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NASHVILLE, Tenn.--(BUSINESS WIRE)--Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.65 for the quarter ended March 31, 2022, compared to net income per diluted common share of $1.61 for the quarter ended March 31, 2021, an increase of approximately 2.5 percent. Items significantly impacting the comparability between the two periods were: PPP income in the first quarter of 2022 was $10.8 million, compared to $23.0 million in the first quarter of 2021. PPP loans at March 31, 2022 were $157.2 million, down from $371.1 million at Dec. 31, 2021 and $2.2 billion at March 31, 2021. Income from the firm’s sale of residential mortgage loans amounted to $4.1 million during the first quarter of 2022, compared to $13.7 million during the first quarter of 2021. On March 1, 2022, Pinnacle Bank acquired the remaining equity of JB&B Capital, LLC ("JB&B"), a commercial equipment leasing business in Knoxville, TN, in a cash transaction. Pinnacle had previously acquired 20 percent of JB&B's equity in 2017. As a result of the acquisition of JB&B, first quarter 2022 net income per diluted common share increased by $0.04 per share, which includes approximately $5.5 million of gains resulting from remeasurement of the previous investment offset in part by approximately $1.0 million of provision for credit losses recorded in accordance with CECL for the outstanding leases at JB&B. Lease balances attributable to the JB&B acquisition approximated $60.7 million at March 31, 2022. "In our view, the economic landscape remains fragile," said M. Terry Turner, Pinnacle's president and chief executive officer. "Russia's invasion of Ukraine and the various economic sanctions enacted in response are likely to continue to weigh on our economy. The full impact of the ongoing supply chain issues, inflation, inverted yield curves and a potential recession are as yet unknown. Our response thus far has been to seek to protect tangible book value, to initiate a number of targeted loan portfolio reviews, including our COVID-impacted and commercial real estate portfolios, and to heighten our diligence on cybersecurity and fraud detection. "Despite the uncertain economic environment, we are pleased with our first quarter performance and remain optimistic for 2022," Turner said. "As a result of our prolific hiring over the last few years, we had anticipated rapid loan growth this year based primarily on market share movement as the new revenue producers continue to consolidate their clients from their previous employers to us. Not only are we realizing outsized loan growth in our legacy Tennessee, Carolinas and Virginia markets, but we are also having great success in our market extensions to Atlanta, Washington, D.C., Birmingham, and Huntsville. The prolific hiring continued during the first quarter with 28 additional revenue producers. The loan growth we experienced during the first quarter, along with our current loan pipelines and our continued ability to attract new associates, have bolstered our confidence that we could meet or exceed mid-teen percentage loan growth for this year." BALANCE SHEET GROWTH: Total assets at March 31, 2022 were $39.4 billion, an increase of approximately $4.1 billion from March 31, 2021, reflecting a year-over-year increase of 11.6 percent. A further analysis of select balance sheet trends follows: Balances at Balances at (dollars in thousands) March 31, 2022 December 31, 2021 Linked-Quarter Annualized % Change March 31, 2021 Year-over-Year % Change Loans $ 24,499,022 $ 23,414,262 18.5 % $ 23,086,701 6.1 % Less PPP loans 157,180 371,118 (230.6 )% 2,221,409 (92.9 )% Loans excluding PPP loans 24,341,842 23,043,144 22.5 % 20,865,292 16.7 % Securities and other interest-earning assets 10,704,157 11,046,895 (12.4 )% 8,237,831 29.9 % Total interest-earning assets excluding PPP loans $ 35,045,999 $ 34,090,039 11.2 % $ 29,103,123 20.4 % Core Deposits: Noninterest-bearing deposits 10,986,194 10,461,071 20.1 % 8,103,943 35.6 % Interest-bearing core deposits(1) 19,412,489 18,855,840 11.8 % 16,857,447 15.2 % Noncore deposits and other funding(2) 3,428,850 3,452,034 (2.7 )% 5,062,784 (32.3 )% Total funding $ 33,827,533 $ 32,768,945 12.9 % $ 30,024,174 12.7 % (1): Interest-bearing core deposits are interest-bearing deposits, money market accounts, time deposits less than $250,000 and reciprocating time and money market deposits issued through the IntraFi Network. (2): Noncore deposits and other funding consists of time deposits greater than $250,000, securities sold under agreements to repurchase, public funds, brokered deposits, FHLB advances and subordinated debt. "During the first quarter, loan growth approximated an annualized rate of 18.5 percent when compared to balances at Dec. 31, 2021. Excluding the impact of PPP, loans increased at an annualized rate of 22.5 percent," Turner said. "As we have been highlighting for the past several quarters, replacing last year's PPP revenue and extraordinary volume of mortgage origination fees is primarily a function of new loan growth this year, and we are off to a tremendous start. Additionally, we were pleased with our core deposit growth in the first quarter of 14.7 percent and that our average deposit costs decreased during the quarter to 13 basis points." PRE-TAX, PRE-PROVISION NET REVENUES (PPNR): Pre-tax, pre-provision net revenues (PPNR) for the quarter ended March 31, 2022 were $160.3 million, a decrease of 1.4 percent from the $160.9 million recognized in the quarter ended March 31, 2021. Three months ended March 31, (dollars in thousands) 2022 2021 % change Revenues: Net interest income $ 239,475 $ 222,870 7.5 % Noninterest income 103,496 92,709 11.6 % Total revenues 342,971 315,579 8.7 % Noninterest expense 182,661 154,696 18.1 % Pre-tax, pre-provision net revenue (PPNR) $ 160,310 $ 160,883 (0.4 )% Adjustments: Investment losses on sales of securities, net 61 — NM ORE expense (benefit) 105 (13 ) NM Adjusted PPNR $ 160,476 $ 160,870 (0.2 )% Revenue per fully diluted common share was $4.52 for the three months ended March 31, 2022, compared to $4.47 for the fourth quarter of 2021 and $4.17 for the first quarter of 2021, an 8.4 percent year-over-year growth rate. Net interest income for the quarter ended March 31, 2022 was $239.5 million, compared to $238.8 million for the fourth quarter of 2021 and $222.9 million for the first quarter of 2021, a year-over-year growth rate of 7.5 percent. Revenues from PPP loans approximated $10.8 million in the first quarter of 2022, compared to $15.5 million in the fourth quarter of 2021 and $23.0 million in the first quarter of 2021. At March 31, 2022, remaining unamortized fees for PPP loans were approximately $5.0 million. Included in net interest income for the first quarter of 2022 was $1.7 million of discount accretion associated with fair value adjustments, compared to $2.2 million of discount accretion recognized in the fourth quarter of 2021 and $3.8 million in the first quarter of 2021. There remains $7.0 million of purchase accounting discount accretion as of March 31, 2022. Revenues from PPP loans approximated $10.8 million in the first quarter of 2022, compared to $15.5 million in the fourth quarter of 2021 and $23.0 million in the first quarter of 2021. At March 31, 2022, remaining unamortized fees for PPP loans were approximately $5.0 million. Included in net interest income for the first quarter of 2022 was $1.7 million of discount accretion associated with fair value adjustments, compared to $2.2 million of discount accretion recognized in the fourth quarter of 2021 and $3.8 million in the first quarter of 2021. There remains $7.0 million of purchase accounting discount accretion as of March 31, 2022. Noninterest income for the quarter ended March 31, 2022 was $103.5 million, compared to $100.7 million for the quarter ended Dec. 31, 2021, a linked-quarter annualized increase of 11.0 percent. Compared to $92.7 million for the first quarter of 2021, noninterest income grew 11.6 percent. Wealth management revenues, which include investment, trust and insurance services, were $20.7 million for the first quarter of 2022, compared to $19.3 million for the fourth quarter of 2021, a linked-quarter annualized increase of 28.2 percent. Compared to $16.1 million for the first quarter of 2021, wealth management revenues were up 28.5 percent. First quarter 2022 gains from investments in joint ventures and other funds was $1.7 million, compared to $3.4 million in the first quarter of 2021 and $4.1 million in the fourth quarter of 2021. Service charges on deposit accounts were $11.0 million for the quarter ended March 31, 2022, compared to $12.7 million for the quarter ended Dec. 31, 2021 and $8.3 million for the quarter ended March 31, 2021. Fluctuations in these accounts are directly correlated with transaction volume and include NSF fees, analysis fees and check card interchange revenues. Income from the firm's investment in BHG was $33.7 million for the quarter ended March 31, 2022, up from $30.8 million for the quarter ended Dec. 31, 2021 and $29.0 million for the quarter ended March 31, 2021. Other noninterest income was $34.1 million for the quarter ended March 31, 2022, compared to $33.2 million for the quarter ended Dec. 31, 2021 and $25.7 million for the quarter ended March 31, 2021, a linked-quarter annualized increase of 10.4 percent and year-over-year growth of 32.8 percent, respectively. The year-over-year growth was primarily impacted by the $5.5 million gain on remeasurement of our investment in JB&B. Wealth management revenues, which include investment, trust and insurance services, were $20.7 million for the first quarter of 2022, compared to $19.3 million for the fourth quarter of 2021, a linked-quarter annualized increase of 28.2 percent. Compared to $16.1 million for the first quarter of 2021, wealth management revenues were up 28.5 percent. First quarter 2022 gains from investments in joint ventures and other funds was $1.7 million, compared to $3.4 million in the first quarter of 2021 and $4.1 million in the fourth quarter of 2021. Service charges on deposit accounts were $11.0 million for the quarter ended March 31, 2022, compared to $12.7 million for the quarter ended Dec. 31, 2021 and $8.3 million for the quarter ended March 31, 2021. Fluctuations in these accounts are directly correlated with transaction volume and include NSF fees, analysis fees and check card interchange revenues. Income from the firm's investment in BHG was $33.7 million for the quarter ended March 31, 2022, up from $30.8 million for the quarter ended Dec. 31, 2021 and $29.0 million for the quarter ended March 31, 2021. Other noninterest income was $34.1 million for the quarter ended March 31, 2022, compared to $33.2 million for the quarter ended Dec. 31, 2021 and $25.7 million for the quarter ended March 31, 2021, a linked-quarter annualized increase of 10.4 percent and year-over-year growth of 32.8 percent, respectively. The year-over-year growth was primarily impacted by the $5.5 million gain on remeasurement of our investment in JB&B. Noninterest expense for the quarter ended March 31, 2022 was $182.7 million, compared to $170.4 million in the fourth quarter of 2021 and $154.7 million in the first quarter of 2021, reflecting a linked-quarter annualized growth rate of 28.7 percent and a year-over-year increase of 18.1 percent. Salaries and employee benefits were $121.9 million in the first quarter of 2022, compared to $110.0 million in the fourth quarter of 2021 and $102.7 million in the first quarter of 2021, reflecting a linked-quarter annualized growth rate of 43.0 percent and a year-over-year increase of 18.6 percent. Total full-time equivalent associates amounted to 2,988 associates at March 31, 2022, compared to 2,621 full-time equivalent associates at March 31, 2021, an increase of 14.0 percent. Noninterest expense categories, other than salaries and employee benefits, were $60.8 million in the first quarter of 2022, compared to $60.4 million in the fourth quarter of 2021 and $52.0 million in the first quarter of 2021, reflecting a linked-quarter annualized growth rate of less than 1 percent and a year-over-year increase of 17.0 percent. Salaries and employee benefits were $121.9 million in the first quarter of 2022, compared to $110.0 million in the fourth quarter of 2021 and $102.7 million in the first quarter of 2021, reflecting a linked-quarter annualized growth rate of 43.0 percent and a year-over-year increase of 18.6 percent. Total full-time equivalent associates amounted to 2,988 associates at March 31, 2022, compared to 2,621 full-time equivalent associates at March 31, 2021, an increase of 14.0 percent. Noninterest expense categories, other than salaries and employee benefits, were $60.8 million in the first quarter of 2022, compared to $60.4 million in the fourth quarter of 2021 and $52.0 million in the first quarter of 2021, reflecting a linked-quarter annualized growth rate of less than 1 percent and a year-over-year increase of 17.0 percent. "We continue to highlight PPNR and our efforts to grow PPNR consistently," said Harold R. Carpenter, Pinnacle’s chief financial officer. "PPNR was flattish compared to last year’s first quarter, but given the headwinds of reduced PPP revenues and reduced revenues from our residential mortgage business, we are pleased with our first quarter PPNR results. In addition to our anticipated loan growth this year, we believe that BHG's performance will result in at least 20 percent noninterest income growth in 2022 and that our wealth management businesses will also have a strong year given market volatility and several significant hires that were accomplished in 2021. As to expenses, compensation costs increased nearly 19 percent over last year, due primarily to increased headcount, annual merit raises and seasonal payroll taxes. We are optimistic that our hiring model will continue to provide us even more opportunities to add revenue producers this year. As a result, including the impact of inflation and the addition of JB&B on our expense base, we believe our noninterest expenses for 2022 will approximate mid-teen percentage increase over 2021 noninterest expense. "We all appreciated that growing PPNR in 2022 would be challenging for the entire banking industry. We believe our loan growth momentum going into the second quarter is very strong, and assuming rates continue to increase and eliminate the impact of a larger percentage of our loan floors, not only should our revenue growth accelerate, but our margins should begin to expand as well." PROFITABILITY: Three months ended March 31, 2022 December 31, 2021 March 31, 2021 Net interest margin 2.89 % 2.96 % 3.02 % Efficiency ratio 53.26 % 50.20 % 49.02 % Return on average assets 1.32 % 1.39 % 1.42 % Return on average tangible common equity (TCE) 15.63 % 16.13 % 17.16 % Book value per common share $ 66.30 $ 66.89 $ 62.33 Tangible book value per common share $ 41.65 $ 42.55 $ 37.88 Net interest margin was 2.89 percent for the first quarter of 2022, compared to 2.96 percent for the fourth quarter of 2021 and 3.02 percent for the first quarter of 2021. Impacting the firm’s net interest margin in the first quarter of 2022 and first and fourth quarters of 2021 were both PPP loans and the firm’s decision early in the pandemic to maintain additional on-balance sheet liquidity. The firm estimates its first quarter 2022 and fourth quarter 2021 net interest margin was negatively impacted by approximately 29 and 25 basis points, respectively, as a result of PPP loans and additional liquidity, compared to approximately 27 basis points for the first quarter 2021. Impacting the firm’s net interest margin in the first quarter of 2022 and first and fourth quarters of 2021 were both PPP loans and the firm’s decision early in the pandemic to maintain additional on-balance sheet liquidity. The firm estimates its first quarter 2022 and fourth quarter 2021 net interest margin was negatively impacted by approximately 29 and 25 basis points, respectively, as a result of PPP loans and additional liquidity, compared to approximately 27 basis points for the first quarter 2021. During the quarter ended March 31, 2022, book value decreased by $0.59 per share and tangible book value decreased by $0.90 per share when compared to the fourth quarter of 2021, due in large part to approximately $132.8 million decrease in the net unrealized fair value of the firm's available-for-sale investment securities portfolio caused by rising rates. Additionally, during the first quarter, the firm transferred approximately $1.1 billion of available-for-sale securities to held-to-maturity. "We remain pleased with our profitability metrics for the first quarter," Carpenter said. "There is much discussion about the rate environment and its impact on our balance sheet sensitivity going forward. We believe our balance sheet is positioned more conservatively than most given our disciplined adherence to loan floors over the last few years. Over the course of the last few weeks and since the most recent increase in Fed funds rates, our loan yields have expanded by almost 6 basis points, while our total deposit costs have increased approximately 2 basis points. Thus far, and we are very early in the up-rate cycle, we are pleased with how our relationship managers are working with their clients and setting expectations for the next several quarters. "Additionally, the impact of increased rates on tangible book value has garnered attention. Our tangible book value per share decreased by 2.1 percent this quarter, primarily due to the impact of rising rates on accumulated other comprehensive income. Early in the first quarter of 2022, we transferred approximately $1.1 billion of available-for-sale securities to held-to-maturity to help counter the impact of rising rates on tangible equity. Tangible book value per share is a key initiative of ours, so we will continue to position our firm to grow tangible book value over the long term." MAINTAINING A STRONG BALANCE SHEET: Three months ended or as of March 31, 2022 December 31, 2021 March 31, 2021 Annualized net loan charge-offs to avg. loans(1) 0.05 % 0.14 % 0.20 % Nonperforming assets to total loans, ORE and other nonperforming assets (NPAs) 0.14 % 0.17 % 0.36 % Classified asset ratio (Pinnacle Bank) (2) 3.60 % 4.10 % 7.30 % Allowance for credit losses (ACL) to total loans 1.07 % 1.12 % 1.22 % ACL to total loans, excluding PPP 1.07 % 1.14 % 1.35 % (1): Annualized net loan charge-offs to average loans ratios are computed by annualizing quarterly net loan charge-offs and dividing the result by average loans for the quarter. (2): Classified assets as a percentage of Tier 1 capital plus allowance for credit losses. Provision for credit losses was $2.7 million in the first quarter of 2022 and the fourth quarter of 2021, compared to $7.2 million in the first quarter of 2021. Net charge-offs were $3.0 million for the quarter ended March 31, 2022, compared to $8.1 million for the quarter ended Dec. 31, 2021 and $11.4 million for the quarter ended March 31, 2021. Nonperforming assets were $35.1 million at March 31, 2022, compared to $40.1 million at Dec. 31, 2021 and $82.8 million at March 31, 2021. The ratio of the allowance for credit losses to nonperforming loans at March 31, 2022 was 982.9 percent, compared to 833.8 percent at Dec. 31, 2021 and 389.4 percent at March 31, 2021. Classified assets were $137.0 million at March 31, 2022, compared to $151.3 million at Dec. 31, 2021 and $244.9 million at March 31, 2021. "Our credit performance has been strong for many years, and this was even more evident in the first quarter," Carpenter said. "Several of our loan credit metrics are at the lowest point they have been at in many years. During the first quarter, our allowance for credit losses to total loans (excluding PPP loans) (ACL) decreased from 1.14 percent at year end 2021 to 1.07 percent at March 31, 2022. We believe that continued reductions in our ACL are possible through most of 2022." WEBCAST AND CONFERENCE CALL INFORMATION Pinnacle will host a webcast and conference call at 8:30 a.m. CT on April 19, 2022, to discuss first quarter 2022 results and other matters. To access the call for audio only, please call 1-877-602-7944. For the presentation and streaming audio, please 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 2021 deposit data from the FDIC, is listed by Forbes among the top 25 banks in the nation and earned a spot on the 2022 list of 100 Best Companies to Work For® in the U.S., its sixth consecutive appearance. American Banker recognized Pinnacle as one of America’s Best Banks to Work For nine years in a row and No. 1 among banks with more than $11 billion in assets in 2021. 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. 4 on its 2021 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 $39.4 billion in assets as of March 31, 2022. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 15 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. 