PNFP Reports Diluted EPS of $1.31, ROAA of 1.55% and ROTCE of 17.74% For 2Q 2019

Published

Excluding non-GAAP adjustments, 2Q19 diluted EPS was $1.42, ROAA was 1.69% and ROTCE was 19.28% NASHVILLE, Tenn.--(BUSINESS WIRE)-- Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.31 for the quarter ended June 30, 2019, compared to net income per diluted common share of $1.12 for the quarter ended June 30, 2018, an increase of 17.0 percent. Net income per diluted common share was $2.53 for the six months ended June 30, 2019, compared to net income per diluted common share of $2.20 for the six months ended June 30, 2018, an increase of 15.0 percent. The following items impacted Pinnacle Financial’s second quarter of 2019 results: $4.5 million in net losses on the sale of $382.0 million of investment securities as the firm seeks to better position its balance sheet for potential reductions in short-term rates, $1.5 million loss from the sale of its remaining non-prime automobile portfolio, to finalize our exit from that business, which has been underway for some time, $2.4 million write-down of facilities and land acquired in the BNC acquisition that previously had been held for potential expansion, and $3.2 million non-cash impairment charge related to the proposed consolidation of five offices across the firm's footprint. Excluding these items, as well as merger-related charges in 2018 and ORE expense in each period, net income per diluted common share was $1.42 for the three months ended June 30, 2019, compared to net income per diluted common share of $1.16 for the three months ended June 30, 2018, a growth rate of 22.4 percent. Excluding the same adjustments noted above for the six months ended June 30, 2019 and 2018, net income per diluted common share was $2.66 for the six months ended June 30, 2019, compared to net income per diluted common share of $2.28 for the six months ended June 30, 2018, a growth rate of 16.7 percent. "Obviously, we are excited about our very strong earnings growth in the second quarter and first six months of 2019," said M. Terry Turner, Pinnacle's president and chief executive officer. "Highlights for the quarter included double-digit loan growth, strong hiring throughout our footprint and better than anticipated fee income associated with our investment in BHG. During the quarter, we also implemented plans for rationalization of certain assets. Our decision to sell the remainder of our non-prime automobile loans and to consolidate a number of branch offices, along with the other items noted above, negatively impacted the second quarter by approximately $12.0 million in additional expenses. However, by incurring these expenses, we believe we are much better positioned to absorb potential decreases in short-term interest rates. These actions also eliminate any future losses that could have been incurred from the non-prime automobile portfolio." GROWING THE CORE EARNINGS CAPACITY OF THE FIRM: Loans at June 30, 2019 were a record $18.8 billion, an increase of $1.8 billion from June 30, 2018, reflecting year-over-year growth of 10.4 percent. Loans at June 30, 2019 increased $639.4 million from March 31, 2019, reflecting a linked-quarter annualized growth rate of 14.1 percent. Average loans were $18.6 billion for the three months ended June 30, 2019, up $672.7 million from $17.9 billion for the three months ended March 31, 2019, an annualized growth rate of 15.0 percent. At June 30, 2019, the remaining discount associated with fair value accounting adjustments on acquired loans was $75.4 million, compared to $85.8 million at March 31, 2019. Deposits at June 30, 2019 were $19.4 billion, an increase of $1.6 billion from June 30, 2018, reflecting year-over-year growth of 8.9 percent. Deposits at June 30, 2019 increased $968.9 million from March 31, 2019, reflecting a linked-quarter annualized growth rate of 21.0 percent. Average deposits were $18.9 billion for the three months ended June 30, 2019, compared to $18.4 billion for the three months ended March 31, 2019, an annualized growth rate of 11.0 percent. Core deposits were $16.5 billion at June 30, 2019, compared to $16.3 billion at March 31, 2019 and $15.4 billion at June 30, 2018, a year-over-year growth rate of 7.2 percent. Revenues for the quarter ended June 30, 2019 were $259.6 million, an increase of $21.3 million from the $238.3 million recognized in the first quarter of 2019, and up $29.4 million from the second quarter of 2018. This represents a year-over-year growth rate of 12.8 percent. Second quarter 2019 revenues reflect the impact of a $7.2 million reduction in loan discount accretion when compared to the second quarter of 2018. Revenue per fully diluted share was $3.39 for the three months ended June 30, 2019, compared to $3.09 for the first quarter of 2019 and $2.97 for the second quarter of 2018. "We hired 45 high-profile revenue producers during the first six months of 2019, a strong predictor of our continued future growth," Turner said. "We believe our recruiting success is creating even more opportunities for our firm to move meaningful market share from larger banks. Taking market share by virtue of being able to hire the best bankers in our market is the only way I know to reliably produce outsized growth on a sound basis over the long term. "We continue to experience much progress in the Carolinas and Virginia and could not be more proud of our successes there. We believe the BNC merger has been a great success and we anticipate many years of sustainable growth for our firm. BHG was another sound investment for our firm. Its franchise value, we believe, has increased significantly since our first investment in 2015. We believe the leadership and employees at BHG have worked tirelessly to grow their firm on a sound basis, and we anticipate more growth in future periods as our partnership continues to thrive." FOCUSING ON PROFITABILITY: Return on average assets was 1.55 percent for the second quarter of 2019, compared to 1.52 percent for the first quarter of 2019 and 1.50 percent for the second quarter last year. Second quarter 2019 return on average tangible assets amounted to 1.67 percent, compared to 1.64 percent for the first quarter of 2019 and 1.63 percent for the second quarter of 2018. Excluding the adjustments described above for both 2019 and 2018, return on average assets was 1.69 percent for the second quarter of 2019, compared to 1.55 percent for both the first quarter