Group 1 - Pinnacle Financial Partners has experienced a significant rebound, with shares returning approximately 20% since April [1] - The investment strategy focuses on a long-term, buy-and-hold approach, emphasizing stocks that can consistently generate high-quality earnings [1] - The company is primarily associated with the dividend and income investment sector [1]

Financial Data and Key Metrics Changes - In Q2 2025, revenue increased by 15.1% compared to the same quarter last year, adjusted EPS rose by 22.7%, and tangible book value per share grew by 10.9% year-over-year [6][7][10] - The company has achieved double-digit compound annual growth rates (CAGRs) over the last decade in revenue, EPS, and tangible book value per share, significantly outperforming peers [7][10] Business Line Data and Key Metrics Changes - End of period loans increased by 10.7% on a linked quarter annualized basis, driven by new markets and relationship managers [17] - Deposit growth was recorded at 4.7% linked quarter annualized, with an estimated total deposit growth rate maintained at 7% to 10% for 2025 [19][20] - Net interest margin (NIM) finished up two basis points at 3.23%, with expectations for a flat to slightly up NIM in the upcoming quarters [21] Market Data and Key Metrics Changes - Core deposit growth was 13%, significantly outpacing the peer median during a challenging economic environment [10] - The company has adjusted its loan growth outlook to a range of 9% to 11% for the year, reflecting a strong pipeline despite macroeconomic uncertainties [18] Company Strategy and Development Direction - The company employs a market share takeaway strategy, focusing on recruiting experienced revenue producers from competitors to drive growth [11][12] - The focus remains on organic growth rather than mergers and acquisitions, with a strong emphasis on hiring and developing talent within existing markets [35][36] - The company is optimistic about deepening its presence in current markets, particularly in Florida and Texas, while continuing to hire across its existing footprint [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the current economic environment, noting that clients are in a cautious state but showing underlying optimism for future growth [46][47] - The company anticipates a strong year in 2025, supported by investments in new markets and successful hiring strategies [28][26] Other Important Information - The company has raised its earnings estimate for Bankers Healthcare Group (BHG) from 20% growth to approximately 40% growth for 2025, driven by lower operating costs and improved credit performance [25] - The total expense outlook for the year has been modified to a range of $1,145 million to $1,155 million, reflecting a more positive outlook [27] Q&A Session Summary Question: Clarification on the expected asset growth from new hires - Management confirmed that the cohort of hires from 2020 to 2024 is expected to yield approximately $19 billion in organic asset growth through 2029 [30][31] Question: Appetite for M&A given organic growth success - Management reiterated a preference for organic growth over M&A, citing the ability to produce outsized growth through hiring rather than taking on integration risks [35][36] Question: Customer sentiment and appetite for growth - Management indicated that existing customers are currently cautious but optimistic about future opportunities, with a focus on maintaining credit quality [45][46] Question: Update on BHG's performance and outlook - Management noted that BHG's strong performance is driven by both production growth and improved credit quality, with expectations for continued strength in the second half of the year [56] Question: Future deposit costs and beta expectations - Management expects to maintain current deposit costs and beta levels, with a focus on managing through potential future rate cuts [105][106] Question: Regulatory developments and their impact - Management observed a more positive regulatory environment, which is not expected to alter the company's operational plans significantly [88][89]