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 the spread of the virus, 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) further public acceptance of the booster shots of the vaccines that were developed against the virus as well as the decisions of governmental agencies with respect to vaccines including recommendations related to booster shots and requirements that seek to mandate that individuals receive or employers require that their employees receive the vaccine; (iv) those vaccines' efficacy against the virus, including new variants; (v) 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; (vi) 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; (vii) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (viii) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower-quality assets; (ix) 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; (x) 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, including the negative impact of inflationary pressures on our customers and their businesses; (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) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (xxvii) fluctuations in the valuations of Pinnacle Financial's equity investments and the ultimate success of such investments; (xxiii) the availability of and access to capital; (xxix) 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, 2021, and subsequently filed Quarterly Reports on Form 10-Q 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, PPNR, 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 2022 versus certain periods in 2021 and to internally prepared projections. CONSOLIDATED BALANCE SHEETS – UNAUDITED (dollars in thousands, except for share and per share data) March 31, 2022 December 31, 2021 March 31, 2021 ASSETS Cash and noninterest-bearing due from banks $ 187,093 $ 188,287 $ 189,251 Restricted cash 29,680 82,505 162,834 Interest-bearing due from banks 3,103,008 3,830,747 2,780,137 Federal funds sold and other — — 55,186 Cash and cash equivalents 3,319,781 4,101,539 3,187,408 Securities purchased with agreement to resell 1,332,753 1,000,000 450,000 Securities available-for-sale, at fair value 3,569,723 4,914,194 3,677,019 Securities held-to-maturity (fair value of $2.4 billion, $1.2 billion and $1.0 billion, net of allowance for credit losses of $1.1 million, $161 and $198 at March 31, 2022, Dec. 31, 2021 and March 31, 2021, respectively) 2,566,386 1,155,958 1,014,345 Consumer loans held-for-sale 67,224 45,806 85,769 Commercial loans held-for-sale 35,383 17,685 12,541 Loans 24,499,022 23,414,262 23,086,701 Less allowance for credit losses (261,618 ) (263,233 ) (280,881 ) Loans, net 24,237,404 23,151,029 22,805,820 Premises and equipment, net 296,779 288,182 289,515 Equity method investment 382,256 360,833 327,512 Accrued interest receivable 95,147 98,813 98,477 Goodwill 1,850,951 1,819,811 1,819,811 Core deposits and other intangible assets 31,997 33,819 40,130 Other real estate owned 8,237 8,537 10,651 Other assets 1,606,357 1,473,193 1,480,707 Total assets $ 39,400,378 $ 38,469,399 $ 35,299,705 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Noninterest-bearing $ 10,986,194 $ 10,461,071 $ 8,103,943 Interest-bearing 6,838,659 6,530,015 5,814,689 Savings and money market accounts 12,416,101 12,179,663 11,361,620 Time 2,054,860 2,133,784 3,012,688 Total deposits 32,295,814 31,304,533 28,292,940 Securities sold under agreements to repurchase 219,530 152,559 172,117 Federal Home Loan Bank advances 888,870 888,681 888,115 Subordinated debt and other borrowings 423,319 423,172 671,002 Accrued interest payable 8,575 12,504 15,359 Other liabilities 283,320 377,343 300,648 Total liabilities 34,119,428 33,158,792 30,340,181 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 March 31, 2022, Dec. 31, 2021 and March 31, 2021, respectively 217,126 217,126 217,126 Common stock, par value $1.00; 180.0 million shares authorized; 76.4 million, 76.1 million and 76.1 million shares issued and outstanding at March 31, 2022, Dec. 31, 2021, and March 31, 2021, respectively 76,377 76,143 76,088 Additional paid-in capital 3,045,914 3,045,802 3,027,311 Retained earnings 1,972,686 1,864,350 1,515,451 Accumulated other comprehensive income (loss), net of taxes (31,153 ) 107,186 123,548 Total stockholders' equity 5,280,950 5,310,607 4,959,524 Total liabilities and stockholders' equity $ 39,400,378 $ 38,469,399 $ 35,299,705 This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED (dollars in thousands, except for share and per share data) Three months ended March 31, 2022 December 31, 2021 March 31, 2021 Interest income: Loans, including fees $ 227,047 $ 230,026 $ 227,372 Securities Taxable 11,048 9,696 7,728 Tax-exempt 17,446 16,931 15,498 Federal funds sold and other 3,076 2,540 1,319 Total interest income 258,617 259,193 251,917 Interest expense: Deposits 10,250 10,648 17,468 Securities sold under agreements to repurchase 56 54 72 FHLB advances and other borrowings 8,836 9,728 11,507 Total interest expense 19,142 20,430 29,047 Net interest income 239,475 238,763 222,870 Provision for credit losses 2,720 2,675 7,235 Net interest income after provision for credit losses 236,755 236,088 215,635 Noninterest income: Service charges on deposit accounts 11,030 12,663 8,307 Investment services 10,691 11,081 8,191 Insurance sales commissions 4,036 2,328 3,225 Gains on mortgage loans sold, net 4,066 4,244 13,666 Investment gains (losses) on sales, net (61 ) 393 — Trust fees 5,973 5,926 4,687 Income from equity method investment 33,655 30,844 28,950 Other noninterest income 34,106 33,244 25,683 Total noninterest income 103,496 100,723 92,709 Noninterest expense: Salaries and employee benefits 121,852 110,048 102,728 Equipment and occupancy 25,536 24,997 23,220 Other real estate, net 105 37 (13 ) Marketing and other business development 3,777 4,562 2,349 Postage and supplies 2,371 2,191 1,806 Amortization of intangibles 1,871 2,057 2,206 Other noninterest expense 27,149 26,525 22,400 Total noninterest expense 182,661 170,417 154,696 Income before income taxes 157,590 166,394 153,648 Income tax expense 28,480 32,866 28,220 Net income 129,110 133,528 125,428 Preferred stock dividends (3,798 ) (3,798 ) (3,798 ) Net income available to common shareholders $ 125,312 $ 129,730 $ 121,630 Per share information: Basic net income per common share $ 1.66 $ 1.72 $ 1.61 Diluted net income per common share $ 1.65 $ 1.71 $ 1.61 Weighted average common shares outstanding: Basic 75,654,986 75,523,052 75,372,883 Diluted 75,930,372 76,024,700 75,657,149 This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED (dollars in thousands) March December September June March December 2022 2021 2021 2021 2021 2020 Balance sheet data, at quarter end: Commercial and industrial loans $ 8,213,204 7,703,428 7,079,431 6,771,254 6,355,119 6,239,588 Commercial real estate - owner occupied loans 3,124,275 3,048,822 2,954,519 2,817,689 2,869,785 2,802,227 Commercial real estate - investment loans 4,707,761 4,607,048 4,597,736 4,644,551 4,782,712 4,565,040 Commercial real estate - multifamily and other loans 718,822 614,656 621,471 724,253 790,469 638,344 Consumer real estate - mortgage loans 3,813,252 3,680,684 3,540,439 3,335,537 3,086,916 3,099,172 Construction and land development loans 3,277,029 2,903,017 3,096,961 2,791,611 2,568,969 2,901,746 Consumer and other loans 487,499 485,489 459,182 440,124 411,322 379,515 Paycheck protection program loans 157,180 371,118 708,722 1,372,916 2,221,409 1,798,869 Total loans 24,499,022 23,414,262 23,058,461 22,897,935 23,086,701 22,424,501 Allowance for credit losses (261,618 ) (263,233 ) (268,635 ) (273,747 ) (280,881 ) (285,050 ) Securities 6,136,109 6,070,152 5,623,890 5,326,908 4,691,364 4,615,040 Total assets 39,400,378 38,469,399 36,523,936 35,412,309 35,299,705 34,932,860 Noninterest-bearing deposits 10,986,194 10,461,071 9,809,691 8,926,200 8,103,943 7,392,325 Total deposits 32,295,814 31,304,533 29,369,807 28,217,603 28,292,940 27,705,575 Securities sold under agreements to repurchase 219,530 152,559 148,240 177,661 172,117 128,164 FHLB advances 888,870 888,681 888,493 888,304 888,115 1,087,927 Subordinated debt and other borrowings 423,319 423,172 542,712 671,994 671,002 670,575 Total stockholders' equity 5,280,950 5,310,607 5,191,798 5,101,231 4,959,524 4,904,611 Balance sheet data, quarterly averages: Total loans $ 23,848,533 23,225,735 22,986,835 23,179,803 22,848,086 22,524,683 Securities 6,143,664 5,813,636 5,451,232 5,036,786 4,666,269 4,567,872 Federal funds sold and other 4,799,946 4,356,113 3,743,074 3,143,078 3,356,199 3,621,623 Total earning assets 34,792,143 33,395,484 32,181,141 31,359,667 30,870,554 30,714,178 Total assets 38,637,221 37,132,078 35,896,130 35,053,772 34,659,132 34,436,765 Noninterest-bearing deposits 10,478,403 10,240,393 9,247,382 8,500,465 7,620,665 7,322,393 Total deposits 31,538,985 30,034,026 28,739,871 28,013,659 27,620,784 27,193,256 Securities sold under agreements to repurchase 179,869 141,781 164,837 173,268 143,586 121,331 FHLB advances 888,746 888,559 888,369 888,184 934,662 1,250,848 Subordinated debt and other borrowings 441,755 484,389 586,387 674,162 673,662 673,419 Total stockholders' equity 5,331,405 5,262,586 5,176,625 5,039,608 4,953,656 4,852,373 Statement of operations data, for the three months ended: Interest income $ 258,617 259,193 260,868 259,236 251,917 257,047 Interest expense 19,142 20,430 23,325 26,011 29,047 36,062 Net interest income 239,475 238,763 237,543 233,225 222,870 220,985 Provision for credit losses 2,720 2,675 3,382 2,834 7,235 9,180 Net interest income after provision for credit losses 236,755 236,088 234,161 230,391 215,635 211,805 Noninterest income 103,496 100,723 104,095 98,207 92,709 83,444 Noninterest expense 182,661 170,417 168,851 166,140 154,696 161,305 Income before taxes 157,590 166,394 169,405 162,458 153,648 133,944 Income tax expense 28,480 32,866 32,828 30,668 28,220 23,068 Net income 129,110 133,528 136,577 131,790 125,428 110,876 Preferred stock dividends (3,798 ) (3,798 ) (3,798 ) (3,798 ) (3,798 ) (3,798 ) Net income available to common shareholders $ 125,312 129,730 132,779 127,992 121,630 107,078 Profitability and other ratios: Return on avg. assets (1) 1.32 % 1.39 % 1.47 % 1.46 % 1.42 % 1.24 % Return on avg. equity (1) 9.53 % 9.78 % 10.18 % 10.19 % 9.96 % 8.78 % Return on avg. common equity (1) 9.94 % 10.20 % 10.62 % 10.65 % 10.41 % 9.19 % Return on avg. tangible common equity (1) 15.63 % 16.13 % 16.98 % 17.32 % 17.16 % 15.37 % Common stock dividend payout ratio (16) 12.94 % 10.65 % 11.13 % 11.73 % 13.69 % 15.84 % Net interest margin (2) 2.89 % 2.96 % 3.03 % 3.08 % 3.02 % 2.97 % Noninterest income to total revenue (3) 30.18 % 29.67 % 30.47 % 29.63 % 29.38 % 27.41 % Noninterest income to avg. assets (1) 1.09 % 1.08 % 1.15 % 1.12 % 1.08 % 0.96 % Noninterest exp. to avg. assets (1) 1.92 % 1.82 % 1.87 % 1.90 % 1.81 % 1.86 % Efficiency ratio (4) 53.26 % 50.20 % 49.42 % 50.13 % 49.02 % 52.99 % Avg. loans to avg. deposits 75.62 % 77.33 % 79.98 % 82.74 % 82.72 % 82.83 % Securities to total assets 15.57 % 15.78 % 15.40 % 15.04 % 13.29 % 13.21 % This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED (dollars in thousands) Three months ended Three months ended March 31, 2022 March 31, 2021 Average Balances Interest Rates/ Yields Average Balances Interest Rates/ Yields Interest-earning assets Loans (1) (2) $ 23,848,533 $ 227,047 3.94 % $ 22,848,086 $ 227,372 4.11 % Securities Taxable 3,234,641 11,048 1.39 % 2,271,325 7,728 1.38 % Tax-exempt (2) 2,909,023 17,446 2.94 % 2,394,944 15,498 3.15 % Interest-bearing due from banks 3,347,804 1,303 0.16 % 3,168,308 713 0.09 % Resell agreements 1,281,746 1,214 0.38 % 5,000 — — % Federal funds sold — — — % 22,809 — — % Other 170,396 559 1.33 % 160,082 606 1.54 % Total interest-earning assets 34,792,143 $ 258,617 3.11 % 30,870,554 $ 251,917 3.41 % Nonearning assets Intangible assets 1,863,730 1,861,386 Other nonearning assets 1,981,348 1,927,192 Total assets $ 38,637,221 $ 34,659,132 Interest-bearing liabilities Interest-bearing deposits: Interest checking 6,391,316 2,599 0.16 % 5,466,389 2,599 0.19 % Savings and money market 12,587,219 5,124 0.17 % 11,321,344 6,713 0.24 % Time 2,082,047 2,527 0.49 % 3,212,386 8,156 1.03 % Total interest-bearing deposits 21,060,582 10,250 0.20 % 20,000,119 17,468 0.35 % Securities sold under agreements to repurchase 179,869 56 0.13 % 143,586 72 0.20 % Federal Home Loan Bank advances 888,746 4,474 2.04 % 934,662 4,494 1.95 % Subordinated debt and other borrowings 441,755 4,362 4.00 % 673,662 7,013 4.22 % Total interest-bearing liabilities 22,570,952 19,142 0.34 % 21,752,029 29,047 0.54 % Noninterest-bearing deposits 10,478,403 — — 7,620,665 — — Total deposits and interest-bearing liabilities 33,049,355 $ 19,142 0.23 % 29,372,694 $ 29,047 0.40 % Other liabilities 256,461 332,782 Stockholders' equity 5,331,405 4,953,656 Total liabilities and stockholders' equity $ 38,637,221 $ 34,659,132 Net interest income $ 239,475 $ 222,870 Net interest spread (3) 2.77 % 2.86 % Net interest margin (4) 2.89 % 3.02 % (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 $8.5 million of taxable equivalent income for the three months ended March 31, 2022 compared to $7.3 million for the three months ended March 31, 2021. 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 March 31, 2022 would have been 2.88% compared to a net interest spread of 3.00% for the three months ended March 31, 2021. (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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED (dollars in thousands) March December September June March December 2022 2021 2021 2021 2021 2020 Asset quality information and ratios: Nonperforming assets: Nonaccrual loans $ 26,616 31,569 46,692 53,105 72,135 73,836 ORE and other nonperforming assets (NPAs) 8,437 8,537 8,415 9,602 10,651 12,360 Total nonperforming assets $ 35,053 40,106 55,107 62,707 82,786 86,196 Past due loans over 90 days and still accruing interest $ 1,605 1,607 1,914 1,810 2,833 2,362 Accruing troubled debt restructurings (5) $ 2,317 2,354 2,397 2,428 2,460 2,494 Accruing purchase credit deteriorated loans $ 12,661 13,086 12,158 12,400 13,904 14,091 Net loan charge-offs $ 2,958 8,077 9,281 9,968 11,397 10,775 Allowance for credit losses to nonaccrual loans 982.9 % 833.8 % 575.3 % 515.5 % 389.4 % 386.1 % As a percentage of total loans: Past due accruing loans over 30 days 0.11 % 0.09 % 0.09 % 0.07 % 0.09 % 0.19 % Potential problem loans (6) 0.41 % 0.47 % 0.60 % 0.74 % 0.70 % 0.77 % Allowance for credit losses (20) 1.07 % 1.12 % 1.17 % 1.20 % 1.22 % 1.27 % Nonperforming assets to total loans, ORE and other NPAs 0.14 % 0.17 % 0.24 % 0.27 % 0.36 % 0.38 % Classified asset ratio (Pinnacle Bank) (8) 3.6 % 4.1 % 5.6 % 6.8 % 7.3 % 8.1 % Annualized net loan charge-offs to avg. loans (7) 0.05 % 0.14 % 0.16 % 0.17 % 0.20 % 0.19 % Wtd. avg. commercial loan internal risk ratings (6) 44.9 45.3 46.0 46.1 45.2 45.1 Interest rates and yields: Loans 3.94 % 4.04 % 4.13 % 4.11 % 4.11 % 4.20 % Securities 2.12 % 2.08 % 2.04 % 2.25 % 2.29 % 2.27 % Total earning assets 3.11 % 3.20 % 3.32 % 3.42 % 3.41 % 3.44 % Total deposits, including non-interest bearing 0.13 % 0.14 % 0.17 % 0.20 % 0.26 % 0.33 % Securities sold under agreements to repurchase 0.13 % 0.15 % 0.14 % 0.13 % 0.20 % 0.21 % FHLB advances 2.04 % 2.04 % 2.04 % 2.03 % 1.95 % 2.00 % Subordinated debt and other borrowings 4.00 % 4.23 % 4.45 % 4.52 % 4.22 % 4.13 % Total deposits and interest-bearing liabilities 0.23 % 0.26 % 0.30 % 0.35 % 0.40 % 0.49 % Capital and other ratios (8): Pinnacle Financial ratios: Stockholders' equity to total assets 13.4 % 13.8 % 14.2 % 14.4 % 14.0 % 14.0 % Common equity Tier one 10.5 % 10.9 % 10.5 % 10.5 % 10.3 % 10.0 % Tier one risk-based 11.2 % 11.7 % 11.3 % 11.3 % 11.2 % 10.9 % Total risk-based 13.3 % 13.8 % 14.0 % 14.5 % 14.5 % 14.3 % Leverage 9.5 % 9.7 % 9.3 % 9.2 % 8.9 % 8.6 % Tangible common equity to tangible assets 8.5 % 8.8 % 9.0 % 9.0 % 8.6 % 8.5 % Pinnacle Bank ratios: Common equity Tier one 11.4 % 11.9 % 11.7 % 11.9 % 11.8 % 11.4 % Tier one risk-based 11.4 % 11.9 % 11.7 % 11.9 % 11.8 % 11.4 % Total risk-based 12.1 % 12.6 % 12.5 % 13.1 % 13.0 % 12.7 % Leverage 9.6 % 9.9 % 9.7 % 9.6 % 9.4 % 9.1 % Construction and land development loans as a percentage of total capital (19) 87.4 % 79.1 % 89.3 % 80.1 % 76.0 % 89.0 % Non-owner occupied commercial real estate and multi-family as a percentage of total capital (19) 243.7 % 234.1 % 252.4 % 248.8 % 256.0 % 264.0 % This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED (dollars in thousands, except per share data) March December September June March December 2022 2021 2021 2021 2021 2020 Per share data: Earnings per common share – basic $ 1.66 1.72 1.76 1.70 1.61 1.42 Earnings per common share - basic, excluding non-GAAP adjustments $ 1.66 1.71 1.76 1.69 1.61 1.58 Earnings per common share – diluted $ 1.65 1.71 1.75 1.69 1.61 1.42 Earnings per common share - diluted, excluding non-GAAP adjustments $ 1.65 1.70 1.75 1.68 1.61 1.58 Common dividends per share $ 0.22 0.18 0.18 0.18 0.18 0.16 Book value per common share at quarter end (9) $ 66.30 66.89 65.36 64.19 62.33 61.80 Tangible book value per common share at quarter end (9) $ 41.65 42.55 40.98 39.77 37.88 37.25 Revenue per diluted common share $ 4.52 4.47 4.50 4.37 4.17 4.03 Revenue per diluted common share, excluding non-GAAP adjustments $ 4.52 4.46 4.50 4.37 4.17 4.03 Investor information: Closing sales price of common stock on last trading day of quarter $ 92.08 95.50 94.08 88.29 88.66 64.40 High closing sales price of common stock during quarter $ 110.41 104.72 98.00 92.94 93.58 65.51 Low closing sales price of common stock during quarter $ 90.46 90.20 83.84 84.25 63.48 35.97 Closing sales price of depositary shares on last trading day of quarter $ 26.72 28.21 28.14 29.13 27.62 27.69 High closing sales price of depositary shares during quarter $ 28.53 28.99 29.23 29.13 27.83 27.94 Low closing sales price of depositary shares during quarter $ 25.63 27.42 28.00 27.38 26.83 26.45 Other information: Residential mortgage loan sales: Gross loans sold $ 270,793 352,342 347,664 394,299 546,963 479,867 Gross fees (10) $ 5,700 10,098 11,215 15,552 18,793 23,729 Gross fees as a percentage of loans originated 2.11 % 2.87 % 3.23 % 3.94 % 3.44 % 4.94 % Net gain on residential mortgage loans sold $ 4,066 4,244 7,814 6,700 13,666 12,387 Investment gains (losses) on sales of securities, net (15) $ (61 ) 393 — 366 — — Brokerage account assets, at quarter end (11) $ 7,158,939 7,187,085 6,597,152 6,344,416 5,974,884 5,509,560 Trust account managed assets, at quarter end $ 4,499,911 4,720,290 4,155,510 3,640,932 3,443,373 3,295,198 Core deposits (12) $ 30,398,683 29,316,911 27,170,367 25,857,639 24,961,390 23,510,883 Core deposits to total funding (12) 89.9 % 89.5 % 87.8 % 86.3 % 83.1 % 79.5 % Risk-weighted assets $ 31,170,258 29,349,534 27,945,624 26,819,277 26,105,158 25,791,896 Number of offices 119 118 117 116 115 114 Total core deposits per office $ 255,451 248,448 232,225 222,911 217,141 206,236 Total assets per full-time equivalent employee $ 13,186 13,541 13,188 13,087 13,468 13,262 Annualized revenues per full-time equivalent employee $ 465.5 474.1 489.4 491.3 488.3 459.8 Annualized expenses per full-time equivalent employee $ 247.9 238.0 241.9 246.3 239.4 246.6 Number of employees (full-time equivalent) 2,988.0 2,841.0 2,769.5 2,706.0 2,621.0 2,634.0 Associate retention rate (13) 93.1 % 93.4 % 93.4 % 93.3 % 94.4 % 94.8 % This information is preliminary and based on company data available at the time of the presentation. 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) March December March 2022 2021 2021 Net interest income $ 239,475 238,763 222,870 Noninterest income 103,496 100,723 92,709 Total revenues 342,971 339,486 315,579 Less: Investment (gains) losses on sales of securities, net 61 (393 ) — Total revenues excluding the impact of adjustments noted above $ 343,032 339,093 315,579 Noninterest expense $ 182,661 170,417 154,696 Less: ORE expense 105 37 (13 ) Noninterest expense excluding the impact of adjustments noted above $ 182,556 170,380 154,709 Pre-tax income $ 157,590 166,394 153,648 Provision for credit losses 2,720 2,675 7,235 Pre-tax pre-provision net revenue 160,310 169,069 160,883 Adjustments noted above 166 (356 ) (13 ) Adjusted pre-tax pre-provision net revenue (14) $ 160,476 168,713 160,870 Noninterest income $ 103,496 100,723 92,709 Less: Adjustments as noted above 61 (393 ) — Noninterest income excluding the impact of adjustments noted above $ 103,557 100,330 92,709 Efficiency ratio (4) 53.26 % 50.20 % 49.02 % Adjustments as noted above (0.04 )% 0.05 % — % Efficiency ratio (excluding adjustments noted above) (4) 53.22 % 50.25 % 49.02 % Total average assets $ 38,637,221 37,132,078 34,659,132 Noninterest income to average assets (1) 1.09 % 1.08 % 1.08 % Adjustments as noted above — % (0.01 )% — % Noninterest income (excluding adjustments noted above) to average assets (1) 1.09 % 1.07 % 1.08 % Noninterest expense to average assets (1) 1.92 % 1.82 % 1.81 % Adjustments as noted above — % — % — % Noninterest expense (excluding adjustments noted above) to average assets (1) 1.92 % 1.82 % 1.81 % This information is preliminary and based on company data available at the time of the presentation. 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) March December September June March December 2022 2021 2021 2021 2021 2020 Net income available to common shareholders $ 125,312 129,730 132,779 127,992 121,630 107,078 Investment (gains) losses on sales of securities, net 61 (393 ) — (366 ) — — ORE expense 105 37 (79 ) (657 ) (13 ) 1,457 FHLB restructuring charges — — — — — 10,307 Hedge termination charges — — — — — 4,673 Tax effect on adjustments noted above (18) (43 ) 93 21 267 3 (4,297 ) Net income available to common shareholders excluding adjustments noted above $ 125,435 129,467 132,721 127,236 121,620 119,218 Basic earnings per common share $ 1.66 1.72 1.76 1.70 1.61 1.42 Adjustment due to investment (gains) losses on sales of securities, net — (0.01 ) — — — — Adjustment due to ORE expense — — — (0.01 ) — 0.02 Adjustment due to FHLB restructuring charges — — — — — 0.14 Adjustment due to hedge termination charges — — — — — 0.06 Adjustment due to tax effect on adjustments noted above (18) — — — — — (0.06 ) Basic earnings per common share excluding adjustments noted above $ 1.66 1.71 1.76 1.69 1.61 1.58 Diluted earnings per common share $ 1.65 1.71 1.75 1.69 1.61 1.42 Adjustment due to investment (gains) losses on sales of securities, net — (0.01 ) — — — — Adjustment due to ORE expense — — — (0.01 ) — 0.02 Adjustment due to FHLB restructuring charges — — — — — 0.14 Adjustment due to hedge termination charges — — — — — 0.06 Adjustment due to tax effect on adjustments noted above (18) — — — — — (0.06 ) Diluted earnings per common share excluding the adjustments noted above $ 1.65 1.70 1.75 1.68 1.61 1.58 Revenue per diluted common share $ 4.52 4.47 4.50 4.37 4.17 4.03 Adjustments as noted above — (0.01 ) — — — — Revenue per diluted common share excluding adjustments noted above $ 4.52 4.46 4.50 4.37 4.17 4.03 Book value per common share at quarter end (9) $ 66.30 66.89 65.36 64.19 62.33 61.80 Adjustment due to goodwill, core deposit and other intangible assets (24.65 ) (24.34 ) (24.38 ) (24.42 ) (24.45 ) (24.55 ) Tangible book value per common share at quarter end (9) $ 41.65 42.55 40.98 39.77 37.88 37.25 Equity method investment (17) Fee income from BHG, net of amortization $ 33,655 30,844 30,409 32,071 28,950 24,294 Funding cost to support investment 666 388 379 1,230 1,205 1,222 Pre-tax impact of BHG 32,989 30,456 30,030 30,841 27,745 23,072 Income tax expense at statutory rates (18) 8,623 7,961 7,850 8,062 7,253 6,031 Earnings attributable to BHG $ 24,366 22,495 22,180 22,779 20,492 17,041 Basic earnings per common share attributable to BHG $ 0.32 0.30 0.29 0.30 0.27 0.23 Diluted earnings per common share attributable to BHG $ 0.32 0.30 0.29 0.30 0.27 0.23 This information is preliminary and based on company data available at the time of the presentation. 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) March December March 2022 2021 2021 Return on average assets (1) 1.32 % 1.39 % 1.42 % Adjustments as noted above — % (0.01 ) % — % Return on average assets excluding adjustments noted above (1) 1.32 % 1.38 % 1.42 % Tangible assets: Total assets $ 39,400,378 38,469,399 35,299,705 Less: Goodwill (1,850,951 ) (1,819,811 ) (1,819,811 ) Core deposit and other intangible assets (31,997 ) (33,819 ) (40,130 ) Net tangible assets $ 37,517,430 36,615,769 33,439,764 Tangible common equity: Total stockholders' equity $ 5,280,950 5,310,607 4,959,524 Less: Preferred stockholders' equity (217,126 ) (217,126 ) (217,126 ) Total common stockholders' equity 5,063,824 5,093,481 4,742,398 Less: Goodwill (1,850,951 ) (1,819,811 ) (1,819,811 ) Core deposit and other intangible assets (31,997 ) (33,819 ) (40,130 ) Net tangible common equity $ 3,180,876 3,239,851 2,882,457 Ratio of tangible common equity to tangible assets 8.48 % 8.85 % 8.62 % Average tangible assets: Average assets $ 38,637,221 37,132,078 34,659,132 Less: Average goodwill (1,830,553 ) (1,819,811 ) (1,819,811 ) Average core deposit and other intangible assets (33,177 ) (35,152 ) (41,575 ) Net average tangible assets $ 36,773,491 35,277,115 32,797,746 Return on average assets (1) 1.32 % 1.39 % 1.42 % Adjustment due to goodwill, core deposit and other intangible assets 0.06 % 0.07 % 0.08 % Return on average tangible assets (1) 1.38 % 1.46 % 1.50 % Adjustments as noted above — % — % — % Return on average tangible assets excluding adjustments noted above (1) 1.38 % 1.46 % 1.50 % Average tangible common equity: Average stockholders' equity $ 5,331,405 5,262,586 4,953,656 Less: Average preferred equity (217,126 ) (217,126 ) (217,126 ) Average common equity 5,114,279 5,045,460 4,736,530 Less: Average goodwill (1,830,553 ) (1,819,811 ) (1,819,811 ) Average core deposit and other intangible assets (33,177 ) (35,152 ) (41,575 ) Net average tangible common equity $ 3,250,549 3,190,497 2,875,144 Return on average equity (1) 9.53 % 9.78 % 9.96 % Adjustment due to average preferred stockholders' equity 0.41 % 0.42 % 0.45 % Return on average common equity (1) 9.94 % 10.20 % 10.41 % Adjustment due to goodwill, core deposit and other intangible assets 5.69 % 5.93 % 6.75 % Return on average tangible common equity (1) 15.63 % 16.13 % 17.16 % Adjustments as noted above 0.02 % (0.03 )% — % Return on average tangible common equity excluding adjustments noted above (1) 15.65 % 16.10 % 17.16 % Allowance for credit losses on loans as a percent of total loans (20) 1.07 % 1.12 % 1.22 % Impact of excluding PPP loans from total loans — % 0.02 % 0.13 % Allowance as adjusted for the above exclusion of PPP loans from total loans (20) 1.07 % 1.14 % 1.35 % This information is preliminary and based on company data available at the time of the presentation. 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 net revenue 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. pnfp-earnings
NASHVILLE, Tenn.--(BUSINESS WIRE)--Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today announced it will release its first quarter 2022 financial results on Monday, April 18, 2022, after market close. It will also host a live webcast on Tuesday, April 19, at 8:30 a.m. CT to review its financial results, business outlook for the firm and other matters. The first quarter 2022 earnings release will be available on the investor relations page of Pinnacle's website at www.pnfp.com. To access the call for audio only, please call 1-877-602-7944. For the presentation and streaming audio, please 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 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 2021 deposit data from the FDIC, is listed by Forbes among the top 25 banks in the nation and 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 nine years in a row and No. 1 among banks with more than $11 billion in assets in 2021. 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. 4 on its 2021 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 $38.5 billion in assets as of Dec. 31, 2021. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 15 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.