of 2019 and the second quarter of 2018. Likewise, excluding those same adjustments, the firm’s return on average tangible assets was 1.82 percent for the second quarter of 2019, compared to 1.67 percent for the first quarter of 2019 and 1.68 for the second quarter of 2018. Return on average common equity for the second quarter of 2019 amounted to 9.77 percent, compared to 9.49 percent for the first quarter of 2019 and 9.18 percent for the second quarter of 2018. Second quarter 2019 return on average tangible common equity amounted to 17.74 percent, compared to 17.60 percent for the first quarter of 2019 and 18.01 for the second quarter of 2018. Excluding the adjustments described above for both 2019 and 2018, return on average tangible common equity amounted to 19.28 percent for the second quarter of 2019, compared to 17.91 percent for the first quarter of 2019 and 18.58 percent for the second quarter of 2018. "Our profitability metrics remain strong and provide us the ongoing leverage to hire more revenue producers and continue investing in our future growth," said Harold R. Carpenter, Pinnacle's chief financial officer. "BHG reported a remarkable quarter that was the culmination of many initiatives they have been working on for several months. They have not only developed more sophisticated tools to better target potential borrowers, but they also have expanded their reach into other professional firms such as lawyers, accountants and others. This elevated production occurred during a time when FICO scores and their internally generated credit scores for their borrowers have actually improved. During the quarter, we also took the opportunity to critically evaluate certain assets. Specifically, we executed several initiatives during the quarter to better insulate our earnings in a down rate environment such as purchasing loan interest rate floors, unwinding fixed to floating loan interest rate swaps and repositioning a portion of the bond portfolio. "We are aware that our industry faces many macro challenges. In spite of these challenges, we continue to target top-quartile profitability and, more importantly, continue our focus on earnings per share growth and tangible book value per share accretion, having produced 5-year compounded annual growth rates of 23.7 percent and 15.8 percent, respectively, in those key metrics through the second quarter of 2019." MAINTAINING A FORTRESS BALANCE SHEET: Net charge-offs were $4.1 million for the quarter ended June 30, 2019, compared to $3.6 million for the quarter ended March 31, 2019 and $4.0 million for the quarter ended June 30, 2018. Annualized net charge-offs as a percentage of average loans for the quarter ended June 30, 2019 were 0.09 percent, compared to 0.08 percent for the quarter ended March 31, 2019 and 0.10 percent for the second quarter of 2018. Nonperforming assets decreased to 0.55 percent of total loans and ORE at June 30, 2019, from 0.61 percent at March 31, 2019, and up slightly from 0.53 percent at June 30, 2018. Nonperforming assets were $102.7 million at June 30, 2019, compared to $111.3 million at March 31, 2019 and $91.1 million at June 30, 2018. The classified asset ratio at June 30, 2019 was 13.9 percent, compared to 13.0 percent at March 31, 2019 and 12.6 percent at June 30, 2018. Classified assets were $337.8 million at June 30, 2019, compared to $306.8 million at March 31, 2019 and $267.3 million at June 30, 2018. The allowance for loan losses represented 0.48 percent of total loans at each of June 30, 2019 and March 31, 2019, compared to 0.44 percent at June 30, 2018. The ratio of the allowance for loan losses to nonperforming loans increased to 118.6 percent at June 30, 2019, from 90.7 percent at March 31, 2019 and 106.7 percent at June 30, 2018. At June 30, 2019, purchase credit impaired loans of $7.2 million, which were recorded at fair value upon acquisition, represented 9.4 percent of the firm's nonperforming loans. Provision for loan losses was $7.2 million in the second quarter of 2019, compared to $7.2 million in the first quarter of 2019 and $9.4 million in the second quarter of 2018. "Asset quality continues to be a highlight for our firm," Carpenter said. "Net charge-offs, nonperforming assets and classified assets remain very low. Net charge-offs in our primary loan segments of C&I, CRE and construction have been very low for an extended period of time. Year-to-date in 2019, net charge-offs in these segments were 0.07 percent annualized, compared to 0.07 percent in 2018 and 0.02 percent in 2017." GROWING REVENUES Net interest income for the quarter ended June 30, 2019 was $188.9 million, compared to $187.2 million for the first quarter of 2019 and $182.2 million for the second quarter of 2018, a year-over-year growth rate of 3.7 percent. Net interest margin was 3.48 percent for the second quarter of 2019, compared to 3.62 percent for the first quarter of 2019 and 3.69 percent for the second quarter of 2018. Included in net interest income for the second quarter of 2019 was $8.9 million of discount accretion associated with fair value adjustments, compared to $9.7 million of similar discount accretion recognized in the first quarter of 2019 and $16.1 million in the second quarter of 2018. Average earning assets included $81.4 million of fair value adjustments related to our acquisitions at June 30, 2019, compared to $92.4 million at March 31, 2019 and $143.3 million at June 30, 2018. Noninterest income for the quarter ended June 30, 2019 was $70.7 million, compared to $51.1 million for the first quarter of 2019 and $47.9 million for the second quarter of 2018, a year-over-year growth rate of 47.4 percent. Wealth management revenues, which include investment, trust and insurance services, were $11.4 million for the quarter ended June 30, 2019, compared to $11.6 million for the first quarter of 2019 and $10.5 million for the second quarter of 2018. Income from the firm's investment in BHG was $32.3 million for the quarter ended June 30, 2019, compared to $13.3 million for the quarter ended March 31, 2019 and $9.7 million for the quarter ended June 30, 2018. Income from the firm's investment in BHG grew more than 200 percent for the quarter ended June 30, 2019, compared to the quarter ended June 30, 2018. Other noninterest income was $16.5 million for the quarter ended June 30, 2019 compared to $14.6 million for the quarter ended March 31, 2019 and $15.3 million for the quarter ended June 30, 