20 | % | ||||||
Wtd. avg. commercial loan internal risk ratings (6) | 4.4 | 4.4 | 4.5 | 4.5 | 4.5 | 4.5 | ||||||||||||
Interest rates and yields: | ||||||||||||||||||
Loans | 5.04 | % | 4.91 | % | 4.87 | % | 4.91 | % | 4.66 | % | 4.49 | % | ||||||
Securities | 2.91 | % | 2.87 | % | 2.68 | % | 2.64 | % | 2.51 | % | 2.44 | % | ||||||
Total earning assets | 4.66 | % | 4.56 | % | 4.46 | % | 4.50 | % | 4.21 | % | 4.06 | % | ||||||
Total deposits, including non-interest bearing | 0.78 | % | 0.60 | % | 0.53 | % | 0.48 | % | 0.42 | % | 0.36 | % | ||||||
Securities sold under agreements to repurchase | 0.47 | % | 0.40 | % | 0.38 | % | 0.37 | % | 0.32 | % | 0.25 | % | ||||||
FHLB advances | 2.06 | % | 1.79 | % | 1.64 | % | 1.48 | % | 1.49 | % | 1.72 | % | ||||||
Subordinated debt and other borrowings | 5.20 | % | 5.11 | % | 4.83 | % | 4.84 | % | 4.87 | % | 4.92 | % | ||||||
Total deposits and interest-bearing liabilities | 1.01 | % | 0.81 | % | 0.73 | % | 0.66 | % | 0.61 | % | 0.56 | % | ||||||
Capital ratios (8): | ||||||||||||||||||
Pinnacle Financial ratios: | ||||||||||||||||||
Stockholders' equity to total assets | 16.0 | % | 16.3 | % | 16.7 | % | 16.9 | % | 17.3 | % | 14.7 | % | ||||||
Common equity Tier one | 9.3 | % | 9.2 | % | 9.2 | % | 9.4 | % | 9.5 | % | 9.8 | % | ||||||
Tier one risk-based | 9.3 | % | 9.2 | % | 9.2 | % | 9.4 | % | 9.5 | % | 10.6 | % | ||||||
Total risk-based | 12.0 | % | 12.0 | % | 12.0 | % | 12.3 | % | 12.6 | % | 13.7 | % | ||||||
Leverage | 8.8 | % | 8.8 | % | 8.7 | % | 8.9 | % | 14.5 | % | 10.3 | % | ||||||
Tangible common equity to tangible assets | 8.9 | % | 9.0 | % | 9.1 | % | 9.1 | % | 9.2 | % | 10.4 | % | ||||||
Pinnacle Bank ratios: | ||||||||||||||||||
Common equity Tier one | 10.2 | % | 10.3 | % | 10.3 | % | 10.7 | % | 11.0 | % | 11.1 | % | ||||||
Tier one risk-based | 10.2 | % | 10.3 | % | 10.3 | % | 10.7 | % | 11.0 | % | 11.1 | % | ||||||
Total risk-based | 11.2 | % | 11.3 | % | 11.4 | % | 11.8 | % | 12.1 | % | 12.9 | % | ||||||
Leverage | 9.7 | % | 9.8 | % | 9.7 | % | 10.1 | % | 16.7 | % | 10.9 | % | ||||||
Construction and land development loans as a percent of total capital (19) | 94.6 | % | 96.1 | % | 89.4 | % | 88.1 | % | 85.1 | % | 75.2 | % | ||||||
Non-owner occupied commercial real estate and multi-family as a percent of total capital (19) | 304.3 | % | 306.2 | % | 297.1 | % | 289.1 | % | 286.4 | % | 220.9 | % | ||||||
This information is preliminary and based on company data available at the time of the presentation. | ||||||||||||||||||
14
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | |||||||||||||
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED | |||||||||||||
(dollars in thousands, except per share data) | June | March | December | September | June | March | |||||||
2018 | 2018 | 2017 | 2017 | 2017 | 2017 | ||||||||
Per share data: | |||||||||||||
Earnings – basic | $ | 1.13 | 1.08 | 0.35 | 0.84 | 0.81 | 0.83 | ||||||
Earnings – diluted | $ | 1.12 | 1.08 | 0.35 | 0.83 | 0.80 | 0.82 | ||||||
Common dividends per share | $ | 0.14 | 0.14 | 0.14 | 0.14 | 0.14 | 0.14 | ||||||
Book value per common share at quarter end (9) | $ | 49.15 | 48.16 | 47.70 | 47.31 | 46.56 | 34.61 | ||||||
Tangible book value per common share at quarter end (9) | $ | 25.28 | 24.24 | 23.71 | 23.32 | 22.58 | 23.25 | ||||||
