Docoh
Loading...

PNFP Pinnacle Financial Partners

Filed: 20 Jul 21, 5:17pm

image2.jpg
FOR IMMEDIATE RELEASE
MEDIA CONTACT:Joe Bass, 615-743-8219
FINANCIAL CONTACT:Harold Carpenter, 615-744-3742
WEBSITE: www.pnfp.com

PNFP REPORTS DILUTED EPS OF $1.69, ROAA OF 1.46% AND ROTCE OF 17.32% FOR 2Q2021
Net interest income grew 18.6% annualized and fee income grew 23.7% annualized

NASHVILLE, TN, July 20, 2021 - Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.69 for the quarter ended June 30, 2021, compared to net income per diluted common share of $0.83 for the quarter ended June 30, 2020, an increase of approximately 104 percent. Excluding gains and losses on the sale of investment securities and ORE expense for the three months ended June 30, 2021 and 2020 and FHLB restructuring charges for the three months ended June 30, 2020, net income per diluted common share was $1.68 for the three months ended June 30, 2021, compared to $0.89 for the three months ended June 30, 2020, a year-over-year increase of nearly 89 percent.
Net income per diluted common share was $3.30 for the six months ended June 30, 2021, compared to net income per diluted common share of $1.20 for the six months ended June 30, 2020, an increase of 175 percent. Excluding gains and losses on the sale of investment securities and other real estate (ORE) expense for the six months ended June 30, 2021 and 2020 and FHLB restructuring charges for the six months ended June 30, 2020, net income per diluted common share was $3.29 in 2021, compared to $1.28 in 2020, a year-over-year increase of 157 percent.
“Second quarter was another outstanding quarter for our firm," said M. Terry Turner, Pinnacle's president and chief executive officer. "We continued to exploit opportunities to hire leading revenue producers from many of the larger institutions in our markets as we added 36 revenue producers during the quarter. This brings our total revenue producers onboarded in the last two and a half years to 216 associates. Within that, we now have 15 revenue producers located in Atlanta, and our recent announcements in Huntsville and Birmingham include seven revenue producers. Across our entire franchise, approximately 25 percent of our revenue producers have been with our firm for less than two and a half years, all while maintaining an overall associate retention rate of 93 percent, which we expect to result in significant incremental revenue growth as these new associates introduce their clients to our award-winning service.
"The impact of our previous hiring successes appear evident in our second quarter’s performance for key metrics. While total loans declined 0.8 percent on a linked quarter basis, after excluding the $848.5 million reduction of PPP loans, our remaining loans grew 12.6 percent on a linked-quarter annualized basis. Linked-quarter annualized core deposit growth was 14.2 percent. Year-over-year growth in wealth management fees was 35.4 percent. And linked-quarter annualized growth in revenue per share was 19.2 percent. Not only are we optimistic about the impact our hiring to date will have on key growth metrics going forward, we also expect to continue attracting many of the best bankers in our markets in order to further propel our growth going forward."





1


BALANCE SHEET GROWTH:
Loans at June 30, 2021 were $22.9 billion, an increase of approximately $377.6 million from June 30, 2020, reflecting year-over-year growth of 1.7 percent. Loans at June 30, 2021 decreased approximately $188.8 million from March 31, 2021.
Loans at June 30, 2021 include approximately $1.4 billion of loans issued pursuant to the Small Business Administration’s (SBA’s) Paycheck Protection Program (PPP) compared to $2.2 billion at both June 30, 2020 and March 31, 2021. The average yield on these loans was 5.47 percent for the second quarter of 2021, inclusive of $21.3 million of loan fee accretion recognized during the quarter. At June 30, 2021, $47.7 million in SBA PPP loan fees remained, which should be accreted into net interest income over the next year as these loans are repaid and/or are forgiven under the PPP.
PPP loans decreased by $848.5 million between March 31, 2021 and June 30, 2021.
Excluding PPP loans, total loans increased by $659.7 million during the same period, or 12.6 percent on an annualized basis.
Average loans were $23.2 billion for the three months ended June 30, 2021, up $331.7 million from the three months ended March 31, 2021, a linked-quarter annualized growth rate of 5.8 percent.
Excluding the impact of $1.9 billion of average PPP loans outstanding during the three months ended June 30, 2021 and $2.1 billion during the three months ended March 31, 2021, average loans were $21.3 billion for the three months ended June 30, 2021, up $467.2 million from $20.8 billion for the three months ended March 31, 2021, a linked-quarter annualized growth rate of 9.0 percent.
At June 30, 2021, the remaining discount associated with fair value accounting adjustments on acquired loans was $20.6 million, compared to $24.0 million at March 31, 2021.
Deposits at June 30, 2021 were $28.2 billion, an increase of $2.7 billion from June 30, 2020, reflecting year-over-year growth of 10.6 percent. Deposits at June 30, 2021 decreased $75.3 million from March 31, 2021, reflecting a linked-quarter annualized rate of decline of 1.1 percent.
Average deposits were $28.0 billion for the three months ended June 30, 2021, compared to $27.6 billion for the three months ended March 31, 2021, a linked-quarter annualized growth rate of 5.7 percent.
Core deposits were $25.9 billion at June 30, 2021, compared to $21.4 billion at June 30, 2020 and $25.0 billion at March 31, 2021. The linked-quarter annualized growth rate of core deposits in the second quarter of 2021 was 14.2 percent.
“During the second quarter, PPP loans decreased $848.5 million as our relationship managers have been on offense with borrowers to encourage them to accelerate their forgiveness applications with the SBA,” Turner said. “It is our hope that as many borrowers as possible will seek forgiveness for their PPP loans prior to year end.”

REVENUES:
Revenues for the quarter ended June 30, 2021 were $331.4 million, an increase of $15.8 million from the $315.6 million recognized in the first quarter of 2021, a linked-quarter annualized growth rate of 20.1 percent. Revenues were up $57.8 million from the second quarter of 2020, a year-over-year growth rate of 21.1 percent.
Revenue per fully diluted common share was at an all-time record of $4.37 for the three months ended June 30, 2021, compared to $4.17 for the first quarter of 2021 and $3.63 for the second quarter of 2020, a 20.4 percent year-over-year growth rate.
2


Net interest income for the quarter ended June 30, 2021 was $233.2 million, compared to $222.9 million for the first quarter of 2021 and $200.7 million for the second quarter of 2020, a year-over-year growth rate of 16.2 percent. Net interest margin was 3.08 percent for the second quarter of 2021, compared to 3.02 percent for the first quarter of 2021 and 2.87 percent for the second quarter of 2020.
Impacting the firm’s net interest margin in the first and second quarters of 2021 and the second quarter of 2020 were both the PPP loans and the firm’s decision to maintain additional on-balance sheet liquidity as a result of the COVID-19 pandemic. The firm estimates its second quarter 2021 net interest margin was negatively impacted by approximately 17 basis points as a result of PPP loans and additional liquidity, compared to approximately 27 basis points for the first quarter of 2021 and 32 basis points for the second quarter 2020.
Included in net interest income for the second quarter of 2021 was $3.3 million of discount accretion associated with fair value adjustments, compared to $3.8 million of discount accretion recognized in the first quarter of 2021 and $5.8 million in the second quarter of 2020. The firm's net interest margin was positively impacted by approximately 5 basis points, 4 basis points and 8 basis points, respectively, because of fair value adjustment discount accretion in each of the first and second quarters of 2021 and the second quarter of 2020. There remains $13.6 million of purchase accounting discount accretion as of June 30, 2021.
Noninterest income for the quarter ended June 30, 2021 was $98.2 million, compared to $92.7 million for the quarter ended March 31, 2021, a linked-quarter annualized increase of 23.7 percent. Compared to $73.0 million for the second quarter of 2020, noninterest income grew 34.6 percent year-over-year.
Wealth management revenues, which include investment, trust and insurance services, were $16.5 million for the second quarter of 2021, compared to $16.1 million for the first quarter of 2021, a linked-quarter annualized increase of 9.0 percent. Compared to $12.2 million for the second quarter of 2020, wealth management revenues were up 35.4 percent.
Income from the firm's investment in BHG was $32.1 million for the quarter ended June 30, 2021, up from $29.0 million for the quarter ended March 31, 2021 and $17.2 million for the quarter ended June 30, 2020.
Net gains on mortgage loans sold were $6.7 million during the quarter ended June 30, 2021, down from $13.7 million for the quarter ended March 31, 2021. Net gains on mortgage loans sold were down 65.8 percent from $19.6 million during the quarter ended June 30, 2020. This dramatic year-over-year decline is reflective of market conditions during the periods.
Other noninterest income was $33.7 million for the quarter ended June 30, 2021, compared to $25.7 million for the quarter ended March 31, 2021 and $17.2 million for the quarter ended June 30, 2020, a linked-quarter annualized increase of 124.8 percent and year-over-year growth of 95.9 percent. Contributing to this growth were $7.0 million in gains on other equity investments during the three months ended June 30, 2021 compared to gains of $3.4 million for the three months ended March 31, 2021 and losses of $278,000 during the three months ended June 30, 2020. Additionally, income from SBA loan sales increased by $2.0 million over the first quarter of 2021.