NASHVILLE, Tenn.--(BUSINESS WIRE)--Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today announced it will release its fourth quarter 2021 financial results on Tuesday, Jan. 18, 2022, after the stock market closes. It will also host a live webcast on Wednesday, Jan. 19, 2022, at 8:30 a.m. CST to review its financial results, business outlook for the firm and other matters. The fourth quarter 2021 earnings release will be available on the investor relations page of Pinnacle's website at www.pnfp.com. To access the call for audio only, please call 1-877-602-7944. For the presentation and streaming audio, please 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 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 2021 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 nine years in a row and No. 1 among banks with more than $11 billion in assets in 2021. 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 $36.5 billion in assets as of Sept. 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.
NASHVILLE, Tenn.--(BUSINESS WIRE)--Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.75 for the quarter ended Sept. 30, 2021, compared to net income per diluted common share of $1.42 for the quarter ended Sept. 30, 2020, an increase of approximately 23.2 percent. Excluding ORE expense for the three months ended Sept. 30, 2021 and 2020 and gains and losses on the sale of investment securities and FHLB restructuring charges for the three months ended Sept. 30, 2020, net income per diluted common share was $1.75 for the three months ended Sept. 30, 2021, compared to $1.45 for the three months ended Sept. 30, 2020, a year-over-year increase of 20.7 percent. Net income per diluted common share was $5.05 for the nine months ended Sept. 30, 2021, compared to net income per diluted common share of $2.62 for the nine months ended Sept. 30, 2020, an increase of nearly 93 percent. Excluding gains and losses on the sale of investment securities and other real estate (ORE) expense for the nine months ended Sept. 30, 2021 and 2020 and FHLB restructuring charges for the nine months ended Sept. 30, 2020, net income per diluted common share was $5.04 in 2021, compared to $2.72 in 2020, a year-over-year increase of 85.3 percent. "Despite the ongoing uncertain economic climate, we continue to experience strong organic growth," said M. Terry Turner, Pinnacle's president and chief executive officer. "Our business model continued to serve us well during the third quarter. Aggregate loans grew at an annualized rate of 2.8 percent for the quarter, after excluding the impact of PPP forgiveness and paydowns of $664.2 million, other loans increased at an annualized rate of 15.3 percent. We continue to see increased lending opportunities as a result of our now two-decade long focus on hiring the best bankers in our markets. "We successfully recruited 32 new revenue producers to our firm during the third quarter, and our ongoing recruiting pipelines are as strong as I can remember," Turner said. "We also remain very excited about our new markets, which include Atlanta, Huntsville and Birmingham, as well as our recent hires in the equipment finance and franchise lending segments. We believe our 2021 end-of-year loan balances should exceed 2020 end-of-year balances by 2 to 5 percent, or by 9 to 12 percent excluding PPP loans. Our current belief is that our 2022 loan growth, with our new markets and the strength of our hiring over the last few years, should produce low-double digit growth assuming an economic environment similar to the one we operate in presently." BALANCE SHEET GROWTH: Loans at Sept. 30, 2021 were $23.1 billion, an increase of approximately $581.1 million from Sept. 30, 2020, reflecting year-over-year growth of 2.6 percent. Loans at Sept. 30, 2021 increased approximately $160.5 million from June 30, 2021 reflecting linked-quarter annualized growth of 2.8 percent. Loans at Sept. 30, 2021 include approximately $708.7 million of loans issued pursuant to the Small Business Administration’s (SBA’s) Paycheck Protection Program (PPP), compared to $2.3 billion at Sept. 30, 2020 and $1.4 billion at June 30, 2021. The average yield on these loans was 8.54 percent for the third quarter of 2021, inclusive of $18.5 million of loan fee accretion recognized during the quarter. At Sept. 30, 2021, $29.2 million in SBA PPP loan fees remained, which should be accreted into net interest income over the next nine months as these loans are repaid and/or are forgiven under the PPP. PPP loans decreased by $664.2 million between June 30, 2021 and Sept. 30, 2021. Excluding PPP loans, total loans increased by $824.7 million during the same period, or 15.3 percent on an annualized basis. Average loans were $23.0 billion for the three months ended Sept. 30, 2021, down $193.0 million from the three months ended June 30, 2021, a linked-quarter annualized reduction of 3.3 percent. Excluding the impact of $983.5 million of average PPP loans outstanding during the three months ended Sept. 30, 2021 and $1.9 billion during the three months ended June 30, 2021, average loans were $22.0 billion for the three months ended Sept. 30, 2021, up $752.9 million from $21.3 billion for the three months ended June 30, 2021, a linked-quarter annualized growth rate of 14.2 percent. At Sept. 30, 2021, the remaining discount associated with fair value accounting adjustments on acquired loans was $17.6 million, compared to $20.6 million at June 30, 2021. Loans at Sept. 30, 2021 include approximately $708.7 million of loans issued pursuant to the Small Business Administration’s (SBA’s) Paycheck Protection Program (PPP), compared to $2.3 billion at Sept. 30, 2020 and $1.4 billion at June 30, 2021. The average yield on these loans was 8.54 percent for the third quarter of 2021, inclusive of $18.5 million of loan fee accretion recognized during the quarter. At Sept. 30, 2021, $29.2 million in SBA PPP loan fees remained, which should be accreted into net interest income over the next nine months as these loans are repaid and/or are forgiven under the PPP. PPP loans decreased by $664.2 million between June 30, 2021 and Sept. 30, 2021. Excluding PPP loans, total loans increased by $824.7 million during the same period, or 15.3 percent on an annualized basis. PPP loans decreased by $664.2 million between June 30, 2021 and Sept. 30, 2021. Excluding PPP loans, total loans increased by $824.7 million during the same period, or 15.3 percent on an annualized basis. Average loans were $23.0 billion for the three months ended Sept. 30, 2021, down $193.0 million from the three months ended June 30, 2021, a linked-quarter annualized reduction of 3.3 percent. Excluding the impact of $983.5 million of average PPP loans outstanding during the three months ended Sept. 30, 2021 and $1.9 billion during the three months ended June 30, 2021, average loans were $22.0 billion for the three months ended Sept. 30, 2021, up $752.9 million from $21.3 billion for the three months ended June 30, 2021, a linked-quarter annualized growth rate of 14.2 percent. Excluding the impact of $983.5 million of average PPP loans outstanding during the three months ended Sept. 30, 2021 and $1.9 billion during the three months ended June 30, 2021, average loans were $22.0 billion for the three months ended Sept. 30, 2021, up $752.9 million from $21.3 billion for the three months ended June 30, 2021, a linked-quarter annualized growth rate of 14.2 percent. At Sept. 30, 2021, the remaining discount associated with fair value accounting adjustments on acquired loans was $17.6 million, compared to $20.6 million at June 30, 2021. Deposits at Sept. 30, 2021 were $29.4 billion, an increase of $2.8 billion from Sept. 30, 2020, reflecting year-over-year growth of 10.6 percent. Deposits at Sept. 30, 2021 increased $1.2 billion from June 30, 2021, reflecting a linked-quarter annualized growth rate of 16.3 percent. Average deposits were $28.7 billion for the three months ended Sept. 30, 2021, compared to $28.0 billion for the three months ended June 30, 2021, a linked-quarter annualized growth rate of 10.4 percent. Core deposits were $27.2 billion at Sept. 30, 2021, compared to $22.0 billion at Sept. 30, 2020 and $25.9 billion at June 30, 2021. The linked-quarter annualized growth rate of core deposits in the third quarter of 2021 was 20.3 percent. Average deposits were $28.7 billion for the three months ended Sept. 30, 2021, compared to $28.0 billion for the three months ended June 30, 2021, a linked-quarter annualized growth rate of 10.4 percent. Core deposits were $27.2 billion at Sept. 30, 2021, compared to $22.0 billion at Sept. 30, 2020 and $25.9 billion at June 30, 2021. The linked-quarter annualized growth rate of core deposits in the third quarter of 2021 was 20.3 percent. "During the third quarter, core deposits increased by 23.5 percent over our balances this time last year," Turner said. "We are very pleased that approximately 53 percent of the increase in core deposit balances is attributable to increases in noninterest bearing deposits. Our research indicates these increases come from many different sources, including PPP and quantitative easing as well as our depositors continuing to grow their deposit balances due to the ongoing uncertainties that exist in the economy. Approximately 15 percent of our average deposit growth this year is from new accounts." REVENUES: Revenues for the quarter ended Sept. 30, 2021 were $341.6 million, an increase of $10.2 million from the $331.4 million recognized in the second quarter of 2021, a linked-quarter annualized growth rate of 12.3 percent. Revenues were up $44.0 million from the third quarter of 2020, a year-over-year growth rate of 14.8 percent. Revenue per fully diluted common share was at an all-time record of $4.50 for the three months ended Sept. 30, 2021, compared to $4.37 for the second quarter of 2021 and $3.95 for the third quarter of 2020, a 13.9 percent year-over-year growth rate. Revenue per fully diluted common share was at an all-time record of $4.50 for the three months ended Sept. 30, 2021, compared to $4.37 for the second quarter of 2021 and $3.95 for the third quarter of 2020, a 13.9 percent year-over-year growth rate. Net interest income for the quarter ended Sept. 30, 2021 was $237.5 million, compared to $233.2 million for the second quarter of 2021 and $206.6 million for the third quarter of 2020, a year-over-year growth rate of 15.0 percent. Net interest margin was 3.03 percent for the third quarter of 2021, compared to 3.08 percent for the second quarter of 2021 and 2.82 percent for the third quarter of 2020. Impacting the firm’s net interest margin in the second and third quarters of 2021 and the third quarter of 2020 were both the PPP loans and the firm’s decision early in the pandemic to maintain additional on-balance sheet liquidity. The firm estimates its second and third 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 40 basis points for the third quarter 2020. Included in net interest income for the third quarter of 2021 was $2.8 million of discount accretion associated with fair value adjustments, compared to $3.3 million of discount accretion recognized in the second quarter of 2021 and $5.6 million in the third quarter of 2020. The firm's net interest margin was positively impacted by approximately 4 basis points, 3 basis points and 9 basis points, respectively, because of fair value adjustment discount accretion in each of the second and third quarters of 2021 and the third quarter of 2020. There remains $10.8 million of purchase accounting discount accretion as of Sept. 30, 2021. Impacting the firm’s net interest margin in the second and third quarters of 2021 and the third quarter of 2020 were both the PPP loans and the firm’s decision early in the pandemic to maintain additional on-balance sheet liquidity. The firm estimates its second and third 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 40 basis points for the third quarter 2020. Included in net interest income for the third quarter of 2021 was $2.8 million of discount accretion associated with fair value adjustments, compared to $3.3 million of discount accretion recognized in the second quarter of 2021 and $5.6 million in the third quarter of 2020. The firm's net interest margin was positively impacted by approximately 4 basis points, 3 basis points and 9 basis points, respectively, because of fair value adjustment discount accretion in each of the second and third quarters of 2021 and the third quarter of 2020. There remains $10.8 million of purchase accounting discount accretion as of Sept. 30, 2021. Noninterest income for the quarter ended Sept. 30, 2021 was $104.1 million, compared to $98.2 million for the quarter ended June 30, 2021, a linked-quarter annualized increase of 24.0 percent. Compared to $91.1 million for the third quarter of 2020, noninterest income grew 14.3 percent year-over-year. Service charges on deposit accounts were $11.4 million for the third quarter of 2021, compared to $8.9 million for the second quarter of 2021, a linked-quarter annualized increase of more than 100 percent primarily the result of vendor incentives received in the third quarter of 2021. Compared to $9.9 million for the third quarter of 2020, service charges on deposit accounts were up 16.0 percent. Wealth management revenues, which include investment, trust and insurance services, were $17.3 million for the third quarter of 2021, compared to $16.5 million for the second quarter of 2021, a linked-quarter annualized increase of 19.2 percent. Compared to $13.0 million for the third quarter of 2020, wealth management revenues were up 32.7 percent. Income from the firm's investment in BHG was $30.4 million for the quarter ended Sept. 30, 2021, down from $32.1 million for the quarter ended June 30, 2021 and up from $26.4 million for the quarter ended Sept. 30, 2020. Net gains on mortgage loans sold were $7.8 million during the quarter ended Sept. 30, 2021, up from $6.7 million for the quarter ended June 30, 2021. Net gains on mortgage loans sold were down 59.8 percent from $19.5 million during the quarter ended Sept. 30, 2020. The dramatic year-over-year decline continues to be reflective of the unusual market conditions that existed in 2020. Other noninterest income was $37.2 million for the quarter ended Sept. 30, 2021, compared to $33.7 million for the quarter ended June 30, 2021 and $21.7 million for the quarter ended Sept. 30, 2020, a linked-quarter annualized increase of 41.4 percent and year-over-year growth of 71.7 percent. Contributing to this growth were $8.6 million in income on other equity investments during the three months ended Sept. 30, 2021 compared to income of $7.0 million for the three months ended June 30, 2021 and $460,000 during the three months ended Sept. 30, 2020. Additionally, income from SBA loan sales increased by $2.3 million over the same quarter last year. Service charges on deposit accounts were $11.4 million for the third quarter of 2021, compared to $8.9 million for the second quarter of 2021, a linked-quarter annualized increase of more than 100 percent primarily the result of vendor incentives received in the third quarter of 2021. Compared to $9.9 million for the third quarter of 2020, service charges on deposit accounts were up 16.0 percent. Wealth management revenues, which include investment, trust and insurance services, were $17.3 million for the third quarter of 2021, compared to $16.5 million for the second quarter of 2021, a linked-quarter annualized increase of 19.2 percent. Compared to $13.0 million for the third quarter of 2020, wealth management revenues were up 32.7 percent. Income from the firm's investment in BHG was $30.4 million for the quarter ended Sept. 30, 2021, down from $32.1 million for the quarter ended June 30, 2021 and up from $26.4 million for the quarter ended Sept. 30, 2020. Net gains on mortgage loans sold were $7.8 million during the quarter ended Sept. 30, 2021, up from $6.7 million for the quarter ended June 30, 2021. Net gains on mortgage loans sold were down 59.8 percent from $19.5 million during the quarter ended Sept. 30, 2020. The dramatic year-over-year decline continues to be reflective of the unusual market conditions that existed in 2020. Other noninterest income was $37.2 million for the quarter ended Sept. 30, 2021, compared to $33.7 million for the quarter ended June 30, 2021 and $21.7 million for the quarter ended Sept. 30, 2020, a linked-quarter annualized increase of 41.4 percent and year-over-year growth of 71.7 percent. Contributing to this growth were $8.6 million in income on other equity investments during the three months ended Sept. 30, 2021 compared to income of $7.0 million for the three months ended June 30, 2021 and $460,000 during the three months ended Sept. 30, 2020. Additionally, income from SBA loan sales increased by $2.3 million over the same quarter last year. Pre-tax, pre-provision net revenues (PPNR) for the quarter ended Sept. 30, 2021 were $172.8 million, an increase of $7.5 million from the $165.3 million recognized in the second quarter of 2021, a linked-quarter annualized growth rate of 18.1 percent. PPNR was up $19.0 million from the third quarter of 2020, a year-over-year growth rate of 12.3 percent. Excluding gains and losses on the sale of investment securities and ORE expense for the three months ended Sept. 30, 2021 and 2020 and FHLB restructuring charges for the three months ended Sept. 30, 2020, PPNR was $172.7 million, an increase of $8.4 million from the $164.3 million recognized in the second quarter of 2021, a linked-quarter annualized growth rate of 20.5 percent. PPNR, as adjusted, was up $15.8 million from the third quarter of 2020, a year-over-year growth rate of 10.0 percent. Excluding gains and losses on the sale of investment securities and ORE expense for the three months ended Sept. 30, 2021 and 2020 and FHLB restructuring charges for the three months ended Sept. 30, 2020, PPNR was $172.7 million, an increase of $8.4 million from the $164.3 million recognized in the second quarter of 2021, a linked-quarter annualized growth rate of 20.5 percent. PPNR, as adjusted, was up $15.8 million from the third quarter of 2020, a year-over-year growth rate of 10.0 percent. "Several factors contributed to the linked-quarter decline in our net interest margin, which was attributable to the increase in on-balance sheet liquidity driven primarily by forgiveness and paydowns of PPP loans during the quarter," Pinnacle's Chief Financial Officer Harold Carpenter said. "Overall loan yields were up slightly at 4.13 percent in the third quarter. Excluding the impact of PPP loan yields, which had an average yield of 8.54 percent, loan yields decreased by 5 basis points in the third quarter of 2021, which offset a 3 basis point decrease in deposit rates. "Third quarter was a record-breaking fee quarter for our firm. BHG continues to perform and, we believe, create significant franchise value. Mortgage rebounded in the third quarter as our gain on sale revenues increased by 16 percent from the second quarter. Wealth management had another strong quarter primarily due to broader market appreciation as well as the addition of 10 new wealth management advisors since Sept. 30, 2020. Additionally, excluding our investment in BHG, other equity investments had another big quarter, with these investments contributing $8.6 million to third quarter revenues. That was $1.6 million more than the amount recorded in the second quarter, as several of our venture fund investments experienced increased valuations in their underlying portfolios. Collectively, these investments have contributed $19.0 million more in fee income for the first nine months of 2021 compared to the same period last year." PROFITABILITY: Return on average assets was 1.47 percent for the third quarter of 2021, compared to 1.46 percent for the second quarter of 2021 and 1.26 percent for the third quarter of 2020. Third quarter 2021 return on average tangible assets amounted to 1.55 percent, compared to 1.55 percent for the second quarter of 2021 and 1.33 percent for the third quarter of 2020. Excluding the adjustments described above for the three months ended Sept. 30, 2021, June 30, 2021 and Sept. 30, 2020, return on average assets was 1.47 percent for the third quarter of 2021, compared to 1.46 percent for the second quarter of 2021 and 1.28 percent for the third quarter of 2020. Likewise, excluding those same adjustments, the firm’s return on average tangible assets was 1.55 percent for the third quarter of 2021, compared to 1.54 percent for the second quarter of 2021 and 1.36 percent for the third quarter of 2020. Excluding the adjustments described above for the three months ended Sept. 30, 2021, June 30, 2021 and Sept. 30, 2020, return on average assets was 1.47 percent for the third quarter of 2021, compared to 1.46 percent for the second quarter of 2021 and 1.28 percent for the third quarter of 2020. Likewise, excluding those same adjustments, the firm’s return on average tangible assets was 1.55 percent for the third quarter of 2021, compared to 1.54 percent for the second quarter of 2021 and 1.36 percent for the third quarter of 2020. Return on average equity for the third quarter of 2021 amounted to 10.18 percent, compared to 10.19 percent for the second quarter of 2021 and 8.92 percent for the third quarter of 2020. Excluding preferred stockholders' equity for each of the three months ended Sept. 30, 2021, June 30, 2021 and Sept. 30, 2020, respectively, return on average common equity for the third quarter of 2021 amounted to 10.62 percent, compared to 10.65 percent for the second quarter of 2021 and 9.35 percent for the third quarter of 2020. Third quarter 2021 return on average tangible common equity amounted to 16.98 percent, compared to 17.32 percent for the second quarter of 2021 and 15.85 percent for the third quarter of 2020. Excluding the adjustments described above for the three months ended Sept. 30, 2021, June 30, 2021 and June 30, 2020, return on average tangible common equity amounted to 16.97 percent for the third quarter of 2021, compared to 17.22 percent for the second quarter of 2021 and 16.19 percent for the third quarter of 2020. Excluding the adjustments