2018. Contributing to the increase were increased credit card interchange fees and increased fees related to the firm's various lending programs. Other noninterest income for the quarter ended June 30, 2019 was also impacted by a $1.5 million charge associated with the sale of the firm's remaining non-prime automobile portfolio in the second quarter of 2019. "For good reason, the rate environment has attracted much attention from the broader banking community, including not only bankers but also investors and analysts," Carpenter said. "Operating in this environment while funding high quality loan growth as inexpensively as possible is clearly a challenge. We will continue to support our relationship managers as they attract great clients to our firm, which typically begins with loans. "We remain optimistic about our deposit-gathering strategies, which are largely dependent upon our continuing to recruit deposit gatherers to our firm. We are fortunate that we operate in markets with outstanding bankers that allow us to focus on growing revenues consistently and organically over the longer term. Our track record is strong, and we believe we have the runway in our current footprint to accomplish our goals of continuing to be a top-quartile performer." CREATING OPERATING LEVERAGE Noninterest expense for the quarter ended June 30, 2019 was $127.7 million, compared to $114.1 million in the first quarter of 2019 and $110.9 million in the second quarter of 2018, reflecting a year-over-year increase of 15.1 percent. Excluding the impairment charges associated with our branch consolidation initiatives, ORE expenses and merger-related charges for the relevant periods as described above, noninterest expense increased 13.8 percent over the second quarter of 2018. Salaries and employee benefits were $75.6 million in the second quarter of 2019, compared to $70.4 million in the first quarter of 2019 and $64.1 million in the second quarter of 2018, reflecting a year-over-year increase of 17.9 percent. Included in salaries and employee benefits are costs related to the firm’s annual cash incentive plan. Incentive costs for this plan amounted to $11.0 million in the second quarter of 2019, compared to $6.3 million in the first quarter of 2019 and $6.9 million in the second quarter of last year. The efficiency ratio for the second quarter of 2019 increased to 49.19 percent, compared to 47.86 percent for the first quarter of 2019 and 48.18 percent in the second quarter of 2018. The ratio of noninterest expenses to average assets increased to 1.98 percent for the second quarter of 2019 from 1.85 percent in the first quarter of 2019 and 1.91 percent in the second quarter of 2018. Excluding the adjustments noted elsewhere in this release for both 2019 and 2018, the efficiency ratio was 45.92 percent for the second quarter of 2019, compared to 47.37 percent for the first quarter of 2019 and 46.57 percent for the second quarter of 2018. Excluding the above described impairment charge, ORE expense and merger-related charges, the ratio of noninterest expense to average assets was 1.89 percent for the second quarter of 2019, compared to 1.84 percent for the first quarter of 2019 and 1.85 percent for the second quarter of 2018. The effective tax rate for the second quarter of 2019 was 19.6 percent, compared to 19.7 percent for the first quarter of 2019 and 20.9 percent for the second quarter of 2018. The effective tax rate for the second quarter of 2019 includes tax expense related to equity compensation of $68,000, compared to a benefit of $769,000 in the first quarter of 2019 and $72,000 in the second quarter of 2018, respectively, associated with vesting of equity-based awards. During the second quarter of 2019, the firm acquired 130,888 shares of its common stock in open market transactions pursuant to its previously announced share repurchase program, at an average price of $56.31. "We continue to be pleased with the management of our expense base and our team’s focus on growing revenues," Carpenter said. "We reviewed our branch network for opportunities and believe the proposed consolidation of approximately five facilities is sufficient at this time. We are not exiting any market or entering into any formal personnel reduction programs as a result of these actions. "Additionally, we are reporting an adjusted efficiency ratio of 46 percent for our firm for the second quarter of 2019, providing further support that our firm can generate outsized returns efficiently and that we take our reputation of being sound operators seriously." BOARD OF DIRECTORS DECLARES DIVIDEND On July 16, 2019, Pinnacle's Board of Directors approved a quarterly cash dividend of $0.16 per common share to be paid on Aug. 30, 2019 to common shareholders of record as of the close of business on Aug. 2, 2019. The amount and timing of any future dividend payments to common shareholders will be subject to the discretion of Pinnacle's Board of Directors. WEBCAST AND CONFERENCE CALL INFORMATION Pinnacle will host a webcast and conference call at 8:30 a.m. (CDT) on July 17, 2019 to discuss second quarter 2019 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. Pinnacle Bank has the No. 1 deposit market share in the Nashville-Murfreesboro-Franklin MSA, according to June 30, 2018 deposit data from the FDIC. Pinnacle earned a place on FORTUNE’s 2017, 2018 and 2019 lists of the 100 Best Companies to Work For in the U.S., and American Banker recognized Pinnacle as one of America’s Best Banks to Work For six years in a row. The firm began operations in a single location in downtown Nashville, TN in October 2000 and has since grown to approximately $26.5 billion in assets as of June 30, 2019. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 11 primarily urban markets in Tennessee, the Carolinas and Virginia. 