UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x Indicate by check mark whether the registrant (1) has filed all repo ...

Financial Data and Key Metrics Changes - The company achieved a 14.8% increase in tangible book value year-over-year and a 20% total shareholder return in 2023 despite a challenging operating environment [3][104] - The end-of-period (EOP) deposit rates increased by only seven basis points, marking the smallest increase in some time [5] - The net interest margin (NIM) remained flat quarter-over-quarter, with expectations for modest increases in 2024 [7][61] Business Line Data and Key Metrics Changes - The company reported a 10.7% linked-quarter annualized average loan growth for the fourth quarter, with average fixed-rate loan yields on new originations at 7.33% [6][19] - Fee revenues, excluding BHG and nonrecurring items, increased by 1% to 2% linked-quarter, with strong performance in wealth management [10] - Fourth quarter expenses included a $29 million FDIC special assessment, which will be paid over eight quarters starting June 2024 [11][12] Market Data and Key Metrics Changes - The company’s loan portfolio continued to perform well, with net charge-offs during the quarter at just 17 basis points [113] - The average FICO score for BHG improved to 745 in 2023 from 732 in 2022, indicating better credit quality [14] - The company anticipates a gradual increase in net interest margin throughout 2024, with expectations of four rate cuts [161][171] Company Strategy and Development Direction - The company aims to maintain consistent, reliable growth in its deposit book at a reasonable price, targeting high-single to low-double digit growth [44] - The focus remains on growing net interest income in the high-single to low-double digits for 2024, with an emphasis on fixed-rate loan pricing [19][39] - The company is strategically selective in commercial real estate lending, focusing on projects with strategic reasons for participation [96] Management's Comments on Operating Environment and Future Outlook - Management acknowledged 2023 as one of the most difficult operating environments for banks since the Great Recession but expressed confidence in future performance [3] - The company expects credit metrics to normalize, with a belief that credit will continue to perform well moving into 2024 [8][113] - Management emphasized the importance of maintaining a strong capital base and effective risk management to support growth [148] Other Important Information - The company has a strong liquidity position, with BHG's liquidity platform remaining exceptionally strong [13] - The tangible book value per common share increased to $51.38 at quarter-end, reflecting effective management of tangible book value [104] - The company plans to continue investing in technology and talent to support growth, even during challenging times [135] Q&A Session Summary Question: Can you discuss the confidence on reduced losses by Q2? - Management indicated that BHG believes most losses will occur within the first 30 months of origination, with expectations for reduced losses by Q2 2024 [26][160] Question: What are the expectations for commercial real estate maturities? - Management discussed the differences in credits from 2019 and prior vintages, noting that most commercial real estate loans are on three to five-year terms and are ready for rate increases [30][57] Question: What is the outlook for net interest margin throughout the year? - Management expects NIM to be relatively flat in Q1, with gradual increases anticipated as rate cuts occur [161][171]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission File Number: 001-39309 Pinnacle Financial Partners Inc. , Inc. (Exact name of registrant as specified in its ...

Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) Q3 2023 Earnings Call Transcript October 18, 2023 9:30 AM ET Company Participants Terry Turner - Chief Executive Officer Harold Carpenter - Chief Financial Officer Conference Call Participants Steven Alexopoulos - JPMorgan Brett Rabatin - Hovde Group Timur Braziler - Wells Fargo Stephen Scouten - Piper Sandler Brandon King - Truist Securities Matt Olney - Stephens Catherine Mealor - KBW Brody Preston - UBS Brian Martin - Jonnie Montgomery Operator Good morning ...

