PNFP

PINNACLE FINANCIAL PARTNERS INC

Financial Services | Mid Cap

$1.85

EPS Forecast

$468.1

Revenue Forecast

Announcing earnings for the quarter ending 2024-12-31 soon
EX-99.1 2 a2019q4exhibit991.htm EX-99.1 Document

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FOR IMMEDIATE RELEASE

MEDIA CONTACT:Joe Bass, 615-743-8219
FINANCIAL CONTACT:Harold Carpenter, 615-744-3742
WEBSITE: www.pnfp.com

PNFP REPORTS DILUTED EPS OF $1.26, ROAA OF 1.38% AND ROTCE OF 15.41% FOR 4Q 2019
Excluding non-GAAP adjustments, 4Q19 diluted EPS was $1.27, ROAA was 1.39% and ROTCE was 15.49%


NASHVILLE, TN, Jan. 21, 2020 - Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.26 for the quarter ended Dec. 31, 2019, compared to net income per diluted common share of $1.23 for the quarter ended Dec. 31, 2018, an increase of 2.4 percent. Net income per diluted common share was $5.22 for the year ended Dec. 31, 2019, compared to net income per diluted common share of $4.64 for the year ended Dec. 31, 2018, an increase of 12.5 percent.
Excluding gains and losses on the sale of investment securities and ORE expense for the three months ended Dec. 31, 2019 and 2018, net income per diluted common share was $1.27 in 2019, compared to $1.25 in 2018. Excluding these items for 2019 and 2018 as well as merger-related charges in 2018, a $1.5 million loss from the sale of the non-prime automobile portfolio earlier in 2019 and $3.2 million of non-cash impairment charges related to the consolidation of five offices earlier in 2019, net income per diluted common share was $5.37 for the year ended Dec. 31, 2019, compared to net income per diluted common share of $4.75 for the year ended Dec. 31, 2018, a growth rate of 13.1 percent.
"Given the volatile interest rate backdrop during 2019, we are very pleased to report 13 percent earnings per share growth in 2019," said M. Terry Turner, Pinnacle's president and chief executive officer. "We believe that growth rate should place us in the top quartile of our peers, which is specifically where we aim to be every year. Additionally, I'm pleased to report that our book value per share increased 11.2 percent to $56.89 per common share on Dec. 31, 2019 from $51.18 per share on Dec. 31, 2018 while tangible book value increased 19.0 percent to $32.45 per common share at Dec. 31, 2019, compared to $27.27 at Dec. 31, 2018, a growth rate that we believe will also result in top-quartile performance among our peers.
"We hired 85 revenue producers across our franchise in 2019, which followed hiring 107 in 2018, a strong indicator of our ability to produce outsized growth in the future. We also remain excited about our opportunities in the Carolinas and Virginia. We believe our integration in those markets has been tremendously successful, and we expect more opportunities in 2020 due to the health of those markets and the large number of revenue producers we have hired there. We've experienced more than 22 percent growth in both loans and client deposits since closing the acquisition. BHG had another phenomenal year, experiencing year-over-year earnings growth of 76 percent. Their business model is operating at a high level, and we believe BHG's current strategy to retain more loans on their balance sheet will serve all of us very well in 2020 and beyond. Lastly, we've announced our expansion into the Atlanta market and have hired four revenue producers there since our announcement in late December. Our hiring pipelines continue to grow in that market. Needless to say, as a result of the increased earnings capacity we have built over the last several years with these and other initiatives, we are excited about the opportunity to continue to produce outsized earnings and tangible book value growth going into 2020."


1

GROWING THE CORE EARNINGS CAPACITY OF THE FIRM:
•Loans at Dec. 31, 2019 were a record $19.8 billion, an increase of $2.1 billion from Dec. 31, 2018, reflecting year-over-year growth of 11.7 percent. Loans at Dec. 31, 2019 increased $442.2 million from Sept. 30, 2019, reflecting a linked-quarter annualized growth rate of 9.1 percent.
â—¦Average loans were $19.6 billion for the three months ended Dec. 31, 2019, up $382.8 million from $19.2 billion for the three months ended Sept. 30, 2019, a linked-quarter annualized growth rate of 8.0 percent.
â—¦At Dec. 31, 2019, the remaining discount associated with fair value accounting adjustments on acquired loans was $55.1 million, compared to $65.2 million at Sept. 30, 2019.
•Deposits at Dec. 31, 2019 were $20.2 billion, an increase of $1.3 billion from Dec. 31, 2018, reflecting year-over-year growth of 7.1 percent. Deposits at Dec. 31, 2019 increased $180.4 million from Sept. 30, 2019, reflecting a linked-quarter annualized growth rate of 3.6 percent.
â—¦Average deposits were $20.1 billion for the three months ended Dec. 31, 2019, compared to $19.8 billion for the three months ended Sept. 30, 2019, a linked-quarter annualized growth rate of 6.1 percent.
â—¦Core deposits were $17.6 billion at Dec. 31, 2019, compared to $16.5 billion at Dec. 31, 2018 and $17.1 billion at Sept. 30, 2019. The linked-quarter annualized growth rate of core deposits in the fourth quarter of 2019 was 12.0 percent.
•Revenues for the quarter ended Dec. 31, 2019 were $253.6 million, a decrease of $24.8 million from the $278.4 million recognized in the third quarter of 2019 and up $6.1 million from the fourth quarter of 2018. This represents a year-over-year growth rate of 2.5 percent.
â—¦Revenue per fully diluted share was $3.32 for the three months ended Dec. 31, 2019, compared to $3.64 for the third quarter of 2019 and $3.19 for the fourth quarter of 2018.

