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Sep 30, 2021
Pinnacle Financial Q3 2021 Earnings Report
Reported diluted EPS of $1.75, ROAA of 1.47% and ROTCE of 16.98% for 3Q2021.
Key Takeaways
Pinnacle Financial Partners reported a strong third quarter with a 23.2% increase in net income per diluted common share, driven by strong organic loan growth and successful recruitment of revenue producers.
Diluted EPS was $1.75, a 23.2% increase compared to Q3 2020.
Loans grew at an annualized rate of 2.8%, or 15.3% excluding PPP impact.
Successfully recruited 32 new revenue producers during the quarter.
Revenues for the quarter were $341.6 million, up 14.8% year-over-year.
Pinnacle Financial
Pinnacle Financial
Forward Guidance
Pinnacle anticipates continued loan growth and expense management for the remainder of 2021 and into 2022.
Positive Outlook
- 2021 end-of-year loan balances should exceed 2020 end-of-year balances by 2 to 5 percent.
- 2022 loan growth should produce low-double digit growth.
- Exploring several options that provide a reasonable return while not resulting in excess risk to tangible book value growth.
- Reduction in the allowance for credit losses ratio will continue for the next several quarters.
- Total expenses for the fourth quarter of 2021 should be flat to down from the amounts reported in the second and third quarters of 2021.
Challenges Ahead
- Ongoing uncertain economic climate.
- Linked-quarter decline in net interest margin.
- Increase in on-balance sheet liquidity driven primarily by forgiveness and paydowns of PPP loans during the quarter.
- Loan yields decreased by 5 basis points in the third quarter of 2021, which offset a 3 basis point decrease in deposit rates.
- Expense growth should range between 8 to 11 percent in comparison to 2021