Revenue per diluted share | $ | 2.97 | 2.83 | 2.73 | 2.80 | 2.64 | 2.46 | ||||||
Revenue per diluted share, excluding investment (gains) losses on sale of securities, net | $ | 2.97 | 2.83 | 2.83 | 2.80 | 2.64 | 2.46 | ||||||
Noninterest expense per diluted share | $ | 1.43 | 1.40 | 1.59 | 1.42 | 1.34 | 1.28 | ||||||
Noninterest expense per diluted share, excluding the impact of other real estate expense and merger-related charges | $ | 1.38 | 1.34 | 1.34 | 1.30 | 1.28 | 1.26 | ||||||
Investor information: | |||||||||||||
Closing sales price on last trading day of quarter | $ | 61.35 | 64.20 | 66.30 | 66.95 | 62.80 | 66.45 | ||||||
High closing sales price during quarter | $ | 68.10 | 69.45 | 69.30 | 66.95 | 69.10 | 71.05 | ||||||
Low closing sales price during quarter | $ | 61.35 | 60.20 | 63.85 | 58.50 | 60.00 | 66.45 | ||||||
Other information: | |||||||||||||
Gains on residential mortgage loans sold: | |||||||||||||
Residential mortgage loan sales: | |||||||||||||
Gross loans sold | $ | 264,934 | 237,667 | 289,149 | 299,763 | 245,474 | 160,740 | ||||||
Gross fees (10) | $ | 7,134 | 6,036 | 7,364 | 9,050 | 7,361 | 4,427 | ||||||
Gross fees as a percentage of loans originated | 2.69 | % | 2.54 | % | 2.55 | % | 3.02 | % | 3.00 | % | 2.75 | % | |
Net gain on residential mortgage loans sold | $ | 3,777 | 3,744 | 3,839 | 5,963 | 4,668 | 4,155 | ||||||
Investment gains (losses) on sales of securities, net (15) | $ | — | 30 | (8,265 | ) | — | — | — | |||||
Brokerage account assets, at quarter end (11) | $ | 3,745,635 | 3,508,669 | 3,266,936 | 2,979,936 | 2,815,501 | 2,280,355 | ||||||
Trust account managed assets, at quarter end | $ | 1,920,226 | 1,844,871 | 1,837,233 | 1,880,488 | 1,804,811 | 1,011,964 | ||||||
Core deposits (12) | $ | 15,400,142 | 14,750,211 | 14,838,208 | 14,236,205 | 14,461,407 | 8,792,288 | ||||||
Core deposits to total funding (12) | 76.9 | % | 77.3 | % | 80.8 | % | 79.1 | % | 84.3 | % | 88.5 | % | |
Risk-weighted assets | $ | 20,151,827 | 19,286,101 | 18,812,653 | 18,164,765 | 17,285,264 | 10,489,944 | ||||||
Number of offices | 115 | 114 | 114 | 123 | 121 | 45 | |||||||
Total core deposits per office | $ | 133,914 | 129,388 | 130,160 | 115,742 | 119,516 | 195,384 | ||||||
Total assets per full-time equivalent employee | $ | 10,911 | 10,677 | 10,415 | 9,930 | 9,398 | 9,630 | ||||||
Annualized revenues per full-time equivalent employee | $ | 419.9 | 412.8 | 393.1 | 390.8 | 255.7 | 396.9 | ||||||
Annualized expenses per full-time equivalent employee | $ | 202.3 | 205.0 | 228.8 | 198.4 | 129.6 | 206.7 | ||||||
Number of employees (full-time equivalent) | 2,198.5 | 2,148.0 | 2,132.0 | 2,194.5 | 2,222.5 | 1,217.5 | |||||||
Associate retention rate (13) | 89.6 | % | 89.9 | % | 93.5 | % | 98.3 | % | 87.1 | % | 92.9 | % | |
This information is preliminary and based on company data available at the time of the presentation. | |||||||||||||
15
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | ||||||||||||
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
(dollars in thousands, except per share data) | June 30, | March | June 30, | June 30, | June 30, | |||||||
2018 | 2018 | 2017 | 2018 | 2017 | ||||||||
Net interest income | $ | 182,236 | 174,471 | 106,627 | 356,707 | 195,394 | ||||||
Noninterest income | 47,939 | 44,183 | 35,057 | 92,122 | 65,438 | |||||||