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 resulting in significant increases in loan losses and provisions for those losses; (ii) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits; (iii) the inability of Pinnacle Financial, or entities in which it has significant investments, like BHG, to maintain the historical growth rate of its, or such entities', loan portfolio; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower-quality assets; (vi) 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; (vii) greater than anticipated adverse conditions in the national or local economies including in Pinnacle Financial's markets throughout Tennessee, North Carolina, South Carolina and Virginia, particularly in commercial and residential real estate markets; (viii) fluctuations or differences in interest rates on loans or deposits from those that Pinnacle Financial is modeling or anticipating or that affect the yield curve; (ix) the results of regulatory examinations; (x) a merger or acquisition; (xi) risks of expansion into new geographic or product markets; (xii) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including intangible assets; (xiii) 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; (xiv) the ability of Pinnacle Financial to implement its branch consolidation strategy on the timelines, and at the costs, presently contemplated; (xv) deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xvi) 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 Financial's level of applicable commercial real estate loans were to exceed percentage levels of total capital in guidelines recommended by its regulators; (xvii) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xviii) the vulnerability of Pinnacle Bank's network and online banking portals, and the systems of parties with whom Pinnacle Financial contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (xix) 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; (xx) 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 if not prohibited from doing so by Pinnacle Financial or Pinnacle Bank; (xxi) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (xxii) risks associated with the possible shutdown of the United States federal government, including adverse effects on the national or local economies and adverse effects resulting from a shutdown of the U.S. Small Business Administration's SBA loan program; (xxiii) 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; and (xxv) 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 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, the charges associated with Pinnacle Financial's branch consolidation project, the sale of the remaining portion of Pinnacle Bank's non-prime automobile portfolio, the revaluation of Pinnacle Financial’s deferred tax assets and other matters for the accounting periods presented. This release also includes non-GAAP financial measures which exclude expenses associated with Pinnacle Bank's merger with BNC. 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. 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 2019 versus certain periods in 2018 and to internally prepared projections. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS – UNAUDITED (dollars in thousands)         June 30, 2019 December 31, 2018 June 30, 2018 ASSETS       Cash and noninterest-bearing due from banks $ 153,071 $ 137,433 $ 193,962 Restricted cash 121,440 65,491 16,233 Interest-bearing due from banks 332,862 516,920 407,265 Federal funds sold and other 20,214 1,848 29,463 Cash and cash equivalents 627,587 721,692 646,923         Securities available-for-sale, at fair value 3,256,906 3,083,686 2,960,128 Securities held-to-maturity (fair value of $200.6 million, $193.1 million, and $15.3 million at June 30, 2019, Dec. 31, 2018, and June 30, 2018, respectively) 190,928 194,282 15,341 Consumer loans held-for-sale 70,004 34,196 108,592 Commercial loans held-for-sale 21,295 15,954 21,277         Loans 18,814,318 17,707,549 17,042,853 Less allowance for loan losses (90,253) (83,575) (75,670) Loans, net 18,724,065 17,623,974 16,967,183         Premises and equipment, net 274,729 265,560 269,876 Equity method investment 243,875 239,237 217,283 Accrued interest receivable 84,582 79,657 65,175 Goodwill 1,807,121 1,807,121 1,807,121 Core deposits and other intangible assets 41,578 46,161 51,353 Other real estate owned 26,657 15,165 19,785 Other assets 1,171,028 904,359 838,333 Total assets $ 26,540,355 $ 25,031,044 $ 23,988,370         LIABILITIES AND STOCKHOLDERS' EQUITY       Deposits:       Noninterest-bearing $ 4,493,419 $ 4,309,067 $ 4,361,414 Interest-bearing 3,129,941 3,464,001 2,939,833 Savings and money market accounts 7,547,166 7,607,796 7,129,335 Time 4,278,857 3,468,243 3,426,836 Total deposits 19,449,383 18,849,107 17,857,418 Securities sold under agreements to repurchase 154,169 104,741 128,739 Federal Home Loan Bank advances 1,960,062 1,443,589 1,581,867 Subordinated debt and other borrowings 464,144 485,130 465,433 Accrued interest payable 30,376 23,586 15,604 Other liabilities 305,860 158,951 112,632 Total liabilities 22,363,994 21,065,104 20,161,693         Preferred stock, no par value; 10.0 million shares authorized; no shares issued and outstanding — — — Common stock, par value $1.00; 180.0 million shares authorized; 76.9 million, 77.5 million and 77.9 million shares issued and outstanding at June 30, 2019, Dec. 31, 2018 and June 30, 2018, respectively 76,929 77,484 77,855 Additional paid-in capital 3,076,486 3,107,431 3,119,461 Retained earnings 1,002,434 833,130 667,594 Accumulated other comprehensive income (loss), net of taxes 20,512 (52,105) (38,233) Total stockholders' equity 4,176,361 3,965,940 3,826,677 Total liabilities and stockholders' equity $ 26,540,355 $ 25,031,044 $ 23,988,370         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 Six Months Ended   June 30, 2019 March 31, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Interest income:           Loans, including fees $ 237,653 $ 229,379 $ 208,758 $ 467,032 $ 399,972 Securities           Taxable 12,243 13,540 11,748 25,783 22,970 Tax-exempt 12,556 11,672 8,350 24,228 15,635 Federal funds sold and other 3,399 3,292 2,128 6,691 3,935 Total interest income 265,851 257,883 230,984 523,734 442,512             Interest expense:           Deposits 58,988 54,217 32,767 113,205 56,748 Securities sold under agreements to repurchase 142 145 143 287 273 FHLB advances and other borrowings 17,803 16,275 15,838 34,078 28,784 Total interest expense 76,933 70,637 48,748 147,570 85,805 Net interest income 188,918 187,246 182,236 376,164 356,707 Provision for loan losses 7,195 7,184 9,402 14,379 16,333 Net interest income after provision for loan losses 181,723 180,062 172,834 361,785 340,374             Noninterest income:           Service charges on deposit accounts 8,940 8,542 8,456 17,482 16,361 Investment services 5,803 5,404 5,074 11,207 10,319 Insurance sales commissions 2,147 2,928 2,048 5,075 5,167 Gains on mortgage loans sold, net 6,011 4,878 3,777 10,889 7,521 Investment gains (losses) on sales, net (4,466) (1,960) — (6,426) 30 Trust fees 3,461 3,295 3,564 6,756 6,681 Income from equity method investment 32,261 13,290 9,690 45,551 19,050 Other noninterest income 16,525 14,686 15,330 31,211 26,993 Total noninterest income 70,682 51,063 47,939 121,745 92,122             Noninterest expense:           Salaries and employee benefits 75,620 70,376 64,112 145,996 127,831 Equipment and occupancy 23,844 19,331 18,208 43,175 35,951 Other real estate, net 2,523 246 819 2,769 25 Marketing and other business development 3,282 2,948 2,544 6,230 4,791 Postage and supplies 2,079 1,892 2,291 3,971 4,330 Amortization of intangibles 2,271 2,311 2,659 4,582 5,357 Merger-related expenses — — 2,906 — 8,259 Other noninterest expense 18,067 16,947 17,369 35,014 32,944 Total noninterest expense 127,686 114,051 110,908 241,737 219,488 Income before income taxes 124,719 117,074 109,865 241,793 213,008 Income tax expense 24,398 23,114 23,000 47,512 42,633 Net income $ 100,321 $ 93,960 $ 86,865 $ 194,281 $ 170,375             Per share information:           Basic net income per common share $ 1.31 $ 1.22 $ 1.13 $ 2.54 $ 2.21 Diluted net income per common share $ 1.31 $ 1.22 $ 1.12 $ 2.53 $ 2.20             Weighted average shares outstanding:           Basic 76,343,608 76,803,171 77,123,854 76,572,120 77,101,816 Diluted 76,611,657 77,127,692 77,468,082 76,866,163 77,417,930             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 2019 March 2019 December 2018 September 2018 June 2018 March 2018 Balance sheet data, at quarter end:             Commercial and industrial loans $ 5,795,107 5,419,520 5,271,420 5,006,247 4,821,299 4,490,886 Commercial real estate - owner occupied   2,624,160 2,617,541 2,653,433 2,688,247 2,504,891 2,427,946 Commercial real estate - investment   4,252,098 4,107,953 3,855,643 3,818,055 3,822,182 3,714,854 Commercial real estate - multifamily and other   709,135 693,652 655,879 708,817 697,566 651,488 Consumer real estate - mortgage loans   2,949,755 2,887,628 2,844,447 2,815,160 2,699,399 2,580,766 Construction and land development loans   2,117,969 2,097,570 2,072,455 2,059,009 2,133,646 2,095,875 Consumer and other   366,094 351,042 354,272 368,474 363,870 364,202 Total loans   18,814,318 18,174,906 17,707,549 17,464,009 17,042,853 16,326,017 Allowance for loan losses   (90,253) (87,194) (83,575) (79,985) (75,670) (70,204) Securities   3,447,834 3,444,049 3,277,968 3,199,579 2,975,469 2,981,301 Total assets   26,540,355 25,557,858 25,031,044 24,557,545 23,988,370 22,935,174 Noninterest-bearing deposits   4,493,419 4,317,787 4,309,067 4,476,925 4,361,414 4,274,213 Total deposits   19,449,383 18,480,461 18,849,107 18,407,515 17,857,418 16,502,909 Securities sold under agreements to repurchase   154,169 100,698 104,741 130,217 128,739 131,863 FHLB advances   1,960,062 2,121,075 1,443,589 1,520,603 1,581,867 1,976,881 Subordinated debt and other borrowings   464,144 484,703 485,130 465,487 465,433 465,550 Total stockholders' equity   4,176,361 4,055,939 3,965,940 3,897,041 3,826,677 3,749,303 Balance sheet data, quarterly averages:             Total loans $ 18,611,164 17,938,480 17,630,281 17,259,139 16,729,734 15,957,466 Securities   3,412,475 3,302,676 3,148,638 3,075,633 2,970,267 2,829,604 Federal funds sold and other   530,556 469,909 645,644 647,728 442,401 335,093 Total earning assets   22,554,195 21,711,065 21,424,563 20,982,500 20,142,402 19,122,163 Total assets   25,915,971 25,049,954 24,616,733 24,125,051 23,236,945 22,204,599 Noninterest-bearing deposits   4,399,766 4,195,443 4,317,782 4,330,917 4,270,459 4,304,186 Total deposits   18,864,859 18,358,094 18,368,012 18,112,766 16,949,374 16,280,581 Securities sold under agreements to repurchase   117,261 109,306 119,247 146,864 123,447 129,969 FHLB advances   2,164,341 1,926,358 1,689,920 1,497,511 1,884,828 1,584,281 Subordinated debt and other borrowings   469,498 470,775 469,074 468,990 474,328 471,029 Total stockholders' equity   4,117,754 4,017,375 3,939,927 3,874,430 3,795,963 3,732,633 Statement of operations data, for the three months ended: Interest income $ 265,851 257,883 256,095 248,110 230,984 211,528 Interest expense   76,933 70,637 65,880 58,690 48,748 37,057 Net interest income   188,918 187,246 190,215 189,420 182,236 174,471 Provision for loan losses   7,195 7,184 9,319 8,725 9,402 6,931 Net interest income after provision for loan losses   181,723 180,062 180,896 180,695 172,834 167,540 Noninterest income   70,682 51,063 57,270 51,478 47,939 44,183 Noninterest expense   127,686 114,051 119,409 113,990 110,908 108,580 Income before taxes   124,719 117,074 118,757 118,183 109,865 103,143 Income tax expense   24,398 23,114 23,439 24,436 23,000 19,633 Net income $ 100,321 93,960 95,318 93,747 86,865 83,510               Profitability and other ratios:             Return on avg. assets (1)   1.55% 1.52% 1.54% 1.54% 1.50% 1.53% Return on avg. common equity (1)   9.77% 9.49% 9.60% 9.60% 9.18% 9.07% Return on avg. tangible common equity (1)   17.74% 17.60% 18.14% 18.44% 18.01% 18.12% Dividend payout ratio (16)   12.88% 13.39% 13.79% 14.89% 16.57% 18.36% Net interest margin (2)   3.48% 3.62% 3.63% 3.65% 3.69% 3.77% Noninterest income to total revenue (3)   27.23% 21.43% 23.14% 21.37% 20.83% 20.21% Noninterest income to avg. assets (1)   1.09% 0.83% 0.92% 0.85% 0.83% 0.81% Noninterest exp. to avg. assets (1)   1.98% 1.85% 1.92% 1.87% 1.91% 1.98% Efficiency ratio (4)   49.19% 47.86% 48.25% 47.32% 48.18% 49.66% Avg. loans to avg. deposits   98.66% 97.71% 95.98% 95.29% 98.70% 98.02% Securities to total assets   12.99% 13.48% 13.10% 13.03% 12.40% 13.00%               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, 2019   June 30, 2018   Average Balances Interest Rates/ Yields   Average Balances Interest Rates/ Yields Interest-earning assets               Loans (1) (2) $ 18,611,164 $ 237,653 5.22%   $ 16,729,734 $ 208,758 5.04% Securities               Taxable 1,781,814 12,243 2.76%   1,792,845 11,748 2.63% Tax-exempt (2) 1,630,661 12,556 3.68%   1,177,422 8,350 3.34% Federal funds sold and other 530,556 3,399 2.57%   442,401 2,128 1.93% Total interest-earning assets 22,554,195 $ 265,851 4.85%   20,142,402 $ 230,984 4.66% Nonearning assets               Intangible assets 1,850,146       1,860,868     Other nonearning assets 1,511,630       1,233,675     Total assets $ 25,915,971       $ 23,236,945                     Interest-bearing liabilities               Interest-bearing deposits:               