“Our net interest margin improved to 3.08 percent in the second quarter of 2021, compared to 3.02 percent for the first quarter of 2021,” Carpenter said. “Several factors contributed to this quarterly increase including increased PPP revenues, core loan growth, continued reduction in deposit pricing and an overall decrease in cash liquidity. Overall loan yields held steady at 4.11 percent in the second quarter. Excluding the impact of PPP loan yields, which had an average yield of 5.12 percent, loan
3


yields decreased by 9 basis points in the second quarter of 2021, which offset a 6 basis points decrease in deposit rates. Maintaining our loan yields will continue to be a focus item for us going into the last half of 2021. Fortunately, we believe further reductions in deposit rates are likely as well.
“Additionally, second quarter was another strong fee quarter for our firm. BHG is performing at exceptional levels and, we believe, creating substantial franchise value. Mortgage did experience a linked-quarter decline of $7.0 million this quarter as rates began to fluctuate and the absolute volume of originations retreated in comparison to the impressive amount of business produced over the last several quarters. Additionally, our equity investments in other businesses had several big wins in the second quarter of 2021 with these investments contributing $3.6 million in incremental second quarter revenues.”

PROFITABILITY:
Return on average assets was 1.46 percent for the second quarter of 2021, compared to 1.42 percent for the first quarter of 2021 and 0.77 percent for the second quarter of 2020. Second quarter 2021 return on average tangible assets amounted to 1.55 percent, compared to 1.50 percent for the first quarter of 2021 and 0.81 percent for the second quarter of 2020.
Excluding the adjustments described above for both the three months ended June 30 and March 31, 2021 and the three months ended June 30, 2020, return on average assets was 1.46 percent for the second quarter of 2021, compared to 1.42 percent for the first quarter of 2021 and 0.82 percent for the second quarter of 2020. Likewise, excluding those same adjustments, the firm’s return on average tangible assets was 1.54 percent for the second quarter of 2021, compared to 1.50 percent for the first quarter of 2021 and 0.87 percent for the second quarter of 2020.
Return on average equity for the second quarter of 2021 amounted to 10.19 percent, compared to 9.96 percent for the first quarter of 2021 and 5.58 percent for the second quarter of 2020. Excluding preferred stockholders' equity for each of the three months ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively, return on average common equity for the second quarter of 2021 amounted to 10.65 percent, compared to 10.41 percent for the first quarter of 2021 and 5.66 percent for the second quarter of 2020. Second quarter 2021 return on average tangible common equity amounted to 17.32 percent, compared to 17.16 percent for the first quarter of 2021 and 9.77 percent for the second quarter of 2020.
Excluding the adjustments described above for both the three months ended June 30 and March 31, 2021 and the three months ended June 30, 2020, return on average tangible common equity amounted to 17.22 percent for the second quarter of 2021, compared to 17.16 percent for the first quarter of 2021 and 10.45 percent for the second quarter of 2020.

“Again, we are pleased with our second quarter profitability metrics,” said Harold R. Carpenter, Pinnacle’s chief financial officer. “During the second quarter, we were able to execute on various tactics that we believe should positively impact our profitability in the future. We deployed a modest amount of our liquidity into investment securities and redeemed approximately $950 million of wholesale funding during the quarter. We also anticipate redeeming $130 million in bank-level subordinated indebtedness in late July 2021, using our on-balance sheet liquidity which will also result in reduced funding costs going forward.
“As has been previously disclosed, tangible book value per share accretion is an additional component of our equity incentive compensation plans for the firm’s leadership. Obviously, our reasoning for making this change is to focus our associates on delivering even stronger tangible book value per share growth in the future, which we believe should translate to increased shareholder returns. Accordingly, we are pleased to report that our book value per share has grown from $61.80 at the end of 2020
4


to $64.19 at June 30, 2021, an annualized growth rate of 7.7 percent thus far this year and a five-year cumulative annual growth rate of 15.0 percent and our tangible book value per share has grown from $37.25 at the end of 2020 to $39.77 at June 30, 2021, an annualized growth rate of 13.5 percent thus far this year and a five-year cumulative annual growth rate of 15.1 percent.”

MAINTAINING A STRONG BALANCE SHEET:
Net charge-offs were $10.0 million for the quarter ended June 30, 2021, compared to $11.4 million for the quarter ended March 31, 2021 and $5.4 million for the quarter ended June 30, 2020. Annualized net charge-offs as a percentage of average loans for the quarter ended June 30, 2021 were 0.17 percent, compared to 0.20 percent for the quarter ended March 31, 2021 and 0.10 percent for the quarter ended June 30, 2020.
Nonperforming assets were 0.27 percent of total loans and ORE at June 30, 2021, compared to 0.36 percent at March 31, 2021 and 0.38 percent at June 30, 2020. Nonperforming assets were $62.7 million at June 30, 2021, compared to $82.8 million at March 31, 2021 and $84.7 million at June 30, 2020.
The classified asset ratio at June 30, 2021 was 6.8 percent, compared to 7.3 percent at March 31, 2021 and 11.2 percent at June 30, 2020. Classified assets were $233.8 million at June 30, 2021, compared to $244.9 million at March 31, 2021 and $338.4 million at June 30, 2020.
The allowance for credit losses represented 1.20 percent of total loans at June 30, 2021, compared to 1.22 percent at March 31, 2021 and 1.27 percent at June 30, 2020. Excluding PPP loans, the allowance for credit losses as a percentage of total loans was 1.27 percent at June 30, 2021 compared to 1.35 percent at March 31, 2021 and 1.41 percent at June 30, 2020.
The ratio of the allowance for credit losses to nonperforming loans at June 30, 2021 was 515.5 percent, compared to 389.4 percent at March 31, 2021 and 456.1 percent at June 30, 2020.
Provision for credit losses was $2.8 million in the second quarter of 2021, compared to $7.2 million in the first quarter of 2021 and $68.3 million in the second quarter of 2020.

“Our credit performance throughout COVID-19 has been remarkable,” Carpenter said. “Our relationship managers and credit officers have worked tirelessly over the last year to protect our firm from avoidable losses and to assist our borrowers in navigating through an extremely difficult time. Our relationship-based business model has also given us opportunities to work with borrowers, particularly those that were most impacted by COVID-19. Net charge-offs as a percentage of average loans for the second quarter of 2021 were slightly less than net charge-offs for the first quarter. Our allowance for credit losses decreased to 1.20 percent at June 30, 2021, which was 0.02 percent less than the same ratio at March 31, 2021. As the economy continues to recover from COVID-19, we believe the reduction in this ratio will continue for the next several quarters.”

OPERATING LEVERAGE AND OTHER HIGHLIGHTS:
The firm's efficiency ratio for the second quarter of 2021 was 50.1 percent, compared to 49.0 percent for the first quarter of 2021 and 48.1 percent in the second quarter of 2020. The ratio of noninterest expenses to average assets was 1.90 percent for the second quarter of 2021, compared to 1.81 percent in the first quarter of 2021 and 1.61 percent in the second quarter of 2020.
Excluding the adjustments described above for both the three months ended June 30 and March 31, 2021 and the three months ended June 30, 2020, the efficiency ratio was 50.4 percent for the second quarter of 2021, compared to 49.0 percent for the first quarter of 2021 and 46.0 percent for the second quarter of 2020. Excluding ORE expense for 2021 and 2020 and FHLB restructuring charges for 2020, the ratio of noninterest
5


expense to average assets was 1.91 percent for the second quarter of 2021, compared to 1.81 percent for the first quarter of 2021 and 1.54 percent for the second quarter of 2020.
Noninterest expense for the quarter ended June 30, 2021 was $166.1 million, compared to $154.7 million in the first quarter of 2021 and $131.6 million in the second quarter of 2020, reflecting a year-over-year increase of 26.2 percent. Excluding ORE expense for 2021 and 2020, and FHLB restructuring charges for 2020, noninterest expense for the second quarter of 2021 increased 32.5 percent over the second quarter of 2020 and 7.8 percent over the first quarter of 2021.
Salaries and employee benefits were $110.8 million in the second quarter of 2021, compared to $102.7 million in the first quarter of 2021 and $73.9 million in the second quarter of 2020, reflecting a year-over-year increase of 50.0 percent.
Incentive costs related to the firm’s annual cash incentive plan amounted to approximately $25.5 million in the second quarter of 2021, compared to $18.2 million in the first quarter of 2021 and $573,000 in the second quarter of 2020.
Incentive costs related to the Company’s equity compensation plans amounted to approximately $5.7 million in the second quarter of 2021 compared to $5.4 million in the first quarter of 2021 and $4.1 million in the second quarter of 2020.
Noninterest expense categories, other than salaries and employee benefits, were $55.3 million in the second quarter of 2021, compared to $52.0 million in the first quarter of 2021 and $57.7 million in the second quarter of 2020, reflecting a year-over-year decrease of 4.2 percent.
The effective tax rate for the second quarter of 2021 was 18.9 percent, compared to 18.4 percent for the first quarter of 2021 and 15.2 percent for the second quarter of 2020.