Total revenues | 230,175 | 218,654 | 141,684 | 448,829 | 260,832 | |||||||
Noninterest expense | 110,908 | 108,580 | 71,798 | 219,488 | 133,851 | |||||||
Less: Other real estate (ORE) expense (income) | 819 | (794 | ) | 63 | 25 | 315 | ||||||
Merger-related charges | 2,906 | 5,353 | 3,221 | 8,259 | 3,893 | |||||||
Noninterest expense excluding the impact of ORE expense (income) and merger-related charges | 107,183 | 104,021 | 68,514 | 211,204 | 129,643 | |||||||
Adjusted pre-tax pre-provision income (14) | $ | 122,992 | 114,633 | 73,170 | 237,625 | 131,189 | ||||||
Efficiency ratio (4) | 48.18 | % | 49.66 | % | 50.67 | % | 48.90 | % | 51.32 | % | ||
Adjustment due to ORE expense and merger-related charges | (1.61 | %) | (2.09 | %) | (2.30 | %) | (1.84 | %) | (1.62 | %) | ||
Efficiency ratio (excluding ORE expense (income), and merger-related charges) | 46.57 | % | 47.57 | % | 48.37 | % | 47.06 | % | 49.70 | % | ||
Total average assets | $ | 23,236,945 | 22,204,599 | 13,335,359 | 22,723,624 | 12,383,791 | ||||||
Noninterest expense to average assets | 1.91 | % | 1.98 | % | 2.16 | % | 1.95 | % | 2.18 | % | ||
Adjustment due to ORE expense (income) and merger-related charges | (0.06 | %) | (0.08 | %) | (0.10 | %) | (0.08 | %) | (0.07 | %) | ||
Noninterest expense (excluding ORE expense (income), and merger-related charges) to average assets (1) | 1.85 | % | 1.90 | % | 2.06 | % | 1.87 | % | 2.11 | % | ||
Net income | $ | 86,865 | 83,510 | 43,086 | 170,375 | 82,739 | ||||||
Merger-related charges | 2,906 | 5,353 | 3,221 | 8,259 | 3,893 | |||||||
Tax effect on merger-related charges (18) | (760 | ) | (1,399 | ) | (1,264 | ) | (2,159 | ) | (1,527 | ) | ||
Revaluation of deferred tax assets | — | — | — | — | — | |||||||
Net income excluding merger-related charges | $ | 89,011 | 87,464 | 45,043 | 176,475 | 85,105 | ||||||
Basic earnings per share | $ | 1.13 | 1.08 | 0.81 | 2.21 | 1.64 | ||||||
Adjustment due to merger-related charges | 0.02 | 0.05 | 0.04 | 0.08 | 0.04 | |||||||
Basic earnings per share excluding merger-related charges | $ | 1.15 | 1.13 | 0.85 | 2.29 | 1.68 | ||||||
Diluted earnings per share | $ | 1.12 | 1.08 | 0.80 | 2.20 | 1.62 | ||||||
Adjustment due to merger-related charges | 0.03 | 0.05 | 0.04 | 0.08 | 0.05 | |||||||
Diluted earnings per share excluding merger-related charges | $ | 1.15 | 1.13 | 0.84 | 2.28 | 1.67 | ||||||
This information is preliminary and based on company data available at the time of the presentation. | ||||||||||||
16
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | ||||||||||||
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
(dollars in thousands, except per share data) | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||
2018 | 2018 | 2017 | 2018 | 2017 | ||||||||
Return on average assets | 1.50 | % | 1.53 | % | 1.30 | % | 1.51 | % | 1.35 | % | ||
Adjustment due to merger-related charges | 0.04 | % | 0.07 | % | 0.05 | % | 0.06 | % | 0.04 | % | ||
Return on average assets excluding merger-related charges | 1.54 | % | 1.60 | % | 1.35 | % | 1.57 | % | 1.39 | % | ||
Tangible assets: | ||||||||||||
Total assets | $ | 23,988,370 | 22,935,174 | 20,886,154 | 23,988,370 | 20,886,154 | ||||||
Less: Goodwill | (1,807,121 | ) | (1,808,300 | ) | (1,800,742 | ) | (1,807,121 | ) | (1,800,742 | ) | ||