described above for the three months ended Sept. 30, 2021, June 30, 2021 and June 30, 2020, return on average tangible common equity amounted to 16.97 percent for the third quarter of 2021, compared to 17.22 percent for the second quarter of 2021 and 16.19 percent for the third quarter of 2020. Book value per share was $65.36 at Sept. 30, 2021, compared to $61.80 at the end of 2020, an annualized growth rate of 7.7 percent thus far this year. Since Dec. 31, 2016, book value per share has grown at a compound annual growth rate of 15.2 percent. Tangible book value per share was $40.98 at Sept. 30, 2021, compared to $37.25 at the end of 2020, an annualized growth rate of 13.4 percent thus far this year. Since Dec. 31, 2016, tangible book value per share has grown at a compound annual growth rate of 15.4 percent. Tangible book value per share was $40.98 at Sept. 30, 2021, compared to $37.25 at the end of 2020, an annualized growth rate of 13.4 percent thus far this year. Since Dec. 31, 2016, tangible book value per share has grown at a compound annual growth rate of 15.4 percent. "Maintaining our profitability at high levels and growing tangible book value predictably and consistently remain significant priorities for our firm," Carpenter said. "We continue to look for ways to leverage our excess liquidity into higher earning assets. We are exploring several options that provide a reasonable return while not resulting in excess risk to tangible book value growth." MAINTAINING A STRONG BALANCE SHEET: Net charge-offs were $9.3 million for the quarter ended Sept. 30, 2021, compared to $10.0 million for the quarter ended June 30, 2021 and $13.1 million for the quarter ended Sept. 30, 2020. Annualized net charge-offs as a percentage of average loans for the quarter ended Sept. 30, 2021 were 0.16 percent, compared to 0.17 percent for the quarter ended June 30, 2021 and 0.23 percent for the quarter ended Sept. 30, 2020. Nonperforming assets were 0.24 percent of total loans and ORE at Sept. 30, 2021, compared to 0.27 percent at June 30, 2021 and 0.40 percent at Sept. 30, 2020. Nonperforming assets were $55.1 million at Sept. 30, 2021, compared to $62.7 million at June 30, 2021 and $90.8 million at Sept. 30, 2020. The classified asset ratio at Sept. 30, 2021 was 5.6 percent, compared to 6.8 percent at June 30, 2021 and 9.9 percent at Sept. 30, 2020. Classified assets were $196.3 million at Sept. 30, 2021, compared to $233.8 million at June 30, 2021 and $307.8 million at Sept. 30, 2020. The allowance for credit losses represented 1.17 percent of total loans at Sept. 30, 2021, compared to 1.20 percent at June 30, 2021 and 1.28 percent at Sept. 30, 2020. Excluding PPP loans, the allowance for credit losses as a percentage of total loans was 1.20 percent at Sept. 30, 2021 compared to 1.27 percent at June 30, 2021 and 1.43 percent at Sept. 30, 2020. The ratio of the allowance for credit losses to nonperforming loans at Sept. 30, 2021 was 575.3 percent, compared to 515.5 percent at June 30, 2021 and 404.3 percent at Sept. 30, 2020. Provision for credit losses was $3.4 million in the third quarter of 2021, compared to $2.8 million in the second quarter of 2021 and was $16.8 million in the third quarter of 2020. The ratio of the allowance for credit losses to nonperforming loans at Sept. 30, 2021 was 575.3 percent, compared to 515.5 percent at June 30, 2021 and 404.3 percent at Sept. 30, 2020. Provision for credit losses was $3.4 million in the third quarter of 2021, compared to $2.8 million in the second quarter of 2021 and was $16.8 million in the third quarter of 2020. "We continue to be very pleased with our credit performance which we believe is the result of the hard work of our relationship managers and credit officers," Carpenter said. "The big three soundness measurements of net charge-offs, nonperformers and classified assets are all down from the previous quarter. Our allowance for credit losses as a percentage of total loans decreased to 1.17 percent at Sept. 30, 2021, which was slightly less than the same ratio at June 30, 2021. We believe the reduction in this ratio will continue for the next several quarters and, hopefully, with continued steady improvement in the economy, through next year." OPERATING LEVERAGE AND OTHER HIGHLIGHTS: The firm's efficiency ratio for the third quarter of 2021 was 49.4 percent, compared to 50.1 percent for the second quarter of 2021 and 48.3 percent in the third quarter of 2020. The ratio of noninterest expenses to average assets was 1.87 percent for the third quarter of 2021, compared to 1.90 percent in the second quarter of 2021 and 1.69 percent in the third quarter of 2020. Excluding the adjustments described above for the three months ended Sept. 30, 2021, June 30, 2021 and Sept. 30, 2020, the efficiency ratio was 49.5 percent for the third quarter of 2021, compared to 50.4 percent for the second quarter of 2021 and 47.2 percent for the third quarter of 2020. Excluding ORE expense for 2021 and 2020 and FHLB restructuring charges for 2020, the ratio of noninterest expense to average assets was 1.87 percent for the third quarter of 2021, compared to 1.91 percent for the second quarter of 2021 and 1.65 percent for the third quarter of 2020. Excluding the adjustments described above for the three months ended Sept. 30, 2021, June 30, 2021 and Sept. 30, 2020, the efficiency ratio was 49.5 percent for the third quarter of 2021, compared to 50.4 percent for the second quarter of 2021 and 47.2 percent for the third quarter of 2020. Excluding ORE expense for 2021 and 2020 and FHLB restructuring charges for 2020, the ratio of noninterest expense to average assets was 1.87 percent for the third quarter of 2021, compared to 1.91 percent for the second quarter of 2021 and 1.65 percent for the third quarter of 2020. Noninterest expense for the quarter ended Sept. 30, 2021 was $168.9 million, compared to $166.1 million in the second quarter of 2021 and $143.9 million in the third quarter of 2020, reflecting a year-over-year increase of 17.4 percent. Excluding ORE expense for 2021 and 2020, and FHLB restructuring charges for 2020, noninterest expense for the third quarter of 2021 increased 20.6 percent over the third quarter of 2020 and 1.3 percent over the second quarter of 2021. Salaries and employee benefits were $112.4 million in the third quarter of 2021, compared to $110.8 million in the second quarter of 2021 and $90.1 million in the third quarter of 2020, reflecting a year-over-year increase of 24.8 percent. Incentive costs related to the firm’s annual cash incentive plan amounted to approximately $23.4 million in the third quarter of 2021, compared to $25.5 million in the second quarter of 2021 and $15.2 million in the third quarter of 2020. Incentive costs related to the Company’s equity compensation plans amounted to approximately $6.8 million in the third quarter of 2021 compared to $5.7 million in second quarter of 2021 and $4.4 million in the third quarter of 2020. Noninterest expense categories, other than salaries and employee benefits, were $56.4 million in the third quarter of 2021, compared to $55.3 million in the second quarter of 2021 and $53.7 million in the third quarter of 2020, reflecting a year-over-year increase of 5.0 percent. Salaries and employee benefits were $112.4 million in the third quarter of 2021, compared to $110.8 million in the second quarter of 2021 and $90.1 million in the third quarter of 2020, reflecting a year-over-year increase of 24.8 percent. Incentive costs related to the firm’s annual cash incentive plan amounted to approximately $23.4 million in the third quarter of 2021, compared to $25.5 million in the second quarter of 2021 and $15.2 million in the third quarter of 2020. Incentive costs related to the Company’s equity compensation plans amounted to approximately $6.8 million in the third quarter of 2021 compared to $5.7 million in second quarter of 2021 and $4.4 million in the third quarter of 2020. Incentive costs related to the firm’s annual cash incentive plan amounted to approximately $23.4 million in the third quarter of 2021, compared to $25.5 million in the second quarter of 2021 and $15.2 million in the third quarter of 2020. Incentive costs related to the Company’s equity compensation plans amounted to approximately $6.8 million in the third quarter of 2021 compared to $5.7 million in second quarter of 2021 and $4.4 million in the third quarter of 2020. Noninterest expense categories, other than salaries and employee benefits, were $56.4 million in the third quarter of 2021, compared to $55.3 million in the second quarter of 2021 and $53.7 million in the third quarter of 2020, reflecting a year-over-year increase of 5.0 percent. The effective tax rate for the third quarter of 2021 was 19.4 percent, compared to 18.9 percent for the second quarter of 2021 and 19.3 percent for the third quarter of 2020. "As anticipated, expenses were essentially flat when compared to the second quarter of 2021," Carpenter said. "We continue to accrue our annual cash incentives at the maximum award level and increased our equity incentive accruals to an estimated above-target award. We believe total expenses for the fourth quarter of 2021 should be flat to down from the amounts reported in the second and third quarters of 2021. Looking to 2022, we believe our expense growth should range between 8 to 11 percent in comparison to 2021." BOARD OF DIRECTORS DECLARES DIVIDENDS On Oct. 12, 2021, Pinnacle Financial's Board of Directors approved a quarterly cash dividend of $0.18 per common share to be paid on Nov. 26, 2021 to common shareholders of record as of the close of business on Nov. 5, 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 Dec. 1, 2021 to shareholders of record at the close of business on Nov. 16, 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 Oct. 13, 2021, to discuss third 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 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 2021 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 $36.5 billion in assets as of Sept. 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. 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 the spread of the virus, 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) further public acceptance of the vaccines that were developed against the virus as well as the decisions of governmental agencies with respect to vaccines including recommendations related to booster shots and requirements that seek to mandate that individuals receive or employers require that their employees receive the vaccine; (iv) those vaccines' efficacy against the virus, including new variants; (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; (xxix) 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 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, PPNR, 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. CONSOLIDATED BALANCE SHEETS – UNAUDITED (dollars in thousands, except for share and per share data) September 30, 2021 December 31, 2020 September 30, 2020 ASSETS Cash and noninterest-bearing due from banks $ 155,965 $ 203,296 $ 179,231 Restricted cash 104,157 223,788 247,761 Interest-bearing due from banks 3,206,383 3,522,224 2,604,646 Federal funds sold and other — 12,141 11,687 Cash and cash equivalents 3,466,505 3,961,449 3,043,325 Securities purchased with agreement to resell 500,000 — — Securities available-for-sale, at fair value 4,634,653 3,586,681 3,463,422 Securities held-to-maturity (fair value of $1.0 billion, $1.1 billion and $1.1 billion, net of allowance for credit losses of $161,000, $191,000 and $191,000 at Sept. 30, 2021, Dec. 31, 2020 and Sept. 30, 2020, respectively) 989,237 1,028,359 1,039,650 Consumer loans held-for-sale 55,273 87,821 82,748 Commercial loans held-for-sale 49,121 31,200 12,290 Loans 23,058,461 22,424,501 22,477,409 Less allowance for credit losses (268,635) (285,050) (288,645) Loans, net 22,789,826 22,139,451 22,188,764 Premises and equipment, net 288,833 290,001 287,711 Equity method investment 333,764 308,556 289,301 Accrued interest receivable 89,137 104,078 101,762 Goodwill 1,819,811 1,819,811 1,819,811 Core deposits and other intangible assets 35,876 42,336 44,713 Other real estate owned 8,415 12,360 19,445 Other assets 1,463,485 1,520,757 1,431,989 Total assets $ 36,523,936 $ 34,932,860 $ 33,824,931 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Noninterest-bearing $ 9,809,691 $ 7,392,325 $ 7,050,670 Interest-bearing 5,767,286 5,689,095 4,995,769 Savings and money market accounts 11,381,033 11,099,523 10,513,645 Time 2,411,797 3,524,632 3,983,872 Total deposits 29,369,807 27,705,575 26,543,956 Securities sold under agreements to repurchase 148,240 128,164 127,059 Federal Home Loan Bank advances 888,493 1,087,927 1,287,738 Subordinated debt and other borrowings 542,712 670,575 670,273 Accrued interest payable 11,838 24,934 26,101 Other liabilities 371,048 411,074 382,496 Total liabilities 31,332,138 30,028,249 29,037,623 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 Sept. 30, 2021, Dec. 31, 2020 and Sept. 30, 2020, respectively 217,126 217,126 217,126 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 Sept. 30, 2021, Dec. 31, 2020 and Sept. 30, 2020, respectively 76,115 75,850 75,835 Additional paid-in capital 3,038,800 3,028,063 3,023,430 Retained earnings 1,748,491 1,407,723 1,312,929 Accumulated other comprehensive income, net of taxes 111,266 175,849 157,988 Total stockholders' equity 5,191,798 4,904,611 4,787,308 Total liabilities and stockholders' equity $ 36,523,936 $ 34,932,860 $ 33,824,931 This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED (dollars in thousands, except for share and per share data) Three months ended Nine months ended September 30, 2021 June 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Interest income: Loans, including fees $ 233,857 $ 232,788 $ 224,482 $ 694,017 $ 687,183 Securities Taxable 8,986 8,359 8,276 25,073 28,133 Tax-exempt 15,873 16,546 15,001 47,917 43,421 Federal funds sold and other 2,152 1,543 1,429 5,014 5,258 Total interest income 260,868 259,236 249,188 772,021 763,995 Interest expense: Deposits 12,139 13,861 28,401 43,468 112,826 Securities sold under agreements to repurchase 57 56 77 185 286 FHLB advances and other borrowings 11,129 12,094 14,116 34,730 50,080 Total interest expense 23,325 26,011 42,594 78,383 163,192 Net interest income 237,543 233,225 206,594 693,638 600,803 Provision for credit losses 3,382 2,834 16,758 13,451 194,635 Net interest income after provision for credit losses 234,161 230,391 189,836 680,187 406,168 Noninterest income: Service charges on deposit accounts 11,435 8,906 9,854 28,648 25,796 Investment services 9,648 8,997 6,734 26,836 21,944 Insurance sales commissions 2,557 2,406 2,284 8,188 7,755 Gains on mortgage loans sold, net 7,814 6,700 19,453 28,180 47,655 Investment gains on sales, net — 366 651 366 986 Trust fees 5,049 5,062 3,986 14,798 12,114 Income from equity method investment 30,409 32,071 26,445 91,430 59,245 Other noninterest income 37,183 33,699 21,658 96,565 58,901 Total noninterest income 104,095 98,207 91,065 295,011 234,396 Noninterest expense: Salaries and employee benefits 112,406 110,824 90,103 325,958 244,470 Equipment and occupancy 23,712 23,321 21,622 70,253 64,626 Other real estate, net (79 ) (657 ) 1,795 (749 ) 7,098 Marketing and other business development 3,325 2,652 2,321 8,326 7,714 Postage and supplies 2,083 2,115 1,761 6,004 5,821 Amortization of intangibles 2,088 2,167 2,417 6,461 7,416 Other noninterest expense 25,316 25,718 23,833 73,434 66,005 Total noninterest expense 168,851 166,140 143,852 489,687 403,150 Income before income taxes 169,405 162,458 137,049 485,511 237,414 Income tax expense 32,828 30,668 26,404 91,716 35,969 Net income 136,577 131,790 110,645 393,795 201,445 Preferred stock dividends (3,798 ) (3,798 ) (3,798 ) (11,394 ) (3,798 ) Net income available to common shareholders $ 132,779 $ 127,992 $ 106,847 $ 382,401 $ 197,647 Per share information: Basic net income per common share $ 1.76 $ 1.70 $ 1.42 $ 5.07 $ 2.62 Diluted net income per common share $ 1.75 $ 1.69 $ 1.42 $ 5.05 $ 2.62 Weighted average common shares outstanding: Basic 75,494,286 75,481,198 75,240,664 75,449,900 75,417,663 Diluted 75,836,142 75,809,974 75,360,033 75,760,618 75,544,677 This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED (dollars in thousands) September June March December September June 2021 2021 2021 2020 2020 2020 Balance sheet data, at quarter end: Commercial and industrial loans $ 7,079,431 6,771,254 6,355,119 6,239,588 6,144,949 6,293,709 Commercial real estate - owner occupied loans 2,954,519 2,817,689 2,869,785 2,802,227 2,748,075 2,708,306 Commercial real estate - investment loans 4,597,736 4,644,551 4,782,712 4,565,040 4,648,457 4,822,537 Commercial real estate - multifamily and other loans 621,471 724,253 790,469 638,344 571,995 561,481 Consumer real estate - mortgage loans 3,540,439 3,335,537 3,086,916 3,099,172 3,041,019 3,042,604 Construction and land development loans 3,096,961 2,791,611 2,568,969 2,901,746 2,728,439 2,574,494 Consumer and other loans 459,182 440,124 411,322 379,515 343,461 294,545 Paycheck protection program loans 708,722 1,372,916 2,221,409 1,798,869 2,251,014 2,222,624 Total loans 23,058,461 22,897,935 23,086,701 22,424,501 22,477,409 22,520,300 Allowance for credit losses (268,635 ) (273,747 ) (280,881 ) (285,050 ) (288,645 ) (285,372 ) Securities 5,623,890 5,326,908 4,691,364 4,615,040 4,503,072 4,358,313 Total assets 36,523,936 35,412,309 35,299,705 34,932,860 33,824,931 33,342,112 Noninterest-bearing deposits 9,809,691 8,926,200 8,103,943 7,392,325 7,050,670 6,892,864 Total deposits 29,369,807 28,217,603 28,292,940 27,705,575 26,543,956 25,521,829 Securities sold under agreements to repurchase 148,240 177,661 172,117 128,164 127,059 194,553 FHLB advances 888,493 888,304 888,115 1,087,927 1,287,738 1,787,551 Subordinated debt and other borrowings 542,712 671,994 671,002 670,575 670,273 717,043 Total stockholders' equity 5,191,798 5,101,231 4,959,524 4,904,611 4,787,308 4,695,647 Balance sheet data, quarterly averages: Total loans $ 22,986,835 23,179,803 22,848,086 22,524,683 22,493,192 22,257,168 Securities 5,451,232 5,036,786 4,666,269 4,567,872 4,420,280 4,194,811 Federal funds sold and other 3,743,074 3,143,078 3,356,199 3,621,623 3,279,248 2,618,832 Total earning assets 32,181,141 31,359,667 30,870,554 30,714,178 30,192,720 29,070,811 Total assets 35,896,130 35,053,772 34,659,132 34,436,765 33,838,716 32,785,391 Noninterest-bearing deposits 9,247,382 8,500,465 7,620,665 7,322,393 6,989,439 6,432,010 Total deposits 28,739,871 28,013,659 27,620,784 27,193,256 26,352,823 24,807,032 Securities sold under agreements to repurchase 164,837 173,268 143,586 121,331 147,211 191,084 FHLB advances 888,369 888,184 934,662 1,250,848 1,515,879 2,213,769 Subordinated debt and other borrowings 586,387 674,162 673,662 673,419 715,138 706,657 Total stockholders' equity 5,176,625 5,039,608 4,953,656 4,852,373 4,765,864 4,499,438 Statement of operations data, for the three months ended: Interest income $ 260,868 259,236 251,917 257,047 249,188 251,738 Interest expense 23,325 26,011 29,047 36,062 42,594 51,081 Net interest income 237,543 233,225 222,870 220,985 206,594 200,657 Provision for credit losses 3,382 2,834 7,235 9,180 16,758 72,832 Net interest income after provision for credit losses 234,161 230,391 215,635 211,805 189,836 127,825 Noninterest income 104,095 98,207 92,709 83,444 91,065 72,954 Noninterest expense 168,851 166,140 154,696 161,305 143,852 127,105 Income before taxes 169,405 162,458 153,648 133,944 137,049 73,674 Income tax expense 32,828 30,668 28,220 23,068 26,404 11,230 Net income 136,577 131,790 125,428 110,876 110,645 62,444 Preferred stock dividends (3,798 ) (3,798 ) (3,798 ) (3,798 ) (3,798 ) — Net income available to common shareholders $ 132,779 127,992 121,630 107,078 106,847 62,444 Profitability and other ratios: Return on avg. assets (1) 1.47 % 1.46 % 1.42 % 1.24 % 1.26 % 0.77 % Return on avg. equity (1) 10.18 % 10.19 % 9.96 % 8.78 % 8.92 % 5.58 % Return on avg. common equity (1) 10.62 % 10.65 % 10.41 % 9.19 % 9.35 % 5.66 % Return on avg. tangible common equity (1) 16.98 % 17.32 % 17.16 % 15.37 % 15.85 % 9.77 % Common stock dividend payout ratio (16) 11.13 % 11.73 % 13.69 % 15.84 % 16.49 % 16.41 % Net interest margin (2) 3.03 % 3.08 % 3.02 % 2.97 % 2.82 % 2.87 % Noninterest income to total revenue (3) 30.47 % 29.63 % 29.38 % 27.41 % 30.59 % 26.66 % Noninterest income to avg. assets (1) 1.15 % 1.12 % 1.08 % 0.96 % 1.07 % 0.89 % Noninterest exp. to avg. assets (1) 1.87 % 1.90 % 1.81 % 1.86 % 1.69 % 1.56 % Efficiency ratio (4) 49.42 % 50.13 % 49.02 % 52.99 % 48.33 % 46.45 % Avg. loans to avg. deposits 79.98 % 82.74 % 82.72 % 82.83 % 85.35 % 89.72 % Securities to total assets 15.40 % 15.04 % 13.29 % 13.21 % 13.31 % 13.07 % This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED (dollars in thousands) Three months ended Three months ended September 30, 2021 September 30, 2020 Average Balances Interest Rates/ Yields Average Balances Interest Rates/ Yields Interest-earning assets Loans (1) (2) $ 22,986,835 $ 233,857 4.13 % $ 22,493,192 $ 224,482 4.04 % Securities Taxable 2,868,212 8,986 1.24 % 2,226,008 8,276 1.48 % Tax-exempt (2) 2,583,020 15,873 2.93 % 2,194,272 15,001 3.29 % Federal funds sold and other 3,743,074 2,152 0.23 % 3,279,248 1,429 0.17 % Total interest-earning assets 32,181,141 $ 260,868 3.32 % 30,192,720 $ 249,188 3.38 % Nonearning assets Intangible assets 1,857,039 1,866,082 Other nonearning assets 1,857,950 1,779,914 Total assets $ 35,896,130 $ 33,838,716 Interest-bearing liabilities Interest-bearing deposits: Interest checking 5,591,119 2,453 0.17 % 4,784,627 3,733 0.31 % Savings and money market 11,359,595 5,300 0.19 % 10,312,876 8,374 0.32 % Time 2,541,775 4,386 0.68 % 4,265,881 16,294 1.52 % Total interest-bearing deposits 19,492,489 12,139 0.25 % 19,363,384 28,401 0.58 % Securities sold under agreements to repurchase 164,837 57 0.14 % 147,211 77 0.21 % Federal Home Loan Bank advances 888,369 4,558 2.04 % 1,515,879 6,945 1.82 % Subordinated debt and other borrowings 586,387 6,571 4.45 % 715,138 7,171 3.99 % Total interest-bearing liabilities 21,132,082 23,325 0.44 % 21,741,612 42,594 0.78 % Noninterest-bearing deposits 9,247,382 — — 6,989,439 — — Total deposits and interest-bearing liabilities 30,379,464 $ 23,325 0.30 % 28,731,051 $ 42,594 0.59 % Other liabilities 340,041 341,801 Stockholders' equity 5,176,625 4,765,864 Total liabilities and stockholders' equity $ 35,896,130 $ 33,838,716 Net interest income $ 237,543 $ 206,594 Net interest spread (3) 2.88 % 2.60 % Net interest margin (4) 3.03 % 2.82 % (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 $8.5 million of taxable equivalent income for the three months ended Sept. 30, 2021 compared to $7.3 million for the three months ended Sept. 