Dear Fellow Shareholders,
Many banks spent 2024 hoping. They hoped for interest rate cuts, hoped the election would go their way, hoped for a better operating environment for their business.
We all know that hope is not a strategy. At Pinnacle, thankfully we have more than hope to rely on. A better word describes how we view 2024 now that it's in the rearview: Momentum.
We worked throughout the year continuing to build on our firm's ongoing momentum—our hiring pace and continued efforts to grow our balance sheet and, most importantly, revenue, fully diluted EPS and tangible book value per share, because these are three of the elements we believe result in elevated shareholder return. Our long-term track record with them has been strong, and in 2024 we continued that momentum.
- Q4
- Q3
- Q2
- Q1
*For a reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures, see the Business Insights page.
These metrics are a result of the simple formula we've run since our founding in 2000.
That's the formula that lifted us to be the No. 1 bank by deposits in Nashville by 2018 and fueled our expansion into some of the highest-growth markets in the country, like Atlanta, Jacksonville and Washington, D.C. And it's what has fueled shareholder returns that, over the history of our bank, have consistently outperformed our peers and other regional banks.
The reason Pinnacle has a strong track record of success in the metrics that matter most to shareholders is our similar track record with associates and clients. They are foundational. Each element of the formula builds on the success of its antecedent. That's how we designed this firm at the very beginning and why Pinnacle is still positioned to win.
| PNFP | KRX | Out-Performance | |
|---|---|---|---|
| Since IPO | 3420% | 20% | 3400% |
| 10 year | 189% | 51% | 138% |
| 5 year | 79% | 12% | 67% |
| 3 year | 20% | -5% | 25% |
| 1 year | 31% | 10% | 21% |
Momentum with Our People: Excited Associates are the Foundation of Our Success
Our success starts with our ability to attract and retain top talent to serve our clients. By cultivating an exceptional work environment, one where associates feel empowered, engaged and excited to contribute to Pinnacle's mission, our firm is a powerful magnet for high achievers with loyal client followings at more hidebound competitors.
In 2024, we demonstrated the power of this foundation with record-setting results in recruitment and another banner year for associate satisfaction and retention.
Sustaining a Great Work Environment
Pinnacle built on its reputation as one of the top employers in financial services, ranking No. 1 in nearly every market where we operate and reaching new heights in the national programs in which we compete, including:
to Work For
to Work For
for Women
for Millennials
See what it's like to be an associate at Pinnacle and what makes this such a great place to work.
Where People Want to Work
In 2024 alone, we successfully recruited 161 revenue-producing associates, a 50 percent increase over 2023, further evidence of our ongoing ability to attract top-tier talent. These associates bring with them not just expertise but also deep client relationships, which translate directly into long-term growth for our firm. Our associate retention rate of 94 percent remains unheard of for banks our size.
New Revenue Producers Hired
To Build on Our Momentum
The clients our newest associates brought to Pinnacle accounted for nearly $3 billion in loan growth, and our associates as a whole grew deposits by $4.3 billion, which we believe represents significant market share takeaway in 2024. Much of that comes from our strategic market extensions and growing specialties, both of which help free us from being overly dependent on the economy for growth. And those strategies are only possible because of our ability to attract and retain the talent to execute them at a high level.
Deposit Market Share*
- MSAs where we grew market share
- MSAs where we grew deposits
Our commitment to fostering a workplace culture that prioritizes people and building an environment where people love coming to work is a core part of why we believe Pinnacle is positioned to win. By investing in our culture and associates, we continue to position our clients for success, which we believe drives more value for shareholders.
Momentum in Client Engagement: Engaged Clients Drive Sustainable Growth
Success in banking comes as a result of relationships. It's not enough just to acquire clients. Loyalty is what leads to long-term, sustainable wins, and that loyalty must be earned by delivering on promises and giving them more than they could ever expect from any other financial partner.
In 2024, Pinnacle clients continued to honor us with their loyalty and business because of our consistent overperformance in the measures that matter most to them.
Distinctive Service
Every interaction between a bank and their client matters. Pinnacle once again achieved industry-leading Net Promoter Scores (NPS) and earned 30 Crisil Coalition Greenwich Best Bank Awards for small business and middle market banking—more than any other bank in the nation.