Core deposit and other intangible assets | (51,353 | ) | (54,012 | ) | (60,964 | ) | (51,353 | ) | (60,964 | ) | ||
Net tangible assets | $ | 22,129,896 | 21,072,862 | 19,024,448 | 22,129,896 | 19,024,448 | ||||||
Tangible equity: | ||||||||||||
Total stockholders' equity | $ | 3,826,677 | 3,749,303 | 3,615,327 | 3,826,677 | 3,615,327 | ||||||
Less: Goodwill | (1,807,121 | ) | (1,808,300 | ) | (1,800,742 | ) | (1,807,121 | ) | (1,800,742 | ) | ||
Core deposit and other intangible assets | (51,353 | ) | (54,012 | ) | (60,964 | ) | (51,353 | ) | (60,964 | ) | ||
Net tangible common equity | $ | 1,968,203 | 1,886,991 | 1,753,621 | 1,968,203 | 1,753,621 | ||||||
Ratio of tangible common equity to tangible assets | 8.89 | % | 8.95 | % | 9.22 | % | 8.89 | % | 9.22 | % | ||
Average tangible assets: | ||||||||||||
Average assets | $ | 23,236,945 | 22,204,599 | 13,335,359 | 22,723,624 | 12,383,791 | ||||||
Less: Average goodwill | (1,807,850 | ) | (1,808,055 | ) | (760,646 | ) | (1,807,952 | ) | (656,730 | ) | ||
Core deposit and other intangible assets | (53,018 | ) | (55,681 | ) | (23,957 | ) | (54,342 | ) | (19,341 | ) | ||
Net average tangible assets | $ | 21,376,077 | 20,340,863 | 12,550,756 | 20,861,330 | 11,707,720 | ||||||
Return on average assets | 1.50 | % | 1.53 | % | 1.30 | % | 1.51 | % | 1.35 | % | ||
Adjustment due to goodwill, core deposit and other intangible assets | 0.13 | % | 0.14 | % | 0.08 | % | 0.14 | % | 0.08 | % | ||
Return on average tangible assets | 1.63 | % | 1.67 | % | 1.38 | % | 1.65 | % | 1.43 | % | ||
Adjustment due to merger-related charges | 0.04 | % | 0.07 | % | 0.06 | % | 0.06 | % | 0.04 | % | ||
Return on average tangible assets excluding merger-related charges | 1.67 | % | 1.74 | % | 1.44 | % | 1.71 | % | 1.47 | % | ||
This information is preliminary and based on company data available at the time of the presentation. | ||||||||||||
17
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | ||||||||||||
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
(dollars in thousands, except per share data) | June 30, | March 31, | June 30, | June 30, | June 30, | |||||||
2018 | 2018 | 2017 | 2018 | 2017 | ||||||||
Average tangible stockholders' equity: | ||||||||||||
Average stockholders' equity | $ | 3,795,963 | 3,732,633 | 2,057,505 | 3,764,473 | 1,858,396 | ||||||
Less: Average goodwill | (1,807,850 | ) | (1,808,055 | ) | (760,646 | ) | (1,807,952 | ) | (656,730 | ) | ||
Core deposit and other intangible assets | (53,018 | ) | (55,681 | ) | (23,957 | ) | (54,342 | ) | (19,341 | ) | ||
Net average tangible common equity | $ | 1,935,095 | 1,868,897 | 1,272,902 | 1,902,179 | 1,182,325 | ||||||
Return on average common equity | 9.18 | % | 9.07 | % | 8.40 | % | 9.13 | % | 8.98 | % | ||
Adjustment due to goodwill, core deposit and other intangible assets | 8.83 | % | 9.05 | % | 5.18 | % | 8.93 | % | 5.13 | % | ||
Return on average tangible common equity (1) | 18.01 | % | 18.12 | % | 13.58 | % | 18.06 | % | 14.11 | % | ||
Adjustment due to merger-related charges | 0.44 | % | 0.86 | % | 0.61 | % | 0.65 | % | 0.41 | % | ||
Return on average tangible common equity excluding merger-related charges | 18.45 | % | 18.98 | % | 14.19 | % | 18.71 | % | 14.52 | % | ||
