10 Bank Stocks Beating Analysts' Price Targets

5. Pinnacle Financial Partners

Shares of Pinnacle Financial Partners (PNFP) of Nashville, Tenn., closed at $14.04 Monday, returning 3% year-to-date. The shares were 18% higher than the consensus price target of $11.89 at the end of last year.

The company had $4.9 billion in total assets as of Sept. 30, with 33 branches in the Nashville and Knoxville areas in Tennessee.

The company owes $95 million in TARP money.

Third-quarter net income available to common shareholders was $24.5 million, or 72 cents a share, boosted by a $17 million income tax benefit. Excluding the recapture of deferred tax assets, third-quarter earnings would have been 21 cents a share, increasing from two cents a share a year earlier.

Third-quarter results also reflected a 6% year-over-year increase in net interest income to $38.4 million and a decline in the provision for loan losses to $3.6 million from $4.9 million a year earlier. The third-quarter net interest margin was 3.60%, improving from 3.23% in the third quarter of 2010.

Total noninterest income during the third quarter increased to $10.1 million from $8.6 million in the third quarter of 2010, with a 38% increase in investment services income to $1.7 million.

Meanwhile, total noninterest expenses declined to $35.7 million in the third quarter, from $37.8 million a year earlier, with declines in expenses on repossessed real estate, as well as on expenses on equipment and occupancy, more than offsetting an 18% year-over-year increase in salary and benefits expenses, which were $19.0 million.

FIG Partners analyst Christopher Marinac has a "Market Perform" rating on Pinnacle Financial Partners, with a $15.50 price target, saying in October after the company's third-quarter results were announced that "solid progress continued to be made on improving credit and growing the core earnings power of the bank," with "the two key levers impacting earnings power [being] accelerating loan volumes and margin expansion."

The shares trade for just under 19 times the consensus 2012 EPS estimate of 72 cents among analysts polled by FactSet, and for 1.3 times tangible book value, according to SNL.

Two out of 10 analysts covering Pinnacle Financial Partners rate the shares a buy, while the remaining analysts all have neutral ratings.

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