Financial Data and Key Metrics Changes - In Q2 2025, revenue increased by 15.1% compared to the same quarter last year, adjusted EPS rose by 22.7%, and tangible book value per share grew by 10.9% year-over-year [8][9][11] - The company has achieved double-digit compound annual growth rates (CAGRs) over the last decade in revenue, EPS, and tangible book value per share, significantly outperforming peers [9][10] Business Line Data and Key Metrics Changes - End-of-period loans increased by 10.7% on a linked quarter annualized basis, driven by new markets and relationship managers [19] - Deposit growth was recorded at 4.7% linked quarter annualized, with an estimated total deposit growth rate maintained at 7% to 10% for 2025 [21][22] - Net interest margin (NIM) finished up two basis points at 3.23%, with expectations for a flat to slightly up NIM in the upcoming quarters [23] Market Data and Key Metrics Changes - Core deposit growth was reported at 13%, significantly higher than the peer median, indicating strong market performance despite a challenging economic environment [11] - The company is focusing on deepening its presence in existing markets rather than expanding into new geographies, with potential opportunities identified in Florida and Texas [43][44] Company Strategy and Development Direction - The company employs a market share takeaway strategy, targeting the largest market share leaders in its footprint to capitalize on their vulnerabilities [12] - The hiring strategy focuses on experienced revenue producers, with an average of 18 years of experience, which is expected to yield approximately $19 billion in organic asset growth through 2029 [14][15] - The company aims to maintain organic growth as its primary strategy, with limited appetite for mergers and acquisitions due to the successful hiring model [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the economic environment, noting that while clients are currently cautious, there is underlying optimism for future growth [51][52] - The company anticipates a strong year in 2025, supported by investments in new markets and successful hiring practices [30][28] Other Important Information - The company has adjusted its net interest income growth outlook to a range of 12% to 13% for 2025, reflecting a positive outlook despite potential rate cuts [24] - The company is increasing its guidance for fee growth from 8%-10% to 12%-15% for the year, driven by strong performance in banking fees and wealth management [28] Q&A Session Summary Question: Clarification on the expected asset growth from new hires - Management confirmed that the cohort of hires from 2020 to 2024 is expected to yield approximately $19 billion in organic asset growth, focusing on relationship managers [35][36] Question: Appetite for M&A given the organic growth model - Management reiterated a strong preference for organic growth over M&A, citing the ability to produce outsized growth through hiring rather than taking on integration risks [39][40] Question: Customer sentiment and appetite for growth - Management indicated that existing customers are currently cautious but optimistic about future opportunities, with a focus on maintaining credit quality [50][52] Question: Update on the BHG business and its contribution to earnings - Management noted that BHG's earnings contribution has increased, with expectations for continued strong performance driven by better credit quality and origination growth [62][63] Question: Future deposit costs and beta expectations - Management expects to maintain current deposit costs and beta levels, with a focus on optimizing margins in response to potential rate cuts [107][108]

Investor Call SECOND QUARTER 2025 JULY 16, 2025 Time: 8:30 AM CT Webcast: www.pnfp.com (investor relations) M. TERRY TURNER, PRESIDENT AND CEO HAROLD R. CARPENTER, EVP AND CFO Safe Harbor Statements Forward Looking Statements All statements, other than statements of historical fact, included in this presentation, 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 o ...

Core Viewpoint - Pinnacle Financial reported strong financial results for the quarter ended June 2025, with significant year-over-year growth in revenue and earnings per share, exceeding market expectations [1][2]. Financial Performance - Revenue for the quarter was $504.99 million, a 37.8% increase year-over-year, surpassing the Zacks Consensus Estimate of $492.81 million by 2.47% [1]. - Earnings per share (EPS) reached $2.00, compared to $1.63 a year ago, reflecting a surprise of 4.17% against the consensus estimate of $1.92 [1]. Key Metrics - Net Interest Margin was reported at 3.2%, matching the average estimate from six analysts [4]. - Efficiency Ratio stood at 56.7%, slightly above the estimated 55.4% by six analysts [4]. - Annualized net loan charge-offs to average loans were 0.2%, in line with the five-analyst average estimate [4]. - Average balances of total interest-earning assets were $49.1 billion, exceeding the estimated $48.7 billion [4]. - Nonaccrual loans totaled $157.17 million, lower than the estimated $180.33 million [4]. - Total nonperforming assets were $162.01 million, compared to the average estimate of $184.79 million [4]. - Total noninterest income was $125.46 million, surpassing the average estimate of $116.7 million [4]. - Net Interest Income was reported at $379.53 million, slightly above the estimated $376.81 million [4]. - Gains on mortgage loans sold, net, were $1.97 million, below the estimated $3 million [4]. - Service charges on deposit accounts were $17.09 million, slightly below the estimated $17.5 million [4]. - Insurance sales commissions were $3.69 million, compared to the average estimate of $4.41 million [4]. - Trust fees were reported at $9.28 million, slightly below the average estimate of $9.4 million [4]. Stock Performance - Pinnacle Financial's shares have returned +15% over the past month, outperforming the Zacks S&P 500 composite's +5% change [3]. - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3].