24 points above our nearest competitor
Small Business Banking
- Best Bank — Overall Satisfaction
- Best Bank — Trust
- Best Bank — Values Long-Term Relationships
- Best Bank — Customer Service
- Best Bank — Ease of Doing Business
- Best Bank — Likelihood to Recommend
- Best Bank — Satisfaction with RM
- Best Bank — Advisory Capabilities of RM
- Best Bank — Satisfaction in Cash Management
- Best Bank — Ease of Making Payments
- Best Bank — Product Capabilities in Cash Management
- Best Bank — Satisfaction in Cash Management (South Region)
- Best Bank — Likelihood to Recommend (South Region)
- Best Bank — Overall Satisfaction (South Region)
- Best Bank — Satisfaction with RM (South Region)
Middle Market Banking
- Best Bank — Overall Satisfaction
- Best Bank — Trust
- Best Bank — Values Long-Term Relationships
- Best Bank — Customer Service
- Best Bank — Ease of Doing Business
- Best Bank — Likelihood to Recommend
- Best Bank — Satisfaction with RM
- Best Bank — Advisory Capabilities of RM
- Best Bank — Satisfaction in Cash Management
- Best Bank — Ease of Making Payments
- Best Bank — Product Capabilities in Cash Management
- Best Bank — Satisfaction with RM (South Region)
- Best Bank — Satisfaction in Cash Management (South Region)
- Best Bank — Likelihood to Recommend (South Region)
- Best Bank — Overall Satisfaction (South Region)
Pinnacle leads the South in client perception and loyalty, including:
- Overall Satisfaction
- Ease of Doing Business
- Bank You Can Trust
- Values Long-term Relationships
Paired with Effective Advice
Clients tell us and third-party researchers that our financial advisors proactively provide advice, give insights they wouldn't otherwise have and are responsive and prompt, making us a bank they can trust.
Pinnacle leads the South in all Relationship Manager categories, including:
on Requests
Your Industry
Listen to these clients talk about how Pinnacle helped them reach their goals while making it easy to do business.
That Meets All Their Needs
Since Day One, we set out to meet all the client's needs. As we've grown, so have they, and we've been intentional about keeping pace. Our growing specialty loan and deposit programs continue to open new industry possibilities that bring aboard new business and give our long-standing clients more and better solutions to reach their goals.
Dive into Pinnacle's deposit specialties that have brought nearly $9 billion in funding to the firm.
While Making It Easy to Do Business
At $23.5 million in technology-related capital expenditures in 2024, we continue to grow our ability to serve clients. By combining competitive technology with our unbeatable service, we ranked No. 1 in our footprint for the overall digital experience, the capabilities of our cash management platform and the ability of our people to assist with it.
Pinnacle leads the South in all Cash Management categories but one, including:
Experience
Service
Capability
Capabilities
Pinnacle also leads the South in all Credit Process categories, including:
Extend Credit
Credit Process
Pricing
As we look ahead, our focus on the client experience won't change. It works, and we intend to continue building on the momentum that we have achieved from prioritizing people. It powered year-over-year deposit market share gains in 20 out of 27 MSAs measured by the FDIC* and cultivates loyalty that has historically allowed our performance to transcend rate changes and economic conditions--with shareholders reaping the rewards.
*As of June 30, 2024
Momentum in Our Returns: Sustained Growth Enriches Shareholders
Pinnacle's model doesn't just drive associate and client success—it delivers for shareholders again and again through consistent financial performance, strategic growth and disciplined capital management. Our ability to deliver returns to our investors is a result of our relentless focus on the metrics that we believe matter most to value creation: Revenue growth, fully diluted EPS growth and tangible book value per share growth.
In 2024, the core of our strategy to return value to shareholders again showed that Pinnacle has been a winning and advantaged stock since it was listed on NASDAQ in 2002.
Balance Sheet Growth
Without sustainable loan and deposit growth, it's incredibly difficult to reliably grow revenue, earnings and tangible book value per share. Strategic expansion fueled $2.6 billion in loan growth in 2024—even while we were intentionally focused on reducing our commercial real estate exposure—and deposits grew by $4.3 billion, which we believe showcases our ongoing ability to take a significant amount of market share from our vulnerable competitors.