[Part I – Financial Information](index=4&type=section&id=PART%20I%20%E2%80%93%20Financial%20Information) This part presents the company's unaudited consolidated financial statements and management's discussion and analysis for the period [Item 1. Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) Presents the unaudited consolidated balance sheets, income statements, and cash flows as of and for the period ended June 30, 2023 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $46.9 billion, driven by increases in loans, cash, deposits, and FHLB advances Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $3,833,131 | $1,177,382 | | Loans, net | $30,815,831 | $28,740,940 | | Total assets | $46,875,982 | $41,970,021 | | **Liabilities & Equity** | | | | Total deposits | $37,722,661 | $34,961,238 | | Federal Home Loan Bank advances | $2,200,917 | $464,436 | | Total liabilities | $41,032,223 | $36,450,629 | | Total shareholders' equity | $5,843,759 | $5,519,392 | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income rose significantly, boosted by higher net interest income and a large one-time gain on an asset sale Income Statement Summary (in thousands, except per share data) | Metric | Q2 2023 | Q2 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $315,393 | $264,574 | $627,624 | $504,049 | | Provision for Credit Losses | $31,689 | $12,907 | $50,456 | $15,627 | | Noninterest Income | $173,839 | $125,502 | $263,368 | $228,998 | | Noninterest Expense | $211,641 | $196,038 | $423,368 | $378,699 | | Net Income to Common Shareholders | $193,501 | $141,329 | $326,974 | $266,641 | | Diluted EPS | $2.54 | $1.86 | $4.30 | $3.51 | - A significant contributor to noninterest income in Q2 2023 was an **$85.7 million gain on the sale of fixed assets**, related to a sale-leaseback transaction[12](index=12&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed disclosures on accounting policies, credit losses, securities, leases, and other financial statement components [Note 1. Summary of Significant Accounting Policies](index=10&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines key accounting policies, including the CECL methodology for credit losses and the company's investment in BHG - Pinnacle Bank holds a **49% interest in Bankers Healthcare Group, LLC (BHG)**, a provider of commercial and consumer loans to healthcare and other professionals[23](index=23&type=chunk) - During Q2 2023, the company implemented **updated CECL models** to better capture portfolio risk in the uncertain economy, with no material effect on the total allowance for credit losses[29](index=29&type=chunk) - The company adopted ASU 2022-02 on January 1, 2023, which **eliminated troubled debt restructuring accounting** and enhanced disclosure requirements for loan modifications to borrowers experiencing financial difficulties[44](index=44&type=chunk) [Note 2. Equity method investment](index=15&type=section&id=Note%202.%20Equity%20method%20investment) Income from the 49% investment in Bankers Healthcare Group (BHG) declined significantly compared to the prior year BHG Financial Summary (in thousands) | Metric | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Revenues | $613,284 | $536,559 | | Net Income | $104,038 | $177,033 | - Pinnacle Bank received **dividends of $27.6 million from BHG** in the first six months of 2023, compared to $40.8 million in the same period of 2022[50](index=50&type=chunk) - At June 30, 2023, Pinnacle Bank held **$305.2 million of BHG joint venture program loans**, down from $350.6 million at year-end 2022[50](index=50&type=chunk) [Note 3. Securities](index=16&type=section&id=Note%203.%20Securities) The company held $3.6 billion in AFS and $3.0 billion in HTM securities, with significant unrealized losses due to interest rates Securities Portfolio Summary (in thousands) | Category | Amortized Cost | Fair Value | Gross Unrealized Losses | | :--- | :--- | :--- | :--- | | **Available-for-sale** | $3,854,009 | $3,591,280 | $(288,192) | | **Held-to-maturity** | $3,033,885 | $2,746,055 | $(292,104) | - At June 30, 2023, the company had approximately **$288.2 million in unrealized losses on its AFS securities**, which management attributes to interest rate changes, not credit quality deterioration[54](index=54&type=chunk) - The allowance for credit losses on held-to-maturity securities was **$1.7 million** at June 30, 2023, with all debt securities in this category rated A or higher[56](index=56&type=chunk)[57](index=57&type=chunk) [Note 4. Loans and Allowance for Credit Losses](index=18&type=section&id=Note%204.