Financial Performance - Pinnacle Financial Partners reported diluted EPS of $2.00 for Q2 2025, a 212.5% increase from $0.64 in Q2 2024[2] - Total revenues for Q2 2025 were $505.0 million, up 37.8% year-over-year from $366.6 million in Q2 2024[11] - Pre-tax, pre-provision net revenue (PPNR) for Q2 2025 was $218.5 million, compared to $95.2 million in Q2 2024, reflecting a growth of over 100%[9] - Net income available to common shareholders for the second quarter of 2025 was $154.7 million, a significant increase of 213.5% compared to $49.4 million in the same quarter of 2024[31] - Basic net income per common share for Q2 2025 was $2.01, up from $0.65 in Q2 2024, representing a growth of 209.2%[31] - For the first half of 2025, net income available to common shareholders was $291,352, significantly higher than $169,510 in the same period of 2024, marking a 71.8% increase year-over-year[51] Revenue and Income Growth - Total revenues for Q2 2025 were approximately $505.0 million, marking a 37.8% increase year-over-year[16] - Adjusted total revenues for Q2 2025 were $505.0 million, a 15.1% increase from $438.7 million in Q2 2024[12] - Noninterest income for Q2 2025 was $47.9 million, up $6.1 million from Q2 2024, with a notable contribution from equity investments[15] - Wealth management revenues increased to $32.3 million in Q2 2025, up 16.4% from $27.8 million in Q2 2024[15] - Income from the investment in Banker's Healthcare Group (BHG) rose to $26.0 million in Q2 2025, a 39.3% increase from $18.7 million in Q2 2024[15] - Noninterest income for the first half of 2025 totaled $223.9 million, compared to $144.4 million in the same period of 2024, an increase of 55.2%[31] Asset and Deposit Growth - Total assets reached $54.8 billion as of June 30, 2025, marking an increase of approximately $5.4 billion from June 30, 2024[7] - Total deposits rose to $45.0 billion as of June 30, 2025, up from $39.8 billion a year earlier, marking a growth of 13.4%[30] - Noninterest-bearing deposits rose by $133.4 million in Q2 2025, totaling a year-to-date increase of $470.3 million or approximately 11.5% annualized[8] - Total loans reached $37,105,164,000 in June 2025, up from $36,136,746,000 in March 2025, indicating a growth of about 2.68%[34] - Core deposits totaled $39.76 billion at the end of June 2025, slightly down from $40.01 billion in March 2025, reflecting a decrease of 0.60%[45] Expense Management - Noninterest expense for Q2 2025 was $286.4 million, up 5.5% from $271.4 million in Q2 2024[13] - Salaries and employee benefits increased to $181.2 million in Q2 2025, a 20.7% rise from $150.1 million in Q2 2024[18] - The efficiency ratio improved to 55.5% for the first half of 2025, down from 57.5% in the same period of 2024, indicating enhanced operational efficiency[31] - The efficiency ratio improved to 56.72% in June 2025 from 59.52% in March 2025, indicating enhanced operational efficiency[47] Credit Quality and Provisions - The company reported a provision for credit losses of $24.2 million in Q2 2025, compared to $30.2 million in Q2 2024, showing a decrease of 19.9%[31] - Nonperforming assets totaled $162.01 million as of June 30, 2025, a decrease from $175.23 million in the previous quarter, indicating a reduction of 7.0%[43] - The allowance for credit losses was $422,125,000 in June 2025, slightly up from $417,462,000 in March 2025[34] - The allowance for credit losses to nonaccrual loans ratio was 268.6% as of June 30, 2025, compared to 243.3% in the previous quarter, showing an increase in coverage[43] Shareholder Returns - A quarterly cash dividend of $0.24 per common share was declared, payable on August 29, 2025[20] - The book value per common share increased to $82.79 as of June 30, 2025, up from $80.46 at the end of 2024[19] - The common dividends paid increased to $0.48 per share, totaling $37,766,000 for the period ending December 31, 2024[33] Capital and Equity - Pinnacle Financial's total shareholders' equity reached $6.6 billion as of June 30, 2025, up from $6.2 billion at the same time last year, indicating a year-over-year increase of 7.5%[30] - The Tier one risk-based capital ratio was 11.2% as of June 30, 2025, unchanged from the previous quarter, indicating stable capital adequacy[43] - The ratio of tangible common equity to tangible assets was 8.60% in June 2025, consistent with the previous quarter and the same period last year[53] Employee Metrics - The number of full-time equivalent employees increased to 3,627 in June 2025, up from 3,595 in March 2025, a growth of 0.89%[45] - The annualized revenues per full-time equivalent employee rose to $558.5 thousand in June 2025, compared to $522.2 thousand in March 2025, an increase of 6.93%[45]

Analysts on Wall Street project that Pinnacle Financial (PNFP) will announce quarterly earnings of $1.92 per share in its forthcoming report, representing an increase of 17.8% year over year. Revenues are projected to reach $492.81 million, increasing 34.4% from the same quarter last year.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted downward by 0.1% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections durin ...