"We've always prided ourselves on strong organic balance sheet growth," Turner said. "Generally that strong growth has been predicated on our ongoing ability to hire the best bankers and their ability to bring their best clients to our firm. It's a simple strategy and is at the core of our success. Given how successful we have been executing on that strategy over the last two years and the status of our recruiting pipelines currently, we believe high-single to low-double digit loan growth is very much achievable for our firm in 2020.
"Another item that we believe is at the core of our success is our unique, shareholder-aligned incentive system. For the first time in many years, we've decided to tweak our annual cash incentive system for 2020 to provide more focus on growing low-cost core deposits. We had a great fourth quarter in 2019 related to core deposit growth, with a 12 percent linked-quarter annualized growth rate. That said, we still desire more energy aimed at core deposit generation. In addition to core deposit growth, our firm-wide cash incentive plan for 2020 is still focused on the two metrics we believe are most directly aligned with increasing shareholder value: maintaining asset quality and growing EPS. Our goal for the slight modification to our annual cash incentive plan is to energize our entire associate base around core deposit growth, and I am optimistic that they will respond in a very strong way in 2020."

FOCUSING ON PROFITABILITY:
2

•Return on average assets was 1.38 percent for the fourth quarter of 2019, compared to 1.62 percent for the third quarter of 2019 and 1.54 percent for the fourth quarter of 2018. Fourth quarter 2019 return on average tangible assets amounted to 1.48 percent, compared to 1.74 percent for the third quarter of 2019 and 1.66 percent for the fourth quarter of 2018.
◦Excluding the adjustments described above for both 2019 and 2018, return on average assets was 1.39 percent for the fourth quarter of 2019, compared to 1.62 percent for the third quarter of 2019 and 1.56 percent for the fourth quarter of 2018. Likewise, excluding those same adjustments, the firm’s return on average tangible assets was 1.49 percent for the fourth quarter of 2019, compared to 1.74 percent for the third quarter of 2019 and 1.69 percent for the fourth quarter of 2018.
•Return on average common equity for the fourth quarter of 2019 amounted to 8.78 percent, compared to 10.28 percent for the third quarter of 2019 and 9.60 percent for the fourth quarter of 2018. Fourth quarter 2019 return on average tangible common equity amounted to 15.41 percent, compared to 18.28 percent for the third quarter of 2019 and 18.14 percent for the fourth quarter of 2018.
â—¦Excluding the adjustments described above for both 2019 and 2018, return on average tangible common equity amounted to 15.49 percent for the fourth quarter of 2019, compared to 18.31 percent for the third quarter of 2019 and 18.46 percent for the fourth quarter of 2018.

"Our profitability metrics remain very strong and provide us the ongoing operating leverage to hire more revenue producers and, thus, invest in our future growth," said Harold R. Carpenter, Pinnacle's chief financial officer. "The volatility in the interest rate environment impacted many banks, including us, making it more difficult to maintain margins during 2019. Since the yield curve stabilized in late 2019, we believe this will be helpful in stabilizing our net interest margin in 2020. We are fortunate that we operate in great markets with great bankers that yield meaningful growth and, therefore, a meaningful hedge to the negative earnings impact of recent yield curve volatility."

