Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) Q2 2020 Earnings Conference Call July 22, 2020 9:30 AM ET Company Participants | --- | --- | |----------------------------------------------------------------------------------------------------------------------|-------| | | | | Terry Turner – Chief Executive Officer Harold Carpenter – Chief Financial Officer Tim Huestis – Chief Credit Officer | | | Conference Call Participants | | | Stephen Scouten – Piper Sandler Jared Shaw – Wells Fargo Securities | | | Ca ...

| --- | --- | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------------|-------|-------|-------| | | | | | | | | | | | Investor Call | | | | | | | | | | SECOND QUARTER 2020 July 22, 2020 Time: 8:30 AM CDT Webcast: www.pnfp.com (investor relations) | | | | | M. TERRY TURNER, PRESIDENT AND CEO HAROLD R. CARPENTER, EVP AND CFO TIM HUESTIS, EVP AND CHIEF CREDIT OFFICER Audio only: 877-602-7944 | | | | | | | | | Safe Harb ...

Financial Data and Key Metrics Changes - Total revenues increased by 10.8% year-over-year, indicating strong performance despite the pandemic [11] - Fully diluted EPS for the quarter was $0.39, impacted by elevated provisions due to COVID-19 [12] - Pre-provision net revenue grew by 2.8% linked quarter and over 11% on an annualized basis, showcasing resilience [12] Business Line Data and Key Metrics Changes - End of period loans increased by $608 million, with organic loan growth estimated at $350 million, resulting in approximately 7% annualized loan growth [16] - Deposits rose by almost 23%, with core deposits up 22% compared to December 31 [17] - Fee income exceeded $70 million for the quarter, up more than 3% year-over-year, with residential mortgage leading the growth [28] Market Data and Key Metrics Changes - The company experienced significant loan and deposit volume growth, attributed to clients building liquidity during the pandemic [13] - The NIM performance was solid, with expectations of modest yield compression in the second quarter due to LIBOR movements [22][23] Company Strategy and Development Direction - The company adopted a defensive posture in response to the pandemic while focusing on long-term shareholder value [10] - A significant emphasis was placed on gathering low-cost core deposits, which contributed to the record growth in deposits [13] - The company is actively participating in the Payroll Protection Program (PPP), having processed approximately $2.5 billion in applications [66] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery, anticipating a U-shaped recovery over approximately 18 months [43][50] - The company is focused on supporting clients through payment deferral programs and proactive communication regarding financial assistance [64][79] - Management acknowledged the uncertainty surrounding economic conditions but emphasized the strength of their capital and credit quality [54] Other Important Information - The company has taken a conservative approach to credit risk, with a focus on high-quality borrowers and maintaining strong credit standards [96] - The adoption of CECL has resulted in a significant increase in provisions, with a $100 million provision being noted as a substantial investment during uncertain times [49] - The company has suspended its buyback program until more clarity on the pandemic's impact is achieved [51] Q&A Session Summary Question: What is the outlook for loan growth in the current environment? - Management indicated that organic loan growth was approximately $350 million for the quarter, which is commendable given the current economic challenges [16] Question: How is the company managing credit risk during the pandemic? - The company is employing a proactive approach with payment deferral programs and enhanced monitoring strategies to minimize loan defaults [79] Question: What are the expectations regarding the impact of the PPP on the company's financials? - The company expects to recognize approximately $50 million in fees from the PPP loans, which will help mitigate the financial impact of the pandemic [69]

| --- | --- | --- | --- | |----------------------------------------------------------------------------------------------------------------------------------------|-------|-------|-------| | | | | | | | | | | | Investor Call | | | | | | | | | | FIRST QUARTER 2020 April 21, 2020 Time: 8:30 AM CDT Webcast: www.pnfp.com (investor relations) | | | | | M. TERRY TURNER, PRESIDENT AND CEO HAROLD R. CARPENTER, EVP AND CFO TIM HUESTIS, EVP AND CHIEF CREDIT OFFICER Audio only: 877-602-7944 | | | | | | | | | Safe Harb ...