October 17, 2012
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of regional bank Pinnacle Financial Partners (Nasdaq: PNFP ) , the parent company of Pinnacle National Bank, rose as much as 12% after reporting better-than-expected third-quarter results.
So what: For the quarter, Pinnacle Financial reported net income of $0.33, which was a clean $0.03 higher than Wall Street's consensus expectation, but was a sizable reduction from last year's net income which was aided by a tax benefit. Non-interest income and net interest margin both increased year-over-year while non-performing assets were reduced by 11.9% over the prior quarter. However, it's worth noting that total deposits actually fell slightly year over year.
Now what: Today's earnings report is definitely good news in that Pinnacle is focused very intently on cleaning up its balance sheet, but I'd caution that this is still a work in progress -- don't get too excited. Valued at roughly 16 times forward earnings, Pinnacle doesn't exactly scream undervalued, and it's likely a few quarters away from refocusing its efforts away from its non-performing assets and just getting back to growing once again.
Craving more input? Start by adding Pinnacle Financial Partners to your free and personalized watchlist so you can keep up on the latest news with the company.