Pinnacle Financial Partners Inc (NASDAQ:PNFP) stock fell 1.99% (As on April 18, 11:13:30 AM UTC-4, Source: Google Finance) after the company posted mixed result for the first quarter of FY 23. Net interest income for the quarter ended March 31, 2023 was $312.2 million, compared to $319.5 million for the fourth quarter of 2022 and $239.5 million for the first quarter of 2022, a year-over-year growth rate of 30.4 percent. Revenues from PPP loans approximated $20,000 in the first quarter of 2023, compared to $72,000 in the fourth quarter of 2022 and $10.7 million in the first quarter of 2022. At March 31, 2023, remaining unamortized fees for PPP loans were approximately $212,000. Included in net interest income for the first quarter of 2023 was $852,000 of discount accretion associated with fair value adjustments, compared to $1.2 million of discount accretion recognized in the fourth quarter of 2022 and $1.7 million in the first quarter of 2022.

Moreover, during the first quarter of 2023, BHG increased loans held on its balance sheet by approximately $225.1 million. BHG also successfully completed its seventh securitization transaction in the first quarter of 2023 which amounted to approximately $265 million in balance sheet funding during a time when such funding was difficult to obtain. Loan originations decreased to $1.0 billion in the first quarter of 2023 compared to $1.1 billion in the fourth quarter of 2022. Again, originations decreased primarily due to BHG continuing to tighten its underwriting and as it sought to increase the quality of its originations. BHG increased its reserves for on-balance sheet loan losses to $178 million, or 5.19 percent of loans held for investment at March 31, 2023, compared to 4.59 percent at Dec. 31, 2022. BHG also increased its accrual for losses attributable to loan substitutions and prepayments for loans previously sold through its community bank auction platform to $350 million, or 5.81 percent of the loans that have been previously sold and were unpaid, at March 31, 2023 compared to 5.66 percent at Dec. 31, 2022.

PNFP in the first quarter of FY 23 has reported the adjusted earnings per share of $1.76, beating the analysts’ estimates for the adjusted earnings per share of $1.72. The company had reported the adjusted revenue growth of 17.1 percent to $401.8 million in the first quarter of FY 23, missing the analysts’ estimates for revenue of $421.2 million.