“Expenses increased by $11.4 million over the first quarter of 2021,” Carpenter said. “The increase was related to our incentive accruals. Given our performance in the first two quarters of 2021 and our outlook for the remainder of 2021, we increased our accrual to the maximum payout for our annual cash plan and increased our equity incentive accruals slightly. Our current estimates are that total expenses for the third and fourth quarters of 2021 should be flat to down from the amounts reported in the second quarter of 2021, inclusive of our increased investments in Atlanta, Huntsville and Birmingham, which we believe will also contribute to the ongoing positive operating leverage resulting from our ability to onboard such a large number of market-leading revenue producers.”

BOARD OF DIRECTORS DECLARES DIVIDENDS
On July 20, 2021, Pinnacle Financial's Board of Directors approved a quarterly cash dividend of $0.18 per common share to be paid on Aug. 27, 2021 to common shareholders of record as of the close of business on Aug. 6, 2021. Additionally, the Board of Directors approved a quarterly dividend of approximately $3.8 million, or $16.88 per share (or $0.422 per depositary share), on Pinnacle Financial's 6.75 percent Series B Non-Cumulative Perpetual Preferred Stock payable on Sept. 1, 2021 to shareholders of record at the close of business on Aug. 17, 2021. The amount and timing of any future dividend payments to both preferred and common shareholders will be subject to the approval of Pinnacle's Board of Directors.

WEBCAST AND CONFERENCE CALL INFORMATION
Pinnacle will host a webcast and conference call at 8:30 a.m. CT on July 21, 2021, to discuss second quarter 2021 results and other matters. To access the call for audio only, please call 1-877-602-7944. For the presentation and streaming audio, please
6


access the webcast on the investor relations page of Pinnacle's website at www.pnfp.com.
For those unable to participate in the webcast, it will be archived on the investor relations page of Pinnacle's website at www.pnfp.com for 90 days following the presentation.
Pinnacle Financial Partners provides a full range of banking, investment, trust, mortgage and insurance products and services designed for businesses and their owners and individuals interested in a comprehensive relationship with their financial institution. The firm is the No. 1 bank in the Nashville-Murfreesboro-Franklin MSA, according to 2020 deposit data from the FDIC. Pinnacle earned a spot on the 2021 list of 100 Best Companies to Work For® in the U.S., its fifth consecutive appearance. American Banker recognized Pinnacle as one of America’s Best Banks to Work For eight years in a row and No. 1 among banks with more than $10 billion in assets in 2020.
Pinnacle owns a 49 percent interest in Bankers Healthcare Group (BHG), which provides innovative, hassle-free financial solutions to healthcare practitioners and other licensed professionals. Great Place to Work and FORTUNE ranked BHG No. 1 on its 2020 list of Best Workplaces in New York State in the small/medium business category.
The firm began operations in a single location in downtown Nashville, TN in October 2000 and has since grown to approximately $35.4 billion in assets as of June 30, 2021. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 14 primarily urban markets across the Southeast.
Additional information concerning Pinnacle, which is included in the Nasdaq Financial-100 Index, can be accessed at www.pnfp.com.
###
7


Forward-Looking Statements
All statements, other than statements of historical fact, included in this press release, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "expect," "anticipate," "intend," "may," "should," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: (i) deterioration in the financial condition of borrowers of Pinnacle Bank and its subsidiaries or BHG resulting in significant increases in loan losses and provisions for those losses and, in the case of BHG, substitutions; (ii) the effects of new outbreaks of COVID-19, including actions taken by governmental officials to curb its spread, and the resulting impact on general economic and financial market conditions and on Pinnacle Financial's and its customers' business, results of operations, asset quality and financial condition; (iii) the speed with which the COVID-19 vaccines can be widely distributed, decisions of governmental agencies to pause the use of one or more vaccines, those vaccines' efficacy against the virus, including new variants and public acceptance of the vaccines; (iv) the failure of announced or anticipated stimulus programs to be timely approved, or approved at all, or the failure of such programs to provide sufficient relief when approved, and the resulting impact on the economy and our customers and their businesses; (v) the inability of Pinnacle Financial, or entities in which it has significant investments, like BHG, to maintain the long-term historical growth rate of its, or such entities', loan portfolio; (vi) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (vii) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower-quality assets; (viii) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on Pinnacle Financial’s results, including as a result of compression to net interest margin; (ix) adverse conditions in the national or local economies including in Pinnacle Financial's markets throughout Tennessee, North Carolina, South Carolina, Georgia, Alabama and Virginia, particularly in commercial and residential real estate markets; (x) fluctuations or differences in interest rates on loans or deposits from those that Pinnacle Financial is modeling or anticipating, including as a result of Pinnacle Bank's inability to better match deposit rates with the changes in the short-term rate environment, or that affect the yield curve; (xi) the results of regulatory examinations; (xii) Pinnacle Financial's ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions; (xiii) difficulties and delays in integrating acquired businesses or fully realizing costs savings and other benefits from acquisitions; (xiv) BHG's ability to profitably grow its business and successfully execute on its business plans; (xv) risks of expansion into new geographic or product markets; (xvi) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits, including during times when Pinnacle Bank is seeking to lower rates it pays on deposits; (xvii) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including goodwill or other intangible assets; (xviii) the ineffectiveness of Pinnacle Bank's hedging strategies, or the unexpected counterparty failure or hedge failure of the underlying hedges; (xix) reduced ability to attract additional financial advisors (or failure of such advisors to cause their clients to switch to Pinnacle Bank), to retain financial advisors (including as a result of the competitive environment for associates) or otherwise to attract customers from other financial institutions; (xx) deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xxi) inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies, required capital maintenance levels or regulatory requests or directives, particularly if Pinnacle Bank's level of applicable commercial real estate loans were to exceed percentage levels of total capital in guidelines recommended by its regulators; (xxii) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xxiii) the vulnerability of Pinnacle Bank's network and online banking portals, and the systems of parties with whom Pinnacle Bank contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (xxiv) the possibility of increased compliance and operational costs as a result of increased regulatory oversight (including by the Consumer Financial Protection Bureau), including oversight of companies in which Pinnacle Financial or Pinnacle Bank have significant investments, like BHG, and the development of additional banking products for Pinnacle Bank's corporate and consumer clients; (xxv) the risks associated with Pinnacle Financial and Pinnacle Bank being a minority investor in BHG, including the risk that the owners of a majority of the equity interests in BHG decide to sell the company or all or a portion of their ownership interests in BHG (triggering a similar sale by Pinnacle Financial and Pinnacle Bank) if not prohibited from doing so by Pinnacle Financial or Pinnacle Bank; (xxvi) the possibility of increased personal or corporate tax rates and the resulting reduction in our and our customers' businesses as a result of any such increases; (xxvii) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (xxviii) the availability of and access to capital; (xxiv) adverse results (including costs, fines, reputational harm, inability to obtain necessary approvals and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of Pinnacle Bank's participation in and execution of government programs related to the COVID-19 pandemic; and (xxx) general competitive, economic, political and market conditions. Additional factors which could affect the forward looking statements can be found in Pinnacle Financial's Annual Report on Form 10-K for the year ended December 31, 2020, and subsequently filed Quarterly Reports on Form 10-Q
8


and Current Reports on Form 8-K filed with the SEC and available on the SEC's website at http://www.sec.gov. Pinnacle Financial disclaims any obligation to update or revise any forward-looking statements contained in this press release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Matters
This release contains certain non-GAAP financial measures, including, without limitation, earnings per diluted common share, efficiency ratio and the ratio of noninterest expense to average assets, excluding in certain instances the impact of expenses related to other real estate owned, gains or losses on sale of investment securities, FHLB restructuring charges, hedge termination charges and other matters for the accounting periods presented. This release also includes non-GAAP financial measures which exclude the impact of loans originated under the PPP. This release may also contain certain other non-GAAP capital ratios and performance measures that exclude the impact of goodwill and core deposit intangibles associated with Pinnacle Financial's acquisitions of BNC, Avenue Bank, Magna Bank, CapitalMark Bank & Trust, Mid-America Bancshares, Inc., Cavalry Bancorp, Inc. and other acquisitions which collectively are less material to the non-GAAP measure as well as the impact of Pinnacle Financial's Series B Preferred Stock. The presentation of the non-GAAP financial information is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Because non-GAAP financial measures presented in this release are not measurements determined in accordance with GAAP and are susceptible to varying calculations, these non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures presented by other companies.