MAINTAINING A FORTRESS BALANCE SHEET:
•Net charge-offs were $3.5 million for the quarter ended Dec. 31, 2019, compared to $4.9 million for the quarter ended Sept. 30, 2019 and $5.7 million for the quarter ended Dec. 31, 2018. Annualized net charge-offs as a percentage of average loans for the quarter ended Dec. 31, 2019 were 0.07 percent, compared to 0.10 percent for the quarter ended Sept. 30, 2019 and 0.11 percent for the fourth quarter of 2018.
•Nonperforming assets decreased to 0.46 percent of total loans and ORE at Dec. 31, 2019, compared to 0.53 percent at Sept. 30, 2019 and 0.58 percent at Dec. 31, 2018. Nonperforming assets were $91.1 million at Dec. 31, 2019, compared to $103.3 million at Sept. 30, 2019 and $103.2 million at Dec. 31, 2018.
•The classified asset ratio at Dec. 31, 2019 was 13.4 percent, compared to 13.5 percent at Sept. 30, 2019 and 12.4 percent at Dec. 31, 2018. Classified assets were $371.3 million at Dec. 31, 2019, compared to $363.2 million at Sept. 30, 2019 and $284.7 million at Dec. 31, 2018.
•The allowance for loan losses represented 0.48 percent of total loans at Dec. 31, 2019, compared to 0.48 percent at Sept. 30, 2019 and 0.47 percent at Dec. 31, 2018. 
â—¦The ratio of the allowance for loan losses to nonperforming loans increased to 153.8 percent at Dec. 31, 2019, from 127.8 percent at Sept. 30, 2019 and 95.2 percent at Dec. 31, 2018. At Dec. 31, 2019, purchased credit impaired loans of $7.7 million, which were recorded at fair value upon acquisition, represented 12.4 percent of the firm's nonperforming loans.
â—¦Provision for loan losses was $4.6 million in the fourth quarter of 2019, compared to $8.3 million in the third quarter of 2019 and $9.3 million in the fourth quarter of 2018.

3

"Asset quality continues to be a highlight for our firm, with the fourth quarter results yielding improvement to our already strong asset quality metrics," Carpenter said. "We experienced improvement from the previous quarter in nearly every asset quality metric, including nonperformers, past dues, net charge-offs and coverage ratios. After the BNC acquisition, we committed to reducing our regulatory ratios for commercial real estate and worked hard to get that done. Our regulatory ratios for construction and non-owner occupied commercial real estate and multi-family are now down to 83.6 percent and 268.3 percent, respectively. Going into 2020, we remain pleased with where we are with the soundness of our loan portfolio."

GROWING REVENUES
•Net interest income for the quarter ended Dec. 31, 2019 was $194.2 million, compared to $195.8 million for the third quarter of 2019 and $190.2 million for the fourth quarter of 2018, a year-over-year growth rate of 2.1 percent. Net interest margin was 3.35 percent for the fourth quarter of 2019, compared to 3.43 percent for the third quarter of 2019 and 3.63 percent for the fourth quarter of 2018.
â—¦Included in net interest income for the fourth quarter of 2019 was $10.6 million of discount accretion associated with fair value adjustments, compared to $11.1 million of discount accretion recognized in the third quarter of 2019 and $13.2 million in the fourth quarter of 2018.
•Noninterest income for the quarter ended Dec. 31, 2019 was $59.5 million, compared to $82.6 million for the third quarter of 2019 and $57.3 million for the fourth quarter of 2018, a year-over-year growth rate of 3.8 percent.
â—¦Wealth management revenues, which include investment, trust and insurance services, were $12.4 million for the quarter ended Dec. 31, 2019, compared to $12.1 million for the third quarter of 2019 and $11.6 million for the fourth quarter of 2018, a year-over-year increase of 7.4 percent.
â—¦Income from the firm's investment in BHG was $12.3 million for the quarter ended Dec. 31, 2019, compared to $32.2 million for the quarter ended Sept. 30, 2019 and $17.9 million for the quarter ended Dec. 31, 2018.
â—¦Net gains on mortgage loans sold were $6.0 million during the quarter ended Dec. 31, 2019, compared to $7.4 million for the quarter ended Sept. 30, 2019 and $3.1 million during the quarter ended Dec. 31, 2018.
â—¦Other noninterest income was $19.5 million for the quarter ended Dec. 31, 2019, compared to $20.2 million for the quarter ended Sept. 30, 2019 and $17.2 million for the quarter ended Dec. 31, 2018, a year-over-year increase of 13.8 percent. Contributing to the year-over-year increase were increases in credit card interchange fees, SBA loan fees and the value of the firm's bank-owned life insurance policies.

"We are pleased with net interest margin results in the fourth quarter, as the compression in our net interest margin slowed meaningfully," Carpenter said. "We are also pleased with the results of our actions to lower deposit pricing in conjunction with the last three Fed moves. All of this, combined with anticipated continued stabilization in the yield curve, should be helpful to us as we seek to find a floor for our net interest margin in 2020.
"We also had a great 2019 with respect to fee performance. BHG reported 76 percent earnings growth in 2019, with the fourth quarter amount approximating what we anticipated as BHG began executing on its current strategy of holding more loans on its balance sheet. Additionally, excluding BHG and the impact of losses on the sale of investment securities, we are also pleased to report that other fee categories grew 18.3 percent in 2019 over the amounts reported in 2018."


