Pinnacle Financial Partners posted second-quarter earnings of $17.2 million, an increase of 20 percent from a year ago, helped by rising interest income as well as better credit quality. Per diluted share, profits were 49 cents, a penny better than analysts had expected.
Downtown-based Pinnacle ended June with $4.65 billion in deposits, up $150 million from March. Loan growth during the quarter was $134 million, helping push Pinnacle's asset to almost $5.8 billion. (Click here for Pinnacle's release.) The company's net interest margin clocked in at 3.71 percent, down slightly from Q1 and the year-ago quarter, but executives expect that to be the floor in the near term as growth continues. Fee income was down slightly from Q1 but rose 11 percent year over year to $12.6 million despite a drop in gains on the sale of mortgages.
"With the significant loan growth we experienced in the second quarter, we continue to believe we will meet or exceed the three-year loan growth targets we established for the period of 2012 to 2014," said President and CEO Terry Turner. "Our ability to grow our noninterest-bearing deposits has been instrumental in enabling us to increase our net interest income and provides further evidence of the effectiveness of our business model."
Credit quality continues to also provide a bottom-line boost for Pinnacle. Its provision for loan losses in Q2 was just $254,000, down from almost $500,000 early this year and $2.8 million a year ago. Year to date, annualized net charge-offs have been just 0.09 percent of average loans.
Shares of Pinnacle (Ticker: PNFP) ended Tuesday trading at $38.12. Year to date, they're up 17 percent.