Financial Performance - Diluted net income per common share for Q1 2025 was $1.77, up from $1.57 in Q1 2024, representing a 12.7% increase[142] - Net interest income for Q1 2025 was $364.4 million, up $46.4 million or 14.6% compared to Q1 2024[143] - Noninterest income decreased by $11.7 million or 10.6% in Q1 2025 compared to Q1 2024, primarily due to a prior year mortgage servicing right[145] - The efficiency ratio for Q1 2025 was 59.5%, compared to 56.6% in Q1 2024, indicating increased expenses relative to revenue[148] - Income tax expense for Q1 2025 was $30.0 million, with an effective tax rate of 17.6%, down from 18.1% in Q1 2024[149] Loan and Deposit Growth - Total loans increased to $36.1 billion at March 31, 2025, a rise of $651 million or 1.8% from December 31, 2024[150] - Total deposits reached $44.5 billion at March 31, 2025, an increase of $1.6 billion or 3.8% from December 31, 2024[150] - The average balance of loans increased to $36.04 billion for the three months ended March 31, 2025, with an interest yield of 6.24%, compared to $33.04 billion and 6.67% in the same period in 2024[157] - Total loans outstanding increased to $36.1 billion as of March 31, 2025, compared to $35.5 billion at December 31, 2024[192] - Total deposits rose by $1.6 billion to $44.5 billion between December 31, 2024, and March 31, 2025[192] Credit Quality - Provision for credit losses decreased to $17.0 million in Q1 2025, down 50.8% from $34.5 million in Q1 2024[144] - The allowance for credit losses was $417.5 million at March 31, 2025, slightly up from $414.5 million at December 31, 2024[151] - Loans past due 30 to 89 days decreased to $55.26 million from $62.13 million as of December 31, 2024, while loans past due 90 days or more decreased to $96.26 million from $103.95 million[198] - Nonperforming assets increased to $175.2 million from $149.1 million at December 31, 2024, with nonaccrual loans accounting for $171.6 million[199] - The allowance for credit losses (ACL) was approximately $417.5 million as of March 31, 2025, representing 1.16% of total loans, a slight decrease from 1.17% at December 31, 2024[200] Noninterest Expenses - Noninterest expense increased by $33.1 million or 13.7% in Q1 2025, driven by a rise in salaries and employee benefits[146] - Total noninterest expense for the three months ended March 31, 2025, was $275.5 million, an increase of 13.7% from $242.4 million in the same period last year[179] - Salaries and employee benefits increased by $26.1 million to $172.1 million for the three months ended March 31, 2025, reflecting a rise of 17.9% compared to the same period in 2024[179] - Cash incentive expense rose to $20.3 million for the three months ended March 31, 2025, compared to $13.6 million in the same period last year, an increase of 49.0%[182] - Equipment and occupancy expenses rose to $46.2 million for the three months ended March 31, 2025, up from $39.6 million in the same period of 2024, partly due to the relocation of corporate headquarters[185] Investment and Funding - The investment securities portfolio amounted to $8.7 billion at March 31, 2025, compared to $8.4 billion at December 31, 2024, with a tax equivalent yield of 4.30%[205] - Core funding as a percentage of total funding increased from 83.9% at December 31, 2024, to 85.1% at March 31, 2025[209] - Total noncore funding decreased to $7.04 billion at March 31, 2025, from $7.33 billion at December 31, 2024[210] - Pinnacle Bank had approximately $2.6 billion in additional availability with the Federal Home Loan Bank as of March 31, 2025[208] - The company had approximately $6.5 billion in available Federal Reserve discount window lines of credit as of March 31, 2025[238] Shareholder Actions - Shareholders' equity increased from $6.4 billion at December 31, 2024, to $6.5 billion at March 31, 2025[212] - During Q1 2025, the bank paid dividends of $30.4 million, remaining within regulatory limits[216] - The company authorized a new share repurchase program for up to $125 million, effective through March 31, 2026[215] Economic and Regulatory Factors - The company’s CECL models utilize macroeconomic factors such as unemployment rate, GDP, and commercial property price index to estimate future credit losses[201] - Management's model governance and validation processes are subject to regulatory review to ensure compliance with guidelines[228] - The liquidity coverage ratio was in compliance as of March 31, 2025, indicating adequate liquidity management[234] - Interest rate sensitivity modeling showed a more neutral position as of March 31, 2025, compared to the previous year[222] - The company expects to continue incurring costs associated with planned technology improvements to enhance infrastructure[241]