4

OTHER HIGHLIGHTS
•The firm's efficiency ratio for the fourth quarter of 2019 increased to 51.44 percent, compared to 47.75 percent for the third quarter of 2019 and 48.25 percent in the fourth quarter of 2018. The ratio of noninterest expenses to average assets was 1.88 percent for the fourth quarter of 2019, compared to 1.94 percent in the third quarter of 2019 and 1.92 percent in the fourth quarter of 2018.
â—¦Excluding the adjustments noted elsewhere in this release for both 2019 and 2018, the efficiency ratio was 51.14 percent for the fourth quarter of 2019, compared to 47.58 percent for the third quarter of 2019 and 47.55 percent for the fourth quarter of 2018. Excluding ORE expense, the ratio of noninterest expense to average assets was 1.86 percent for the fourth quarter of 2019, compared to 1.93 percent for the third quarter of 2019 and 1.91 percent for the fourth quarter of 2018.
•Noninterest expense for the quarter ended Dec. 31, 2019 was $130.5 million, compared to $132.9 million in the third quarter of 2019 and $119.4 million in the fourth quarter of 2018, reflecting a year-over-year increase of 9.3 percent. Excluding ORE expense, noninterest expense increased 9.2 percent over the fourth quarter of 2018.
â—¦Salaries and employee benefits were $81.4 million in the fourth quarter of 2019, compared to $85.9 million in the third quarter of 2019 and $74.7 million in the fourth quarter of 2018, reflecting a year-over-year increase of 9.0 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 $10.9 million in the fourth quarter of 2019, compared to $18.5 million in the third quarter of 2019 and $13.7 million in the fourth quarter of last year.
•The effective tax rate for the fourth quarter of 2019 was 18.9 percent, compared to 19.5 percent for the third quarter of 2019 and 19.7 percent for the fourth quarter of 2018.
•During the fourth quarter of 2019, the firm acquired 228,533 shares of its common stock in open market transactions pursuant to its previously announced share repurchase program, at an average price of $56.54. For 2019, the number of shares acquired was 1.1 million at an average price of $55.70.

"We experienced reduced expenses in the fourth quarter of 2019 compared to the third quarter of 2019 due in large part to the anticipated reduction in incentive costs," Carpenter said. "Early in the third quarter of 2019, we added Advocate Capital, which contributed to increased expense run rates in the second half of 2019. As we consider expense run rates going into 2020, we fully expect continued hiring, especially with the build out in Atlanta. We believe we can keep our expense growth to the mid- to high-single digit percentage increases for 2020. Going into 2020, we are also targeting cash incentives of approximately $50 million in 2020. These amounts provide us flexibility should revenues not materialize at the growth rates we currently are planning for in 2020."

BOARD OF DIRECTORS DECLARES DIVIDEND
On Jan. 21, 2020, Pinnacle's Board of Directors approved a quarterly cash dividend of $0.16 per common share to be paid on Feb. 28, 2020 to common shareholders of record as of the close of business on Feb. 7, 2020. The amount and timing of any future dividend payments to common shareholders will be subject to the discretion of Pinnacle's Board of Directors.


5

WEBCAST AND CONFERENCE CALL INFORMATION
Pinnacle will host a webcast and conference call at 8:30 a.m. CT on Jan. 22, 2020 to discuss fourth 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. The firm is the No. 1 bank in the Nashville-Murfreesboro-Franklin MSA, according to 2019 deposit data from the FDIC. Pinnacle earned a spot on FORTUNE’s 2019 list of the 100 Best Companies to Work For® in the U.S., its third consecutive appearance. American Banker recognized Pinnacle as one of America’s Best Banks to Work For seven 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 $27.8 billion in assets as of Dec. 31, 2019. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 12 primarily urban markets in Tennessee, the Carolinas, Virginia and Georgia.
Additional information concerning Pinnacle, which is included in the Nasdaq Financial-100 Index, can be accessed at www.pnfp.com.
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6

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 or, in the case of BHG, substitutions; (ii) 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; (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) 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, 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; (ix) the results of regulatory examinations; (x) Pinnacle Financial's ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions; (xi) difficulties and delays in integrating acquired businesses or fully realizing costs savings and other benefits from acquisitions; (xii) BHG's ability to profitably grow its business and successfully execute on its business plans; (xiii) risks of expansion into new geographic or product markets including the recent expansion into the Atlanta, Georgia metro market; (xiv) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including goodwill or the intangible assets; (xv) 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; (xvi) deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xvii) 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; (xviii) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xix) 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; (xx) 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;  (xxi) 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; (xxii) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (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.