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 Sept. 30, 2021 would have been 3.02% compared to a net interest spread of 2.79% for the three months ended Sept. 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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED (dollars in thousands) Nine months ended Nine months ended September 30, 2021 September 30, 2020 Average Balances Interest Rates/ Yields Average Balances Interest Rates/ Yields Interest-earning assets Loans (1) (2) $ 23,005,416 $ 694,017 4.11 % $ 21,589,858 $ 687,183 4.33 % Securities Taxable 2,575,720 25,073 1.30 % 2,103,023 28,133 1.79 % Tax-exempt (2) 2,478,584 47,917 3.11 % 2,041,199 43,421 3.41 % Federal funds sold and other 3,415,534 5,014 0.20 % 2,239,102 5,258 0.31 % Total interest-earning assets 31,475,254 $ 772,021 3.38 % 27,973,182 $ 763,995 3.75 % Nonearning assets Intangible assets 1,859,183 1,868,118 Other nonearning assets 1,873,106 1,787,377 Total assets $ 35,207,543 $ 31,628,677 Interest-bearing liabilities Interest-bearing deposits: Interest checking 5,504,133 7,460 0.18 % 4,391,319 16,456 0.50 % Savings and money market 11,323,160 17,670 0.21 % 9,201,302 37,713 0.55 % Time 2,839,449 18,338 0.86 % 4,298,814 58,657 1.82 % Total interest-bearing deposits 19,666,742 43,468 0.30 % 17,891,435 112,826 0.84 % Securities sold under agreements to repurchase 160,641 185 0.15 % 159,783 286 0.24 % Federal Home Loan Bank advances 903,569 13,553 2.01 % 1,918,371 26,854 1.87 % Subordinated debt and other borrowings 644,417 21,177 4.39 % 698,464 23,226 4.44 % Total interest-bearing liabilities 21,375,369 78,383 0.49 % 20,668,053 163,192 1.05 % Noninterest-bearing deposits 8,462,129 — — 6,063,783 — — Total deposits and interest-bearing liabilities 29,837,498 $ 78,383 0.35 % 26,731,836 $ 163,192 0.82 % Other liabilities 312,598 335,274 Stockholders' equity 5,057,447 4,561,567 Total liabilities and stockholders' equity $ 35,207,543 $ 31,628,677 Net interest income $ 693,638 $ 600,803 Net interest spread (3) 2.89 % 2.70 % Net interest margin (4) 3.05 % 2.97 % (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 $23.7 million of taxable equivalent income for the nine months ended Sept. 30, 2021 compared to $21.3 million for the nine months ended Sept. 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 nine months ended Sept. 30, 2021 would have been 3.03% compared to a net interest spread of 2.93% for the nine months ended Sept. 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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED (dollars in thousands) September June March December September June 2021 2021 2021 2020 2020 2020 Asset quality information and ratios: Nonperforming assets: Nonaccrual loans $ 46,692 53,105 72,135 73,836 71,390 62,562 ORE and other nonperforming assets (NPAs) 8,415 9,602 10,651 12,360 19,445 22,105 Total nonperforming assets $ 55,107 62,707 82,786 86,196 90,835 84,667 Past due loans over 90 days and still accruing interest $ 1,914 1,810 2,833 2,362 1,313 1,982 Accruing troubled debt restructurings (5) $ 2,397 2,428 2,460 2,494 2,588 3,274 Accruing purchase credit deteriorated loans $ 12,158 12,400 13,904 14,091 14,346 14,616 Net loan charge-offs $ 9,281 9,968 11,397 10,775 13,057 5,384 Allowance for credit losses to nonaccrual loans 575.3 % 515.5 % 389.4 % 386.1 % 404.3 % 456.1 % As a percentage of total loans: Past due accruing loans over 30 days 0.09 % 0.07 % 0.09 % 0.19 % 0.11 % 0.09 % Potential problem loans (6) 0.60 % 0.74 % 0.70 % 0.77 % 0.96 % 1.12 % Allowance for credit losses (20) 1.17 % 1.20 % 1.22 % 1.27 % 1.28 % 1.27 % Nonperforming assets to total loans, ORE and other NPAs 0.24 % 0.27 % 0.36 % 0.38 % 0.40 % 0.38 % Classified asset ratio (Pinnacle Bank) (8) 5.6 % 6.8 % 7.3 % 8.1 % 9.9 % 11.2 % Annualized net loan charge-offs to avg. loans (7) 0.16 % 0.17 % 0.20 % 0.19 % 0.23 % 0.10 % Wtd. avg. commercial loan internal risk ratings (6) 46.0 46.1 45.2 45.1 45.2 45.1 Interest rates and yields: Loans 4.13 % 4.11 % 4.11 % 4.20 % 4.04 % 4.16 % Securities 2.04 % 2.25 % 2.29 % 2.27 % 2.38 % 2.59 % Total earning assets 3.32 % 3.42 % 3.41 % 3.44 % 3.38 % 3.58 % Total deposits, including non-interest bearing 0.17 % 0.20 % 0.26 % 0.33 % 0.43 % 0.55 % Securities sold under agreements to repurchase 0.14 % 0.13 % 0.20 % 0.21 % 0.21 % 0.20 % FHLB advances 2.04 % 2.03 % 1.95 % 2.00 % 1.82 % 1.73 % Subordinated debt and other borrowings 4.45 % 4.52 % 4.22 % 4.13 % 3.99 % 4.42 % Total deposits and interest-bearing liabilities 0.30 % 0.35 % 0.40 % 0.49 % 0.59 % 0.74 % Capital and other ratios (8): Pinnacle Financial ratios: Stockholders' equity to total assets 14.2 % 14.4 % 14.0 % 14.0 % 14.2 % 14.1 % Common equity Tier one 10.5 % 10.5 % 10.3 % 10.0 % 9.9 % 9.6 % Tier one risk-based 11.3 % 11.3 % 11.2 % 10.9 % 10.7 % 10.4 % Total risk-based 14.0 % 14.5 % 14.5 % 14.3 % 14.2 % 14.0 % Leverage 9.3 % 9.2 % 8.9 % 8.6 % 8.5 % 8.4 % Tangible common equity to tangible assets 9.0 % 9.0 % 8.6 % 8.5 % 8.5 % 8.3 % Pinnacle Bank ratios: Common equity Tier one 11.7 % 11.9 % 11.8 % 11.4 % 11.3 % 11.0 % Tier one risk-based 11.7 % 11.9 % 11.8 % 11.4 % 11.3 % 11.0 % Total risk-based 12.5 % 13.1 % 13.0 % 12.7 % 12.6 % 12.4 % Leverage 9.7 % 9.6 % 9.4 % 9.1 % 8.9 % 8.9 % Construction and land development loans as a percentage of total capital (19) 89.3 % 80.1 % 76.0 % 89.0 % 86.7 % 83.6 % Non-owner occupied commercial real estate and multi-family as a percentage of total capital (19) 252.4 % 248.8 % 256.0 % 264.0 % 268.8 % 275.0 % This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED (dollars in thousands, except per share data) September June March December September June 2021 2021 2021 2020 2020 2020 Per share data: Earnings per common share – basic $ 1.76 1.70 1.61 1.42 1.42 0.83 Earnings per common share - basic, excluding non-GAAP adjustments $ 1.76 1.69 1.61 1.58 1.45 0.89 Earnings per common share – diluted $ 1.75 1.69 1.61 1.42 1.42 0.83 Earnings per common share - diluted, excluding non-GAAP adjustments $ 1.75 1.68 1.61 1.58 1.45 0.89 Common dividends per share $ 0.18 0.18 0.18 0.16 0.16 0.16 Book value per common share at quarter end (9) $ 65.36 64.19 62.33 61.80 60.26 59.05 Tangible book value per common share at quarter end (9) $ 40.98 39.77 37.88 37.25 35.68 34.43 Revenue per diluted common share $ 4.50 4.37 4.17 4.03 3.95 3.63 Revenue per diluted common share, excluding non-GAAP adjustments $ 4.50 4.37 4.17 4.03 3.94 3.63 Investor information: Closing sales price of common stock on last trading day of quarter $ 94.08 88.29 88.66 64.40 35.59 41.99 High closing sales price of common stock during quarter $ 98.00 92.94 93.58 65.51 44.47 48.98 Low closing sales price of common stock during quarter $ 83.84 84.25 63.48 35.97 33.28 33.24 Closing sales price of depositary shares on last trading day of quarter $ 28.14 29.13 27.62 27.69 26.49 25.98 High closing sales price of depositary shares during quarter $ 29.23 29.13 27.83 27.94 26.82 26.05 Low closing sales price of depositary shares during quarter $ 28.00 27.38 26.83 26.45 25.51 25.19 Other information: Residential mortgage loan sales: Gross loans sold $ 347,664 394,299 546,963 479,867 511,969 550,704 Gross fees (10) $ 11,215 15,552 18,793 23,729 23,557 16,381 Gross fees as a percentage of loans originated 3.23 % 3.94 % 3.44 % 4.94 % 4.60 % 2.97 % Net gain on residential mortgage loans sold $ 7,814 6,700 13,666 12,387 19,453 19,619 Investment gains (losses) on sales of securities, net (15) $ — 366 — — 651 (128) Brokerage account assets, at quarter end (11) $ 6,597,152 6,344,416 5,974,884 5,509,560 4,866,726 4,499,856 Trust account managed assets, at quarter end $ 4,155,510 3,640,932 3,443,373 3,295,198 2,978,035 2,908,131 Core deposits (12) $ 27,170,367 25,857,639 24,971,177 23,510,883 22,003,989 21,391,794 Core deposits to total funding (12) 87.8 % 86.3 % 83.1 % 79.5 % 76.9 % 75.8 % Risk-weighted assets $ 27,945,624 26,819,277 26,105,158 25,791,896 25,189,944 24,937,535 Number of offices 117 116 115 114 114 113 Total core deposits per office $ 232,225 222,911 217,141 206,236 193,017 189,308 Total assets per full-time equivalent employee $ 13,188 13,087 13,468 13,262 13,027 12,936 Annualized revenues per full-time equivalent employee $ 489.4 491.3 488.3 459.8 456.1 426.9 Annualized expenses per full-time equivalent employee $ 241.9 246.3 239.4 246.6 221.1 205.4 Number of employees (full-time equivalent) 2,769.5 2,706.0 2,621.0 2,634.0 2,596.5 2,577.5 Associate retention rate (13) 93.4 % 93.3 % 94.4 % 94.8 % 94.4 % 94.5 % This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED Three months ended Nine months ended (dollars in thousands, except per share data) September June September September September 2021 2021 2020 2021 2020 Net interest income $ 237,543 233,225 206,594 693,638 600,803 Noninterest income 104,095 98,207 91,065 295,011 234,396 Total revenues 341,638 331,432 297,659 988,649 835,199 Less: Investment (gains) losses on sales of securities, net — (366 ) (651 ) (366 ) (986 ) Total revenues excluding the impact of adjustments noted above $ 341,638 331,066 297,008 988,283 834,213 Noninterest expense $ 168,851 166,140 143,852 489,687 403,150 Less: ORE expense (79 ) (657 ) 1,795 (749 ) 7,098 FHLB restructuring charges — — 1,991 — 4,861 Noninterest expense excluding the impact of adjustments noted above $ 168,930 166,797 140,066 490,436 391,191 Pre-tax income $ 169,405 162,458 137,049 485,511 237,414 Provision for credit losses 3,382 2,834 16,758 13,451 194,635 Pre-tax pre-provision net revenue 172,787 165,292 153,807 498,962 432,049 Adjustments noted above (79 ) (1,023 ) 3,135 (1,115 ) 10,973 Adjusted pre-tax pre-provision net revenue (14) $ 172,708 164,269 156,942 497,847 443,022 Noninterest income $ 104,095 98,207 91,065 295,011 234,396 Less: Adjustments as noted above — (366 ) (651 ) (366 ) (986 ) Noninterest income excluding the impact of adjustments noted above $ 104,095 97,841 90,414 294,645 233,410 Efficiency ratio (4) 49.42 % 50.13 % 48.33 % 49.53 % 48.27 % Adjustments as noted above 0.03 % 0.25 % (1.17 )% 0.10 % (1.38 )% Efficiency ratio (excluding adjustments noted above) (4) 49.45 % 50.38 % 47.16 % 49.63 % 46.89 % Total average assets $ 35,896,130 35,053,772 33,838,716 35,207,543 31,628,677 Noninterest income to average assets (1) 1.15 % 1.12 % 1.07 % 1.12 % 0.99 % Adjustments as noted above — % — % (0.01 )% — % — % Noninterest income (excluding adjustments noted above) to average assets (1) 1.15 % 1.12 % 1.06 % 1.12 % 0.99 % Noninterest expense to average assets (1) 1.87 % 1.90 % 1.69 % 1.86 % 1.70 % Adjustments as noted above — % 0.01 % (0.04 )% — % (0.05 )% Noninterest expense (excluding adjustments noted above) to average assets (1) 1.87 % 1.91 % 1.65 % 1.86 % 1.65 % This information is preliminary and based on company data available at the time of the presentation. 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) September June March December September June 2021 2021 2021 2020 2020 2020 Net income available to common shareholders $ 132,779 127,992 121,630 107,078 106,847 62,444 Investment (gains) losses on sales of securities, net — (366 ) — — (651 ) 128 ORE expense (79 ) (657 ) (13 ) 1,457 1,795 2,888 FHLB restructuring charges — — — 10,307 1,991 2,870 Hedge termination charges — — — 4,673 — — Tax effect on adjustments noted above (18) 21 267 3 (4,297 ) (819 ) (1,539 ) Net income available to common shareholders excluding adjustments noted above $ 132,721 127,236 121,620 119,218 109,163 66,791 Basic earnings per common share $ 1.76 1.70 1.61 1.42 1.42 0.83 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 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 ) Basic earnings per common share excluding adjustments noted above $ 1.76 1.69 1.61 1.58 1.45 0.89 Diluted earnings per common share $ 1.75 1.69 1.61 1.42 1.42 0.83 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 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 ) Diluted earnings per common share excluding the adjustments noted above $ 1.75 1.68 1.61 1.58 1.45 0.89 Revenue per diluted common share $ 4.50 4.37 4.17 4.03 3.95 3.63 Adjustments as noted above — — — — (0.01 ) — Revenue per diluted common share excluding adjustments noted above $ 4.50 4.37 4.17 4.03 3.94 3.63 Book value per common share at quarter end (9) $ 65.36 64.19 62.33 61.80 60.26 59.05 Adjustment due to goodwill, core deposit and other intangible assets (24.38 ) (24.42 ) (24.45 ) (24.55 ) (24.59 ) (24.62 ) Tangible book value per common share at quarter end (9) $ 40.98 39.77 37.88 37.25 35.68 34.43 Equity method investment (17) Fee income from BHG, net of amortization $ 30,409 32,071 28,950 24,294 26,445 17,208 Funding cost to support investment 379 1,230 1,205 1,222 1,231 2,134 Pre-tax impact of BHG 30,030 30,841 27,745 23,072 25,214 15,074 Income tax expense at statutory rates (18) 7,850 8,062 7,253 6,031 6,591 3,940 Earnings attributable to BHG $ 22,180 22,779 20,492 17,041 18,623 11,134 Basic earnings per common share attributable to BHG $ 0.29 0.30 0.27 0.23 0.25 0.15 Diluted earnings per common share attributable to BHG $ 0.29 0.30 0.27 0.23 0.25 0.15 This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED Nine months ended (dollars in thousands, except per share data) September 2021 2020 Net income available to common shareholders $ 382,401 197,647 Investment (gains) losses on sales of securities, net (366 ) (986 ) ORE expense (749 ) 7,098 FHLB restructuring charges — 4,861 Tax effect on adjustments noted above (18) 291 (2,868 ) Net income available to common shareholders excluding adjustments noted above $ 381,577 205,752 Basic earnings per common share $ 5.07 2.62 Adjustment due to investment (gains) losses on sales of securities, net — (0.01 ) Adjustment due to ORE expense (0.01 ) 0.09 Adjustment due to FHLB restructuring charges — 0.06 Adjustment due to tax effect on adjustments noted above (18) — (0.04 ) Basic earnings per common share excluding adjustments noted above $ 5.06 2.72 Diluted earnings per common share 5.05 2.62 Adjustment due to investment (gains) losses on sales of securities, net — (0.01 ) Adjustment due to ORE expense (0.01 ) 0.09 Adjustment due to FHLB restructuring charges — 0.06 Adjustment due to tax effect on adjustments noted above (18) — (0.04 ) Diluted earnings per common share excluding the adjustments noted above $ 5.04 2.72 Revenue per diluted common share $ 13.05 11.06 Adjustments as noted above (0.01 ) (0.02 ) Revenue per diluted common share excluding adjustments noted above $ 13.04 11.04 Equity method investment (17) Fee income from BHG, net of amortization $ 91,430 59,245 Funding cost to support investment 2,814 5,487 Pre-tax impact of BHG 88,616 53,758 Income tax expense at statutory rates (18) 23,164 14,052 Earnings attributable to BHG $ 65,452 39,706 Basic earnings per common share attributable to BHG $ 0.87 0.53 Diluted earnings per common share attributable to BHG $ 0.86 0.53 This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED Three months ended Nine months ended (dollars in thousands, except per share data) September June September September September 2021 2021 2020 2021 2020 Return on average assets (1) 1.47 % 1.46 % 1.26 % 1.45 % 0.83 % Adjustments as noted above — % — % 0.02 % — % 0.04 % Return on average assets excluding adjustments noted above (1) 1.47 % 1.46 % 1.28 % 1.45 % 0.87 % Tangible assets: Total assets $ 36,523,936 35,412,309 33,824,931 $ 36,523,936 33,824,931 Less: Goodwill (1,819,811 ) (1,819,811 ) (1,819,811 ) (1,819,811 ) (1,819,811 ) Core deposit and other intangible assets (35,876 ) (37,963 ) (44,713 ) (35,876 ) (44,713 ) Net tangible assets $ 34,668,249 33,554,535 31,960,407 $ 34,668,249 31,960,407 Tangible common equity: Total stockholders' equity $ 5,191,798 5,101,231 4,787,308 $ 5,191,798 4,787,308 Less: Preferred stockholders' equity (217,126 ) (217,126 ) (217,126 ) (217,126 ) (217,126 ) Total common stockholders' equity 4,974,672 4,884,105 4,570,182 4,974,672 4,570,182 Less: Goodwill (1,819,811 ) (1,819,811 ) (1,819,811 ) (1,819,811 ) (1,819,811 ) Core deposit and other intangible assets (35,876 ) (37,963 ) (44,713 ) (35,876 ) (44,713 ) Net tangible common equity $ 3,118,985 3,026,331 2,705,658 $ 3,118,985 2,705,658 Ratio of tangible common equity to tangible assets 9.00 % 9.02 % 8.47 % 9.00 % 8.47 % Average tangible assets: Average assets $ 35,896,130 35,053,772 33,838,716 $ 35,207,543 31,628,677 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 (37,228 ) (39,360 ) (46,272 ) (39,372 ) (48,308 ) Net average tangible assets $ 34,039,091 33,194,601 31,972,633 $ 33,348,360 29,760,558 Return on average assets (1) 1.47 % 1.46 % 1.26 % 1.45 % 0.83 % Adjustment due to goodwill, core deposit and other intangible assets 0.08 % 0.09 % 0.07 % 0.08 % 0.06 % Return on average tangible assets (1) 1.55 % 1.55 % 1.33 % 1.53 % 0.89 % Adjustments as noted above — % (0.01 )% 0.03 % — % 0.03 % Return on average tangible assets excluding adjustments noted above (1) 1.55 % 1.54 % 1.36 % 1.53 % 0.92 % Average tangible common equity: Average stockholders' equity $ 5,176,625 5,039,608 4,765,864 $ 5,057,447 4,561,567 Less: Average preferred equity (217,126 ) (217,126 ) (217,535 ) (217,126 ) (92,831 ) Average common equity 4,959,499 4,822,482 4,548,329 4,840,321 4,468,736 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 (37,228 ) (39,360 ) (46,272 ) (39,372 ) (48,308 ) Net average tangible common equity $ 3,102,460 2,963,311 2,682,246 $ 2,981,138 2,600,617 Return on average equity (1) 10.18 % 10.19 % 8.92 % 10.11 % 5.79 % Adjustment due to average preferred stockholders' equity 0.44 % 0.46 % 0.43 % 0.45 % 0.12 % Return on average common equity (1) 10.62 % 10.65 % 9.35 % 10.56 % 5.91 % Adjustment due to goodwill, core deposit and other intangible assets 6.36 % 6.67 % 6.50 % 6.59 % 4.24 % Return on average tangible common equity (1) 16.98 % 17.32 % 15.85 % 17.15 % 10.15 % Adjustments as noted above (0.01 )% (0.10 )% 0.34 % (0.04 )% 0.42 % Return on average tangible common equity excluding adjustments noted above (1) 16.97 % 17.22 % 16.19 % 17.11 % 10.57 % Allowance for credit losses on loans as a percent of total loans 1.17 % 1.20 % 1.28 % 1.17 % 1.28 % Impact of excluding PPP loans from total loans 0.03 % 0.07 % 0.15 % 0.03 % 0.15 % Allowance as adjusted for the above exclusion of PPP loans from total loans 1.20 % 1.27 % 1.43 % 1.20 % 1.43 % This information is preliminary and based on company data available at the time of the presentation. 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 net revenue 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. pnfp-earnings
NASHVILLE, Tenn.--(BUSINESS WIRE)--Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today announced it will release its third quarter 2021 financial results on Tuesday, Oct. 12, 2021, after market close. It will also host a live webcast on Wednesday, Oct. 13, at 8:30 a.m. CDT to review its financial results, business outlook for the firm and other matters. The third quarter 2021 earnings release will be available on the investor relations page of Pinnacle's website at www.pnfp.com. To access the call for audio only, please call 1-877-602-7944. For the presentation and streaming audio, please 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 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 2021 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.
NASHVILLE, Tenn.--(BUSINESS WIRE)--Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today announced that company leaders will join leaders from Bankers Healthcare Group (BHG) to host a live webcast on Tuesday, September 14, at 8:30 a.m. CDT to review BHG’s financial results, business outlook for the firm and other matters related to BHG’s operations. Participating on the call will be BHG Chairman, CEO and Co-founder Al Crawford and Chief Financial Officer Dan McSherry, as well as Pinnacle Chief Administrative Officer Hugh Queener and Chief Financial Officer Harold Carpenter. Materials for the call will be available on the investor relations page of Pinnacle's website at www.pnfp.com and on BHG’s website at www.bankershealthcaregroup.com/about/company. To access the call for audio only, please call 1-877-602-7944. For the presentation and streaming audio, please 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 for 90 days following the presentation. About Pinnacle Financial Partners 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. About Bankers Healthcare Group BHG is transforming the financial industry, leveraging the power of data, analytics, and cutting-edge technology to become not only one of the best sources for high-performing loans, but the creator of one of the largest community bank loan and product networks in the country. Since 2001, BHG has originated more than $9 billion in loan solutions to top-quality borrowers, which community and midsize banks can access via a state-of-the-art loan delivery platform. Building on nearly two decades of innovation, BHG and its family of brands now offer a full suite of financial solutions that span business, consumer, and SBA 7(a) loans, credit cards, collection services, risk management services, and point-of-sale financing with a focus in patient lending. With record growth year after year, BHG continues to be recognized regionally and nationally: earning a spot on the Inc. 5000 for 14 years running and receiving accolades from Great Place to Work® and Fortune magazine, among others. BHG is partially owned by Pinnacle Bank (PNFP) and has headquarters in Davie, FL, and Syracuse, NY. To learn more about BHG’s financial solutions, visit www.bankershealthcaregroup.com, and for more information about the BHG Bank Network, click here. Follow BHG on LinkedIn, Facebook, and Twitter.
