Senior Economic & Market Analyst, Pinnacle Finl Partners
Search every verified Mac Johnston interview, podcast appearance, and on-the-record quote — each transcript cross-checked by AI and human review to confirm speaker identity. Mac Johnston, Senior Economic & Market Analyst at Pinnacle Financial Partners, appeared on CNBC's "Money Movers" on September 17, 2024, alongside CEO Terry Turner. During the interview, Turner discussed the company's Q4 earnings and real estate loans, explaining that Pinnacle's incentive plan includes 100% of salary-based associates and is tied to hitting revenue and EPS targets. He noted that in 2023, a difficult year for banks, the company reduced incentives by 38%, which was harvested into the earnings stream. Turner stated that for regional banks, Pinnacle's commercial real estate exposure is "pretty well in line" with regulatory guidelines, and that the company is "well underneath" the 100% and 300% risk-based capital thresholds for construction and total commercial real estate, respectively. Turner also addressed credit conditions, saying the company's internal main scenario is a "soft landing" rather than a serious recession. He emphasized the strength of the Southeastern markets, attributing it to population migration trends, and noted that three of four U.S. quadrants have negative net growth while the Southeast has positive growth. He contrasted the health of Pinnacle's commercial real estate portfolio in the Southeast with markets like San Francisco or New England, citing strong growth since 2020.
“We run an incentive plan here that's different than every bank I know specifically, 100% of the salary-based associates are included in that incentive plan, so when we give guidance, we include that incentive payout. The way that gets paid is based on us hitting revenue targets and EPS targets.”
“It's our belief we will grow EPS. I think, again, one of the dynamics there, Leslie, is just to illustrate how it works, 2023 is a difficult year for banks. We reduced our incentives by 38% this year, and so that ends up being harvested into the earnings stream of the company.”
“We have really, I think for regional banks, we're pretty well in line. Regulators use a guideline of 100% of risk-based capital for construction credit, 300% of risk-based capital for total commercial real estate. We're well underneath all of those guidelines.”
“The markets that we operate here in the Southeast are significantly different than what I see in San Francisco or New England or some of these other markets. We've enjoyed really strong growth since 2020, which is a very different dynamic and plays out in the health of the commercial real estate portfolio.”
Terry Turner, Pinnacle Financial Partners CEO, joins 'Money Movers' to discuss Turner's expectations for the company's expenses ...
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