Pinnacle Financial Partners, Inc. Q4 FY2024 earnings call

• Attracting Talent: Pinnacle set a new record in 2024 for hiring highly experienced revenue producers, which fuels optimism for 2025.
• Loan Growth: In 2024, loans grew by $2.8 billion or 8.6%, with new specialties like franchise lending and market extensions to high-growth markets contributing.
• Deposit Growth: Strong Q4 deposit growth, with focus on deposit verticals and work of new associates in newer markets. Core deposits up 13% y-o-y.
• Net Interest Income: Strong track record with 10-year CAGR 12.7%, NIM held steady in Q4, and 2025 NII growth expected.
• BHG: Originations picked up in Q4, working on building inventory for ABS transactions, spreads improving, but off-balance sheet losses increased.

Loans: End of period loans increased by 13.7% linked-quarter annualized. 2025 loan growth expected in the range of 8% to 11% end of period. Deposits: Increased by $1.9 billion in the fourth quarter, with core deposits up 13% year-over-year. 2025 total deposit growth expected to be 7% to 10%. Net Interest Income: 10-year CAGR for net interest income is 12.7%. NIM held at 3.22% in Q4. 2025 net interest income growth approximated to a range of 11% to 13%. Fees: Adjusted fees were up 15% year-over-year in 2024. 2025 fee growth guide is around 8% to 10%.

• Loan Growth: 2025 end of period loan growth expected in the range of 8% to 11%.
• Deposit Growth: 2025 total deposit growth expected to be 7% to 10%.
• Net Interest Income: 2025 net interest income growth approximated to a range of 11% to 13%.
• Fees: 2025 fee growth guide is around 8% to 10%.
• Expenses: 2025 expense guide is $1.13 billion to $1.15 billion, with incentive costs influencing expenses.

• Rate Volatility: Impact on NIM and net interest income as rates fluctuate.
• Credit Risks: Potential for higher charge-offs, especially if the yield curve doesn't trend favorably.
• Integration Risks: If considering M&A, but currently focused on organic growth with no immediate plans for significant M&A activity.

Q: Ben Gerlinger asked about expenses and funding, with a focus on whether there are levers outside of personnel-related costs.

A: Harold Carpenter stated there aren't many non-personnel cost levers, with variability mainly in incentive accrual and hiring focus.

Q: Jared Shaw inquired about variable expenses and NII guidance.

A: Harold Carpenter mentioned the target payout is close to the midpoint, and NII could be higher with higher loan growth or better pricing.

Q: Michael Rose asked about hiring and M&A potential.

A: Terry Turner stated they prefer organic growth with strong hiring, but wouldn't rule out M&A if an attractive opportunity arises.

Q: Catherine Mealor questioned fee growth guidance and NIM expansion.

A: Harold Carpenter noted conservatism in the fee guide with potential for upside from non-recurring items, and NIM should expand with a favorable yield curve.

Q: Anthony Elian asked about strong loan and deposit growth in Q4 and BHG's pipeline.

A: Terry Turner mentioned good timing on loan and deposit growth, and Harold Carpenter noted BHG exited SBA and buy now, pay later businesses to focus on core.