NASHVILLE, Tenn.--(BUSINESS WIRE)--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." 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. 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. 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. 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. 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. 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. 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. 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. 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 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. 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. 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 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. 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 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. 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 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. 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. 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 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. 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 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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS – UNAUDITED (dollars in thousands, except for share and per share data) June 30, 2021 December 31, 2020 June 30, 2020 ASSETS Cash and noninterest-bearing due from banks $ 159,863 $ 203,296 $ 213,551 Restricted cash 155,275 223,788 254,593 Interest-bearing due from banks 2,576,237 3,522,224 2,221,519 Federal funds sold and other — 12,141 3,798 Cash and cash equivalents 2,891,375 3,961,449 2,693,461 Securities purchased with agreement to resell 500,000 — — Securities available-for-sale, at fair value 4,331,070 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-sale 56,968 87,821 69,443 Commercial loans held-for-sale 25,843 31,200 16,201 Loans 22,897,935 22,424,501 22,520,300 Less allowance for credit losses (273,747 ) (285,050 ) (285,372 ) Loans, net 22,624,188 22,139,451 22,234,928 Premises and equipment, net 287,992 290,001 281,739 Equity method investment 320,167 308,556 302,879 Accrued interest receivable 99,664 104,078 112,675 Goodwill 1,819,811 1,819,811 1,819,811 Core deposits and other intangible assets 37,963 42,336 47,131 Other real estate owned 9,602 12,360 22,080 Other assets 1,411,828 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-bearing 5,581,651 5,689,095 4,815,012 Savings and money market accounts 11,079,165 11,099,523 9,338,719 Time 2,630,587 3,524,632 4,475,234 Total deposits 28,217,603 27,705,575 25,521,829 Securities sold under agreements to repurchase 177,661 128,164 194,553 Federal Home Loan Bank advances 888,304 1,087,927 1,787,551 Subordinated debt and other borrowings 671,994 670,575 717,043 Accrued interest payable 15,776 24,934 34,916 Other liabilities 339,740 411,074 390,573 Total liabilities 30,311,078 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, respectively 217,126 217,126 217,632 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, respectively 76,088 75,850 75,836 Additional paid-in capital 3,032,338 3,028,063 3,019,286 Retained earnings 1,629,580 1,407,723 1,218,367 Accumulated other comprehensive income, net of taxes 146,099 175,849 164,526 Total stockholders' equity 5,101,231 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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED (dollars in thousands, except for share and per share data) Three months ended Six months ended June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Interest income: Loans, including fees $ 232,788 $ 227,372 $ 226,281 $ 460,160 $ 462,701 Securities Taxable 8,359 7,728 9,589 16,087 19,857 Tax-exempt 16,546 15,498 14,596 32,044 28,420 Federal funds sold and other 1,543 1,319 1,272 2,862 3,829 Total interest income 259,236 251,917 251,738 511,153 514,807 Interest expense: Deposits 13,861 17,468 33,727 31,329 84,425 Securities sold under agreements to repurchase 56 72 94 128 209 FHLB advances and other borrowings 12,094 11,507 17,260 23,601 35,964 Total interest expense 26,011 29,047 51,081 55,058 120,598 Net interest income 233,225 222,870 200,657 456,095 394,209 Provision for credit losses 2,834 7,235 68,332 10,069 168,221 Net interest income after provision for credit losses 230,391 215,635 132,325 446,026 225,988 Noninterest income: Service charges on deposit accounts 8,906 8,307 6,910 17,213 15,942 Investment services 8,997 8,191 5,971 17,188 15,210 Insurance sales commissions 2,406 3,225 2,231 5,631 5,471 Gains on mortgage loans sold, net 6,700 13,666 19,619 20,366 28,202 Investment gains (losses) on sales, net 366 — (128 ) 366 335 Trust fees 5,062 4,687 3,958 9,749 8,128 Income from equity method investment 32,071 28,950 17,208 61,021 32,800 Other noninterest income 33,699 25,683 17,185 59,382 37,243 Total noninterest income 98,207 92,709 72,954 190,916 143,331 Noninterest expense: Salaries and employee benefits 110,824 102,728 73,887 213,552 154,367 Equipment and occupancy 23,321 23,220 22,026 46,541 43,004 Other real estate, net (657 ) (13 ) 2,888 (670 ) 5,303 Marketing and other business development 2,652 2,349 2,142 5,001 5,393 Postage and supplies 2,115 1,806 2,070 3,921 4,060 Amortization of intangibles 2,167 2,206 2,479 4,373 4,999 Other noninterest expense 25,718 22,400 26,113 48,118 51,828 Total noninterest expense 166,140 154,696 131,605 320,836 268,954 Income before income taxes 162,458 153,648 73,674 316,106 100,365 Income tax expense 30,668 28,220 11,230 58,888 9,565 Net income 131,790 125,428 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: Basic 75,481,198 75,372,883 75,210,869 75,427,340 75,507,136 Diluted 75,809,974 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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED (dollars in thousands) June March December September June March 2021 2021 2020 2020 2020 2020 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 loans 2,817,689 2,869,785 2,802,227 2,748,075 2,708,306 2,650,170 Commercial real estate - investment loans 4,644,551 4,782,712 4,565,040 4,648,457 4,822,537 4,520,234 Commercial real estate - multifamily and other loans 724,253 790,469 638,344 571,995 561,481 550,338 Consumer real estate - mortgage loans 3,335,537 3,086,916 3,099,172 3,041,019 3,042,604 3,106,465 Construction and land development loans 2,791,611 2,568,969 2,901,746 2,728,439 2,574,494 2,520,937 Consumer and other loans 440,124 411,322 379,515 343,461 294,545 296,392 Paycheck protection program loans 1,372,916 2,221,409 1,798,869 2,251,014 2,222,624 — Total loans 22,897,935 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 ) Securities 5,326,908 4,691,364 4,615,040 4,503,072 4,358,313 4,089,821 Total assets 35,412,309 35,299,705 34,932,860 33,824,931 33,342,112 29,264,180 Noninterest-bearing deposits 8,926,200 8,103,943 7,392,325 7,050,670 6,892,864 4,963,415 Total deposits 28,217,603 28,292,940 27,705,575 26,543,956 25,521,829 21,333,171 Securities sold under agreements to repurchase 177,661 172,117 128,164 127,059 194,553 186,548 FHLB advances 888,304 888,115 1,087,927 1,287,738 1,787,551 2,317,520 Subordinated debt and other borrowings 671,994 671,002 670,575 670,273 717,043 669,658 Total stockholders' equity 5,101,231 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 Securities 5,036,786 4,666,269 4,567,872 4,420,280 4,194,811 3,814,543 Federal funds sold and other 3,143,078 3,356,199 3,621,623 3,279,248 2,618,832 807,796 Total earning assets 31,359,667 30,870,554 30,714,178 30,192,720 29,070,811 24,631,627 Total assets 35,053,772 34,659,132 34,436,765 33,838,716 32,785,391 28,237,642 Noninterest-bearing deposits 8,500,465 7,620,665 7,322,393 6,989,439 6,432,010 4,759,729 Total deposits 28,013,659 27,620,784 27,193,256 26,352,823 24,807,032 20,679,455 Securities sold under agreements to repurchase 173,268 143,586 121,331 147,211 191,084 141,192 FHLB advances 888,184 934,662 1,250,848 1,515,879 2,213,769 2,029,888 Subordinated debt and other borrowings 674,162 673,662 673,419 715,138 706,657 673,415 Total stockholders' equity 5,039,608 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 expense 26,011 29,047 36,062 42,594 51,081 69,517 Net interest income 233,225 222,870 220,985 206,594 200,657 193,552 Provision for credit losses 2,834 7,235 7,180 16,333 68,332 99,889 Net interest income after provision for credit losses 230,391 215,635 213,805 190,261 132,325 93,663 Noninterest income 98,207 92,709 83,444 91,065 72,954 70,377 Noninterest expense 166,140 154,696 163,305 144,277 131,605 137,349 Income before taxes 162,458 153,648 133,944 137,049 73,674 26,691 Income tax (benefit) expense 30,668 28,220 23,068 26,404 11,230 (1,665 ) Net income 131,790 125,428 110,876 110,645 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. deposits 82.74 % 82.72 % 82.83 % 85.35 % 89.72 % 96.76 % Securities to total assets 15.04 % 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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED (dollars in thousands) Three months ended Three months ended June 30, 2021 June 30, 2020 Average Balances Interest Rates/ Yields Average Balances Interest Rates/ Yields Interest-earning assets Loans (1) (2) $ 23,179,803 $ 232,788 4.11 % $ 22,257,168 $ 226,281 4.16 % Securities Taxable 2,581,063 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 other 3,143,078 1,543 0.20 % 2,618,832 1,272 0.20 % Total interest-earning assets 31,359,667 $ 259,236 3.42 % 29,070,811 $ 251,738 3.58 % Nonearning assets Intangible assets 1,859,170 1,868,231 Other nonearning assets 1,834,935 1,846,349 Total assets $ 35,053,772 $ 32,785,391 Interest-bearing liabilities Interest-bearing deposits: Interest checking 5,453,520 2,407 0.18 % 4,639,729 4,256 0.37 % Savings and money market 11,288,119 5,658 0.20 % 9,181,266 8,904 0.39 % Time 2,771,555 5,796 0.84 % 4,554,027 20,567 1.82 % Total interest-bearing deposits 19,513,194 13,861 0.28 % 18,375,022 33,727 0.74 % Securities sold under agreements to repurchase 173,268 56 0.13 % 191,084 94 0.20 % Federal Home Loan Bank advances 888,184 4,501 2.03 % 2,213,769 9,502 1.73 % Subordinated debt and other borrowings 674,162 7,593 4.52 % 706,657 7,758 4.42 % Total interest-bearing liabilities 21,248,808 26,011 0.49 % 21,486,532 51,081 0.96 % Noninterest-bearing deposits 8,500,465 — — 6,432,010 — — Total deposits and interest-bearing liabilities 29,749,273 $ 26,011 0.35 % 27,918,542 $ 51,081 0.74 % Other liabilities 264,891 367,411 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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED (dollars in thousands) Six months ended Six months ended June 30, 2021 June 30, 2020 Average Balances Interest Rates/ Yields Average Balances Interest Rates/ Yields Interest-earning assets Loans (1) (2) $ 23,014,861 $ 460,160 4.11 % $ 21,133,228 $ 462,701 4.48 % Securities Taxable 2,427,050 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 other 3,249,050 2,862 0.18 % 1,713,314 3,829 0.45 % Total interest-earning assets 31,116,462 $ 511,153 3.41 % 26,851,219 $ 514,807 3.96 % Nonearning assets Intangible assets 1,860,272 1,869,147 Other nonearning assets 1,880,809 1,791,150 Total assets $ 34,857,543 $ 30,511,516 Interest-bearing liabilities Interest-bearing deposits: Interest checking 5,459,919 5,007 0.18 % 4,192,505 12,723 0.61 % Savings and money market 11,304,640 12,371 0.22 % 8,639,407 29,339 0.68 % Time 2,990,753 13,951 0.94 % 4,315,462 42,363 1.97 % Total interest-bearing deposits 19,755,312 31,329 0.32 % 17,147,374 84,425 0.99 % Securities sold under agreements to repurchase 158,509 128 0.16 % 166,138 209 0.25 % Federal Home Loan Bank advances 911,295 8,995 1.99 % 2,121,828 19,909 1.89 % Subordinated debt and other borrowings 673,913 14,606 4.37 % 690,036 16,055 4.68 % Total interest-bearing liabilities 21,499,029 55,058 0.52 % 20,125,376 120,598 1.21 % Noninterest-bearing deposits 8,062,995 — — 5,595,869 — — Total deposits and interest-bearing liabilities 29,562,024 $ 55,058 0.38 % 25,721,245 $ 120,598 0.94 % Other liabilities 298,649 331,975 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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED (dollars in thousands) June March December September June March 2021 2021 2020 2020 2020 2020 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 loans 515.5 % 389.4 % 386.1 % 404.3 % 456.1 % 313.5 % As a percentage of total loans: Past due accruing loans over 30 days 0.07 % 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 NPAs 0.27 % 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) 46.1 45.2 45.1 45.2 45.1 45.0 Interest rates and yields: Loans 4.11 % 4.11 % 4.20 % 4.04 % 4.16 % 4.84 % Securities 2.25 % 2.29 % 2.27 % 2.38 % 2.59 % 2.82 % Total earning assets 3.42 % 3.41 % 3.44 % 3.38 % 3.58 % 4.41 % Total deposits, including non-interest bearing 0.20 % 0.26 % 0.33 % 0.43 % 0.55 % 0.99 % Securities sold under agreements to repurchase 0.13 % 0.20 % 0.21 % 0.21 % 0.20 % 0.33 % FHLB advances 2.03 % 1.95 % 2.00 % 1.82 % 1.73 % 2.06 % Subordinated debt and other borrowings 4.52 % 4.22 % 4.13 % 3.99 % 4.42 % 4.96 % Total deposits and interest-bearing liabilities 0.35 % 0.40 % 0.49 % 0.59 % 0.74 % 1.19 % Capital and other ratios (8): Pinnacle Financial ratios: Stockholders' equity to total assets 14.4 % 14.0 % 14.0 % 14.2 % 14.1 % 15.0 % Common equity Tier one 10.5 % 10.3 % 10.0 % 9.9 % 9.6 % 9.4 % Tier one risk-based 11.3 % 11.2 % 10.9 % 10.7 % 10.4 % 9.4 % Total risk-based 14.5 % 14.5 % 14.3 % 14.2 % 14.0 % 12.8 % Leverage 9.2 % 8.9 % 8.6 % 8.5 % 8.4 % 8.8 % Tangible common equity to tangible assets 9.0 % 8.6 % 8.5 % 8.5 % 8.3 % 9.2 % Pinnacle Bank ratios: Common equity Tier one 11.9 % 11.8 % 11.4 % 11.3 % 11.0 % 11.0 % Tier one risk-based 11.9 % 11.8 % 11.4 % 11.3 % 11.0 % 11.0 % Total risk-based 13.1 % 13.0 % 12.7 % 12.6 % 12.4 % 12.2 % Leverage 9.6 % 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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED (dollars in thousands, except per share data) June March December September June March 2021 2021 2020 2020 2020 2020 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 originated 3.94 % 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 offices 116 115 114 114 113 111 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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED Three months ended Six months ended (dollars in thousands, except per share data) June March June June June 2021 2021 2020 2021 2020 Net interest income $ 233,225 222,870 200,657 456,095 394,209 Noninterest income 98,207 92,709 72,954 190,916 143,331 Total revenues 331,432 315,579 273,611 647,011 537,540 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 losses 2,834 7,235 68,332 10,069 168,221 Pre-tax pre-provision net revenue 165,292 160,883 142,006 326,175 268,586 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 above 0.25 % — % (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 above 0.01 % — % (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. 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) June March December September June March 2021 2021 2020 2020 2020 2020 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 3 (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 investment 1,230 1,205 1,222 1,231 2,134 2,122 Pre-tax impact of BHG 30,841 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. 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 2021 2020 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 share 3.30 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 investment 2,435 4,256 Pre-tax impact of BHG 58,586 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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED Three months ended Six months ended (dollars in thousands, except per share data) June March June June June 2021 2021 2020 2021 2020 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' equity 4,884,105 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 assets 9.02 % 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 assets 0.09 % 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 equity 4,822,482 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' equity 0.46 % 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 assets 6.67 % 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 loans 1.20 % 1.22 % 1.27 % 1.20 % 1.27 % Impact of excluding PPP loans from total loans 0.07 % 0.13 % 0.14 % 0.07 % 0.14 % Allowance as adjusted for the above exclusion of PPP loans from total loans 1.27 % 1.35 % 1.41 % 1.27 % 1.41 % This information is preliminary and based on company data available at the time of the presentation. 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. pnfp-earnings
NASHVILLE, Tenn.--(BUSINESS WIRE)--Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today announced it will release its second quarter 2021 financial results on Tuesday, July 20, 2021, after market close. It will also host a live webcast on Wednesday, July 21, at 8:30 a.m. CDT to review its financial results, business outlook for the firm and other matters. The second quarter 2021 earnings release will be available on the investor relations page of Pinnacle's website at www.pnfp.com. To access the call for audio only, please call 1-877-602-7944. For the presentation and streaming audio, please 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 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 $35.3 billion in assets as of March 31, 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.
NASHVILLE, Tenn.--(BUSINESS WIRE)--Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.61 for the quarter ended March 31, 2021, compared to net income per diluted common share of $0.37 for the quarter ended March 31, 2020, an increase of approximately 335 percent. Excluding other real estate (ORE) expense for the three months ended March 31, 2021 and ORE expense and gains and losses on the sale of investment securities for the three months ended March 31, 2020, net income per diluted common share was $1.61 for the three months ended March 31, 2021, compared to $0.39 for the three months ended March 31, 2020, a year-over-year increase of nearly 313 percent. "We are very pleased with our operating results for the first quarter of this year," said M. Terry Turner, Pinnacle's president and chief executive officer. "To report these results right out of the gate provides us even more optimism regarding our franchise and the difference that the high-performance culture we have built makes. Just recently, Fortune magazine, in concert with Great Place to Work®, notified us that we ranked as the 26th best place to work in 2020 in all of the United States in all industries. "I believe our reputation as a great place to work has fueled our recruiting success against the large regional and national franchises we target. Following two incredibly successful years of recruiting experienced revenue producers, during the first quarter of 2021 we were off to another fast start, attracting 25 new revenue producers to our firm. We are excited to report diluted earnings per share of $1.61, which is the most we have ever reported for a calendar quarter in our 20 year history. We also increased our book value per common share to $62.33, which is also the highest it has ever been and up nearly 8 percent since March 31, 2020. Over that same period our tangible book value per common share grew by more than 14 percent to $37.88 per common share, also a record. Our hiring pipelines remain strong, and we remain optimistic as we seek to produce both outsized earnings and tangible book value per share growth in 2021." BALANCE SHEET GROWTH: Loans at March 31, 2021 were $23.1 billion, an increase of $2.7 billion from March 31, 2020, reflecting year-over-year growth of 13.2 percent. Loans at March 31, 2021 increased approximately $662.2 million from Dec. 31, 2020. Loans at March 31, 2021 include approximately $2.2 billion of loans issued pursuant to the Small Business Administration’s (SBA’s) Paycheck Protection Program (PPP). The average yield on these loans was 4.51 percent for the first quarter of 2021, inclusive of $17.8 million of loan fee accretion recognized in the quarter. At March 31, 2021, there were $63.3 million in SBA PPP loan fees remaining, which should be accreted into net interest income through mid-year 2026 as these loans are repaid and/or are forgiven under the PPP. PPP loans increased by $422.5 million between Dec. 31, 2020 and March 31, 2021 due to the reopening and extension of the PPP lending programs by the SBA. Excluding PPP loans, total loans increased by $239.7 million during the same period, or 4.6 percent on an annualized basis. Average loans were $22.8 billion for the three months ended March 31, 2021, up $323.4 million from the three months ended Dec. 31, 2020, a linked-quarter annualized growth rate of 5.7 percent. Excluding the impact of $2.1 billion of average PPP loans outstanding during both the three months ended March 31, 2021 and Dec. 31, 2020, average loans were $20.7 billion for the three months ended March 31, 2021, up $369.8 million from $20.4 billion for the three months ended Dec. 31, 2020, a linked-quarter annualized growth rate of 7.2 percent. At March 31, 2021, the remaining discount associated with fair value accounting adjustments on acquired loans was $24.0 million, compared to $27.8 million at Dec. 31, 2020. Loans at March 31, 2021 include approximately $2.2 billion of loans issued pursuant to the Small Business Administration’s (SBA’s) Paycheck Protection Program (PPP). The average yield on these loans was 4.51 percent for the first quarter of 2021, inclusive of $17.8 million of loan fee accretion recognized in the quarter. At March 31, 2021, there were $63.3 million in SBA PPP loan fees remaining, which should be accreted into net interest income through mid-year 2026 as these loans are repaid and/or are forgiven under the PPP. PPP loans increased by $422.5 million between Dec. 31, 2020 and March 31, 2021 due to the reopening and extension of the PPP lending programs by the SBA. Excluding PPP loans, total loans increased by $239.7 million during the same period, or 4.6 percent on an annualized basis. PPP loans increased by $422.5 million between Dec. 31, 2020 and March 31, 2021 due to the reopening and extension of the PPP lending programs by the SBA. Excluding PPP loans, total loans increased by $239.7 million during the same period, or 4.6 percent on an annualized basis. Average loans were $22.8 billion for the three months ended March 31, 2021, up $323.4 million from the three months ended Dec. 31, 2020, a linked-quarter annualized growth rate of 5.7 percent. Excluding the impact of $2.1 billion of average PPP loans outstanding during both the three months ended March 31, 2021 and Dec. 31, 2020, average loans were $20.7 billion for the three months ended March 31, 2021, up $369.8 million from $20.4 billion for the three months ended Dec. 31, 2020, a linked-quarter annualized growth rate of 7.2 percent. Excluding the impact of $2.1 billion of average PPP loans outstanding during both the three months ended March 31, 2021 and Dec. 31, 2020, average loans were $20.7 billion for the three months ended March 31, 2021, up $369.8 million from $20.4 billion for the three months ended Dec. 31, 2020, a linked-quarter annualized growth rate of 7.2 percent. At March 31, 2021, the remaining discount associated with fair value accounting adjustments on acquired loans was $24.0 million, compared to $27.8 million at Dec. 31, 2020. Deposits at March 31, 2021 were a record $28.3 billion, an increase of $7.0 billion from March 31, 2020, reflecting year-over-year growth of 32.6 percent. Deposits at March 31, 2021 increased $587.4 million from Dec. 31, 2020, reflecting a linked-quarter annualized growth rate of 8.5 percent. Average deposits were $27.6 billion for the three months ended March 31, 2021, compared to $27.2 billion for the three months ended Dec. 31, 2020, a linked-quarter annualized growth rate of 6.3 percent. Core deposits were $25.0 billion at March 31, 2021, compared to $18.6 billion at March 31, 2020 and $23.5 billion at Dec. 31, 2020. The linked-quarter annualized growth rate of core deposits in the first quarter of 2021 was 24.8 percent. Average deposits were $27.6 billion for the three months ended March 31, 2021, compared to $27.2 billion for the three months ended Dec. 31, 2020, a linked-quarter annualized growth rate of 6.3 percent. Core deposits were $25.0 billion at March 31, 2021, compared to $18.6 billion at March 31, 2020 and $23.5 billion at Dec. 31, 2020. The