%20Loans%20and%20Allowance%20for%20Credit%20Losses) Total loans grew to $31.2 billion, with the allowance for credit losses increasing to 1.08% of total loans Loan Portfolio Composition (in thousands) | Loan Category | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Commercial real estate: Owner occupied | $3,845,359 | $3,587,257 | | Commercial real estate: Non-owner occupied | $7,170,888 | $6,542,619 | | Consumer real estate – mortgage | $4,692,673 | $4,435,046 | | Construction and land development | $3,904,774 | $3,679,498 | | Commercial and industrial | $10,983,911 | $10,241,362 | | Consumer and other | $555,685 | $555,823 | | **Total Loans** | **$31,153,290** | **$29,041,605** | Allowance for Credit Losses (ACL) Activity - H1 2023 (in thousands) | | Amount | | :--- | :--- | | ACL at Dec 31, 2022 | $300,665 | | Charged-off loans | $(32,907) | | Recoveries | $15,845 | | Provision for credit losses | $53,856 | | **ACL at June 30, 2023** | **$337,459** | - **Nonaccrual loans totaled $44.3 million** at June 30, 2023, up from $38.1 million at December 31, 2022[69](index=69&type=chunk)[83](index=83&type=chunk) - The company has significant credit exposure to **Lessors of Nonresidential Buildings ($6.4 billion)** and **Lessors of Residential Buildings ($3.1 billion)** as of June 30, 2023[85](index=85&type=chunk) [Note 5. Premises and Equipment and Lease Commitments](index=26&type=section&id=Note%205.%20Premises%20and%20Equipment%20and%20Lease%20Commitments) A major sale-leaseback transaction resulted in an $85.7 million gain and significantly increased lease assets and liabilities - In Q2 2023, Pinnacle Bank completed a **sale-leaseback of 49 properties** for an aggregate price of $198.2 million, resulting in a **pre-tax net gain of $85.7 million**[93](index=93&type=chunk) - The sale-leaseback transaction involves an initial lease term of 14.5 years with an aggregate **annual lease expense of approximately $17.0 million** for the first year[93](index=93&type=chunk) Lease Balances (in thousands) | Account | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Operating lease right-of-use assets | $236,689 | $126,767 | | Operating lease liabilities | $243,906 | $133,108 | [Note 6. Income Taxes](index=28&type=section&id=Note%206.%20Income%20Taxes) The effective tax rate for H1 2023 was 19.8%, with unrecognized tax benefits decreasing to $9.4 million - The **effective tax rate** for the six months ended June 30, 2023 was **19.8%**[99](index=99&type=chunk) - **Unrecognized tax benefits** related to uncertain state tax positions were **$9.4 million** at June 30, 2023, a decrease from $15.8 million at December 31, 2022[97](index=97&type=chunk) [Note 7. Commitments and Contingent Liabilities](index=28&type=section&id=Note%207.%20Commitments%20and%20Contingent%20Liabilities) The company had $16.0 billion in commitments to extend credit and $333.0 million in standby letters of credit - **Commitments to extend credit**, including unfunded lines of credit, totaled **$16.0 billion** at June 30, 2023[102](index=102&type=chunk) - **Standby letters of credit** amounted to **$333.0 million** at June 30, 2023[103](index=103&type=chunk) - A **reserve of $21.5 million** was held for risks associated with off-balance sheet commitments as of June 30, 2023, down from $25.0 million at year-end 2022[105](index=105&type=chunk) [Note 8. Stock Options and Restricted Shares](index=29&type=section&id=Note%208.%20Stock%20Options%20and%20Restricted%20Shares) Stock compensation expense was $19.5 million for H1 2023, with $82.2 million in unrecognized cost for unvested awards Unvested Restricted Share & Unit Activity - H1 2023 | Award Type | Unvested at 12/31/22 | Awarded | Lapsed/Released | Forfeited | Unvested at 6/30/23 | | :--- | :--- | :--- | :--- | :--- | :--- | | Restricted Shares | 675,611 | 213,773 | (163,044) | (13,724) | 712,616 | | Restricted Stock Units | 73,983 | 70,716 | (31,392) | (7,060) | 106,247 | - Total **stock compensation expense** for the six months ended June 30, 2023, was **$19.5 million**[119](index=119&type=chunk) - As of June 30, 2023, there was **$82.2 million in total unrecognized compensation cost** related to unvested awards, to be recognized over a weighted-average period of 2.01 years[119](index=119&type=chunk) [Note 9. Derivative Instruments](index=32&type=section&id=Note%209.%20Derivative%20Instruments) The company utilizes various derivative instruments with a total notional value over $7.7 billion to manage interest rate risk Derivative Notional Amounts at June 30, 2023 (in thousands) | Derivative Type | Notional Amount | Purpose | | :--- | :--- | :--- | | Non-hedge Swaps | $3,766,486 | Customer Facilitation | | Cash Flow Hedges (Floors/Collars) | $1,750,000 | Hedge variable rate loans | | Fair Value Hedges (Swaps) | $2,270,724 | Hedge fixed rate securities/borrowings | - In March and May 2023, the company entered into **fair value hedges with aggregate notional amounts of $850 million** to mitigate interest rate risk on FHLB advances[125](index=125&type=chunk) [Note 10. Fair Value of Financial Instruments](index=35&type=section&id=Note%2010.%20Fair%20Value%20of%20Financial%20Instruments) Details the fair value hierarchy for assets and liabilities, with most recurring fair value assets classified as Level 2 Assets at Fair Value (Recurring Basis) - June 30, 2023 (in thousands) | Category | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | AFS Securities | $— | $3,590,801 | $479 | $3,591,280 | | Other investments | $— | $22,019 | $151,762 | $173,781 | | Other assets (Derivatives) | $— | $227,850 | $— | $227,850 | | **Total Assets** | **$—** | **$3,840,670** | **$152,241** | **$3,992,911** | Assets at Fair Value (Nonrecurring Basis) - June 30, 2023 (in thousands) | Category | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | Other real estate owned | $— | $— | $2,555 | $2,555 | | Collateral dependent loans | $— | $— | $40,241 | $40,241 | | **Total** | **$—** | **$—** | **$42,796** | **$42,796** | [Note 11. Regulatory Matters](index=39&type=section&id=Note%2011.