Interest checking 3,150,865 9,305 1.18%   3,038,705 6,395 0.84% Savings and money market 7,355,783 26,947 1.47%   6,739,430 16,165 0.96% Time 3,958,445 22,736 2.30%   2,900,779 10,207 1.41% Total interest-bearing deposits 14,465,093 58,988 1.64%   12,678,914 32,767 1.04% Securities sold under agreements to repurchase 117,261 142 0.49%   123,447 143 0.47% Federal Home Loan Bank advances 2,164,341 11,552 2.14%   1,884,828 9,690 2.06% Subordinated debt and other borrowings 469,498 6,251 5.34%   474,328 6,148 5.20% Total interest-bearing liabilities 17,216,193 76,933 1.79%   15,161,517 48,748 1.29% Noninterest-bearing deposits 4,399,766 — —   4,270,459 — — Total deposits and interest-bearing liabilities 21,615,959 $ 76,933 1.43%   19,431,976 $ 48,748 1.01% Other liabilities 182,258       9,005     Stockholders' equity 4,117,754       3,795,963     Total liabilities and stockholders' equity $ 25,915,971       $ 23,236,944     Net interest income   $ 188,918       $ 182,236   Net interest spread (3)     3.06%       3.37% Net interest margin (4)     3.48%       3.69%                 (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 include $6.9 million of taxable equivalent income for the three months ended June 30, 2019 compared to $3.1 million for the three months ended June 30, 2018. 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 quarter ended June 30, 2019 would have been 3.42% compared to a net interest spread of 3.66% for the quarter ended June 30, 2018. (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, 2019   June 30, 2018   Average Balances Interest Rates/ Yields   Average Balances Interest Rates/ Yields Interest-earning assets               Loans (1) (2) $ 18,276,680 $ 467,032 5.25%   $ 16,345,734 $ 399,972 4.98% Securities               Taxable 1,813,693 25,783 2.87%   1,793,619 22,970 2.58% Tax-exempt (2) 1,544,186 24,228 3.77%   1,106,705 15,635 3.33% Federal funds sold and other 500,400 6,691 2.70%   389,043 3,935 2.04% Total interest-earning assets 22,134,959 $ 523,734 4.89%   19,635,101 $ 442,512 4.61% Nonearning assets               Intangible assets 1,851,292       1,862,294     Other nonearning assets 1,499,104       1,226,229     Total assets $ 25,485,355       $ 22,723,624                     Interest-bearing liabilities               Interest-bearing deposits:               Interest checking 3,140,734 18,628 1.20%   3,006,328 11,509 0.77% Savings and money market 7,446,911 53,284 1.44%   6,597,734 28,153 0.86% Time 3,727,061 41,293 2.23%   2,725,534 17,086 1.26% Total interest-bearing deposits 14,314,706 113,205 1.59%   12,329,596 56,748 0.93% Securities sold under agreements to repurchase 113,305 287 0.51%   126,690 273 0.43% Federal Home Loan Bank advances 2,046,007 21,515 2.12%   1,735,385 16,697 1.94% Subordinated debt and other borrowings 470,133 12,563 5.39%   475,066 12,087 5.13% Total interest-bearing liabilities 16,944,151 147,570 1.76%   14,666,737 85,805 1.18% Noninterest-bearing deposits 4,298,169 — —   4,287,229 — — Total deposits and interest-bearing liabilities 21,242,320 $ 147,570 1.40%   18,953,966 $ 85,805 0.91% Other liabilities 175,193       5,185     Stockholders' equity 4,067,842       3,764,473     Total liabilities and stockholders' equity $ 25,485,355       $ 22,723,624     Net interest income   $ 376,164       $ 356,707   Net interest spread (3)     3.14%       3.43% Net interest margin (4)     3.55%       3.73%                 (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 include $13.4 million of taxable equivalent income for the six months ended June 30, 2019 compared to $6.3 million for the six months ended June 30, 2018. 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, 2019 would have been 3.49% compared to a net interest spread of 3.70% for the six months ended June 30, 2018. (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 2019 March 2019 December 2018 September 2018 June 2018 March 2018 Asset quality information and ratios:             Nonperforming assets:             Nonaccrual loans   76,077 96,144 87,834 77,868 70,887 70,202 Other real estate (ORE) and other nonperforming assets (NPAs)   26,658 15,138 15,393 17,731 20,229 24,533 Total nonperforming assets $ 102,735 111,282 103,227 95,599 91,116 94,735 Past due loans over 90 days and still accruing interest $ 2,733 1,982 1,558 1,773 1,572 1,131 Accruing troubled debt restructurings (5) $ 7,412 5,481 5,899 6,125 5,647 6,115 Accruing purchase credit impaired loans $ 12,632 13,122 14,743 21,473 22,993 24,398 Net loan charge-offs $ 4,136 3,565 5,729 4,410 3,936 3,967 Allowance for loan losses to nonaccrual loans   118.6% 90.7% 95.2% 102.7% 106.7% 100.0% As a percentage of total loans:             Past due accruing loans over 30 days   0.21% 0.22% 0.34% 0.25% 0.23% 0.24% Potential problem loans (6)   1.21% 1.05% 1.00% 1.16% 1.00% 0.97% Allowance for loan losses   0.48% 0.48% 0.47% 0.46% 0.44% 0.43% Nonperforming assets to total loans, ORE and other NPAs   0.55% 0.61% 0.58% 0.55% 0.53% 0.58% Nonperforming assets to total assets   0.39% 0.44% 0.41% 0.39% 0.38% 0.41% Classified asset ratio (Pinnacle Bank) (8)   13.9% 13.0% 12.4% 13.7% 12.6% 12.6% Annualized net loan charge-offs to avg. loans (7)   0.09% 0.08% 0.11% 0.10% 0.10% 0.10% Wtd. avg. commercial loan internal risk ratings (6)   44.9 44.9 44.4 4.5 4.4 4.4     44.4 4.5 4.4 4.4 4.5 Interest rates and yields:             Loans   5.22% 5.28% 5.22% 5.15% 5.04% 4.91% Securities   3.20% 3.37% 3.22% 3.11% 2.91% 2.87% Total earning assets   4.85% 4.94% 4.85% 4.76% 4.66% 4.56% Total deposits, including non-interest bearing   1.25% 1.20% 1.08% 0.97% 0.78% 0.60% Securities sold under agreements to repurchase   0.49% 0.54% 0.50% 0.44% 0.47% 0.40% FHLB advances   2.14% 2.10% 2.18% 2.16% 2.06% 1.79% Subordinated debt and other borrowings   5.34% 5.44% 5.33% 5.29% 5.20% 5.11% Total deposits and interest-bearing liabilities   1.43% 1.37% 1.27% 1.15% 1.01% 0.81%               Capital and other ratios (8):             Pinnacle Financial ratios:             Stockholders' equity to total assets   15.7% 15.9% 15.8% 15.9% 16.0% 16.3% Common equity Tier one   9.5% 9.4% 9.6% 9.4% 9.3% 9.2% Tier one risk-based   9.5% 9.4% 9.6% 9.4% 9.3% 9.2% Total risk-based   12.0% 12.0% 12.2% 12.1% 12.0% 12.0% Leverage   9.1% 9.0% 8.9% 8.8% 8.8% 8.8% Tangible common equity to tangible assets   9.4% 9.3% 9.1% 9.0% 8.9% 9.0% Pinnacle Bank ratios:             Common equity Tier one   10.3% 10.4% 10.5% 10.3% 10.2% 10.3% Tier one risk-based   