In This Article:
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Adjusted Revenue Growth: Strong, with double-digit five-year CAGR.
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Adjusted Fully Diluted EPS Growth: Strong, with double-digit five-year CAGR.
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Tangible Book Value Per Share Growth: Strong, with double-digit five-year CAGR.
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Net Interest Income 10-Year CAGR: 12.7%, peer-leading.
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Loan Growth: $2.8 billion or 8.6% for 2024.
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End of Period Loan Growth: 13.7% linked quarter annualized.
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Deposit Growth: $1.9 billion in the fourth quarter; core deposits up 13% year-over-year.
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Net Charge-Offs: 23 basis points for the year.
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Fee Growth: Adjusted fees up 15% year-over-year.
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2025 Loan Growth Expectation: 8% to 11% end-of-period growth.
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2025 Deposit Growth Expectation: 7% to 10% over 2024.
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2025 Net Interest Income Growth Expectation: 11% to 13%.
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2025 Fee Growth Guide: 8% to 10%.
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2025 Expense Guide: $1.13 billion to $1.15 billion.
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BHG Originations: $1.16 billion in the fourth quarter.
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BHG Contribution to Earnings: Approximately 6% of consolidated earnings for 2024.
Release Date: January 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Pinnacle Financial Partners Inc (NASDAQ:PNFP) reported strong adjusted revenue growth, fully diluted EPS growth, and tangible book value per share growth, all with double-digit five-year CAGRs.
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The company set a new record in 2024 for hiring highly experienced revenue producers, which fuels optimism for continued growth in 2025.
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Loan growth was robust, with a 13.7% increase in the fourth quarter, providing a strong start for 2025.
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Deposit growth was a highlight, with a $1.9 billion increase in the fourth quarter, one of the strongest quarters ever.
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The company has a strong track record of net interest income growth, with a 10-year CAGR of 12.7%, outperforming peers.
Negative Points
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The operating environment remains uncertain, particularly regarding interest rates and the yield curve.
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There is a reliance on new revenue producers for loan growth, which may not be sustainable if hiring slows.
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BHG's contribution to consolidated earnings decreased from 9% in 2023 to 6% in 2024, indicating potential challenges in this segment.
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The company faces competitive pressures in loan origination yields, which could impact profitability if not managed effectively.
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There are concerns about credit quality, particularly in the C&I book, which could affect future charge-offs and provisioning.
Q & A Highlights
Q: Can you elaborate on the factors contributing to the variability in expenses, particularly regarding personnel-related costs? A: Harold Carpenter, CFO: The variability in expenses is largely tied to personnel-related costs, such as incentive accruals and hiring. While there are some non-personnel costs that could be adjusted, such as delaying branch build-outs, the primary focus remains on managing personnel expenses and hiring strategically to support growth.