Pinnacle Financial believes that these non-GAAP financial measures facilitate making period-to-period comparisons and are meaningful indications of its operating performance. In addition, because intangible assets such as goodwill and the core deposit intangible, and the other items excluded each vary extensively from company to company, Pinnacle Financial believes that the presentation of this information allows investors to more easily compare Pinnacle Financial's results to the results of other companies. Pinnacle Financial's management utilizes this non-GAAP financial information to compare Pinnacle Financial's operating performance for 2021 versus certain periods in 2020 and to internally prepared projections.

9


PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS – UNAUDITED
 (dollars in thousands, except for share and per share data)June 30, 2021December 31, 2020June 30, 2020
ASSETS
Cash and noninterest-bearing due from banks$159,863 $203,296 $213,551 
Restricted cash155,275 223,788 254,593 
Interest-bearing due from banks2,576,237 3,522,224 2,221,519 
Federal funds sold and other— 12,141 3,798 
Cash and cash equivalents2,891,375 3,961,449 2,693,461 
Securities purchased with agreement to resell500,000 — — 
Securities available-for-sale, at fair value4,331,070 3,586,681 3,310,278 
Securities held-to-maturity (fair value of $1.0 billion, $1.1 billion and $1.1 billion, net of allowance for credit losses of $198, $191 and $188 at June 30, 2021, Dec. 31, 2020 and June 30, 2020, respectively)995,838 1,028,359 1,048,035 
Consumer loans held-for-sale56,968 87,821 69,443 
Commercial loans held-for-sale25,843 31,200 16,201 
Loans22,897,935 22,424,501 22,520,300 
Less allowance for credit losses(273,747)(285,050)(285,372)
Loans, net22,624,188 22,139,451 22,234,928 
Premises and equipment, net287,992 290,001 281,739 
Equity method investment320,167 308,556 302,879 
Accrued interest receivable99,664 104,078 112,675 
Goodwill1,819,811 1,819,811 1,819,811 
Core deposits and other intangible assets37,963 42,336 47,131 
Other real estate owned9,602 12,360 22,080 
Other assets1,411,828 1,520,757 1,383,451 
Total assets$35,412,309 $34,932,860 $33,342,112 
LIABILITIES AND STOCKHOLDERS' EQUITY 
Deposits: 
Noninterest-bearing$8,926,200 $7,392,325 $6,892,864 
Interest-bearing5,581,651 5,689,095 4,815,012 
Savings and money market accounts11,079,165 11,099,523 9,338,719 
Time2,630,587 3,524,632 4,475,234 
Total deposits28,217,603 27,705,575 25,521,829 
Securities sold under agreements to repurchase177,661 128,164 194,553 
Federal Home Loan Bank advances888,304 1,087,927 1,787,551 
Subordinated debt and other borrowings671,994 670,575 717,043 
Accrued interest payable15,776 24,934 34,916 
Other liabilities339,740 411,074 390,573 
Total liabilities30,311,078 30,028,249 28,646,465 
Preferred stock, no par value, 10.0 million shares authorized; 225,000 shares non-cumulative perpetual preferred stock, Series B, liquidation preference $225.0 million, issued and outstanding at June 30, 2021, Dec. 31, 2020 and June 30, 2020, respectively217,126 217,126 217,632 
Common stock, par value $1.00; 180.0 million shares authorized; 76.1 million, 75.9 million and 75.8 million shares issued and outstanding at June 30, 2021, Dec. 31, 2020 and June 30, 2020, respectively76,088 75,850 75,836 
Additional paid-in capital3,032,338 3,028,063 3,019,286 
Retained earnings1,629,580 1,407,723 1,218,367 
Accumulated other comprehensive income, net of taxes146,099 175,849 164,526 
Total stockholders' equity5,101,231 4,904,611 4,695,647 
Total liabilities and stockholders' equity$35,412,309 $34,932,860 $33,342,112 
This information is preliminary and based on company data available at the time of the presentation.

10


PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED
(dollars in thousands, except for share and per share data)Three months endedSix months ended
 June 30, 2021March 31, 2021June 30, 2020June 30, 2021June 30, 2020
Interest income:
Loans, including fees$232,788 $227,372 $226,281 $460,160 $462,701 
Securities
Taxable8,359 7,728 9,589 16,087 19,857 
Tax-exempt16,546 15,498 14,596 32,044 28,420 
Federal funds sold and other1,543 1,319 1,272 2,862 3,829 
Total interest income259,236 251,917 251,738 511,153 514,807 
Interest expense:
Deposits13,861 17,468 33,727 31,329 84,425 
Securities sold under agreements to repurchase56 72 94 128 209 
FHLB advances and other borrowings12,094 11,507 17,260 23,601 35,964 
Total interest expense26,011 29,047 51,081 55,058 120,598 
Net interest income233,225 222,870 200,657 456,095 394,209 
Provision for credit losses2,834 7,235 68,332 10,069 168,221 
Net interest income after provision for credit losses230,391 215,635 132,325 446,026 225,988 
Noninterest income:
Service charges on deposit accounts8,906 8,307 6,910 17,213 15,942 
Investment services8,997 8,191 5,971 17,188 15,210 
Insurance sales commissions2,406 3,225 2,231 5,631 5,471 
Gains on mortgage loans sold, net6,700 13,666 19,619 20,366 28,202 
Investment gains (losses) on sales, net366 — (128)366 335 
Trust fees5,062 4,687 3,958 9,749 8,128 
Income from equity method investment32,071 28,950 17,208 61,021 32,800 
Other noninterest income33,699 25,683 17,185 59,382 37,243 
Total noninterest income98,207 92,709 72,954 190,916 143,331 
Noninterest expense:
Salaries and employee benefits110,824 102,728 73,887 213,552 154,367 
Equipment and occupancy23,321 23,220 22,026 46,541 43,004 
Other real estate, net(657)(13)2,888 (670)5,303 
Marketing and other business development2,652 2,349 2,142 5,001 5,393 
Postage and supplies2,115 1,806 2,070 3,921 4,060 
Amortization of intangibles2,167 2,206 2,479 4,373 4,999 
Other noninterest expense25,718 22,400 26,113 48,118 51,828 
Total noninterest expense166,140 154,696 131,605 320,836 268,954 
Income before income taxes162,458 153,648 73,674 316,106 100,365 
Income tax expense30,668 28,220 11,230 58,888 9,565 
Net income131,790 125,428 62,444 257,218 90,800 
Preferred stock dividends(3,798)(3,798)— (7,596)— 
Net income available to common shareholders$127,992 $121,630 $62,444 $249,622 $90,800 
Per share information:
Basic net income per common share$1.70 $1.61 $0.83 $3.31 $1.20 
Diluted net income per common share$1.69 $1.61 $0.83 $3.30 $1.20 
Weighted average common shares outstanding:
Basic75,481,198 75,372,883 75,210,869 75,427,340 75,507,136 
Diluted75,809,974 75,657,149 75,323,259 75,735,763 75,645,768 
This information is preliminary and based on company data available at the time of the presentation.
11


PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands)JuneMarchDecemberSeptemberJuneMarch
202120212020202020202020
Balance sheet data, at quarter end:
Commercial and industrial loans$6,771,254 6,355,119 6,239,588 6,144,949 6,293,709 6,752,317 
Commercial real estate - owner occupied loans2,817,689 2,869,785 2,802,227 2,748,075 2,708,306 2,650,170 
Commercial real estate - investment loans4,644,551 4,782,712 4,565,040 4,648,457 4,822,537 4,520,234 
Commercial real estate - multifamily and other loans724,253 790,469 638,344 571,995 561,481 550,338 
Consumer real estate  - mortgage loans3,335,537 3,086,916 3,099,172 3,041,019 3,042,604 3,106,465 
Construction and land development loans2,791,611 2,568,969 2,901,746 2,728,439 2,574,494 2,520,937 
Consumer and other loans440,124 411,322 379,515 343,461 294,545 296,392 
Paycheck protection program loans1,372,916 2,221,409 1,798,869 2,251,014 2,222,624 — 
Total loans22,897,935 23,086,701 22,424,501 22,477,409 22,520,300 20,396,853 
Allowance for credit losses(273,747)(280,881)(285,050)(288,645)(285,372)(222,465)
Securities5,326,908 4,691,364 4,615,040 4,503,072 4,358,313 4,089,821 
Total assets35,412,309 35,299,705 34,932,860 33,824,931 33,342,112 29,264,180 
Noninterest-bearing deposits8,926,200 8,103,943 7,392,325 7,050,670 6,892,864 4,963,415 
Total deposits28,217,603 28,292,940 27,705,575 26,543,956 25,521,829 21,333,171 
Securities sold under agreements to repurchase177,661 172,117 128,164 127,059 194,553 186,548 
FHLB advances888,304 888,115 1,087,927 1,287,738 1,787,551 2,317,520 
Subordinated debt and other borrowings671,994 671,002 670,575 670,273 717,043 669,658 
Total stockholders' equity5,101,231 4,959,524 4,904,611 4,787,308 4,695,647 4,385,128 
Balance sheet data, quarterly averages:
Total loans$23,179,803 22,848,086 22,524,683 22,493,192 22,257,168 20,009,288 
Securities5,036,786 4,666,269 4,567,872 4,420,280 4,194,811 3,814,543 
Federal funds sold and other3,143,078 3,356,199 3,621,623 3,279,248 2,618,832 807,796 
Total earning assets31,359,667 30,870,554 30,714,178 30,192,720 29,070,811 24,631,627 
Total assets35,053,772 34,659,132 34,436,765 33,838,716 32,785,391 28,237,642 
Noninterest-bearing deposits8,500,465 7,620,665 7,322,393 6,989,439 6,432,010 4,759,729 
Total deposits28,013,659 27,620,784 27,193,256 26,352,823 24,807,032 20,679,455 
Securities sold under agreements to repurchase173,268 143,586 121,331 147,211 191,084 141,192 
FHLB advances888,184 934,662 1,250,848 1,515,879 2,213,769 2,029,888 
Subordinated debt and other borrowings674,162 673,662 673,419 715,138 706,657 673,415 
Total stockholders' equity5,039,608 4,953,656 4,852,373 4,765,864 4,499,438 4,417,155 
Statement of operations data, for the three months ended:
Interest income$259,236 251,917 257,047 249,188 251,738 263,069 
Interest expense26,011 29,047 36,062 42,594 51,081 69,517 
Net interest income233,225 222,870 220,985 206,594 200,657 193,552 
Provision for credit losses2,834 7,235 7,180 16,333 68,332 99,889 
Net interest income after provision for credit losses230,391 215,635 213,805 190,261 132,325 93,663 
Noninterest income98,207 92,709 83,444 91,065 72,954 70,377 
Noninterest expense166,140 154,696 163,305 144,277 131,605 137,349 
Income before taxes162,458 153,648 133,944 137,049 73,674 26,691 
Income tax (benefit) expense30,668 28,220 23,068 26,404 11,230 (1,665)
Net income131,790 125,428 110,876 110,645 62,444 28,356 
Preferred stock dividends(3,798)(3,798)(3,798)(3,798)— — 
Net income available to common shareholders$127,992 121,630 107,078 106,847 62,444 28,356 
Profitability and other ratios:
Return on avg. assets (1)
1.46 %1.42 %1.24 %1.26 %0.77 %0.40 %
Return on avg. equity (1)
10.19 %9.96 %8.78 %8.92 %5.58 %2.58 %
 Return on avg. common equity (1)
10.65 %10.41 %9.19 %9.35 %5.66 %2.58 %
Return on avg. tangible common equity (1)
17.32 %17.16 %15.37 %15.85 %9.77 %4.48 %
Common stock dividend payout ratio (16)
11.73 %13.69 %15.84 %16.49 %16.41 %14.61 %
Net interest margin (2)
3.08 %3.02 %2.97 %2.82 %2.87 %3.28 %
Noninterest income to total revenue (3)
29.63 %29.38 %27.41 %30.59 %26.66 %26.67 %
Noninterest income to avg. assets (1)
1.12 %1.08 %0.96 %1.07 %0.89 %1.00 %
Noninterest exp. to avg. assets (1)
1.90 %1.81 %1.89 %1.70 %1.61 %1.96 %
Efficiency ratio (4)
50.13 %49.02 %53.64 %48.47 %48.10 %52.04 %
Avg. loans to avg. deposits82.74 %82.72 %82.83 %85.35 %89.72 %96.76 %
Securities to total assets15.04 %13.29 %13.21 %13.31 %13.07 %13.98 %
This information is preliminary and based on company data available at the time of the presentation.

12


PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
(dollars in thousands)Three months endedThree months ended
June 30, 2021June 30, 2020
 Average BalancesInterestRates/ YieldsAverage BalancesInterestRates/ Yields
Interest-earning assets
Loans (1) (2)
$23,179,803 $232,788 4.11 %$22,257,168 $226,281 4.16 %
Securities
Taxable2,581,063 8,359 1.30 %2,157,081 9,589 1.79 %
Tax-exempt (2)
2,455,723 16,546 3.25 %2,037,730 14,596 3.44 %
Federal funds sold and other3,143,078 1,543 0.20 %2,618,832 1,272 0.20 %
Total interest-earning assets31,359,667 $259,236 3.42 %29,070,811 $251,738 3.58 %
Nonearning assets
Intangible assets1,859,170 1,868,231 
Other nonearning assets1,834,935 1,846,349 
Total assets$35,053,772 $32,785,391 
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking5,453,520 2,407 0.18 %4,639,729 4,256 0.37 %
Savings and money market11,288,119 5,658 0.20 %9,181,266 8,904 0.39 %
Time2,771,555 5,796 0.84 %4,554,027 20,567 1.82 %
Total interest-bearing deposits19,513,194 13,861 0.28 %18,375,022 33,727 0.74 %
Securities sold under agreements to repurchase173,268 56 0.13 %191,084 94 0.20 %
Federal Home Loan Bank advances888,184 4,501 2.03 %2,213,769 9,502 1.73 %
Subordinated debt and other borrowings674,162 7,593 4.52 %706,657 7,758 4.42 %
Total interest-bearing liabilities21,248,808 26,011 0.49 %21,486,532 51,081 0.96 %
Noninterest-bearing deposits8,500,465 — — 6,432,010 — — 
Total deposits and interest-bearing liabilities29,749,273 $26,011 0.35 %27,918,542 $51,081 0.74 %
Other liabilities264,891 367,411 
Stockholders' equity 5,039,608 4,499,438 
Total liabilities and stockholders' equity$35,053,772 $32,785,391 
Net  interest  income 
$233,225 $200,657 
Net interest spread (3)
2.93 %2.62 %
Net interest margin (4)
3.08 %2.87 %
(1) Average balances of nonperforming loans are included in the above amounts.
(2) Yields computed on tax-exempt instruments on a tax equivalent basis and included $7.9 million of taxable equivalent income for the three months ended June 30, 2021 compared to $6.9 million for the three months ended June 30, 2020. The tax-exempt benefit has been reduced by the projected impact of tax-exempt income that will be disallowed pursuant to IRS Regulations as of and for the then current period presented.
(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the three months ended June 30, 2021 would have been 3.07% compared to a net interest spread of 2.84% for the three months ended June 30, 2020.
(4) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.
This information is preliminary and based on company data available at the time of the presentation.  