%20Regulatory%20Matters) The company and its bank subsidiary remain well-capitalized, exceeding all minimum regulatory capital requirements Pinnacle Financial Partners, Inc. Capital Ratios - June 30, 2023 | Ratio | Actual | Minimum Requirement | | :--- | :--- | :--- | | Common equity Tier 1 capital | 10.2% | 4.5% | | Tier 1 capital | 10.8% | 6.0% | | Total capital | 12.7% | 8.0% | | Tier 1 leverage | 9.5% | 4.0% | - The company has elected to phase in the regulatory capital impact of **CECL adoption** over a three-year period ending December 31, 2024[150](index=150&type=chunk) - Pinnacle Bank paid **$52.8 million in dividends** to the parent holding company during the first six months of 2023[146](index=146&type=chunk) [Note 12. Other Borrowings](index=41&type=section&id=Note%2012.%20Other%20Borrowings) The company had $424.5 million in subordinated debt and other borrowings, including trust preferred securities and notes Subordinated Debt and Other Borrowings (in thousands) | Instrument | Outstanding Amount | Interest Rate/Structure | | :--- | :--- | :--- | | Trust preferred securities (12 trusts) | $132,995 | Variable (3-mo LIBOR/SOFR + spread) | | Pinnacle Financial Subordinated Notes | $300,000 | 4.13% Fixed until 9/15/2024 | | Debt issuance costs and fair value adjustments | $(8,498) | N/A | | **Total** | **$424,497** | | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, balance sheet changes, credit quality, and risk management strategies for H1 2023 [Overview](index=42&type=section&id=Overview) The company reported strong H1 2023 performance driven by robust revenue growth, though provisions for credit losses also rose Key Performance Indicators | Metric | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Diluted EPS | $4.30 | $3.51 | | Net Interest Income | $627.6M | $504.0M | | Provision for Credit Losses | $50.5M | $15.6M | | Noninterest Income | $263.4M | $229.0M | - The company has intentionally **tightened underwriting standards** for construction and CRE investment properties for the remainder of 2023, expecting loan growth rates to moderate[165](index=165&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) Details operating results, including growth in net interest income, a large one-time gain, and rising noninterest expenses [Net Interest Income](index=44&type=section&id=Net%20Interest%20Income) Net interest income and margin grew year-over-year, but higher liquidity levels are expected to pressure the NIM going forward Net Interest Margin Analysis | Period | Net Interest Margin | Earning Asset Yield | Total Funding Rate | | :--- | :--- | :--- | :--- | | Q2 2023 | 3.20% | 5.74% | 2.65% | | Q2 2022 | 3.17% | 3.49% | 0.34% | | H1 2023 | 3.30% | 5.60% | 2.40% | | H1 2022 | 3.03% | 3.30% | 0.29% | - The company intentionally **increased on-balance sheet liquidity** in H1 2023 in response to macroeconomic uncertainty, which is expected to negatively impact NIM for the remainder of the year[181](index=181&type=chunk) [Provision for Credit Losses](index=47&type=section&id=Provision%20for%20Credit%20Losses) The provision for credit losses increased substantially due to loan growth, higher net charge-offs, and a weaker economic outlook - The **provision for credit losses increased to $50.5 million** for the six months ended June 30, 2023, from $15.6 million in the prior-year period[183](index=183&type=chunk) - Key drivers for the increased provision were **loan growth, deterioration in projected macroeconomic factors, and an increase in net charge-offs** to $17.1 million in H1 2023[183](index=183&type=chunk) [Noninterest Income](index=47&type=section&id=Noninterest%20Income) Noninterest income was significantly boosted by an $85.7 million gain on a sale-leaseback, offsetting a decline in BHG income Noninterest Income Components - H1 2023 vs H1 2022 (in thousands) | Component | H1 2023 | H1 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Gain on sale of fixed assets | $85,859 | $198 | >100% | | Income from equity method investment (BHG) | $46,003 | $83,120 | (44.7)% | | Investment services & Trust fees | $38,825 | $35,934 | 8.0% | | Investment losses on sales, net | $(9,961) | $(61) | >(100%) | | Gains on mortgage loans sold, net | $3,620 | $6,216 | (41.8)% | - The decrease in income from BHG was largely due to BHG **increasing its liability for estimated future loan losses** and its allowance for loan losses because of the uncertain economic environment[194](index=194&type=chunk) - BHG's liability for future inherent losses on its sold loan portfolio increased to **$369.0 million (5.9% of outstanding core loans)** at June 30, 2023, up from $234.9 million (5.0%) a year prior[197](index=197&type=chunk) [Noninterest Expense](index=51&type=section&id=Noninterest%20Expense) Noninterest expense grew 11.8% in H1 2023, driven by higher salary, benefit, and occupancy costs from business expansion Noninterest Expense Components - H1 