Pinnacle Q2 up 60%

Loan book grows 3%, loss provision minimal

Pinnacle Financial Partners posted a second-quarter profit of almost $7.8 million, a jump of 60 percent from a year ago. Included in the bottom line was a charge of $1.7 million stemming from the company's repayment of its TARP obligation during the period.

As it has in recent quarters, the largest bank headquartered in Nashville produced loan growth during the quarter — with core C&I loans and commercial real estate mortgages leading the way — and added more than $100 million to its deposit base. Credit quality also continued to improve: Nonperforming assets were 1.34 percent of total assets, down from 1.60 percent early this year, and Pinnacle's loan loss provision was just $634,000, compared to about $1 million in Q1 and more than $6 million a year ago.

"The growth in our loan and deposit volume is a foundational building block for our ongoing revenue and earnings growth," said President and CEO Terry Turner. "The success we are having in the Knoxville market is similar to the early-stage growth we experienced in Nashville and now accounts for a meaningful part of the firm’s loan growth."

One area where more improvements will be harder to come by is net interest margin, which has climbed 21 basis points to 3.76 percent in the past year.

"We continue to believe we have additional opportunities to reduce our funding costs in future quarters," said CFO Harold Carpenter. "However, like others in our industry, we are experiencing continued pressure on our loan yields, and we expect expansion in our net interest margin will be challenging going forward. Nevertheless, we expect that loan growth should positively influence our net interest income results over the next several quarters and result in further revenue growth this year."

Shares of Pinnacle (Ticker: PNFP) closed Tuesday trading at $19.37 and are up about 20 percent so far in 2012.