Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) Q2 2023 Earnings Call Transcript

Harold Carpenter: I don’t, but I can get that for you, Brody, and I’ll get it to you.

Rudy Preston: Awesome. I appreciate it. And then just last one, just I think you might have touched on it earlier, but I’m sorry if I misheard you. Just the increase in the CRE reserve. Was there anything like — was there any specific kind of metric that drove that increase within your CRE model just because it had been declining for the last several quarters?

Harold Carpenter: No, I can’t point to any kind of — anything specific in the CRE book. There’s no individual loans in there that contributed to it or anything like that. I don’t know of anything.

Rudy Preston: I was more interested, Harold, within the ACL modeling if there was any specific variable where maybe there was a larger price decline that you were factoring in within the ACL modeling. I just — that’s what I was more getting at.

Harold Carpenter: So I really — I don’t know the answer to that question if there was one. I don’t think there is one.

Operator: The next question is coming from Brian Martin from Jonnie Montgomery.

Brian Martin: Most of my stuff was just asked on the last couple of questions. But just one thing, Harold, you gave a spot rate on, I think, deposits. Just do you have what the spot rate was on the margin at the end of the quarter? Or just — it just sounds as though it’s going to — you’ve talked about the dollars of net interest income, but just the margin itself is going to drop the next couple of quarters and maybe stabilize later in the year? Is that based on kind of your outlook on rates today, is that fair?

Harold Carpenter: Yes, that’s fair. I don’t have monthly financial information in front of me. But we think it’s going to — the margin will decline over the next couple of quarters. But again, our focus is on that net interest income number that we think is flat to up.

Brian Martin: Yes. Got you. Okay. And the liquidity normalizes by end of year. That’s kind of what you’re suggesting that six to seven months or so?

Harold Carpenter: Yes. I think we’ll be close by the end of the year.

Brian Martin: Okay. All right. And then just last two. Just on BHG, just kind of — the outlook narrowed a little bit more. Just as we think about ’24, any high-level how we should be thinking about BHG next year, Harold, with — depending on how these losses potentially play out or I don’t know, CECL is in there?

Harold Carpenter: Yes. I would not — first of all, we’re not giving guidance on 2024. But at the same time, I think BHG’s outsized growth rates from — over the last several years and depending on which one you look at, I think they’ll become a lot more normalized going into 2024.

Operator: And we have another question coming in from Jared Shaw from Wells Fargo.