2023 vs H1 2022 (in thousands) | Component | H1 2023 | H1 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Salaries and employee benefits | $268,151 | $248,463 | 7.9% | | Equipment and occupancy | $64,059 | $52,457 | 22.1% | | Other noninterest expense | $70,139 | $60,439 | 16.0% | | **Total Noninterest Expense** | **$423,368** | **$378,699** | **11.8%** | - The associate base grew to **3,309 full-time equivalents** at June 30, 2023, from 3,074 a year prior, contributing to higher salary costs[201](index=201&type=chunk) - **Cash incentive expense decreased to $46.4 million** in H1 2023 from $57.7 million in H1 2022, based on the assumption of a lower payout percentage for 2023[203](index=203&type=chunk) [Income Taxes](index=53&type=section&id=Income%20Taxes) The effective tax rate for H1 2023 was 19.8%, slightly higher than the 19.0% rate in the prior-year period - The **effective tax rate** for the six months ended June 30, 2023, was **19.8%**, compared to 19.0% for the same period in 2022[212](index=212&type=chunk) [Financial Condition](index=53&type=section&id=Financial%20Condition) Details the company's strong balance sheet, with significant growth in loans and deposits and robust capital levels [Loans](index=53&type=section&id=Loans) The loan portfolio grew 7.3% to $31.2 billion in H1 2023, with a slight increase in potential problem loans Loan Composition (in thousands) | Category | June 30, 2023 | % of Total | | :--- | :--- | :--- | | Commercial and industrial | $10,983,911 | 35.3% | | Non-owner occupied CRE | $7,170,888 | 23.0% | | Consumer real estate – mortgage | $4,692,673 | 15.1% | | Construction and land development | $3,904,774 | 12.5% | | Owner occupied CRE | $3,845,359 | 12.3% | | Consumer and other | $555,685 | 1.8% | | **Total Loans** | **$31,153,290** | **100.0%** | - **Potential problem loans increased to $98.9 million** (0.3% of total loans) at June 30, 2023, from $53.8 million (0.2%) at year-end 2022, mainly due to downgrades in the C&I and non-owner occupied CRE portfolios[219](index=219&type=chunk) - **Nonperforming assets were $47.4 million** at June 30, 2023, compared to $46.1 million at December 31, 2022[220](index=220&type=chunk) [Allowance for Credit Losses (ACL)](index=55&type=section&id=Allowance%20for%20Credit%20Losses%20(ACL)) The ACL increased to 1.08% of total loans, reflecting loan growth and a more uncertain macroeconomic outlook ACL Allocation by Loan Category - June 30, 2023 (in thousands) | Loan Category | ACL Allocated | % of Category's Loans | | :--- | :--- | :--- | | Commercial and industrial | $148,418 | 1.35% | | Consumer real estate - mortgage | $59,374 | 1.27% | | Non-owner occupied CRE | $55,108 | 0.77% | | Construction and land development | $38,855 | 1.00% | | Owner occupied CRE | $26,497 | 0.69% | | Consumer and other | $9,207 | 1.66% | | **Total** | **$337,459** | **1.08%** | - **Net charge-offs** for the first six months of 2023 were **$17.1 million**, equivalent to an annualized rate of 0.11% of average loans[226](index=226&type=chunk) [Investments](index=57&type=section&id=Investments) The $6.6 billion investment portfolio remained stable in size while its tax-equivalent yield increased to 3.66% Investment Portfolio Metrics | Metric | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Portfolio Size | ~$6.6B | ~$6.6B | | Weighted average life | 9.64 years | 11.62 years | | Effective duration (net of hedges) | 4.55% | 4.39% | | Tax equivalent yield | 3.66% | 3.19% | [Deposits and Other Borrowings](index=57&type=section&id=Deposits%20and%20Other%20Borrowings) Total deposits grew by $2.8 billion, with a strategic shift toward more wholesale funding to increase liquidity Funding Composition (in thousands) | Funding Type | June 30, 2023 | % of Total | Dec 31, 2022 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Core funding | $32,780,767 | 80.9% | $31,301,077 | 86.8% | | Noncore funding | $7,731,082 | 19.1% | $4,743,562 | 13.2% | | **Total Funding** | **$40,511,849** | **100.0%** | **$36,044,639** | **100.0%** | - **FHLB advances increased to $2.2 billion** at June 30, 2023, from $464.4 million at year-end 2022, to bolster on-balance sheet liquidity[233](index=233&type=chunk) - Estimated **uninsured deposits were $13.1 billion** at June 30, 2023, down from $15.7 billion at year-end 2022[232](index=232&type=chunk) [Capital Resources](index=60&type=section&id=Capital%20Resources) Shareholders' equity grew to $5.8 billion, capital ratios remained strong, and a new $125 million share repurchase plan was authorized - A new **share repurchase program for up to $125.0 million** was authorized on January 17, 2023, effective through March 31, 2024; no shares were repurchased under this or the prior program in 2023[237](index=237&type=chunk) - The company declared a quarterly cash dividend of **$0.22 per common share** and a dividend of **$16.88 per share on its Series B Preferred Stock**[239](index=239&type=chunk) [Market and Liquidity Risk Management](index=60&type=section&id=Market%20and%20Liquidity%20Risk%20Management) The company actively manages interest rate and liquidity risk, maintaining an asset-sensitive position and adequate liquidity sources [Interest Rate Sensitivity](index=61&type=section&id=Interest%20Rate%20Sensitivity) Simulation models show the company is asset-sensitive, with a 100 bps rate increase projected to boost NII by 3.0% Estimated % Change in Net Interest Income (Next 12 Months) | Instantaneous Rate Change | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | +300 bps | 7.60% | 7.80% | | +100 bps | 3.00% | 2.90% | | -100 bps | (2.90)% | (7.70)% | Estimated % Change in Economic Value of Equity (EVE) | Instantaneous Rate Change | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | +300 bps | (18.90)% | (17.20)% | | +100 bps | (6.90)% | (5.70)% | | -100 bps | 5.60% | 4.30% | - The company's interest rate risk profile has been actively managed through the addition of **$1.75 billion in interest rate floors/collars** on loans and **$850 million in receive-fixed swaps** on wholesale funding since June 2022[243](index=243&type=chunk) [Liquidity Risk Management](index=63&type=section&id=Liquidity%20Risk%20Management) The company maintains adequate liquidity through core deposits and significant available borrowing capacity from the FHLB and Federal Reserve - At June 30, 2023, Pinnacle Bank had an estimated **$2.9 billion in additional borrowing capacity with the FHLB**[263](index=263&type=chunk) - The bank also had approximately **$5.9 billion in available lines of credit** from the Federal Reserve discount window and the Bank Term Funding Program (BTFP)[264](index=264&type=chunk) [Off-Balance Sheet Arrangements](index=64&type=section&id=Of%20-Balance%20Sheet%20Arrangements) Off-balance sheet arrangements consist of $16.0 billion in unfunded loan commitments and $333.0 million in standby letters of credit - Off-balance sheet arrangements at June 30, 2023, included **$16.0 billion in unfunded loan commitments** and **$333.0 million in standby letters of credit**[270](index=270&type=chunk) - The company held a **reserve of $21.5 million** for expected credit losses on these off-balance sheet commitments[272](index=272&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Refers to the MD&A section for quantitative and qualitative disclosures about market risk - Information regarding market risk is included on pages 60 through 63 within the **Management's Discussion and Analysis section**[240](index=240&type=chunk)[275](index=275&type=chunk) [Item 4. Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of the end of the reporting period[275](index=275&type=chunk) - **No material changes** were made to the internal control over financial reporting during the quarter ended June 30, 2023[276](index=276&type=chunk) [Part II – Other Information](index=67&type=section&id=PART%20II%20%E2%80%93%20Other%20Information) This part covers legal proceedings, risk factors, share repurchases, and other required disclosures [Item 1. Legal Proceedings](index=67&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any material pending legal proceedings - There are **no material pending legal proceedings** to which Pinnacle Financial or its subsidiaries are a party[279](index=279&type=chunk) [Item 1A. Risk Factors](index=67&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the 2022 Annual Report on Form 10-K - **No material changes to risk factors** have occurred since the filing of the 2022 Annual Report on Form 10-K[280](index=280&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 5,820 shares to satisfy employee tax obligations, separate from its public repurchase program Share Repurchases - Q2 2023 | Period | Total Shares Repurchased | Average Price Paid | | :--- | :--- | :--- | | April 2023 | 5,578 | $54.24 | | May 2023 | 25 | $50.34 | | June 2023 | 217 | $54.83 | | **Total** | **5,820** | **$54.25** | - The repurchased shares were withheld to **satisfy tax withholding requirements** for vested equity awards and were not part of the public repurchase program[282](index=282&type=chunk) - The company has a share repurchase program authorizing up to **$125.0 million in repurchases**, which is effective through March 31, 2024; no shares were repurchased under this program during the quarter[283](index=283&type=chunk) [Item 5. Other Information](index=67&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter - **No director or officer adopted or terminated a Rule 10b5-1 trading arrangement** during the second quarter of 2023[284](index=284&type=chunk) [Item 6. Exhibits](index=68&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed with the report, including required certifications and Inline XBRL data files - Exhibits filed include **certifications pursuant to the Sarbanes-Oxley Act** and Inline XBRL documents[285](index=285&type=chunk)

Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) Q2 2023 Earnings Conference Call July 19, 2023 9:30 AM ET Company Participants Terry Turner – Chief Executive Officer Harold Carpenter – Chief Financial Officer Conference Call Participants Jared Shaw - Wells Fargo Stephen Scouten - Piper Sandler Steven Alexopoulos - JPMorgan Brandon King - Truist Securities Catherine Mealor - KBW Matt Olney - Stephens Rudy Preston - UBS Brian Martin - Jonnie Montgomery Operator Good morning, everyone, and welcome to the Pinna ...