linked-quarter annualized growth rate of core deposits in the first quarter of 2021 was 24.8 percent. "Despite the significant headwinds of excess borrower liquidity, CRE paydowns and limited loan demand, excluding PPP, we were able to report annualized loan growth for the first quarter of 4.6 percent," Turner said. "We are optimistic that loan growth should pick up in the back half of the year as the revenue producers we have hired gain momentum and believe high-single digit loan growth in 2021 remains possible, excluding the impact of the PPP program. "Additionally, core deposit growth continued at a rapid pace during the first quarter of 2021. We believe that meaningful core deposit growth will continue this year as a post-COVID economy begins to emerge and more government stimulus finds its way into our clients’ accounts." PROFITABILITY: Return on average assets was 1.42 percent for the first quarter of 2021, compared to 1.24 percent for the fourth quarter of 2020 and 0.40 percent for the first quarter of 2020. First quarter 2021 return on average tangible assets amounted to 1.50 percent, compared to 1.31 percent for the fourth quarter of 2020 and 0.43 percent for the first quarter of 2020. Excluding the adjustments described above for both 2021 and 2020 and FHLB restructuring charges and hedge termination charges for the fourth quarter of 2020, return on average assets was 1.42 percent for the first quarter of 2021, compared to 1.38 percent for the fourth quarter of 2020 and 0.42 percent for the first quarter of 2020. Likewise, excluding those same adjustments, the firm’s return on average tangible assets was 1.50 percent for the first quarter of 2021, compared to 1.46 percent for the fourth quarter of 2020 and 0.45 percent for the first quarter of 2020. Excluding the adjustments described above for both 2021 and 2020 and FHLB restructuring charges and hedge termination charges for the fourth quarter of 2020, return on average assets was 1.42 percent for the first quarter of 2021, compared to 1.38 percent for the fourth quarter of 2020 and 0.42 percent for the first quarter of 2020. Likewise, excluding those same adjustments, the firm’s return on average tangible assets was 1.50 percent for the first quarter of 2021, compared to 1.46 percent for the fourth quarter of 2020 and 0.45 percent for the first quarter of 2020. Return on average equity for the first quarter of 2021 amounted to 9.96 percent, compared to 8.78 percent for the fourth quarter of 2020 and 2.58 percent for the first quarter of 2020. Excluding preferred stockholders' equity for each of the three months ended March 31, 2021, Dec. 31, 2020 and March 31, 2020, respectively, return on average common equity for the first quarter of 2021 amounted to 10.41 percent, compared to 9.19 percent for the fourth quarter of 2020 and 2.58 percent for the first quarter of 2020. First quarter 2021 return on average tangible common equity amounted to 17.16 percent, compared to 15.37 percent for the fourth quarter of 2020 and 4.48 percent for the first quarter of 2020. Excluding the adjustments described above for both 2021 and 2020 and FHLB restructuring charges and hedge termination charges in the fourth quarter of 2020, return on average tangible common equity amounted to 17.16 percent for the first quarter of 2021, compared to 17.11 percent for the fourth quarter of 2020 and 4.71 percent for the first quarter of 2020. Excluding the adjustments described above for both 2021 and 2020 and FHLB restructuring charges and hedge termination charges in the fourth quarter of 2020, return on average tangible common equity amounted to 17.16 percent for the first quarter of 2021, compared to 17.11 percent for the fourth quarter of 2020 and 4.71 percent for the first quarter of 2020. "As to our core profitability metrics, we are again reporting another solid quarter," said Harold R. Carpenter, Pinnacle's chief financial officer. "Our aim for 2021 will be top-quartile peer performance with respect to return on tangible common equity, as well as tangible book value per share growth. We believe we are off to a great start in 2021." MAINTAINING A STRONG BALANCE SHEET: Net charge-offs were $11.4 million for the quarter ended March 31, 2021, compared to $10.8 million for the quarter ended Dec. 31, 2020 and $10.2 million for the quarter ended March 31, 2020. Annualized net charge-offs as a percentage of average loans for the quarter ended March 31, 2021 were 0.20 percent, compared to 0.19 percent for the quarter ended Dec. 31, 2020 and 0.20 percent for the quarter ended March 31, 2020. Nonperforming assets were 0.36 percent of total loans and ORE at March 31, 2021, compared to 0.38 percent at Dec. 31, 2020 and 0.48 percent at March 31, 2020. Nonperforming assets were $82.8 million at March 31, 2021, compared to $86.2 million at Dec. 31, 2020 and $98.2 million at March 31, 2020. The classified asset ratio at March 31, 2021 was 7.3 percent, compared to 8.1 percent at Dec. 31, 2020 and 12.0 percent at March 31, 2020. Classified assets were $244.9 million at March 31, 2021, compared to $262.1 million at Dec. 31, 2020 and $350.1 million at March 31, 2020. The allowance for credit losses represented 1.22 percent of total loans at March 31, 2021, compared to 1.27 percent at Dec. 31, 2020 and 1.09 percent at March 31, 2020. Excluding PPP loans, the allowance for credit losses as a percentage of total loans was 1.35 percent at March 31, 2021 and 1.38 percent at Dec. 31, 2020. The ratio of the allowance for credit losses to nonperforming loans at March 31, 2021 was 389.4 percent, compared to 386.1 percent at Dec. 31, 2020 and 313.5 percent at March 31, 2020. Provision for credit losses was $7.2 million in the first quarter of 2021, compared to $7.2 million in the fourth quarter of 2020 and $99.9 million in the first quarter of 2020. First quarter 2020 provision for credit losses was impacted by the economic deterioration related to COVID-19. The ratio of the allowance for credit losses to nonperforming loans at March 31, 2021 was 389.4 percent, compared to 386.1 percent at Dec. 31, 2020 and 313.5 percent at March 31, 2020. Provision for credit losses was $7.2 million in the first quarter of 2021, compared to $7.2 million in the fourth quarter of 2020 and $99.9 million in the first quarter of 2020. First quarter 2020 provision for credit losses was impacted by the economic deterioration related to COVID-19. "We continue to be pleased with our credit metrics and believe our performance is linked to our hiring philosophy and the client selection it yields, as well as the significant effort our relationship managers and credit officers have put forth over the past several quarters," Carpenter said. "Our credit metrics for the first quarter either improved or were consistent with those of last quarter. Classified and nonperforming ratios continued their downward trend again this quarter. Our allowance for credit losses to total loans ratio also decreased by 0.05 percent this quarter. Our current belief is that, with an improving economy there is likely to be further reductions in this ratio over the next several quarters." REVENUES: Revenues for the quarter ended March 31, 2021 were $315.6 million, an increase of $11.2 million from the $304.4 million recognized in the fourth quarter of 2020, an annualized growth rate of 14.7 percent. Revenues were up $51.7 million from the first quarter of 2020, a year-over-year growth rate of 19.6 percent. Revenue per fully diluted common share was at an all-time record of $4.17 for the three months ended March 31, 2021, compared to $4.03 for the fourth quarter of 2020 and $3.47 for the first quarter of 2020, a 20.2 percent year-over-year growth rate. Revenue per fully diluted common share was at an all-time record of $4.17 for the three months ended March 31, 2021, compared to $4.03 for the fourth quarter of 2020 and $3.47 for the first quarter of 2020, a 20.2 percent year-over-year growth rate. Net interest income for the quarter ended March 31, 2021 was $222.9 million, compared to $221.0 million for the fourth quarter of 2020 and $193.6 million for the first quarter of 2020, a year-over-year growth rate of 15.1 percent. Net interest margin was 3.02 percent for the first quarter of 2021, compared to 2.97 percent for the fourth quarter of 2020 and 3.28 percent for the first quarter of 2020. Impacting the firm’s net interest income and net interest margin in the first quarter of 2021 and fourth quarter of 2020 were both the PPP and the firm’s maintenance of additional on-balance sheet liquidity as a result of the COVID-19 pandemic. Average PPP loans outstanding during both the first quarter of 2021 and fourth quarter of 2020 were $2.1 billion. Additionally, during those same periods, the firm maintained approximately $2.8 billion and $3.0 billion, respectively, in average excess liquidity, primarily in Federal funds sold and other cash equivalent balances. The firm estimates its first quarter 2021 net interest margin was negatively impacted by approximately 27 basis points as a result of PPP loans and excess liquidity, compared to approximately 30 basis points for the fourth quarter of 2020. Included in net interest income for the first quarter of 2021 was $3.8 million of discount accretion associated with fair value adjustments, compared to $4.4 million of discount accretion recognized in the fourth quarter of 2020 and $7.4 million in the first quarter of 2020. The firm's net interest margin was positively impacted by approximately 5 basis points, 6 basis points and 13 basis points, respectively, because of fair value adjustment discount accretion in each of the first quarter of 2021 and the fourth and first quarters of 2020. There remains $17.0 million of purchase accounting discount accretion as of March 31, 2021. Impacting the firm’s net interest income and net interest margin in the first quarter of 2021 and fourth quarter of 2020 were both the PPP and the firm’s maintenance of additional on-balance sheet liquidity as a result of the COVID-19 pandemic. Average PPP loans outstanding during both the first quarter of 2021 and fourth quarter of 2020 were $2.1 billion. Additionally, during those same periods, the firm maintained approximately $2.8 billion and $3.0 billion, respectively, in average excess liquidity, primarily in Federal funds sold and other cash equivalent balances. The firm estimates its first quarter 2021 net interest margin was negatively impacted by approximately 27 basis points as a result of PPP loans and excess liquidity, compared to approximately 30 basis points for the fourth quarter of 2020. Included in net interest income for the first quarter of 2021 was $3.8 million of discount accretion associated with fair value adjustments, compared to $4.4 million of discount accretion recognized in the fourth quarter of 2020 and $7.4 million in the first quarter of 2020. The firm's net interest margin was positively impacted by approximately 5 basis points, 6 basis points and 13 basis points, respectively, because of fair value adjustment discount accretion in each of the first quarter of 2021 and the fourth and first quarters of 2020. There remains $17.0 million of purchase accounting discount accretion as of March 31, 2021. Noninterest income for the quarter ended March 31, 2021 was $92.7 million, compared to $83.4 million for the quarter ended Dec. 31, 2020, a linked-quarter annualized increase of 44.4 percent. Compared to $70.4 million for the first quarter of 2020, noninterest income grew 31.7 percent year-over-year. Wealth management revenues, which include investment, trust and insurance services, were $16.1 million for the first quarter of 2021, compared to $14.3 million for the fourth quarter of 2020, a linked-quarter annualized increase of 51.2 percent. Compared to $16.6 million for the first quarter of 2020, wealth management revenues were down 3.3 percent. Income from the firm's investment in BHG was $29.0 million for the quarter ended March 31, 2021, up from $24.3 million for the quarter ended Dec. 31, 2020 and $15.6 million for the quarter ended March 31, 2020. Net gains on mortgage loans sold were $13.7 million during the quarter ended March 31, 2021, up from $12.4 million for the quarter ended Dec. 31, 2020. Net gains on mortgage loans sold were up 59.2 percent from $8.6 million during the quarter ended March 31, 2020. This dramatic year-over-year growth primarily reflects market conditions as well as the addition of revenue producing mortgage originators over the last 24 months. Other noninterest income was $25.7 million for the quarter ended March 31, 2021, compared to $24.0 million for the quarter ended Dec. 31, 2020 and $20.1 million for the quarter ended March 31, 2020, a year-over-year increase of 28.0 percent. Contributing to the year-over-year growth were $3.4 million in gains on other equity investments in the first quarter of 2021. Wealth management revenues, which include investment, trust and insurance services, were $16.1 million for the first quarter of 2021, compared to $14.3 million for the fourth quarter of 2020, a linked-quarter annualized increase of 51.2 percent. Compared to $16.6 million for the first quarter of 2020, wealth management revenues were down 3.3 percent. Income from the firm's investment in BHG was $29.0 million for the quarter ended March 31, 2021, up from $24.3 million for the quarter ended Dec. 31, 2020 and $15.6 million for the quarter ended March 31, 2020. Net gains on mortgage loans sold were $13.7 million during the quarter ended March 31, 2021, up from $12.4 million for the quarter ended Dec. 31, 2020. Net gains on mortgage loans sold were up 59.2 percent from $8.6 million during the quarter ended March 31, 2020. This dramatic year-over-year growth primarily reflects market conditions as well as the addition of revenue producing mortgage originators over the last 24 months. Other noninterest income was $25.7 million for the quarter ended March 31, 2021, compared to $24.0 million for the quarter ended Dec. 31, 2020 and $20.1 million for the quarter ended March 31, 2020, a year-over-year increase of 28.0 percent. Contributing to the year-over-year growth were $3.4 million in gains on other equity investments in the first quarter of 2021. "We are reporting a net interest margin for the first quarter of 3.02 percent, which we estimate was negatively impacted by approximately 0.21 percent for PPP loans, excess liquidity and purchase accounting accretion, compared to a net interest margin of 2.97 percent in the fourth quarter of 2020, which we estimate was negatively impacted by the same items by 0.22 percent," Carpenter said. "As a result, we are very pleased with our net interest margin in the first quarter. Our average deposit costs were 0.26 percent in the first quarter, down 7 basis points from the fourth quarter, while our average total funding costs were down 9 basis points between the same two periods. We also reduced our wholesale funding base with reductions of approximately $1.0 billion of brokered funds and FHLB borrowings during the first quarter. We will continue to explore opportunities to deploy excess liquidity and thus improve our operating margins further. "We had another strong fee quarter in the first quarter. Our wealth management businesses of investment, trust and insurance services had a very strong first quarter, reporting fee revenues of $16.1 million in the first quarter compared to $14.3 million in the fourth quarter, a linked-quarter annualized growth rate of over 50 percent. Mortgage and BHG both outperformed our initial expectations for the quarter. Our outlook for BHG in 2021 has improved since January 2021. We now believe BHG's 2021 revenues will exceed our previous expectations. We also believe our robust markets and increased number of mortgage originators will provide for another solid year for our mortgage origination business." OPERATING LEVERAGE AND OTHER HIGHLIGHTS: The firm's efficiency ratio for the first quarter of 2021 was 49.0 percent, compared to 53.6 percent for the fourth quarter of 2020 and 52.0 percent in the first quarter of 2020. The ratio of noninterest expenses to average assets was 1.81 percent for the first quarter of 2021, compared to 1.89 percent in the fourth quarter of 2020 and 1.96 percent in the first quarter of 2020. Excluding the adjustments described above for both 2021 and 2020, the efficiency ratio was 49.0 percent for the first quarter of 2021, compared to 48.2 percent for the fourth quarter of 2020 and 51.2 percent for the first quarter of 2020. Excluding ORE expense for 2021 and 2020 and FHLB restructuring and hedge termination charges for the fourth quarter of 2020, the ratio of noninterest expense to average assets was 1.81 percent for the first quarter of 2021, compared to 1.70 percent for the fourth quarter of 2020 and 1.92 percent for the first quarter of 2020. Excluding the adjustments described above for both 2021 and 2020, the efficiency ratio was 49.0 percent for the first quarter of 2021, compared to 48.2 percent for the fourth quarter of 2020 and 51.2 percent for the first quarter of 2020. Excluding ORE expense for 2021 and 2020 and FHLB restructuring and hedge termination charges for the fourth quarter of 2020, the ratio of noninterest expense to average assets was 1.81 percent for the first quarter of 2021, compared to 1.70 percent for the fourth quarter of 2020 and 1.92 percent for the first quarter of 2020. Noninterest expense for the quarter ended March 31, 2021 was $154.7 million, compared to $163.3 million in the fourth quarter of 2020 and $137.3 million in the first quarter of 2020, reflecting a year-over-year increase of 12.6 percent. Excluding ORE expense for 2021 and 2020, and FHLB restructuring and hedge termination charges for the fourth quarter of 2020, noninterest expense for the first quarter of 2021 increased 14.7 percent over the first quarter of 2020 and decreased 5.3 percent over the fourth quarter of 2020. Salaries and employee benefits were $102.7 million in the first quarter of 2021, compared to $90.0 million in the fourth quarter of 2020 and $80.5 million in the first quarter of 2020, reflecting a year-over-year increase of 27.6 percent. Incentive costs related to the firm’s annual cash incentive plan amounted to approximately $18.2 million in the first quarter of 2021, compared to $13.4 million in the fourth quarter of 2020 and $4.7 million in the first quarter of 2020. Incentive costs related to the Company’s equity compensation plans amounted to approximately $5.4 million in the first quarter of 2021 compared to $4.6 million in the fourth quarter of 2020 and $5.5 million first quarter of 2020. Noninterest expense categories, other than salaries and employee benefits, were $52.0 million in the first quarter of 2021, compared to $73.3 million in the fourth quarter of 2020 and $56.9 million in the first quarter of 2020, reflecting a year-over-year decrease of 8.6 percent. Expenses attributable to off-balance sheet reserves and costs attributable to FHLB restructuring and hedge termination charges were $17.0 million in the fourth quarter of last year, compared to no expense in the first quarter of 2021 and $5.2 million of expenses associated with off-balance sheet reserves in the first quarter of 2020. Salaries and employee benefits were $102.7 million in the first quarter of 2021, compared to $90.0 million in the fourth quarter of 2020 and $80.5 million in the first quarter of 2020, reflecting a year-over-year increase of 27.6 percent. Incentive costs related to the firm’s annual cash incentive plan amounted to approximately $18.2 million in the first quarter of 2021, compared to $13.4 million in the fourth quarter of 2020 and $4.7 million in the first quarter of 2020. Incentive costs related to the Company’s equity compensation plans amounted to approximately $5.4 million in the first quarter of 2021 compared to $4.6 million in the fourth quarter of 2020 and $5.5 million first quarter of 2020. Incentive costs related to the firm’s annual cash incentive plan amounted to approximately $18.2 million in the first quarter of 2021, compared to $13.4 million in the fourth quarter of 2020 and $4.7 million in the first quarter of 2020. Incentive costs related to the Company’s equity compensation plans amounted to approximately $5.4 million in the first quarter of 2021 compared to $4.6 million in the fourth quarter of 2020 and $5.5 million first quarter of 2020. Noninterest expense categories, other than salaries and employee benefits, were $52.0 million in the first quarter of 2021, compared to $73.3 million in the fourth quarter of 2020 and $56.9 million in the first quarter of 2020, reflecting a year-over-year decrease of 8.6 percent. Expenses attributable to off-balance sheet reserves and costs attributable to FHLB restructuring and hedge termination charges were $17.0 million in the fourth quarter of last year, compared to no expense in the first quarter of 2021 and $5.2 million of expenses associated with off-balance sheet reserves in the first quarter of 2020. Expenses attributable to off-balance sheet reserves and costs attributable to FHLB restructuring and hedge termination charges were $17.0 million in the fourth quarter of last year, compared to no expense in the first quarter of 2021 and $5.2 million of expenses associated with off-balance sheet reserves in the first quarter of 2020. The effective tax rate for the first quarter of 2021 was 18.4 percent, compared to 17.2 percent for the fourth quarter of 2020 and a benefit of 6.2 percent for the first quarter of 2020. "As anticipated, we reported a large increase in linked quarter salaries and benefit costs in the first quarter due to $4.8 million in additional incentive costs from the fourth quarter of last year," Carpenter said. "As we reported last year, the pandemic negatively impacted our results and resulted in reduced cash and equity incentives charges in 2020. We anticipate an increase in our performance-based cash incentive awards in 2021, and through the first quarter have increased the accrual for a payout at above target levels." WEBCAST AND CONFERENCE CALL INFORMATION Pinnacle will host a webcast and conference call at 8:30 a.m. CT on April 20, 2021, to discuss first 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 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 FORTUNE's 2020 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 seven years in a row. 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 $35.3 billion in assets as of March 31, 2021. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 12 primarily urban markets in Tennessee, the Carolinas, Virginia and Atlanta. Additional information concerning Pinnacle, which is included in the Nasdaq Financial-100 Index, can be accessed at www.pnfp.com. 