13


PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
(dollars in thousands)Six months endedSix months ended
June 30, 2021June 30, 2020
 Average BalancesInterestRates/ YieldsAverage BalancesInterestRates/ Yields
Interest-earning assets
Loans (1) (2)
$23,014,861 $460,160 4.11 %$21,133,228 $462,701 4.48 %
Securities
Taxable2,427,050 16,087 1.34 %2,040,855 19,857 1.96 %
Tax-exempt (2)
2,425,501 32,044 3.20 %1,963,822 28,420 3.47 %
Federal funds sold and other3,249,050 2,862 0.18 %1,713,314 3,829 0.45 %
Total interest-earning assets31,116,462 $511,153 3.41 %26,851,219 $514,807 3.96 %
Nonearning assets
Intangible assets1,860,272 1,869,147 
Other nonearning assets1,880,809 1,791,150 
Total assets$34,857,543 $30,511,516 
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking5,459,919 5,007 0.18 %4,192,505 12,723 0.61 %
Savings and money market11,304,640 12,371 0.22 %8,639,407 29,339 0.68 %
Time2,990,753 13,951 0.94 %4,315,462 42,363 1.97 %
Total interest-bearing deposits19,755,312 31,329 0.32 %17,147,374 84,425 0.99 %
Securities sold under agreements to repurchase158,509 128 0.16 %166,138 209 0.25 %
Federal Home Loan Bank advances911,295 8,995 1.99 %2,121,828 19,909 1.89 %
Subordinated debt and other borrowings673,913 14,606 4.37 %690,036 16,055 4.68 %
Total interest-bearing liabilities21,499,029 55,058 0.52 %20,125,376 120,598 1.21 %
Noninterest-bearing deposits8,062,995 — — 5,595,869 — — 
Total deposits and interest-bearing liabilities29,562,024 $55,058 0.38 %25,721,245 $120,598 0.94 %
Other liabilities298,649 331,975 
Stockholders' equity 4,996,870 4,458,296 
Total liabilities and stockholders' equity$34,857,543 $30,511,516 
Net  interest  income 
$456,095 $394,209 
Net interest spread (3)
2.89 %2.76 %
Net interest margin (4)
3.05 %3.06 %
(1) Average balances of nonperforming loans are included in the above amounts.
(2) Yields computed on tax-exempt instruments on a tax equivalent basis and included $15.2 million of taxable equivalent income for the six months ended June 30, 2021 compared to $14.0 million for the six months ended June 30, 2020. The tax-exempt benefit has been reduced by the projected impact of tax-exempt income that will be disallowed pursuant to IRS Regulations as of and for the then current period presented.
(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the six months ended June 30, 2021 would have been 3.04% compared to a net interest spread of 3.02% for the six months ended June 30, 2020.
(4) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.
This information is preliminary and based on company data available at the time of the presentation.

14


PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands)JuneMarchDecemberSeptemberJuneMarch
202120212020202020202020
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans$53,105 72,135 73,836 71,390 62,562 70,970 
ORE and other nonperforming assets (NPAs)9,602 10,651 12,360 19,445 22,105 27,182 
Total nonperforming assets$62,707 82,786 86,196 90,835 84,667 98,152 
Past due loans over 90 days and still accruing interest$1,810 2,833 2,362 1,313 1,982 1,990 
Accruing troubled debt restructurings (5)
$2,428 2,460 2,494 2,588 3,274 3,869 
Accruing purchase credit deteriorated loans$12,400 13,904 14,091 14,346 14,616 13,984 
Net loan charge-offs$9,968 11,397 10,775 13,057 5,384 10,155 
Allowance for credit losses to nonaccrual loans515.5 %389.4 %386.1 %404.3 %456.1 %313.5 %
As a percentage of total loans:
Past due accruing loans over 30 days0.07 %0.09 %0.19 %0.11 %0.09 %0.17 %
Potential problem loans (6)
0.74 %0.70 %0.77 %0.96 %1.12 %1.22 %
Allowance for credit losses (20)
1.20 %1.22 %1.27 %1.28 %1.27 %1.09 %
Nonperforming assets to total loans, ORE and other NPAs0.27 %0.36 %0.38 %0.40 %0.38 %0.48 %
    Classified asset ratio (Pinnacle Bank) (8)
6.8 %7.3 %8.1 %9.9 %11.2 %12.0 %
Annualized net loan charge-offs to avg. loans (7)
0.17 %0.20 %0.19 %0.23 %0.10 %0.20 %
Wtd. avg. commercial loan internal risk ratings (6)
46.145.245.145.245.145.0
Interest rates and yields:
Loans4.11 %4.11 %4.20 %4.04 %4.16 %4.84 %
Securities2.25 %2.29 %2.27 %2.38 %2.59 %2.82 %
Total earning assets3.42 %3.41 %3.44 %3.38 %3.58 %4.41 %
Total deposits, including non-interest bearing0.20 %0.26 %0.33 %0.43 %0.55 %0.99 %
Securities sold under agreements to repurchase0.13 %0.20 %0.21 %0.21 %0.20 %0.33 %
FHLB advances2.03 %1.95 %2.00 %1.82 %1.73 %2.06 %
Subordinated debt and other borrowings4.52 %4.22 %4.13 %3.99 %4.42 %4.96 %
Total deposits and interest-bearing liabilities0.35 %0.40 %0.49 %0.59 %0.74 %1.19 %
Capital and other ratios (8):
Pinnacle Financial ratios:
Stockholders' equity to total assets14.4 %14.0 %14.0 %14.2 %14.1 %15.0 %
Common equity Tier one10.5 %10.3 %10.0 %9.9 %9.6 %9.4 %
Tier one risk-based11.3 %11.2 %10.9 %10.7 %10.4 %9.4 %
Total risk-based14.5 %14.5 %14.3 %14.2 %14.0 %12.8 %
Leverage9.2 %8.9 %8.6 %8.5 %8.4 %8.8 %
Tangible common equity to tangible assets9.0 %8.6 %8.5 %8.5 %8.3 %9.2 %
Pinnacle Bank ratios:
Common equity Tier one11.9 %11.8 %11.4 %11.3 %11.0 %11.0 %
Tier one risk-based11.9 %11.8 %11.4 %11.3 %11.0 %11.0 %
Total risk-based13.1 %13.0 %12.7 %12.6 %12.4 %12.2 %
Leverage9.6 %9.4 %9.1 %8.9 %8.9 %10.3 %
Construction and land development loans
as a percentage of total capital (19)
80.1 %76.0 %89.0 %86.7 %83.6 %84.2 %
Non-owner occupied commercial real estate and
multi-family as a percentage of total capital (19)
248.8 %256.0 %264.0 %268.8 %275.0 %264.1 %
This information is preliminary and based on company data available at the time of the presentation.

15


PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands, except per share data)JuneMarchDecemberSeptemberJuneMarch
202120212020202020202020
Per share data:
Earnings per common share – basic$1.70 1.61 1.42 1.42 0.83 0.37 
Earnings per common share - basic, excluding non-GAAP adjustments$1.69 1.61 1.58 1.45 0.89 0.39 
Earnings per common share – diluted$1.69 1.61 1.42 1.42 0.83 0.37 
Earnings per common share - diluted, excluding non-GAAP adjustments$1.68 1.61 1.58 1.45 0.89 0.39 
Common dividends per share$0.18 0.18 0.16 0.16 0.16 0.16 
Book value per common share at quarter end (9)
$64.19 62.33 61.80 60.26 59.05 57.85 
Tangible book value per common share at quarter end (9)
$39.77 37.88 37.25 35.68 34.43 33.20 
Revenue per diluted common share$4.37 4.17 4.03 3.95 3.63 3.47 
Revenue per diluted common share, excluding non-GAAP adjustments$4.37 4.17 4.03 3.94 3.63 3.47 
Investor information:
Closing sales price of common stock on last trading day of quarter$88.29 88.66 64.40 35.59 41.99 37.54 
High closing sales price of common stock during quarter$92.94 93.58 65.51 44.47 48.98 64.03 
Low closing sales price of common stock during quarter$84.25 63.48 35.97 33.28 33.24 31.98 
Closing sales price of depositary shares on last trading day of quarter$29.13 27.62 27.69 26.49 25.98 — 
High closing sales price of depositary shares during quarter$29.13 27.83 27.94 26.82 26.05 — 
Low closing sales price of depositary shares during quarter$27.38 26.83 26.45 25.51 25.19 — 
Other information:
Residential mortgage loan sales:
Gross loans sold$394,299 546,963 479,867 511,969 550,704 286,703 
Gross fees (10)
$15,552 18,793 23,729 23,557 16,381 9,490 
Gross fees as a percentage of loans originated3.94 %3.44 %4.94 %4.60 %2.97 %3.31 %
Net gain on residential mortgage loans sold$6,700 13,666 12,387 19,453 19,619 8,583 
Investment gains (losses) on sales of securities, net (15)
$366 — — 651 (128)463 
Brokerage account assets, at quarter end (11)
$6,344,416 5,974,884 5,509,560 4,866,726 4,499,856 4,000,643 
Trust account managed assets, at quarter end$3,640,932 3,443,373 3,295,198 2,978,035 2,908,131 2,714,582 
Core deposits (12)
$25,857,639 24,971,177 23,510,883 22,003,989 21,391,794 18,604,262 
Core deposits to total funding (12)
86.3 %83.1 %79.5 %76.9 %75.8 %75.9 %
Risk-weighted assets$26,819,277 26,105,158 25,791,896 25,189,944 24,937,535 24,600,490 
Number of offices116 115 114 114 113 111 
Total core deposits per office$222,911 217,141 206,236 193,017 189,308 167,606 
Total assets per full-time equivalent employee$13,087 13,468 13,262 13,027 12,936 11,422 
Annualized revenues per full-time equivalent employee$491.3 488.3 459.8 456.1 426.9 414.3 
Annualized expenses per full-time equivalent employee$246.3 239.4 246.6 221.1 205.4 215.6 
Number of employees (full-time equivalent)2,706.0 2,621.0 2,634.0 2,596.5 2,577.5 2,562.0 
Associate retention rate (13)
93.3 %94.4 %94.8 %94.4 %94.5 %93.5 %
This information is preliminary and based on company data available at the time of the presentation.