| --- | --- | --- | |-----------------------------------------------------------------------------|-------|-------| | | | | | | | | | Investor Call | | | | | | | | SECOND QUARTER 2023 | | | | JULY 19, 2023 Time: 8:30 AM CT Webcast: www.pnfp.com (investor relations) | | | | M. TERRY TURNER, PRESIDENT AND CEO HAROLD R. CARPENTER, EVP AND CFO | | | | | | | All statements, other than statements of historical fact, included in this presentation, are forward-looking statements within the meaning of the Private Se ...

PART I – Financial Information [Item 1. Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited consolidated financial statements for Q1 2023, detailing financial position, performance, and accounting policies [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$45.1 billion** by Q1 2023, driven by growth in loans and cash, with deposits and FHLB advances also rising Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$45,119,587** | **$41,970,021** | | Cash and cash equivalents | $2,819,476 | $1,177,382 | | Loans, net | $29,984,030 | $28,740,940 | | Total deposits | $36,178,553 | $34,961,238 | | Federal Home Loan Bank advances | $2,166,508 | $464,436 | | **Total Liabilities** | **$39,435,459** | **$36,450,629** | | **Total Shareholders' Equity** | **$5,684,128** | **$5,519,392** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income available to common shareholders rose to **$133.5 million** in Q1 2023, driven by a **30.4%** increase in net interest income Consolidated Income Statement Highlights (in thousands, except per share data) | Account | Three months ended March 31, 2023 | Three months ended March 31, 2022 | | :--- | :--- | :--- | | Net Interest Income | $312,231 | $239,475 | | Provision for credit losses | $18,767 | $2,720 | | Noninterest Income | $89,529 | $103,496 | | Noninterest Expense | $211,727 | $182,661 | | Net Income | $137,271 | $129,110 | | **Net Income Available to Common Shareholders** | **$133,473** | **$125,312** | | **Diluted Net Income per Common Share** | **$1.76** | **$1.65** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes disclose accounting policies, BHG investment performance, portfolio credit quality, allowance for credit losses, and capital adequacy - Subsequent to quarter-end, the company completed a sale-leaseback of 36 properties for **$127.5 million**, expecting a pre-tax net gain of approximately **$55.4 million** in Q2 2023, with an additional 15 properties under agreement for sale for **$90.5 million**[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - Following the sale-leaseback, the company restructured its bond portfolio, selling **$166.0 million** in available-for-sale securities for a net loss of **$9.2 million** to partially offset the property sale gain[37](index=37&type=chunk) - Income from the **49%** equity method investment in Bankers Healthcare Group (BHG) was **$19.1 million** for Q1 2023, a significant decrease from **$33.7 million** in Q1 2022[20](index=20&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk) - As of March 31, 2023, the company had approximately **$280.1 million** in unrealized losses on its available-for-sale securities portfolio, primarily due to interest rate changes[45](index=45&type=chunk) - The allowance for credit losses on loans stood at **$313.8 million**, or **1.04%** of total loans, with a provision for credit losses of **$18.8 million** for the quarter[62](index=62&type=chunk)[209](index=209&type=chunk) - Both Pinnacle Financial and Pinnacle Bank met all capital adequacy requirements to be considered **well-capitalized** under regulatory standards as of March 31, 2023[140](index=140&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q1 2023 financial performance, covering net interest income, credit losses, noninterest income/expense, loan/deposit growth, and liquidity management [Overview](index=37&type=section&id=MD%26A_Overview) Q1 2023 diluted EPS rose to **$1.76**, driven by **30.4%** net interest income growth, despite higher credit provisions and lower noninterest income Q1 2023 Key Performance Metrics (in millions) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Diluted EPS | $1.76 | $1.65 | | Net Interest Income | $312.2M | $239.5M | | Provision for Credit Losses | $18.8M | $2.7M | | Noninterest Income | $89.5M | $103.5M | | Noninterest Expense | $211.7M | $182.7M | - Subsequent to the quarter, the company executed a sale-leaseback of 36 properties for **$127.5 million**, expecting a pre-tax gain of **$55.4 million** in Q2 2023, and sold **$166 million** of AFS securities for a **$9.2 million** loss to partially offset the gain[159](index=159&type=chunk)[160](index=160&type=chunk)[162](index=162&type=chunk) [Results of Operations](index=39&type=section&id=MD%26A_Results_of_Operations) Q1 2023 net interest income increased **30.4%** to **$312.2 million**, with NIM at **3.40%**, while credit provisions and noninterest expenses rose - Net interest margin was **3.40%** for Q1 2023, compared to **2.89%** for Q1 2022 and **3.60%** for Q4 2022, reflecting the rising short-term interest rate environment[169](index=169&type=chunk) - The provision for credit losses increased to **$18.8 million** in Q1 2023 from **$2.7 million** in Q1 2022, primarily due to loan growth and a weaker economic forecast[172](index=172&type=chunk) - Income from the equity-method investment