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Jun 30, 2023
Pinnacle Financial Q2 2023 Earnings Report
Reported diluted EPS of $2.54, ROAA of 1.71% and ROATCE of 21.06% for Q2 2023.
Key Takeaways
Pinnacle Financial Partners reported a strong second quarter in 2023, with diluted EPS of $2.54, a 36.6% increase compared to Q2 2022. The company saw annualized linked-quarter loan growth of 11.3% and deposit growth of 17.1%.
Diluted earnings per share increased by 36.6% compared to the same quarter last year.
End-of-period loans grew by $855.4 million over last quarter, reflecting an annualized linked-quarter growth rate of 11.3 percent.
End-of-period deposits grew by $1.5 billion over the same period, reflecting an annualized linked-quarter growth rate of 17.1 percent.
The company added 20 revenue producers during the quarter, investing in its relationship banking model.
Forward Guidance
Pinnacle Financial anticipates that the reduction in noninterest bearing balances will slow from the pace of previous quarters this year. The company believes with more rate hikes in the forecast for 2023, their funding costs will increase but not at the same rate as the second quarter increase. The impact of hiring and usual seasonal growth will enable them to continue to grow deposits for the remainder of the year at levels that should support their current outlook of high single-digit percentage deposit growth for 2023 over 2022. Pinnacle's current outlook is that growth in net interest income for fiscal year 2023 over 2022 should approximate a low-teens percentage increase.
Positive Outlook
- Company anticipates that the reduction in noninterest bearing balances will slow from the pace of previous quarters this year
- Company believes with more rate hikes in the forecast for 2023, their funding costs will increase but not at the same rate as the second quarter increase
- Impact of hiring and usual seasonal growth will enable them to continue to grow deposits for the remainder of the year
- Deposit growth should support current outlook of high single-digit percentage deposit growth for 2023 over 2022
- Growth in net interest income for fiscal year 2023 over 2022 should approximate a low-teens percentage increase
Challenges Ahead
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