16


PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
Three months endedSix months ended
(dollars in thousands, except per share data)
JuneMarchJuneJuneJune
20212021202020212020
Net interest income$233,225 222,870 200,657 456,095 394,209 
Noninterest income98,207 92,709 72,954 190,916 143,331 
Total revenues331,432 315,579 273,611 647,011 537,540 
Less: Investment (gains) losses on sales of securities, net(366)— 128 (366)(335)
Total revenues excluding the impact of adjustments noted above$331,066 315,579 273,739 646,645 537,205 
Noninterest expense$166,140 154,696 131,605 320,836 268,954 
Less: ORE expense(657)(13)2,888 (670)5,303 
FHLB restructuring charges— — 2,870 — 2,870 
Noninterest expense excluding the impact of adjustments noted above$166,797 154,709 125,847 321,506 260,781 
Pre-tax income$162,458 153,648 73,674 316,106 100,365 
Provision for credit losses2,834 7,235 68,332 10,069 168,221 
Pre-tax pre-provision net revenue165,292 160,883 142,006 326,175 268,586 
Adjustments noted above(1,023)(13)5,886 (1,036)7,838 
Adjusted pre-tax pre-provision net revenue(14)
$164,269 160,870 147,892 325,139 276,424 
Noninterest income$98,207 92,709 72,954 190,916 143,331 
Less: Adjustments as noted above(366)— 128 (366)(335)
Noninterest income excluding the impact of adjustments noted above$97,841 92,709 73,082 190,550 142,996 
Efficiency ratio (4)
50.13 %49.02 %48.10 %49.59 %50.03 %
Adjustments as noted above0.25 %— %(2.13)%0.13 %(1.49)%
Efficiency ratio (excluding adjustments noted above) (4)
50.38 %49.02 %45.97 %49.72 %48.54 %
Total average assets$35,053,772 34,659,132 32,785,391 34,857,543 30,511,516 
Noninterest income to average assets (1)
1.12 %1.08 %0.89 %1.10 %0.94 %
Adjustments as noted above— %— %0.01 %— %— %
Noninterest income (excluding adjustments noted above) to average assets (1)
1.12 %1.08 %0.90 %1.10 %0.94 %
Noninterest expense to average assets (1)
1.90 %1.81 %1.61 %1.86 %1.77 %
Adjustments as noted above0.01 %— %(0.07)%— %(0.05)%
Noninterest expense (excluding adjustments noted above) to average assets (1)
1.91 %1.81 %1.54 %1.86 %1.72 %
This information is preliminary and based on company data available at the time of the presentation.

17


PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
Three months ended
(dollars in thousands, except per share data)JuneMarchDecemberSeptemberJuneMarch
202120212020202020202020
Net income available to common shareholders$127,992 121,630 107,078 106,847 62,444 28,356 
Investment (gains) losses on sales of securities, net(366)— — (651)128 (463)
ORE expense(657)(13)1,457 1,795 2,888 2,415 
FHLB restructuring charges— — 10,307 1,991 2,870 — 
Hedge termination charges— — 4,673 — — — 
Tax effect on adjustments noted above (18)
267 (4,297)(819)(1,539)(510)
Net income available to common shareholders excluding adjustments noted above$127,236 121,620 119,218 109,163 66,791 29,798 
Basic earnings per common share$1.70 1.61 1.42 1.42 0.83 0.37 
Adjustment due to investment (gains) losses on sales of securities, net— — — (0.01)— — 
Adjustment due to ORE expense(0.01)— 0.02 0.02 0.04 0.03 
Adjustment due to FHLB restructuring charges— — 0.14 0.03 0.04 — 
Adjustment due to hedge termination charges— — 0.06 — — — 
Adjustment due to tax effect on adjustments noted above (18)
— — (0.06)(0.01)(0.02)(0.01)
Basic earnings per common share excluding adjustments noted above$1.69 1.61 1.58 1.45 0.89 0.39 
Diluted earnings per common share$1.69 1.61 1.42 1.42 0.83 0.37 
Adjustment due to investment (gains) losses on sales of securities, net— — — (0.01)— — 
Adjustment due to ORE expense(0.01)— 0.02 0.02 0.04 0.03 
Adjustment due to FHLB restructuring charges— — 0.14 0.03 0.04 — 
Adjustment due to hedge termination charges— — 0.06 — — — 
Adjustment due to tax effect on adjustments noted above (18)
— — (0.06)(0.01)(0.02)(0.01)
Diluted earnings per common share excluding the adjustments noted above$1.68 1.61 1.58 1.45 0.89 0.39 
Revenue per diluted common share$4.37 4.17 4.03 3.95 3.63 3.47 
Adjustments as noted above— — — (0.01)— — 
Revenue per diluted common share excluding adjustments noted above$4.37 4.17 4.03 3.94 3.63 3.47 
Book value per common share at quarter end (9)
$64.19 62.33 61.80 60.26 59.05 57.85 
Adjustment due to goodwill, core deposit and other intangible assets(24.42)(24.45)(24.55)(24.59)(24.62)(24.65)
Tangible book value per common share at quarter end (9)
$39.77 37.88 37.25 35.68 34.43 33.20 
Equity method investment (17)
Fee income from BHG, net of amortization$32,071 28,950 24,294 26,445 17,208 15,592 
Funding cost to support investment1,230 1,205 1,222 1,231 2,134 2,122 
Pre-tax impact of BHG30,841 27,745 23,072 25,214 15,074 13,470 
Income tax expense at statutory rates (18)
8,062 7,253 6,031 6,591 3,940 3,521 
Earnings attributable to BHG$22,779 20,492 17,041 18,623 11,134 9,949 
Basic earnings per common share attributable to BHG$0.30 0.27 0.23 0.25 0.15 0.13 
Diluted earnings per common share attributable to BHG$0.30 0.27 0.23 0.25 0.15 0.13 
This information is preliminary and based on company data available at the time of the presentation.


18


PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
Six months ended
(dollars in thousands, except per share data)June
20212020
Net income available to common shareholders$249,622 90,800 
Investment (gains) losses on sales of securities, net(366)(335)
ORE expense(670)5,303 
FHLB restructuring charges— 2,870 
Tax effect on adjustments noted above (18)
271 (2,049)
Net income available to common shareholders excluding adjustments noted above$248,857 96,589 
Basic earnings per common share$3.31 1.20 
Adjustment due to investment (gains) losses on sales of securities, net— — 
Adjustment due to ORE expense(0.01)0.07 
Adjustment due to FHLB restructuring charges— 0.04 
Adjustment due to tax effect on adjustments noted above (18)
— (0.03)
Basic earnings per common share excluding adjustments noted above$3.30 1.28 
Diluted earnings per common share3.30 1.20 
Adjustment due to investment (gains) losses on sales of securities, net— — 
Adjustment due to ORE expense(0.01)0.07 
Adjustment due to FHLB restructuring charges— 0.04 
Adjustment due to tax effect on adjustments noted above (18)
— (0.03)
Diluted earnings per common share excluding the adjustments noted above$3.29 1.28 
Revenue per diluted common share$8.54 7.11 
Adjustments as noted above— (0.01)
Revenue per diluted common share excluding adjustments noted above$8.54 7.10 
Equity method investment (17)
Fee income from BHG, net of amortization$61,021 32,800 
Funding cost to support investment2,435 4,256 
Pre-tax impact of BHG58,586 28,544 
Income tax expense at statutory rates (18)
15,314 7,461 
Earnings attributable to BHG$43,272 21,083 
Basic earnings per common share attributable to BHG$0.57 0.28 
Diluted earnings per common share attributable to BHG$0.57 0.28 
This information is preliminary and based on company data available at the time of the presentation.