Total average assets | $ | 23,236,945 | 22,204,599 | 13,335,359 | 22,723,624 | 12,383,791 | ||||||
Noninterest expense per diluted share | $ | 1.43 | 1.40 | 1.34 | 2.84 | 2.62 | ||||||
Adjustment due to ORE expense (income) and merger-related charges | (0.05 | ) | (0.06 | ) | (0.06 | ) | (0.11 | ) | (0.08 | ) | ||
Noninterest expense (excluding ORE expense (income) and merger-related charges) per diluted share | $ | 1.38 | 1.34 | 1.28 | 2.73 | 2.54 | ||||||
Equity method investment (17) | ||||||||||||
Fee income from BHG, net of amortization | $ | 9,690 | 9,360 | 8,755 | 19,050 | 16,578 | ||||||
Funding cost to support investment | 2,114 | 2,004 | 1,844 | 4,118 | 3,619 | |||||||
Pre-tax impact of BHG | 7,576 | 7,356 | 6,911 | 14,932 | 12,959 | |||||||
Income tax expense at statutory rates | 1,980 | 1,923 | 2,711 | 3,903 | 5,084 | |||||||
Earnings attributable to BHG | $ | 5,596 | 5,433 | 4,200 | 11,029 | 7,875 | ||||||
Basic earnings per share attributable to BHG | $ | 0.07 | 0.07 | 0.08 | 0.14 | 0.16 | ||||||
Diluted earnings per share attributable to BHG | $ | 0.07 | 0.07 | 0.08 | 0.14 | 0.15 | ||||||
This information is preliminary and based on company data available at the time of the presentation. | ||||||||||||
18
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES |
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED |
1. Ratios are presented on an annualized basis. |
2. Net interest margin is the result of net interest income on a tax equivalent basis divided by average interest earning assets. |
3. Total revenue is equal to the sum of net interest income and noninterest income. |
4. Efficiency ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income. |
5. Troubled debt restructurings include loans where the company, as a result of the borrower's financial difficulties, has granted a credit concession to the borrower (i.e., interest only payments for a significant period of time, extending the maturity of the loan, etc.). All of these loans continue to accrue interest at the contractual rate. |
6. Average risk ratings are based on an internal loan review system which assigns a numeric value of 1 to 10 to all loans to commercial entities based on their underlying risk characteristics as of the end of each quarter. A "1" risk rating is assigned to credits that exhibit Excellent risk characteristics, "2" exhibit Very Good risk characteristics, "3" Good, "4" Satisfactory, "5" Acceptable or Average, "6" Watch List, "7" Criticized, "8" Classified or Substandard, "9" Doubtful and "10" Loss (which are charged-off immediately). Additionally, loans rated "8" or worse that are not nonperforming or restructured loans are considered potential problem loans. Generally, consumer loans are not subjected to internal risk ratings. Data presented represents legacy Pinnacle portfolio at period end date. |
7. Annualized net loan charge-offs to average loans ratios are computed by annualizing quarter-to-date net loan charge-offs and dividing the result by average loans for the quarter-to-date period. |
8. Capital ratios are calculated using regulatory reporting regulations enacted for such period and are defined as follows: |
Equity to total assets – End of period total stockholders' equity as a percentage of end of period assets. |