in BHG decreased **43.3%** to **$19.1 million** in Q1 2023 from **$33.7 million** in Q1 2022[174](index=174&type=chunk)[180](index=180&type=chunk) - Salaries and employee benefits expense increased by **$13.9 million** YoY, driven by an increase in full-time equivalent associates to **3,281.5** from **2,988.0** and annual merit increases[187](index=187&type=chunk)[188](index=188&type=chunk) [Financial Condition](index=46&type=section&id=MD%26A_Financial_Condition) Total assets reached **$45.1 billion**, with loans at **$30.3 billion** and deposits at **$36.2 billion**, while credit quality remained stable Loan Portfolio Composition (in thousands) | Loan Category | March 31, 2023 | % of Total | | :--- | :--- | :--- | | Commercial and industrial | $10,723,327 | 35.4% | | Non-owner occupied CRE | $6,887,733 | 22.7% | | Consumer real estate – mortgage | $4,531,285 | 15.0% | | Construction and land development | $3,909,024 | 12.9% | | Owner occupied CRE | $3,686,796 | 12.2% | | Consumer and other | $559,706 | 1.8% | | **Total Loans** | **$30,297,871** | **100.0%** | - Total deposits grew to **$36.2 billion**, with uninsured deposits estimated at **$14.2 billion**, of which **$2.2 billion** were collateralized[219](index=219&type=chunk) - Federal Home Loan Bank (FHLB) advances increased significantly to **$2.2 billion** from **$464.4 million** at year-end 2022 to bolster on-balance sheet liquidity[219](index=219&type=chunk) - Nonperforming assets were **$44.8 million** (**0.10%** of total assets) at March 31, 2023, down from **$46.1 million** at December 31, 2022[208](index=208&type=chunk) [Market and Liquidity Risk Management](index=53&type=section&id=MD%26A_Market%20and%20Liquidity%20Risk%20Management) The company manages interest rate and liquidity risk, showing asset sensitivity with a **2.5%** NII increase in a **+100 bps** rate shock Estimated % Change in Net Interest Income Over 12 Months (Instantaneous Rate Change) | Rate Change | March 31, 2023 | | :--- | :--- | | +300 bps | 6.50% | | +200 bps | 4.90% | | +100 bps | 2.50% | | -100 bps | (2.00)% | | -200 bps | (3.60)% | - The company's percentage of deposits that were both uninsured and uncollateralized was approximately **33%** as of March 31, 2023, which management believes is below peer average[254](index=254&type=chunk) - Available liquidity sources at March 31, 2023, included an estimated **$2.2 billion** in additional FHLB borrowing capacity, **$155.0 million** in correspondent bank lines, and **$5.1 billion** in Federal Reserve discount window and BTFP availability[251](index=251&type=chunk)[252](index=252&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section cross-references market risk disclosures to the detailed analysis provided in Management's Discussion and Analysis - The report directs readers to the Management's Discussion and Analysis (MD&A) section for quantitative and qualitative disclosures about market risk[263](index=263&type=chunk) [Item 4. Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting in Q1 2023 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[263](index=263&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[264](index=264&type=chunk) PART II – Other Information [Item 1. Legal Proceedings](index=60&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material pending legal proceedings against it or its subsidiaries - There are no material pending legal proceedings to which Pinnacle Financial or its subsidiaries are a party[267](index=267&type=chunk) [Item 1A. Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported since the 2022 Form 10-K filing - No material changes to the company's risk factors were reported since the filing of the 2022 Form 10-K[268](index=268&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No share repurchases occurred in Q1 2023, but a new **$125 million** share repurchase program was authorized effective April 1, 2023 - No shares were repurchased under the company's publicly announced plan during the three months ended March 31, 2023[271](index=271&type=chunk) - A new **$125.0 million** share repurchase program was authorized, effective from April 1, 2023, through March 31, 2024[271](index=271&type=chunk) [Item 6. Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including award agreements, incentive plans, and certifications

Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) Q1 2023 Earnings Conference Call April 18, 2023 9:30 AM ET Company Participants Terry Turner – Chief Executive Officer Harold Carpenter – Chief Financial Officer Conference Call Participants Steven Alexopoulos – JPMorgan Jared Shaw – Wells Fargo Securities Catherine Mealor – KBW Casey Haire – Jefferies Brandon King – Truist Securities Michael Rose – Raymond James Stephen Scouten – Piper Sandler Brett Rabatin – Hovde Group Brody Preston – UBS Brian Martin – Jan ...

Estimated loan subs and prepayments (Note) • Estimate for loan substitutions and prepayments increased to ~5.81% of total loans (loans sold to other banks) driven primarily by a weaker macroeconomic outlook and conservative loss provisioning. • Collectively, a record $528M in on-balance sheet allowance and reserves for estimated substitutions and prepays. Actual loan substitutions and prepay reserves as % of Outstanding Balances 3.79% 2.94% 2.95% 1.83% 2.68% 3.25%2.72% 2.47% 2.87% 2.51% 2.12% 2.52% 0.25% 0. ...