Pinnacle Financial Partners Inc.
) has gained nearly 70% over the last year, primarily driven by its
strong earnings trend. This regional bank has surprised on the
Zacks Consensus Estimate in 7 of the last 8 quarters, with an
average beat of 66.6%.
Strong fundamentals helped this Zacks #1 Rank (Strong Buy) to reach
its 52-week high on August 21. Moreover, a long-term earnings
growth projection of 12.5% makes Pinnacle Financial a lucrative
pick for growth-seeking investors.
Impressive 2Q Results
On July 17, Pinnacle Financial reported second quarter 2012
earnings of 23 cents per share, outpacing the Zacks Consensus
Estimate of 21 cents by 9.5% and the last year's earnings of 14
cents by 64.3%. The marked improvement was predominantly driven by
top line growth, lower operating costs as well as significant fall
in provision for loan losses.
Net interest income climbed 6.3% year over year to $40.2 million.
Likewise, non-interest income inched up 1.0% to $9.9 million.
Moreover, the net interest margin expanded 21 basis points to
3.76%. Further, the company's non-interest expenses declined 1.5%
to $33.9 million over the same period.
Credit metrics continued to improve at Pinnacle Financial.
Provision for loan losses were $0.6 million, plummeting 90.9% from
the year-ago quarter with net charge-offs exhibiting a downward
trend as well. Net charge-offs were $2.4 million, declining 72.1%
from $8.6 million in the prior-year quarter.
Surge in Earnings Estimates
For 2012, the Zacks Consensus Estimate advanced 9.4% to $1.05 per
share in the past 60 days. This implies a year-over-year growth of
about 63.9%. For 2013, the Zacks Consensus Estimate jumped 5.9% to
$1.25 over the same time period. This represents an increase of
19.2% over the prior-year.
Valuation Looks Reasonable
Shares of Pinnacle Financial currently trade at 18.3x 12-month
forward earnings, a 13.0% premium to the peer group average of
16.2x. Its price to book ratio of 1.0 is at a 16.7% discount to the
peer group median of 1.2. Pinnacle Financial has a trailing
12-month ROE of 5.5%, compared with the peer group average of 7.3%.
Chart Shows Growth Potential
The stock started gaining momentum in March 2011 and has been
continuously outperforming its 200 days moving average over the
last six months, exhibiting steadfast growth. Moreover, the stock
is also trading ahead of the S&P 500 over the same time frame.
Headquartered in Nashville, Tennessee, Pinnacle Financial is a bank
holding company and conducts its primary operations through its
wholly-owned subsidiary, Pinnacle National Bank. Incorporated in
2000, the company conducts its businesses through 29 offices in
eight Middle Tennessee counties and 3 offices in Knoxville. With a
market cap of approximately $663.7 million, Pinnacle Financial
competes with Farmers Capital Bank Corporation (FFKT) and ECB
Bancorp Inc. (ECBE), among others.
PINNACLE FIN PT (PNFP): Free Stock Analysis
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