Pinnacle stays on track

Q3 pre-tax profits up almost 80% as C&I, construction loan growth picks up pace

Third-quarter profits at Pinnacle Financial Partners came in at $11.3 million versus more than $25 million a year ago, when the downtown-based bank holding company booked a large tax gain. Excluding that one-time event, operating profits climbed 79 percent to $16.4 million. Per diluted share, earnings were 33 cents, 3 cents better than what analysts had been looking for.

Driving the good numbers was a combination of growth in core business and commercial construction loans as well as a better net interest margin — the eighth straight quarter that number has improved from the previous three months. In addition, problem loans and interest expenses continued their downward trend.

"Our recent success in hiring a group of highly experienced bankers is already impacting our loan growth," said President and CEO Terry Turner. "Consequently, we expect them to accelerate our growth over the next two to three years."

Pinnacle ended the quarter with a loan portfolio of more than $3.5 billion, up more than 7 percent from a year ago. Commercial and industrial loans are up 17 percent during that time.

Looking ahead, CFO Harold Carpenter said Pinnacle's net interest margin is probably near its peak for now: Further gains from lower deposit interest costs are likely to be minimal and loan yields are expected to drop in coming quarters.

Shares of Pinnacle (Ticker: PNFP) closed Tuesday trading at $18.35, down about 3 percent on the day. Year to date, they're up about 14 percent.