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 the emergence of widespread health emergencies or pandemics, including the magnitude and duration of the COVID-19 pandemic and its 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 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 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 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, Quarterly Reports on Form 10-Q, 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. CONSOLIDATED BALANCE SHEETS – UNAUDITED (dollars in thousands, except for per share data) March 31, 2021 December 31, 2020 March 31, 2020 ASSETS Cash and noninterest-bearing due from banks $ 189,251 $ 203,296 $ 181,088 Restricted cash 162,834 223,788 243,313 Interest-bearing due from banks 2,780,137 3,522,224 598,084 Federal funds sold and other 55,186 12,141 1,883 Cash and cash equivalents 3,187,408 3,961,449 1,024,368 Securities purchased with agreement to resell 450,000 — — Securities available-for-sale, at fair value 3,677,019 3,586,681 3,030,564 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 $148 at March 31, 2021, Dec. 31, 2020 and Mar. 31, 2020, respectively) 1,014,345 1,028,359 1,059,257 Consumer loans held-for-sale 85,769 87,821 87,245 Commercial loans held-for-sale 12,541 31,200 6,850 Loans 23,086,701 22,424,501 20,396,853 Less allowance for credit losses (280,881 ) (285,050 ) (222,465 ) Loans, net 22,805,820 22,139,451 20,174,388 Premises and equipment, net 289,515 290,001 274,919 Equity method investment 327,512 308,556 285,671 Accrued interest receivable 98,477 104,078 82,198 Goodwill 1,819,811 1,819,811 1,819,811 Core deposits and other intangible assets 40,130 42,336 48,610 Other real estate owned 10,651 12,360 27,182 Other assets 1,480,707 1,520,757 1,343,117 Total assets $ 35,299,705 $ 34,932,860 $ 29,264,180 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Noninterest-bearing $ 8,103,943 $ 7,392,325 $ 4,963,415 Interest-bearing 5,814,689 5,689,095 4,025,382 Savings and money market accounts 11,361,620 11,099,523 8,144,409 Time 3,012,688 3,524,632 4,199,965 Total deposits 28,292,940 27,705,575 21,333,171 Securities sold under agreements to repurchase 172,117 128,164 186,548 Federal Home Loan Bank advances 888,115 1,087,927 2,317,520 Subordinated debt and other borrowings 671,002 670,575 669,658 Accrued interest payable 15,359 24,934 33,931 Other liabilities 300,648 411,074 338,224 Total liabilities 30,340,181 30,028,249 24,879,052 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 March 31, 2021 and Dec. 31, 2020, respectively, and $0 issued and outstanding at March 31, 2020 217,126 217,126 — 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 March 31, 2021, Dec. 31, 2020 and March 31, 2020 respectively 76,088 75,850 75,800 Additional paid-in capital 3,027,311 3,028,063 3,015,521 Retained earnings 1,515,451 1,407,723 1,168,301 Accumulated other comprehensive income, net of taxes 123,548 175,849 125,506 Total stockholders' equity 4,959,524 4,904,611 4,385,128 Total liabilities and stockholders' equity $ 35,299,705 $ 34,932,860 $ 29,264,180 This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED (dollars in thousands, except for per share data) Three months ended March 31, 2021 December 31, 2020 March 31, 2020 Interest income: Loans, including fees $ 227,372 $ 232,561 $ 236,420 Securities Taxable 7,728 7,530 10,268 Tax-exempt 15,498 15,446 13,824 Federal funds sold and other 1,319 1,510 2,557 Total interest income 251,917 257,047 263,069 Interest expense: Deposits 17,468 22,721 50,698 Securities sold under agreements to repurchase 72 64 115 FHLB advances and other borrowings 11,507 13,277 18,704 Total interest expense 29,047 36,062 69,517 Net interest income 222,870 220,985 193,552 Provision for credit losses 7,235 7,180 99,889 Net interest income after provision for credit losses 215,635 213,805 93,663 Noninterest income: Service charges on deposit accounts 8,307 8,486 9,032 Investment services 8,191 7,593 9,239 Insurance sales commissions 3,225 2,300 3,240 Gains on mortgage loans sold, net 13,666 12,387 8,583 Investment gains on sales, net — — 463 Trust fees 4,687 4,382 4,170 Income from equity method investment 28,950 24,294 15,592 Other noninterest income 25,683 24,002 20,058 Total noninterest income 92,709 83,444 70,377 Noninterest expense: Salaries and employee benefits 102,728 90,013 80,480 Equipment and occupancy 23,220 23,849 20,978 Other real estate, net (13 ) 1,457 2,415 Marketing and other business development 2,349 2,979 3,251 Postage and supplies 1,806 1,998 1,990 Amortization of intangibles 2,206 2,377 2,520 Other noninterest expense 22,400 40,632 25,715 Total noninterest expense 154,696 163,305 137,349 Income before income taxes 153,648 133,944 26,691 Income tax expense (benefit) 28,220 23,068 (1,665 ) Net income 125,428 110,876 28,356 Preferred stock dividends (3,798 ) (3,798 ) — Net income available to common shareholders $ 121,630 $ 107,078 $ 28,356 Per share information: Basic net income per common share $ 1.61 $ 1.42 $ 0.37 Diluted net income per common share $ 1.61 $ 1.42 $ 0.37 Weighted average common shares outstanding: Basic 75,372,883 75,253,862 75,803,402 Diluted 75,657,149 75,583,986 75,966,295 This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED (dollars in thousands) March December September June March December 2021 2020 2020 2020 2020 2019 Balance sheet data, at quarter end: Commercial and industrial loans $ 6,355,119 6,239,588 6,144,949 6,293,709 6,752,317 6,290,296 Commercial real estate - owner occupied loans 2,869,785 2,802,227 2,748,075 2,708,306 2,650,170 2,669,766 Commercial real estate - investment loans 4,782,712 4,565,040 4,648,457 4,822,537 4,520,234 4,418,658 Commercial real estate - multifamily and other loans 790,469 638,344 571,995 561,481 550,338 620,794 Consumer real estate - mortgage loans 3,086,916 3,099,172 3,041,019 3,042,604 3,106,465 3,068,625 Construction and land development loans 2,568,969 2,901,746 2,728,439 2,574,494 2,520,937 2,430,483 Consumer and other loans 411,322 379,515 343,461 294,545 296,392 289,254 Paycheck protection program loans 2,221,409 1,798,869 2,251,014 2,222,624 — — Total loans 23,086,701 22,424,501 22,477,409 22,520,300 20,396,853 19,787,876 Allowance for credit losses (280,881 ) (285,050 ) (288,645 ) (285,372 ) (222,465 ) (94,777 ) Securities 4,691,364 4,615,040 4,503,072 4,358,313 4,089,821 3,728,991 Total assets 35,299,705 34,932,860 33,824,931 33,342,112 29,264,180 27,805,496 Noninterest-bearing deposits 8,103,943 7,392,325 7,050,670 6,892,864 4,963,415 4,795,476 Total deposits 28,292,940 27,705,575 26,543,956 25,521,829 21,333,171 20,181,028 Securities sold under agreements to repurchase 172,117 128,164 127,059 194,553 186,548 126,354 FHLB advances 888,115 1,087,927 1,287,738 1,787,551 2,317,520 2,062,534 Subordinated debt and other borrowings 671,002 670,575 670,273 717,043 669,658 749,080 Total stockholders' equity 4,959,524 4,904,611 4,787,308 4,695,647 4,385,128 4,355,748 Balance sheet data, quarterly averages: Total loans $ 22,848,086 22,524,683 22,493,192 22,257,168 20,009,288 19,599,620 Securities 4,666,269 4,567,872 4,420,280 4,194,811 3,814,543 3,662,829 Federal funds sold and other 3,356,199 3,621,623 3,279,248 2,618,832 807,796 717,927 Total earning assets 30,870,554 30,714,178 30,192,720 29,070,811 24,631,627 23,980,376 Total assets 34,659,132 34,436,765 33,838,716 32,785,391 28,237,642 27,604,774 Noninterest-bearing deposits 7,620,665 7,322,393 6,989,439 6,432,010 4,759,729 4,834,694 Total deposits 27,620,784 27,193,256 26,352,823 24,807,032 20,679,455 20,078,594 Securities sold under agreements to repurchase 143,586 121,331 147,211 191,084 141,192 109,127 FHLB advances 934,662 1,250,848 1,515,879 2,213,769 2,029,888 1,992,213 Subordinated debt and other borrowings 673,662 673,419 715,138 706,657 673,415 753,244 Total stockholders' equity 4,953,656 4,852,373 4,765,864 4,499,438 4,417,155 4,343,246 Statement of operations data, for the three months ended: Interest income $ 251,917 257,047 249,188 251,738 263,069 268,453 Interest expense 29,047 36,062 42,594 51,081 69,517 74,281 Net interest income 222,870 220,985 206,594 200,657 193,552 194,172 Provision for credit losses 7,235 7,180 16,333 68,332 99,889 4,644 Net interest income after provision for credit losses 215,635 213,805 190,261 132,325 93,663 189,528 Noninterest income 92,709 83,444 91,065 72,954 70,377 59,462 Noninterest expense 154,696 163,305 144,277 131,605 137,349 130,470 Income before taxes 153,648 133,944 137,049 73,674 26,691 118,520 Income tax (benefit) expense 28,220 23,068 26,404 11,230 (1,665 ) 22,441 Net income 125,428 110,876 110,645 62,444 28,356 96,079 Preferred stock dividends (3,798 ) (3,798 ) (3,798 ) — — — Net income available to common shareholders $ 121,630 107,078 106,847 62,444 28,356 96,079 Profitability and other ratios: Return on avg. assets (1) 1.42 % 1.24 % 1.26 % 0.77 % 0.40 % 1.38 % Return on avg. equity (1) 9.96 % 8.78 % 8.92 % 5.58 % 2.58 % 8.78 % Return on avg. common equity (1) 10.41 % 9.19 % 9.35 % 5.66 % 2.58 % 8.78 % Return on avg. tangible common equity (1) 17.16 % 15.37 % 15.85 % 9.77 % 4.48 % 15.41 % Common stock dividend payout ratio (16) 13.69 % 15.84 % 16.49 % 16.41 % 14.61 % 12.24 % Net interest margin (2) 3.02 % 2.97 % 2.82 % 2.87 % 3.28 % 3.35 % Noninterest income to total revenue (3) 29.38 % 27.41 % 30.59 % 26.66 % 26.67 % 23.44 % Noninterest income to avg. assets (1) 1.08 % 0.96 % 1.07 % 0.89 % 1.00 % 0.85 % Noninterest exp. to avg. assets (1) 1.81 % 1.89 % 1.70 % 1.61 % 1.96 % 1.88 % Efficiency ratio (4) 49.02 % 53.64 % 48.47 % 48.10 % 52.04 % 51.44 % Avg. loans to avg. deposits 82.72 % 82.83 % 85.35 % 89.72 % 96.76 % 97.61 % Securities to total assets 13.29 % 13.21 % 13.31 % 13.07 % 13.98 % 13.41 % This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED (dollars in thousands) Three months ended Three months ended March 31, 2021 March 31, 2020 Average Balances Interest Rates/ Yields Average Balances Interest Rates/ Yields Interest-earning assets Loans (1) (2) $ 22,848,086 $ 227,372 4.11 % $ 20,009,288 $ 236,420 4.84 % Securities Taxable 2,271,325 7,728 1.38 % 1,924,629 10,268 2.15 % Tax-exempt (2) 2,394,944 15,498 3.15 % 1,889,914 13,824 3.51 % Federal funds sold and other 3,356,199 1,319 0.16 % 807,796 2,557 1.27 % Total interest-earning assets 30,870,554 $ 251,917 3.41 % 24,631,627 $ 263,069 4.41 % Nonearning assets Intangible assets 1,861,386 1,870,063 Other nonearning assets 1,927,192 1,735,952 Total assets $ 34,659,132 $ 28,237,642 Interest-bearing liabilities Interest-bearing deposits: Interest checking 5,466,389 2,599 0.19 % 3,745,280 8,467 0.91 % Savings and money market 11,321,344 6,713 0.24 % 8,097,549 20,435 1.01 % Time 3,212,386 8,156 1.03 % 4,076,897 21,796 2.15 % Total interest-bearing deposits 20,000,119 17,468 0.35 % 15,919,726 50,698 1.28 % Securities sold under agreements to repurchase 143,586 72 0.20 % 141,192 115 0.33 % Federal Home Loan Bank advances 934,662 4,494 1.95 % 2,029,888 10,407 2.06 % Subordinated debt and other borrowings 673,662 7,013 4.22 % 673,415 8,297 4.96 % Total interest-bearing liabilities 21,752,029 29,047 0.54 % 18,764,221 69,517 1.49 % Noninterest-bearing deposits 7,620,665 — — 4,759,729 — — Total deposits and interest-bearing liabilities 29,372,694 $ 29,047 0.40 % 23,523,950 $ 69,517 1.19 % Other liabilities 332,782 296,537 Stockholders' equity 4,953,656 4,417,155 Total liabilities and stockholders' equity $ 34,659,132 $ 28,237,642 Net interest income $ 222,870 $ 193,552 Net interest spread (3) 2.86 % 2.92 % Net interest margin (4) 3.02 % 3.28 % (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 $7.3 million of taxable equivalent income for the three months ended March 31, 2021 compared to $7.0 million for the three months ended March 31, 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 March 31, 2021 would have been 3.00% compared to a net interest spread of 3.22% for the three months ended March 31, 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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED (dollars in thousands) March December September June March December 2021 2020 2020 2020 2020 2019 Asset quality information and ratios: Nonperforming assets: Nonaccrual loans $ 72,135 73,836 71,390 62,562 70,970 61,605 Other real estate (ORE) and other nonperforming assets (NPAs) 10,651 12,360 19,445 22,105 27,182 29,487 Total nonperforming assets $ 82,786 86,196 90,835 84,667 98,152 91,092 Past due loans over 90 days and still accruing interest $ 2,833 2,362 1,313 1,982 1,990 1,615 Accruing troubled debt restructurings (5) $ 2,460 2,494 2,588 3,274 3,869 4,850 Accruing purchase credit deteriorated loans $ 13,904 14,091 14,346 14,616 13,984 13,249 Net loan charge-offs $ 11,397 10,775 13,057 5,384 10,155 3,515 Allowance for credit losses to nonaccrual loans 389.4 % 386.1 % 404.3 % 456.1 % 313.5 % 153.8 % As a percentage of total loans: Past due accruing loans over 30 days 0.09 % 0.19 % 0.11 % 0.09 % 0.17 % 0.18 % Potential problem loans (6) 0.70 % 0.77 % 0.96 % 1.12 % 1.22 % 1.39 % Allowance for credit losses (20) 1.22 % 1.27 % 1.28 % 1.27 % 1.09 % 0.48 % Nonperforming assets to total loans, ORE and other NPAs 0.36 % 0.38 % 0.40 % 0.38 % 0.48 % 0.46 % Classified asset ratio (Pinnacle Bank) (8) 7.3 % 8.1 % 9.9 % 11.2 % 12.0 % 13.4 % Annualized net loan charge-offs to avg. loans (7) 0.20 % 0.19 % 0.23 % 0.10 % 0.20 % 0.07 % Wtd. avg. commercial loan internal risk ratings (6) 45.2 45.1 45.2 45.1 45.0 44.9 Interest rates and yields: Loans 4.11 % 4.20 % 4.04 % 4.16 % 4.84 % 5.00 % Securities 2.29 % 2.27 % 2.38 % 2.59 % 2.82 % 2.85 % Total earning assets 3.41 % 3.44 % 3.38 % 3.58 % 4.41 % 4.58 % Total deposits, including non-interest bearing 0.26 % 0.33 % 0.43 % 0.55 % 0.99 % 1.10 % Securities sold under agreements to repurchase 0.20 % 0.21 % 0.21 % 0.20 % 0.33 % 0.48 % FHLB advances 1.95 % 2.00 % 1.82 % 1.73 % 2.06 % 2.10 % Subordinated debt and other borrowings 4.22 % 4.13 % 3.99 % 4.42 % 4.96 % 4.04 % Total deposits and interest-bearing liabilities 0.40 % 0.49 % 0.59 % 0.74 % 1.19 % 1.29 % Capital and other ratios (8): Pinnacle Financial ratios: Stockholders' equity to total assets 14.0 % 14.0 % 14.2 % 14.1 % 15.0 % 15.7 % Common equity Tier one 10.3 % 10.0 % 9.9 % 9.6 % 9.4 % 9.7 % Tier one risk-based 11.2 % 10.9 % 10.7 % 10.4 % 9.4 % 9.7 % Total risk-based 14.5 % 14.3 % 14.2 % 14.0 % 12.8 % 13.2 % Leverage 8.9 % 8.6 % 8.5 % 8.4 % 8.8 % 9.1 % Tangible common equity to tangible assets 8.6 % 8.5 % 8.5 % 8.3 % 9.2 % 9.6 % Pinnacle Bank ratios: Common equity Tier one 11.8 % 11.4 % 11.3 % 11.0 % 11.0 % 11.2 % Tier one risk-based 11.8 % 11.4 % 11.3 % 11.0 % 11.0 % 11.2 % Total risk-based 13.0 % 12.7 % 12.6 % 12.4 % 12.2 % 12.2 % Leverage 9.4 % 9.1 % 8.9 % 8.9 % 10.3 % 10.5 % Construction and land development loans as a percentage of total capital (19) 76.0 % 89.0 % 86.7 % 83.6 % 84.2 % 83.6 % Non-owner occupied commercial real estate and multi-family as a percentage of total capital (19) 256.0 % 264.0 % 268.8 % 275.0 % 264.1 % 268.3 % This information is preliminary and based on company data available at the time of the presentation. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED (dollars in thousands, except per share data) March December September June March December 2021 2020 2020 2020 2020 2019 Per share data: Earnings per common share – basic $ 1.61 1.42 1.42 0.83 0.37 1.26 Earnings per common share - basic, excluding non-GAAP adjustments $ 1.61 1.58 1.45 0.89 0.39 1.27 Earnings per common share – diluted $ 1.61 1.42 1.42 0.83 0.37 1.26 Earnings per common share - diluted, excluding non-GAAP adjustments $ 1.61 1.58 1.45 0.89 0.39 1.27 Common dividends per share $ 0.18 0.16 0.16 0.16 0.16 0.16 Book value per common share at quarter end (9) $ 62.33 61.80 60.26 59.05 57.85 56.89 Tangible book value per common share at quarter end (9) $ 37.88 37.25 35.68 34.43 33.20 32.45 Revenue per diluted common share $ 4.17 4.03 3.95 3.63 3.47 3.32 Revenue per diluted common share, excluding non-GAAP adjustments $ 4.17 4.03 3.94 3.63 3.47 3.32 Investor information: Closing sales price of common stock on last trading day of quarter $ 88.66 64.40 35.59 41.99 37.54 64.00 High closing sales price of common stock during quarter $ 93.58 65.51 44.47 48.98 64.03 64.80 Low closing sales price of common stock during quarter $ 63.48 35.97 33.28 33.24 31.98 54.58 Closing sales price of depositary shares on last trading day of quarter $ 27.62 27.69 26.49 25.98 — — High closing sales price of depositary shares during quarter $ 27.83 27.94 26.82 26.05 — — Low closing sales price of depositary shares during quarter $ 26.83 26.45 25.51 25.19 — — Other information: Residential mortgage loan sales: Gross loans sold $ 546,963 479,867 511,969 550,704 286,703 322,228 Gross fees (10) $ 18,793 23,729 23,557 16,381 9,490 9,953 Gross fees as a percentage of loans originated 3.44 % 4.94 % 4.60 % 2.97 % 3.31 % 3.09 % Net gain on residential mortgage loans sold $ 13,666 12,387 19,453 19,619 8,583 6,044 Investment gains (losses) on sales of securities, net (15) $ — — 651 (128) 463 68 Brokerage account assets, at quarter end (11) $ 5,974,884 5,509,560 4,866,726 4,499,856 4,000,643 4,636,441 Trust account managed assets, at quarter end $ 3,443,373 3,295,198 2,978,035 2,908,131 2,714,582 2,942,811 Core deposits (12) $ 24,971,177 23,510,883 22,003,989 21,391,794 18,604,262 17,617,479 Core deposits to total funding (12) 83.1 % 79.5 % 76.9 % 75.8 % 75.9 % 76.2 % Risk-weighted assets $ 26,105,158 25,791,896 25,189,944 24,937,535 24,600,490 23,911,064 Number of offices 115 114 114 113 111 111 Total core deposits per office $ 217,141 206,236 193,017 189,308 167,606 158,716 Total assets per full-time equivalent employee $ 13,468 13,262 13,027 12,936 11,422 11,180 Annualized revenues per full-time equivalent employee $ 488.3 459.8 456.1 426.9 414.3 404.6 Annualized expenses per full-time equivalent employee $ 239.4 246.6 221.1 205.4 215.6 208.1 Number of employees (full-time equivalent) 2,621.0 2,634.0 2,596.5 2,577.5 2,562.0 2,487.0 Associate retention rate (13) 94.4 % 94.8 % 94.4 % 94.5 % 93.5 % 92.8 % This information is preliminary and based on company data available at the time of the presentation. 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) March December March 2021 2020 2020 Net interest income $ 222,870 220,985 193,552 Noninterest income 92,709 83,444 70,377 Total revenues 315,579 304,429 263,929 Less: Investment (gains) losses on sales of securities, net — — (463 ) Total revenues excluding the impact of adjustments noted above $ 315,579 304,429 263,466 Noninterest expense $ 154,696 163,305 137,349 Less: Other real estate (ORE) expense (13 ) 1,457 2,415 FHLB restructuring charges — 10,307 — Hedge termination charges — 4,673 — Noninterest expense excluding the impact of adjustments noted above $ 154,709 146,868 134,934 Pre-tax income $ 153,648 133,944 26,691 Provision for credit losses 7,235 7,180 99,889 Pre-tax pre-provision net revenue 160,883 141,124 126,580 Adjustments noted above (13 ) 16,437 1,952 Adjusted pre-tax pre-provision net revenue(14) $ 160,870 157,561 128,532 Noninterest income $ 92,709 83,444 70,377 Less: Adjustments as noted above — — (463 ) Noninterest income excluding the impact of adjustments noted above $ 92,709 83,444 69,914 Efficiency ratio (4) 49.02 % 53.64 % 52.04 % Adjustments as noted above — % (5.40 )% (0.83 )% Efficiency ratio (excluding adjustments noted above) 49.02 % 48.24 % 51.21 % Total average assets $ 34,659,132 34,436,765 28,237,642 Noninterest income to average assets (1) 1.08 % 0.96 % 1.00 % Adjustments as noted above — % — % — % Noninterest income (excluding adjustments noted above) to average assets (1) 1.08 % 0.96 % 1.00 % Noninterest expense to average assets (1) 1.81 % 1.89 % 1.96 % Adjustments as noted above — % (0.19 )% (0.04 )% Noninterest expense (excluding adjustments noted above) to average assets (1) 1.81 % 1.70 % 1.92 % This information is preliminary and based on company data available at the time of the presentation. 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) March December September June March December 2021 2020 2020 2020 2020 2019 Net income available to common shareholders $ 121,630 107,078 106,847 62,444 28,356 96,079 Investment (gains) losses on sales of securities, net — — (651 ) 128 (463 ) (68 ) ORE expense (13 ) 1,457 1,795 2,888 2,415 804 FHLB restructuring charges — 10,307 1,991 2,870 — — Hedge termination charges — 4,673 — — — — Tax effect on adjustments noted above (18) 3 (4,297 ) (819 ) (1,539 ) (510 ) (192 ) Net income available to common shareholders excluding adjustments noted above $ 121,620 119,218 109,163 66,791 29,798 96,623 Basic earnings per common share $ 1.61 1.42 1.42 0.83 0.37 1.26 Adjustment due to investment (gains) losses on sales of securities, net — — (0.01 ) — — — Adjustment due to ORE expense — 0.02 0.02 0.04 0.03 0.01 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 $ 1.61 1.58 1.45 0.89 0.39 1.27 Diluted earnings per common share $ 1.61 1.42 1.42 0.83 0.37 1.26 Adjustment due to investment (gains) losses on sales of securities, net — — (0.01 ) — — — Adjustment due to ORE expense — 0.02 0.02 0.04 0.03 0.01 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 $ 1.61 1.58 1.45 0.89 0.39 1.27 Revenue per diluted common share $ 4.17 4.03 3.95 3.63 3.47 3.32 Adjustments as noted above — — (0.01 ) — — — Revenue per diluted common share excluding adjustments noted above $ 4.17 4.03 3.94 3.63 3.47 3.32 Book value per common share at quarter end $ 62.33 61.80 60.26 59.05 57.85 56.89 Adjustment due to goodwill, core deposit and other intangible assets (24.45 ) (24.55 ) (24.58 ) (24.62 ) (24.65 ) (24.44 ) Tangible book value per common share at quarter end (9) $ 37.88 37.25 35.68 34.43 33.20 32.45 Equity method investment (17) Fee income from BHG, net of amortization $ 28,950 24,294 26,445 17,208 15,592 12,312 Funding cost to support investment 1,205 1,222 1,231 2,134 2,122 2,345 Pre-tax impact of BHG 27,745 23,072 25,214 15,074 13,470 9,967 Income tax expense at statutory rates 7,253 6,031 6,591 3,940 3,521 2,605 Earnings attributable to BHG $ 20,492 17,041 18,623 11,134 9,949 7,362 Basic earnings per common share attributable to BHG $ 0.27 0.23 0.25 0.15 0.13 0.10 Diluted earnings per common share attributable to BHG $ 0.27 0.23 0.25 0.15 0.13 0.10 This information is preliminary and based on company data available at the time of the presentation. 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) March December March 2021 2020 2020 Return on average assets (1) 1.42 % 1.24 % 0.40 % Adjustments as noted above — % 0.14 % 0.02 % Return on average assets excluding adjustments noted above (1) 1.42 % 1.38 % 0.42 % Tangible assets: Total assets $ 35,299,705 34,932,860 29,264,180 Less: Goodwill (1,819,811 ) (1,819,811 ) (1,819,811 ) Core deposit and other intangible assets (40,130 ) (42,336 ) (48,610 ) Net tangible assets $ 33,439,764 33,070,713 27,395,759 Tangible common equity: Total stockholders' equity $ 4,959,524 4,904,611 4,385,128 Less: Preferred stockholders' equity (217,126 ) (217,126 ) — Total common stockholders' equity 4,742,398 4,687,485 4,385,128 Less: Goodwill (1,819,811 ) (1,819,811 ) (1,819,811 ) Core deposit and other intangible assets (40,130 ) (42,336 ) (48,610 ) Net tangible common equity $ 2,882,457 2,825,338 2,516,707 Ratio of tangible common equity to tangible assets 8.62 % 8.54 % 9.19 % Average tangible assets: Average assets $ 34,659,132 34,436,765 28,237,642 Less: Average goodwill (1,819,811 ) (1,819,811 ) (1,819,811 ) Average core deposit and other intangible assets (41,575 ) (43,886 ) (50,252 ) Net average tangible assets $ 32,797,746 32,573,068 26,367,579 Return on average assets (1) 1.42 % 1.24 % 0.40 % Adjustment due to goodwill, core deposit and other intangible assets 0.08 % 0.07 % 0.03 % Return on average tangible assets (1) 1.50 % 1.31 % 0.43 % Adjustments as noted above — % 0.15 % 0.02 % Return on average tangible assets excluding adjustments noted above (1) 1.50 % 1.46 % 0.45 % Average tangible common equity: Average stockholders' equity $ 4,953,656 4,852,373 4,417,155 Less: Average preferred equity (217,126 ) (217,126 ) — Average common equity 4,736,530 4,635,247 4,417,155 Less: Average goodwill (1,819,811 ) (1,819,811 ) (1,819,811 ) Average core deposit and other intangible assets (41,575 ) (43,886 ) (50,252 ) Net average tangible common equity $ 2,875,144 2,771,550 2,547,092 Return on average equity (1) 9.96 % 8.78 % 2.58 % Adjustment due to average preferred stockholders' equity 0.45 % 0.41 % — % Return on average common equity (1) 10.41 % 9.19 % 2.58 % Adjustment due to goodwill, core deposit and other intangible assets 6.75 % 6.18 % 1.90 % Return on average tangible common equity (1) 17.16 % 15.37 % 4.48 % Adjustments as noted above — % 1.74 % 0.23 % Return on average tangible common equity excluding adjustments noted above (1) 17.16 % 17.11 % 4.71 % Allowance for credit losses on loans as a percent of total loans 1.22 % 1.27 % 1.09 % Impact of excluding PPP loans from total loans 0.13 % 0.11 % — % Allowance as adjusted for the above exclusion of PPP loans from total loans 1.35 % 1.38 % 1.09 % This information is preliminary and based on company data available at the time of the presentation. 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 other real estate 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. pnfp-earnings
NASHVILLE, Tenn.--(BUSINESS WIRE)--Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today announced it will release its first quarter 2021 financial results on Monday, April 19, 2021, after market close. It will also host a live webcast on Tuesday, April 20, at 8:30 a.m. CDT to review its financial results, business outlook for the firm and other matters. The first quarter 2021 earnings release will be available on the investor relations page of Pinnacle's website at www.pnfp.com. To access the call for audio only, please call 1-877-602-7944. For the presentation and streaming audio, please 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 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 2020 list of 100 Best Companies to Work For® in the U.S., its fourth 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 $34.9 billion in assets as of Dec. 31, 2020. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 12 primarily urban markets in Tennessee, the Carolinas, Virginia and Atlanta. Additional information concerning Pinnacle, which is included in the Nasdaq Financial-100 Index, can be accessed at www.pnfp.com.