Financial Performance Highlights - Total revenues increased, with adjusted figures showing 14.2% growth[16] - Adjusted Fully Diluted EPS (FD EPS) increased by 24.2%[16] - Tangible book value per share grew by 10.6%[147] Loan and Deposit Growth - Net loan growth showed strategic expansion of $756 million[19] - Total deposits increased, with strategic expansion contributing $1.1 billion[110] - Average loans increased to $36042 million[28] - Average deposits increased to $43019 million[35] Asset Quality - Classified Asset Ratio decreased to 4.4%[105] - ACL decreased to 1.16% of total loans[52] - Net charge-offs are estimated to be between 0.16% and 0.20% of average loans for 2025[58] BHG Financial Overview - BHG reported Q1 earnings of $44.1 million, the highest since Q3 2023[53] - BHG's bank auction spreads finished at 9.5% for 1Q25[156] - Over 80% of BHG's Q1 2025 originations were to FICO scores of 700+[165] Forward Outlook - EOP loan growth for 2025 is estimated to be 8-11% over 2024[58] - EOP deposit growth for 2025 is estimated to be 7-10% over 2024[58] - Net interest income growth for 2025 is estimated to be 11-13% year over year[58]

Financial Data and Key Metrics Changes - Pinnacle Financial Partners reported a 14.2% revenue growth in Q1 2025 compared to Q1 2024, continuing a double-digit growth trajectory with a 10.1% CAGR over the last four years [15][16] - Adjusted EPS grew by 24.2% in Q1 2025 over Q1 2024, while tangible book value per share increased by 10.6% in the same period [16][16] - The company maintained a net interest margin (NIM) of 3.21%, with expectations for it to remain flat with some upward bias in Q2 2025 [42][42] Business Line Data and Key Metrics Changes - End-of-period loans increased by 7.3% on a quarter annualized basis, driven by new markets and recruited bankers [35][36] - Deposit growth was a highlight, with an increase of $1.6 billion in Q1 2025, following a $1.9 billion increase in the previous quarter [39][39] - The company anticipates total deposit growth of 7% to 10% for 2025, despite expecting a slowdown in Q2 due to seasonal factors [40][40] Market Data and Key Metrics Changes - The company has reduced its concentration in commercial real estate, which has impacted loan growth but has allowed for a focus on C&I loan growth [30][25] - The average years of experience for newly hired revenue producers is 18 years, contributing to high-quality loan growth [26][28] Company Strategy and Development Direction - Pinnacle's strategy focuses on continuously attracting top bankers and enabling them to consolidate their client relationships, which is seen as a sustainable growth model [18][23] - The company aims to maintain its unique work environment and culture, which has been recognized as one of the best workplaces in America [31][32] - The management emphasizes a market share takeaway strategy that is less reliant on overall economic growth [22][25] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current economic volatility but remains confident in the company's ability to grow and produce shareholder value [13][34] - The outlook for 2025 includes expectations for client balance sheet growth consistent with prior guidance, despite uncertainties in the broader economy [34][34] - The company is monitoring potential impacts from tariffs and trade wars on its portfolio, particularly in sectors like trucking and multifamily [111][114] Other Important Information - The company reported a decrease in net charge-offs to 16 basis points in Q1 2025, with expectations for charge-offs to remain around 16 to 20 basis points for the year [45][45] - BHG had a strong quarter, providing fee revenues of over $20 million, leading to an upward revision of earnings estimates for 2025 from 10% growth to 20% growth over 2024 [50][51] Q&A Session Summary Question: Did you change the baseline assumption under CECL for calculating the reserves? - The company kept the baseline unchanged but used an adverse scenario to influence qualitative assumptions [62] Question: Is the growth or higher target for BHG dependent on continued securitizations? - BHG has plenty of room through the bank channel and plans for another ABS issuance towards the end of the year [64] Question: What are the expectations for deposit growth in Q2? - April is traditionally a tough month for deposit growth, but the company believes it has advantages in deposit pricing [72] Question: How does the company view the current loan pricing environment? - The company is not overly concerned about volume but is more focused on the pricing aspect of loans [76] Question: What areas are credit officers focusing on regarding tariffs and trade wars? - Credit officers are focused on trucking, multifamily, and leveraged lending to assess potential impacts [111] Question: What is the outlook for capital ratios given the growth outlook? - The company has not set a specific floor for CET1 but aims to maintain stability in risk-based capital ratios [134]