10.3% 10.4% 10.5% 10.3% 10.2% 10.3% Total risk-based   11.3% 11.4% 11.5% 11.4% 11.2% 11.3% Leverage   9.8% 9.9% 9.8% 9.6% 9.7% 9.8% Construction and land development loans as a percentage of total capital (19)   82.6% 84.1% 85.2% 87.8% 94.6% 96.1% Non-owner occupied commercial real estate and multi-family as a percentage of total capital (19)   288.9% 282.5% 277.7% 287.6% 304.3% 306.2%               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 2019 March 2019 December 2018 September 2018 June 2018 March 2018                 Per share data:               Earnings – basic $ 1.31 1.22 1.24 1.22 1.13 1.08 Earnings - basic, excluding the adjustments noted below $ 1.43 1.24 1.26 1.22 1.15 1.13 Earnings – diluted $ 1.31 1.22 1.23 1.21 1.12 1.08 Earnings - diluted, excluding the adjustments noted below $ 1.42 1.24 1.25 1.21 1.15 1.13 Common dividends per share $ 0.16 0.16 0.16 0.14 0.14 0.14 Book value per common share at quarter end (9) $ 54.29 52.63 51.18 50.05 49.15 48.16 Tangible book value per common share at quarter end (9) $ 30.26 28.61 27.27 26.21 25.28 24.24 Revenue per diluted share $ 3.39 3.09 3.19 3.11 2.97 2.83 Revenue per diluted share, excluding the adjustments noted below $ 3.47 3.12 3.22 3.11 2.97 2.83 Noninterest expense per diluted share $ 1.67 1.48 1.54 1.47 1.43 1.40 Noninterest expense per diluted share, excluding the adjustments noted below $ 1.59 1.48 1.53 1.47 1.38 1.34                 Investor information:               Closing sales price on last trading day of quarter $ 57.48 54.70 46.10 60.15 61.35 64.20 High closing sales price during quarter $ 59.23 59.55 61.04 66.20 68.10 69.45 Low closing sales price during quarter $ 52.95 46.35 44.03 60.05 61.35 60.20                 Other information:               Gains on residential mortgage loans sold:               Residential mortgage loan sales:               Gross loans sold $ 291,813 193,830 236,861 278,073 264,934 237,667 Gross fees (10) $ 8,485 5,695 6,184 7,756 7,134 6,036 Gross fees as a percentage of loans originated   2.91% 2.94% 2.61% 2.79% 2.69% 2.54% Net gain on residential mortgage loans sold $ 6,011 4,878 3,141 3,902 3,777 3,744 Investment gains (losses) on sales of securities, net (15) $ (4,466) (1,960) (2,295) 11 — 30 Brokerage account assets, at quarter end (11) $ 4,287,985 4,122,980 3,763,911 3,998,774 3,745,635 3,508,669 Trust account managed assets, at quarter end $ 2,425,791 2,263,095 2,055,861 2,074,027 1,920,226 1,844,871 Core deposits (12) $ 16,503,686 16,340,763 16,489,173 16,076,859 15,400,142 14,750,211 Core deposits to total funding (12)   74.9% 77.1% 79.0% 78.3% 76.9% 77.3% Risk-weighted assets $ 22,706,512 22,001,959 21,137,263 20,705,547 20,151,827 19,286,101 Number of offices   114 114 114 115 115 114 Total core deposits per office $ 144,769 143,340 144,642 139,799 133,914 129,388 Total assets per full-time equivalent employee $ 11,241 10,997 10,897 10,917 10,911 10,677 Annualized revenues per full-time equivalent employee $ 441.0 415.9 427.5 424.9 419.9 412.8 Annualized expenses per full-time equivalent employee $ 216.9 199.0 206.2 201.0 202.3 205.0 Number of employees (full-time equivalent)   2,361.0 2,324.0 2,297.0 2,249.5 2,198.5 2,148.0 Associate retention rate (13)   93.0% 92.8% 92.3% 91.1% 89.6% 89.9%                 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 30, 2019 March 31, 2019 June 30, 2018   June 30, 2019 June 30, 2018                 Net interest income $ 188,918 187,246 182,236   376,164 356,707                 Noninterest income   70,682 51,063 47,939   121,745 92,122 Total revenues   259,600 238,309 230,175   497,909 448,829 Less: Investment (gains) losses on sales of securities, net   4,466 1,960 —   6,426 (30) Loss on sale of non-prime automobile portfolio   1,536 — —   1,536 — Total revenues excluding the impact of adjustments noted above   265,602 240,269 230,175   505,871 448,799                 Noninterest expense   127,686 114,051 110,908   241,737 219,488 Less: Other real estate (ORE) expense   2,523 246 819   2,769 25 Merger-related charges   — — 2,906   — 8,259 Branch consolidation   3,189 — —   3,189 — Noninterest expense excluding the impact of adjustments noted above   121,974 113,805 107,183   235,779 211,204                 Adjusted pre-tax pre-provision income(14) $ 143,628 126,464 122,992   270,092 237,595                 Efficiency ratio (4)   49.19% 47.86% 48.18%   48.55% 48.90% Adjustments as noted above   (3.27)% (0.49)% (1.61)%   (1.94)% (1.84)% Efficiency ratio (excluding adjustments noted above)   45.92% 47.37% 46.57%   46.61% 47.06%                 Total average assets $ 25,915,971 25,049,954 23,236,945   25,485,355 22,723,624                 Noninterest income to average assets   1.09% 0.83% 0.83%   0.96% 0.82% Adjustments as noted above   0.10% 0.03% —%   0.07% —% Noninterest income (excluding adjustments noted above) to average assets   1.19% 0.86% 0.83%   1.03% 0.82%                 Noninterest expense to average assets   1.98% 1.85% 1.91%   1.91% 1.95% Adjustments as noted above   (0.09)% (0.01)% (0.06)%   (0.04)% (0.08)% Noninterest expense (excluding adjustments noted above) to average assets   1.89% 1.84% 1.85%   1.87% 1.87%                 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 30, 2019 March 31, 2019 June 30, 2018   June 30, 2019 June 30, 2018 Net income $ 100,321 93,960 86,865   194,281 170,375 Merger-related charges   — — 2,906   — 8,259 Investment (gains) losses on sales of securities, net   4,466 1,960 —   6,426 (30) Sale of non-prime automobile portfolio   1,536 — —   1,536 — ORE expense   2,523 246 819   2,769 25 Branch rationalization   3,189 — —   3,189 — Tax effect on adjustments noted above (18)   (3,062) (577) (974)   (3,639) (2,158) Net income excluding adjustments noted above $ 108,973 95,589 89,616   204,562 176,471                 Basic earnings per share $ 1.31 1.22 1.13   2.54 2.21 Adjustment due to merger-related charges   — — 0.04   — 0.11 Adjustment due to investment (gains) losses on sales of securities, net   0.06 0.03 —   0.08 — Adjustment due to sale of non-prime automobile portfolio   0.02 — —   0.02 — Adjustment due to ORE expense   0.04 — 0.01   0.04 — Adjustment due to branch consolidation   0.04 — —   0.04 — Adjustment due to tax effect on adjustments noted above (18)   (0.04) (0.01) (0.01)   (0.05) (0.03) Basic earnings per share excluding adjustments noted above   1.43 1.24 1.17   2.67 2.29                 Diluted earnings per share $ 1.31 1.22 1.12   2.53 2.20 