Tangible common equity to total assets - End of period total stockholders' equity less end of period goodwill, core deposit and other intangibles as a percentage of end of period assets. |
Leverage – Tier one capital (pursuant to risk-based capital guidelines) as a percentage of adjusted average assets. |
Tier one risk-based – Tier one capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets. |
Total risk-based – Total capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets. |
Classified asset - Classified assets as a percentage of Tier 1 capital plus allowance for loan losses. |
Tier one common equity to risk weighted assets - Tier 1 capital (pursuant to risk-based capital guidelines) less the amount of any preferred stock or subordinated indebtedness that is considered as a component of Tier 1 capital as a percentage of total risk-weighted assets. |
9. Book value per share computed by dividing total stockholders' equity by common shares outstanding. |
10. Amounts are included in the statement of operations in "Gains on mortgage loans sold, net", net of commissions paid on such amounts. |
11. At fair value, based on information obtained from Pinnacle's third party broker/dealer for non-FDIC insured financial products and services. |
12. Core deposits include all transaction deposit accounts, money market and savings accounts and all certificates of deposit issued in a denomination of less than $250,000. Periods prior to the second quarter of 2018 have been restated to reflect regulatory changes that were adopted in the second quarter of 2018 that permit reciprocal deposits to be treated as core deposits if they otherwise qualify as such. The ratio noted above represents total core deposits divided by total funding, which includes total deposits, FHLB advances, securities sold under agreements to repurchase, subordinated indebtedness and all other interest-bearing liabilities. |
13. Associate retention rate is computed by dividing the number of associates employed at quarter end less the number of associates that have resigned in the last 12 months by the number of associates employed at quarter end. Associate retention rate does not include associates at acquired institutions displaced by merger. |
14. Adjusted pre-tax, pre-provision income excludes the impact of other real estate expenses and income and merger-related charges. |
15. Represents investment gains (losses) on sales and impairments, net occurring as a result of both credit losses and losses incurred as the result of a change in management's intention to sell a bond prior to the recovery of its amortized cost basis. |
16. The dividend payout ratio is calculated as the sum of the annualized dividend rate divided by the trailing 12-months fully diluted earnings per share as of the dividend declaration date. |
17. Earnings from equity method investment includes the impact of the issuance of subordinated debt as well as the funding costs of the overall franchise. Income tax expense is calculated using statutory tax rates. |
18. Tax effect calculated using the blended statutory rate of 39.23% for all periods prior to 2018. For 2018, tax effect calculated using the blended statutory rate of 26.14%. |
19. Calculated using the same guidelines as are used in the Federal Financial Institutions Examination Council's Uniform Bank Performance Report. |
19