19


PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
Three months endedSix months ended
(dollars in thousands, except per share data)
JuneMarchJuneJuneJune
20212021202020212020
Return on average assets (1)
1.46 %1.42 %0.77 %1.44 %0.60 %
Adjustments as noted above— %— %0.05 %— %0.04 %
Return on average assets excluding adjustments noted above (1)
1.46 %1.42 %0.82 %1.44 %0.64 %
Tangible assets:
Total assets$35,412,309 35,299,705 33,342,112 $35,412,309 33,342,112 
Less:   Goodwill(1,819,811)(1,819,811)(1,819,811)(1,819,811)(1,819,811)
Core deposit and other intangible assets(37,963)(40,130)(47,131)(37,963)(47,131)
Net tangible assets$33,554,535 33,439,764 31,475,170 $33,554,535 31,475,170 
Tangible common equity:
Total stockholders' equity$5,101,231 4,959,524 4,695,647 $5,101,231 4,695,647 
Less: Preferred stockholders' equity(217,126)(217,126)(217,632)(217,126)(217,632)
Total common stockholders' equity4,884,105 4,742,398 4,478,015 4,884,105 4,478,015 
Less: Goodwill(1,819,811)(1,819,811)(1,819,811)(1,819,811)(1,819,811)
Core deposit and other intangible assets(37,963)(40,130)(47,131)(37,963)(47,131)
Net tangible common equity$3,026,331 2,882,457 2,611,073 $3,026,331 2,611,073 
Ratio of tangible common equity to tangible assets9.02 %8.62 %8.30 %9.02 %8.30 %
Average tangible assets:
Average assets$35,053,772 34,659,132 32,785,391 $34,857,543 30,511,516 
Less: Average goodwill(1,819,811)(1,819,811)(1,819,811)(1,819,811)(1,819,811)
Average core deposit and other intangible assets(39,360)(41,575)(48,421)(40,461)(49,337)
Net average tangible assets$33,194,601 32,797,746 30,917,159 $32,997,271 28,642,368 
Return on average assets (1)
1.46 %1.42 %0.77 %1.44 %0.60 %
Adjustment due to goodwill, core deposit and other intangible assets0.09 %0.08 %0.04 %0.09 %0.04 %
Return on average tangible assets (1)
1.55 %1.50 %0.81 %1.53 %0.64 %
Adjustments as noted above(0.01)%— %0.06 %(0.01)%0.04 %
Return on average tangible assets excluding adjustments noted above (1)
1.54 %1.50 %0.87 %1.52 %0.68 %
Average tangible common equity:
Average stockholders' equity$5,039,608 4,953,656 4,499,438 $4,996,870 4,458,296 
Less: Average preferred equity(217,126)(217,126)(59,586)(217,126)(29,793)
Average common equity4,822,482 4,736,530 4,439,852 4,779,744 4,428,503 
Less:   Average goodwill(1,819,811)(1,819,811)(1,819,811)(1,819,811)(1,819,811)
Average core deposit and other intangible assets(39,360)(41,575)(48,421)(40,461)(49,337)
Net average tangible common equity$2,963,311 2,875,144 2,571,620 $2,919,472 2,559,355 
Return on average equity (1)
10.19 %9.96 %5.58 %10.07 %4.10 %
Adjustment due to average preferred stockholders' equity0.46 %0.45 %0.08 %0.46 %0.02 %
Return on average common equity (1)
10.65 %10.41 %5.66 %10.53 %4.12 %
Adjustment due to goodwill, core deposit and other intangible assets6.67 %6.75 %4.11 %6.71 %3.01 %
Return on average tangible common equity (1)
17.32 %17.16 %9.77 %17.24 %7.13 %
Adjustments as noted above(0.10)%— %0.68 %(0.05)%0.46 %
Return on average tangible common equity excluding adjustments noted above (1)
17.22 %17.16 %10.45 %17.19 %7.59 %
Allowance for credit losses on loans as a percent of total loans1.20 %1.22 %1.27 %1.20 %1.27 %
Impact of excluding PPP loans from total loans0.07 %0.13 %0.14 %0.07 %0.14 %
Allowance as adjusted for the above exclusion of PPP loans from total loans1.27 %1.35 %1.41 %1.27 %1.41 %
This information is preliminary and based on company data available at the time of the presentation.

20


PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
 
1. Ratios are presented on an annualized basis.
2. Net interest margin is the result of net interest income on a tax equivalent basis divided by average interest earning assets.
3. Total revenue is equal to the sum of net interest income and noninterest income.
4. Efficiency ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.
5. Troubled debt restructurings include loans where the Company, as a result of the borrower's financial difficulties, has granted a credit concession to the borrower (i.e., interest only payments for a significant period of time, extending the maturity of the loan, etc.).  All of these loans continue to accrue interest at the contractual rate. Troubled debt restructurings do not include, beginning with the quarter ended March 31, 2020, loans for which the Company has granted a deferral of interest and/or principal or other modification pursuant to the guidance issued by the FDIC providing for relief under the Coronavirus Aid, Relief and Economic Security Act.
6. Average risk ratings are based on an internal loan review system which assigns a numeric value of 10 to 100 to all loans to commercial entities based on their underlying risk characteristics as of the end of each quarter. The risk rating scale was changed to allow for granularity, if needed, in criticized and classified risk ratings to distinguish accrual status or structural loan issues. A "10" risk rating is assigned to credits that exhibit Excellent risk characteristics, "20" exhibit Very Good risk characteristics, "30" Good, "40" Satisfactory, "50" Acceptable or Average, "60" Watch List, "70" Criticized, "80" Classified or Substandard, "90" Doubtful and "100" Loss (which are charged-off immediately).  Additionally, loans rated "80" or worse that are not nonperforming or restructured loans are considered potential problem loans.  Generally, consumer loans are not subjected to internal risk ratings.
7. Annualized net loan charge-offs to average loans ratios are computed by annualizing quarter-to-date net loan charge-offs and dividing the result by average loans for the quarter-to-date period.
8. Capital ratios are calculated using regulatory reporting regulations enacted for such period and are defined as follows:
Equity to total assets – End of period total stockholders' equity as a percentage of end of period assets.
Tangible common equity to tangible assets - End of period total stockholders' equity less end of period preferred stock, goodwill, core deposit and other intangibles as a percentage of end of period assets less end of period goodwill, core deposit and other intangibles.
Leverage – Tier I capital (pursuant to risk-based capital guidelines) as a percentage of adjusted average assets.
Tier I risk-based – Tier I capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.
Total risk-based – Total capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.
Classified asset - Classified assets as a percentage of Tier 1 capital plus allowance for credit losses.
Tier I common equity to risk weighted assets - Tier 1 capital (pursuant to risk-based capital guidelines) less the amount of any preferred stock or subordinated indebtedness that is considered as a component of Tier 1 capital as a percentage of total risk-weighted assets.
9. Book value per common share computed by dividing total common stockholders' equity by common shares outstanding. Tangible book value per common share computed by dividing total common stockholders' equity, less goodwill, core deposit and other intangibles by common shares outstanding.
10. Amounts are included in the statement of operations in "Gains on mortgage loans sold, net", net of commissions paid on such amounts.
11. At fair value, based on information obtained from Pinnacle's third party broker/dealer for non-FDIC insured financial products and services.
12. Core deposits include all transaction deposit accounts, money market and savings accounts and all certificates of deposit issued in a denomination of less than $250,000. The ratio noted above represents total core deposits divided by total funding, which includes total deposits, FHLB advances, securities sold under agreements to repurchase, subordinated indebtedness and all other interest-bearing liabilities.
13. Associate retention rate is computed by dividing the number of associates employed at quarter end less the number of associates that have resigned in the last 12 months by the number of associates employed at quarter end. Associate retention rate does not include associates at acquired institutions displaced by merger.
14.  Adjusted pre-tax, pre-provision income excludes the impact of ORE expenses and income, investment gains and losses on sales of securities, FHLB restructuring charges and hedge termination charges.
15. Represents investment gains (losses) on sales and impairments, net occurring as a result of gains or losses incurred as the result of a change in management's intention to sell a bond prior to the recovery of its amortized cost basis.
16. The dividend payout ratio is calculated as the sum of the annualized dividend rate for dividends paid on common shares divided by the trailing 12-months fully diluted earnings per common share as of the dividend declaration date.
17. Earnings from equity method investment includes the impact of the issuance of subordinated debt as well as the funding costs of the overall franchise. Income tax expense is calculated using statutory tax rates.
18. Tax effect calculated using the blended statutory rate of 26.14 percent.
19. Calculated using the same guidelines as are used in the Federal Financial Institutions Examination Council's Uniform Bank Performance Report.
20. Effective January 1, 2020 Pinnacle Financial adopted the current expected credit loss accounting standard which requires the recognition of all losses expected to be recorded over a loan's life.

21