Adjustment due to merger-related charges   — — 0.04   — 0.11 Adjustment due to investment (gains) losses on sales of securities, net   0.06 0.03 —   0.08 — Adjustment due to sale of non-prime automobile portfolio   0.02 — —   0.02 — Adjustment due to ORE expense   0.03 — 0.01   0.04 — Adjustment due to branch consolidation   0.04 — —   0.04 — Adjustment due to tax effect on adjustments noted above (18)   (0.04) (0.01) (0.01)   (0.05) (0.03) Diluted earnings per share excluding the adjustments noted above $ 1.42 1.24 1.16   2.66 2.28                 Noninterest expense per diluted share $ 1.67 1.48 1.43   3.14 2.84 Adjustments as noted above   (0.08) — (0.05)   (0.07) (0.11) Noninterest expense (excluding adjustments noted above) per diluted share $ 1.59 1.48 1.38   3.07 2.73                 Revenue per diluted share $ 3.39 3.09 2.97   6.48 5.80 Adjustments as noted above   0.08 0.03 —   0.10 — Revenue per diluted share (excluding adjustments noted above) per diluted share $ 3.47 3.12 2.97   6.58 5.80                 Equity method investment (17)               Fee income from BHG, net of amortization $ 32,261 13,290 9,690   45,551 19,050 Funding cost to support investment   2,399 2,379 2,114   4,779 4,118 Pre-tax impact of BHG   29,862 10,911 7,576   40,772 14,932 Income tax expense at statutory rates   7,806 2,852 1,980   10,658 3,903 Earnings attributable to BHG $ 22,056 8,059 5,596   30,114 11,029                 Basic earnings per share attributable to BHG $ 0.29 0.10 0.07   0.39 0.14 Diluted earnings per share attributable to BHG $ 0.29 0.10 0.07   0.39 0.14                 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 30, 2019 March 31, 2019 June 30, 2018   June 30, 2019 June 30, 2018                 Return on average assets   1.55% 1.52% 1.50%   1.54% 1.51% Adjustments as noted above   0.14% 0.03% 0.05%   0.08% 0.06% Return on average assets excluding adjustments noted above   1.69% 1.55% 1.55%   1.62% 1.57%                 Tangible assets:               Total assets $ 26,540,355 25,557,858 23,988,370   26,540,355 23,988,370 Less: Goodwill   (1,807,121) (1,807,121) (1,807,121)   (1,807,121) (1,807,121) Core deposit and other intangible assets   (41,578) (43,850) (51,353)   (41,578) (51,353) Net tangible assets $ 24,691,656 23,706,887 22,129,896   24,691,656 22,129,896                 Tangible equity:               Total stockholders' equity $ 4,176,361 4,055,939 3,826,677   4,176,361 3,826,677 Less: Goodwill   (1,807,121) (1,807,121) (1,807,121)   (1,807,121) (1,807,121) Core deposit and other intangible assets   (41,578) (43,850) (51,353)   (41,578) (51,353) Net tangible common equity $ 2,327,662 2,204,968 1,968,203   2,327,662 1,968,203                 Ratio of tangible common equity to tangible assets   9.43% 9.30% 8.89%   9.43% 8.89%                 Average tangible assets:               Average assets $ 25,915,971 25,049,954 23,236,945   25,485,355 22,723,624 Less: Average goodwill   (1,807,121) (1,807,121) (1,807,850)   (1,807,121) (1,807,952) Average core deposit and other intangible assets   (43,025) (45,330) (53,018)   (44,171) (54,342) Net average tangible assets $ 24,065,825 23,197,503 21,376,077   23,634,063 20,861,330                 Return on average assets   1.55% 1.52% 1.50%   1.54% 1.51% Adjustment due to goodwill, core deposit and other intangible assets   0.12% 0.12% 0.13%   0.12% 0.14% Return on average tangible assets   1.67% 1.64% 1.63%   1.66% 1.65% Adjustments as noted above   0.15% 0.03% 0.05%   0.09% 0.06% Return on average tangible assets excluding adjustments noted above   1.82% 1.67% 1.68%   1.75% 1.71%                 Average tangible stockholders' equity:               Average stockholders' equity $ 4,117,754 4,017,375 3,795,963   4,067,842 3,764,473 Less: Average goodwill   (1,807,121) (1,807,121) (1,807,850)   (1,807,121) (1,807,952) Average core deposit and other intangible assets   (43,025) (45,330) (53,018)   (44,171) (54,342) Net average tangible common equity $ 2,267,608 2,164,924 1,935,095   2,216,550 1,902,179                 Return on average common equity   9.77% 9.49% 9.18%   9.63% 9.13% Adjustment due to goodwill, core deposit and other intangible assets   7.97% 8.11% 8.83%   8.05% 8.93% Return on average tangible common equity (1)   17.74% 17.60% 18.01%   17.68% 18.06% Adjustments as noted above   1.54% 0.31% 0.57%   0.93% 0.65% Return on average tangible common equity excluding adjustments noted above   19.28% 17.91% 18.58%   18.61% 18.71%                 Total average assets $ 25,915,971 25,049,954 23,236,945   25,485,355 22,723,624                 Book value per common share at quarter end $ 54.29 52.63 49.15   54.29 49.15 Adjustment due to goodwill, core deposit and other intangible assets   (24.03) (24.02) (23.87)   (24.03) (23.87) Tangible book value per common share at quarter end (9) $ 30.26 28.61 25.28   30.26 25.28                 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. 6. Average risk ratings are based on an internal loan review system which assigns a numeric value of 1 to 10 for quarters ended prior to Dec. 31, 2018 and 10 to 100 for all subsequent periods 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 goodwill, core deposit and other intangibles as a percentage of end of period assets. 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 loan 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 share computed by dividing total stockholders' equity by common shares outstanding. Tangible book value per share computed by dividing total stockholder's 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. Periods prior to the second quarter of 2018 have been restated to reflect regulatory changes that were adopted in the second quarter of 2018 that permit reciprocal deposits to be treated as core deposits if they otherwise qualify as such. 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, merger-related charges, loss on the sale of our non-prime automobile portfolio and branch rationalization, as described above. 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 divided by the trailing 12-months fully diluted earnings per 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.   View source version on businesswire.com: https://www.businesswire.com/news/home/20190716006041/en/ MEDIA CONTACT: Joe Bass, 615-743-8219 FINANCIAL CONTACT: Harold Carpenter, 615-744-3742 WEBSITE: www.pnfp.com Source: Pinnacle Financial Partners, Inc.

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