7

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 rationalization 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.


8

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS – UNAUDITED
(dollars in thousands)
 December 31, 2019September 30, 2019December 31, 2018
ASSETS
Cash and noninterest-bearing due from banks$157,901  $197,660  $137,433  
Restricted cash137,045  157,544  65,491  
Interest-bearing due from banks210,784  553,124  516,920  
Federal funds sold and other20,977  11,975  1,848  
Cash and cash equivalents526,707  920,303  721,692  
Securities available-for-sale, at fair value3,539,995  3,393,435  3,083,686  
Securities held-to-maturity (fair value of $201.2 million, $202.8 million and $193.1 million at Dec. 31, 2019, Sept. 30, 2019, and Dec. 31, 2018, respectively)188,996  189,684  194,282  
Consumer loans held-for-sale81,820  73,042  34,196  
Commercial loans held-for-sale17,585  21,312  15,954  
Loans19,787,876  19,345,642  17,707,549  
Less allowance for loan losses(94,777) (93,647) (83,575) 
Loans, net19,693,099  19,251,995  17,623,974  
Premises and equipment, net273,932  274,983  265,560  
Equity method investment278,037  267,097  239,237  
Accrued interest receivable84,462  81,124  79,657  
Goodwill1,819,811  1,830,652  1,807,121  
Core deposits and other intangible assets51,130  39,349  46,161  
Other real estate owned29,487  30,049  15,165  
Other assets1,220,435  1,174,809  904,359  
Total assets$27,805,496  $27,547,834  $25,031,044  
LIABILITIES AND STOCKHOLDERS' EQUITY 
Deposits: 
Noninterest-bearing$4,795,476  $4,702,155  $4,309,067  
Interest-bearing3,630,168  3,372,028  3,464,001  
Savings and money market accounts7,813,939  7,625,872  7,607,796  
Time3,941,445  4,300,622  3,468,243  
Total deposits20,181,028  20,000,677  18,849,107  
Securities sold under agreements to repurchase126,354  95,402  104,741  
Federal Home Loan Bank advances2,062,534  2,052,548  1,443,589  
Subordinated debt and other borrowings749,080  750,488  485,130  
Accrued interest payable42,183  36,836  23,586  
Other liabilities288,569  317,253  158,951  
Total liabilities23,449,748  23,253,204  21,065,104  
Preferred stock, no par value; 10.0 million shares authorized;
no shares issued and outstanding
—  â€”  â€”  
Common stock, par value $1.00; 180.0 million shares authorized; 76.5 million, 76.7 million and 77.5 million shares issued and outstanding at Dec. 31, 2019, Sept. 30, 2019 and Dec. 31, 2018, respectively76,564  76,736  77,484  
Additional paid-in capital3,064,467  3,070,235  3,107,431  
Retained earnings1,184,183  1,100,517  833,130  
Accumulated other comprehensive income (loss), net of taxes30,534  47,142  (52,105) 
Total stockholders' equity4,355,748  4,294,630  3,965,940  
Total liabilities and stockholders' equity$27,805,496  $27,547,834  $25,031,044  
This information is preliminary and based on company data available at the time of the presentation.

