Pinnacle Financial Q1 Highlights: EPS Beat, Revenues Miss, Growing Deposits & More

Pinnacle Financial Partners, Inc PNFP reported first quarter 2023 revenues of $401.8 million, up 17.1% Y/Y, missing the consensus of $421.2 million.
Net interest income rose 30.4% Y/Y to $312.2 million, which includes $0.852 million of discount accretion associated with fair value adjustments. Noninterest income fell 13.5% Y/Y to $89.53 million.
Paycheck Protection Program net interest income stood at $20,000 in Q1 compared to $10.7 million a year ago and had minimal impact on Q1 EPS.
Net interest margin came in at 3.40%, compared to 2.89% in Q1 2022. Net interest margin declined on a linked-quarter basis by 20 basis points on higher funding costs and a rise in on-balance sheet liquidity (attained in mid-March to shield against uncertainty in the banking industry). The company expects to maintain higher liquidity in the coming few quarters.
Total annualized deposits growth was 13.9% in Q1, led by traction in previously made investments in strategic deposit gathering initiatives. Annualized client's deposits grew 9.6% in Q1, partly led by the two major bank failures.
Linked-quarter annualized end-of period loans grew 17.3%, with total loan rising 23.7% Y/Y to $30.3 billion in Q1.
In Q1, provisions for credit losses were $18.8 million, compared to $2.7 million year-ago quarter.
Adjusted EPS of $1.76 came above the consensus of $1.72.
As of March 31, 2023, total assets increased 14.5% Y/Y to $45.1 billion.
"We continue to experience a shift in the mix of our deposit book and our funding costs continued to increase, which is unsurprising given the interest rate environment and the events of the last few weeks of the quarter. We believe our linked-quarter loan growth for the remainder of the year is likely to moderate to some extent based on slower loan demand as a result of macroeconomic factors and the fact that we have continued to tighten the credit box, particularly as it pertains to construction and commercial real estate lending," stated M. Terry Turner, President and CEO.
Price Action: PNFP shares are trading lower by 1.84% at $53.82 on the last check Tuesday.

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