Growth of Expansion Markets & Specialties
-
5.0years in the market
-
$1.7Bin loans+26.1%
-
$855.4Min deposits+33.1%
-
$43.4Min revenue
-
No. 25deposit market share
-
1.0years in the market
-
$138.9Min loans
-
$37.0Min deposits
-
$1.1Min revenue
- First year in operation
-
3.2years in the market
-
$760.0Min loans+95.7%
-
$1.6Bin deposits+79.9%
-
$24.6in revenue
-
No. 24deposit market share
-
3.5years in the market
-
$990.7Min loans+42.0%
-
$775.3Min deposits+25.4%
-
$26.5Min revenue
-
No. 22deposit market share in Birmingham
-
No. 11deposit market share in Huntsville
-
2.3years in the market
-
$426.8Min loans+31.1%
-
$323.3Min deposits+140.9%
-
$7.4Min revenue
-
No. 34deposit market share in Louisville
-
No. 12deposit market share in Bowling Green
-
$3.1Bin loans+23.0%
-
$8.7Bin deposits+34.1%
All loan and deposit numbers as of Dec. 31, 2024. Market share rankings based on FDIC data as of June 30, 2024.
That Fuels Revenue
Between 70-80 percent of our earnings will always be derived from the margin on our balance sheet volumes, and our net interest margin was 3.16 percent for the year. Fees from wealth management and other services added to our growing net interest income to result in more than $1.7 billion in total revenue for 2024.
Margin
Income
+8.2%
+15.4%
Services
+28.9%
+24.5%
To Drive EPS and TBV
Our key performance indicators for earnings growth show a reliable long-term track record with a steady trajectory. Looking just at the last five years, our CAGRs on revenue (12.5 percent), fully diluted EPS (37.3 percent) and tangible book value per share (11.1 percent) show Pinnacle as a consistent performer that we believe is positioned for continued growth.
- Q4
- Q3
- Q2
- Q1
For a reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures, see the Business Insights page.
While Protecting Our Assets
Nothing would be more damaging to EPS and TBV growth than outsized loan losses. Loan quality statistics confirm the ongoing strength of our loan portfolio. Net charge offs in 2024 were 0.23 percent, and our classified asset ratio and non-performing asset ratio were 3.8 percent and 0.42 percent, respectively.
- Q4
- Q3
- Q2
- Q1
Looking ahead, our focus remains on accelerating our momentum—driving profitable growth, enhancing shareholder value and extending our track record of long-term outperformance versus our peers. Our ability to sustain and build upon the success of 2024 should position Pinnacle to capture even greater market share, expand our balance sheet size and strength and further amplify returns. With a relentless focus on strategic execution and financial discipline, we believe we are well positioned to turn today's momentum into tomorrow's sustained success.
Momentum Positions Us to Win
Many worry that our extraordinary growth over our first quarter century cannot be sustained. But as we close out another year, one thing is clear to us: Pinnacle's momentum rolls on. The foundation we have built over the past 25 years continues to fuel growth that is building a future as promising as our past.
Setting a record for revenue producers hired in 2024 is the strongest predictor of ongoing momentum in 2025. With an aggressive hiring goal for the coming year, we expect continued expansion, market share gains and further momentum for long-term success.
A Clear Path Forward
- We will continue to attract and retain top talent, reinforcing the core of our differentiated model.
- Our focus remains on growing revenue through both fees and net interest income made possible by new client acquisition and growing relationship depth and breadth.
- We target top-quartile performance among our peers for growth in EPS and tangible book value per share.
- We expect to a healthy credit backdrop that contributes to stability while pursuing strategic expansion.
Macroeconomic factors will continue to evolve, and many expect a robust economy going forward. But as we demonstrated in 2024, even absent a robust economic environment, it is our disciplined approach, our commitment to investing in our people and markets and our laser focus on execution that give us confidence in the opportunities ahead. And for this reason, we believe Pinnacle continues to be well positioned to win.
Onward!
M. Terry Turner
President and CEO
Robert A. McCabe, Jr.
Chairman