9


PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED
(dollars in thousands, except for per share data)Three Months EndedYear Ended
 December 31, 2019September 30, 2019December 31, 2018December 31, 2019December 31, 2018
Interest income:
Loans, including fees$241,209  $247,147  $228,599  $955,388  $850,472  
Securities
Taxable10,211  10,655  13,013  46,649  48,192  
Tax-exempt13,597  13,313  10,286  51,138  35,995  
Federal funds sold and other3,436  4,634  4,197  14,761  12,058  
Total interest income268,453  275,749  256,095  1,067,936  946,717  
Interest expense:
Deposits55,905  62,531  50,123  231,641  151,043  
Securities sold under agreements to repurchase131  152  150  570  588  
FHLB advances and other borrowings18,245  17,260  15,607  69,583  58,744  
Total interest expense74,281  79,943  65,880  301,794  210,375  
Net interest income194,172  195,806  190,215  766,142  736,342  
Provision for loan losses4,644  8,260  9,319  27,283  34,377  
Net interest income after provision for loan losses189,528  187,546  180,896  738,859  701,965  
Noninterest income:
Service charges on deposit accounts9,094  10,193  9,753  36,769  36,088  
Investment services6,581  6,270  6,168  24,187  21,985  
Insurance sales commissions2,017  2,252  2,038  9,344  9,331  
Gains on mortgage loans sold, net6,044  7,402  3,141  24,335  14,564  
Investment gains (losses) on sales, net68  417  (2,295) (5,941) (2,254) 
Trust fees3,835  3,593  3,375  14,184  13,143  
Income from equity method investment12,312  32,248  17,936  90,111  51,222  
Other noninterest income19,511  20,244  17,154  70,837  56,771  
Total noninterest income59,462  82,619  57,270  263,826  200,850  
Noninterest expense:
Salaries and employee benefits81,444  85,919  74,725  313,359  271,673  
Equipment and occupancy21,059  20,348  19,073  84,582  74,276  
Other real estate, net804  655  631  4,228  723  
Marketing and other business development4,298  2,723  3,628  13,251  11,712  
Postage and supplies2,407  1,766  1,831  8,144  7,815  
Amortization of intangibles2,896  2,430  2,576  9,908  10,549  
Merger-related expenses—  â€”  â€”  â€”  8,259  
Other noninterest expense17,562  19,100  16,945  71,676  67,860  
Total noninterest expense130,470  132,941  119,409  505,148  452,867  
Income before income taxes118,520  137,224  118,757  497,537  449,948  
Income tax expense22,441  26,703  23,439  96,656  90,508  
Net income$96,079  $110,521  $95,318  $400,881  $359,440  
Per share information:
Basic net income per common share$1.26  $1.45  $1.24  $5.25  $4.66  
Diluted net income per common share$1.26  $1.44  $1.23  $5.22  $4.64  
Weighted average shares outstanding:
Basic76,018,739  76,301,010  77,096,522  76,364,303  77,111,372  
Diluted76,398,982  76,556,309  77,469,803  76,763,903  77,449,917  
This information is preliminary and based on company data available at the time of the presentation.


10

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands)DecemberSeptemberJuneMarchDecemberSeptember
201920192019201920182018
Balance sheet data, at quarter end:
Commercial and industrial loans$6,290,296  6,002,285  5,795,107  5,419,520  5,271,420  5,006,247  
Commercial real estate - owner occupied2,669,766  2,595,837  2,624,160  2,617,541  2,653,433  2,688,247  
Commercial real estate - investment4,418,658  4,443,687  4,252,098  4,107,953  3,855,643  3,818,055  
Commercial real estate - multifamily and other620,794  669,721  709,135  693,652  655,879  708,817  
Consumer real estate  - mortgage loans3,068,625  3,025,502  2,949,755  2,887,628  2,844,447  2,815,160  
Construction and land development loans2,430,483  2,253,303  2,117,969  2,097,570  2,072,455  2,059,009  
Consumer and other289,254  355,307  366,094  351,042  354,272  368,474  
Total loans19,787,876  19,345,642  18,814,318  18,174,906  17,707,549  17,464,009  
Allowance for loan losses(94,777) (93,647) (90,253) (87,194) (83,575) (79,985) 
Securities3,728,991  3,583,119  3,447,834  3,444,049  3,277,968  3,199,579  
Total assets27,805,496  27,547,834  26,540,355  25,557,858  25,031,044  24,557,545  
Noninterest-bearing deposits4,795,476  4,702,155  4,493,419  4,317,787  4,309,067  4,476,925  
Total deposits20,181,028  20,000,677  19,449,383  18,480,461  18,849,107  18,407,515  
Securities sold under agreements to repurchase126,354  95,402  154,169  100,698  104,741  130,217  
FHLB advances2,062,534  2,052,548  1,960,062  2,121,075  1,443,589  1,520,603  
Subordinated debt and other borrowings749,080  750,488  464,144  484,703  485,130  465,487  
Total stockholders' equity4,355,748  4,294,630  4,176,361  4,055,939  3,965,940  3,897,041  
Balance sheet data, quarterly averages:
Total loans$19,599,620  19,216,835  18,611,164  17,938,480  17,630,281  17,259,139  
Securities3,662,829  3,507,363  3,412,475  3,302,676  3,148,638  3,075,633  
Federal funds sold and other717,927  802,326  530,556  469,909  645,644  647,728  
Total earning assets23,980,376  23,526,524  22,554,195  21,711,065  21,424,563  20,982,500  
Total assets27,604,774  27,134,163  25,915,971  25,049,954  24,616,733  24,125,051  
Noninterest-bearing deposits4,834,694  4,574,821  4,399,766  4,195,443  4,317,782  4,330,917  
Total deposits20,078,594  19,778,007  18,864,859  18,358,094  18,368,012  18,112,766  
Securities sold under agreements to repurchase109,127  134,197  117,261  109,306  119,247  146,864  
FHLB advances1,992,213  2,136,928  2,164,341  1,926,358  1,689,920  1,497,511  
Subordinated debt and other borrowings753,244  533,194  469,498  470,775  469,074  468,990  
Total stockholders' equity4,343,246  4,265,006  4,117,754  4,017,375  3,939,927  3,874,430  
Statement of operations data, for the three months ended:
Interest income$268,453  275,749  265,851  257,883  256,095  248,110  
Interest expense74,281  79,943  76,933  70,637  65,880  58,690  
Net interest income194,172  195,806  188,918  187,246  190,215  189,420  
Provision for loan losses4,644  8,260  7,195  7,184  9,319  8,725  
Net interest income after provision for loan losses189,528  187,546  181,723  180,062  180,896  180,695  
Noninterest income59,462  82,619  70,682  51,063  57,270  51,478  
Noninterest expense130,470  132,941  127,686  114,051  119,409  113,990  
Income before taxes118,520  137,224  124,719  117,074  118,757  118,183  
Income tax expense22,441  26,703  24,398  23,114  23,439  24,436  
Net income$96,079  110,521  100,321  93,960  95,318  93,747  
Profitability and other ratios:
Return on avg. assets (1)
1.38 %1.62 %1.55 %1.52 %1.54 %1.54 %
Return on avg. common equity (1)
8.78 %10.28 %9.77 %9.49 %9.60 %9.60 %
Return on avg. tangible common equity (1)
15.41 %18.28 %17.74 %17.60 %18.14 %18.44 %
Dividend payout ratio (16)
12.24 %12.31 %12.88 %13.39 %13.79 %14.89 %
Net interest margin (2)
3.35 %3.43 %3.48 %3.62 %3.63 %3.65 %
Noninterest income to total revenue (3)
23.44 %29.67 %27.23 %21.43 %23.14 %21.37 %
Noninterest income to avg. assets (1)
0.85 %1.21 %1.09 %0.83 %0.92 %0.85 %
Noninterest exp. to avg. assets (1)
1.88 %1.94 %1.98 %1.85 %1.92 %1.87 %
Efficiency ratio (4)
51.44 %47.75 %49.19 %47.86 %48.25 %47.32 %
Avg. loans to avg. deposits
97.61 %97.16 %98.66 %97.71 %95.98 %95.29 %
Securities to total assets
13.41 %13.01 %12.99 %13.48 %13.10 %13.03 %
This information is preliminary and based on company data available at the time of the presentation.


11

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
(dollars in thousands)Three months endedThree months ended
December 31, 2019December 31, 2018
 Average BalancesInterestRates/ YieldsAverage BalancesInterestRates/ Yields
Interest-earning assets
Loans (1) (2)
$19,599,620  $241,209  5.00 %$17,630,281  $228,599  5.22 %
Securities
Taxable1,827,719  10,211  2.22 %1,829,051  13,013  2.82 %
Tax-exempt (2)
1,835,110  13,597  3.48 %1,319,587  10,286  3.77 %
Federal funds sold and other717,927  3,436  1.90 %645,644  4,197  2.58 %
Total interest-earning assets23,980,376  $268,453  4.58 %21,424,563  $256,095  4.85 %
Nonearning assets
Intangible assets1,869,116  1,854,831  
Other nonearning assets1,755,282  1,337,339  
Total assets$27,604,774  $24,616,733  
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking3,425,866  8,755  1.01 %3,229,411  9,430  1.16 %
Savings and money market7,717,082  23,551  1.21 %7,424,287  24,138  1.29 %
Time4,100,952  23,599  2.28 %3,396,532  16,555  1.93 %
Total interest-bearing deposits15,243,900  55,905  1.45 %14,050,230  50,123  1.42 %
Securities sold under agreements to repurchase109,127  131  0.48 %119,247  150  0.50 %
Federal Home Loan Bank advances1,992,213  10,568  2.10 %1,689,920  9,307  2.18 %
Subordinated debt and other borrowings753,244  7,677  4.04 %469,074  6,300  5.33 %
Total interest-bearing liabilities18,098,484  74,281  1.63 %16,328,471  65,880  1.60 %
Noninterest-bearing deposits4,834,694  â€”  â€”  4,317,782  â€”  â€”  
Total deposits and interest-bearing liabilities22,933,178  $74,281  1.29 %20,646,253  $65,880  1.27 %
Other liabilities328,350  30,553  
Stockholders' equity 4,343,246  3,939,927  
Total liabilities and stockholders' equity$27,604,774  $24,616,733  
Net  interest  income 
$194,172  $190,215  
Net interest spread (3)
2.95 %3.25 %
Net interest margin (4)
3.35 %3.63 %
(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 $8.1 million of taxable equivalent income for the three months ended Dec. 31, 2019 compared to $5.8 million for the three months ended Dec. 31, 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 three months ended Dec. 31, 2019 would have been 3.29% compared to a net interest spread of 3.58% for the three months ended Dec. 31, 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.  


12

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
(dollars in thousands)Year endedYear ended
December 31, 2019December 31, 2018
 Average BalancesInterestRates/ YieldsAverage BalancesInterestRates/ Yields
Interest-earning assets
Loans (1) (2)
$18,847,104  $955,388  5.17 %$16,899,738  $850,472  5.09 %
Securities
Taxable1,791,663  46,649  2.60 %1,804,958  48,192  2.67 %
Tax-exempt (2)
1,680,758  51,138  3.62 %1,202,143  35,995  3.58 %
Federal funds sold and other631,331  14,761  2.34 %518,923  12,058  2.32 %
Total interest-earning assets22,950,856  $1,067,936  4.78 %20,425,762  $946,717  4.71 %
Nonearning assets
Intangible assets1,859,548  1,859,183  
Other nonearning assets1,624,750  1,269,083  
Total assets$26,435,154  $23,554,028  
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking3,236,907  36,901  1.14 %3,064,328  28,767  0.94 %
Savings and money market7,557,265  104,138  1.38 %6,994,938  73,431  1.05 %
Time3,978,688  90,602  2.28 %3,070,071  48,845  1.59 %
Total interest-bearing deposits14,772,860  231,641  1.57 %13,129,337  151,043  1.15 %
Securities sold under agreements to repurchase117,518  570  0.49 %129,899  588  0.45 %
Federal Home Loan Bank advances2,055,365  43,675  2.12 %1,663,968  34,174  2.05 %
Subordinated debt and other borrowings557,387  25,908  4.65 %470,189  24,570  5.23 %
Total interest-bearing liabilities17,503,130  301,794  1.72 %15,393,393  210,375  1.37 %
Noninterest-bearing deposits4,503,134  â€”  â€”  4,305,942  â€”  â€”  
Total deposits and interest-bearing liabilities22,006,264  $301,794  1.37 %19,699,335  $210,375  1.07 %
Other liabilities241,935  18,281  
Stockholders' equity 4,186,955  3,836,412  
Total liabilities and stockholders' equity$26,435,154  $23,554,028  
Net  interest  income 
$766,142  $736,342  
Net interest spread (3)
3.06 %3.35 %
Net interest margin (4)
3.46 %3.68 %
(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 $29.0 million of taxable equivalent income for the year ended Dec. 31, 2019 compared to $16.2 million for the year ended Dec. 31, 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 year ended Dec. 31, 2019 would have been 3.41% compared to a net interest spread of 3.65% for the year ended Dec. 31, 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.


13

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands)DecemberSeptemberJuneMarchDecemberSeptember
201920192019201920182018
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans61,605  73,263  76,077  96,144  87,834  77,868  
Other real estate (ORE) and
other nonperforming assets (NPAs)
29,487  30,049  26,658  15,138  15,393  17,731  
Total nonperforming assets$91,092  103,312  102,735  111,282  103,227  95,599  
Past due loans over 90 days and still accruing interest$1,615  2,450  2,733  1,982  1,558  1,773  
Accruing troubled debt restructurings (5)
$4,850  5,803  7,412  5,481  5,899  6,125  
Accruing purchase credit impaired loans$13,249  12,887  12,632  13,122  14,743  21,473  
Net loan charge-offs$3,515  4,866  4,136  3,565  5,729  4,410  
Allowance for loan losses to nonaccrual loans153.8 %127.8 %118.6 %90.7 %95.2 %102.7 %
As a percentage of total loans:
Past due accruing loans over 30 days0.18 %0.24 %0.21 %0.22 %0.34 %0.25 %
Allowance for loan losses0.48 %0.48 %0.48 %0.48 %0.47 %0.46 %
Nonperforming assets to total loans, ORE and other NPAs0.46 %0.53 %0.55 %0.61 %0.58 %0.55 %
    Classified asset ratio (Pinnacle Bank) (8)
13.4 %13.5 %13.9 %13.0 %12.4 %13.7 %
Annualized net loan charge-offs to avg. loans (7)
0.07 %0.10 %0.09 %0.08 %0.11 %0.10 %
Wtd. avg. commercial loan internal risk ratings (6)
44.945.344.944.944.44.5
44.44.54.44.44.5
Interest rates and yields:
Loans5.00 %5.21 %5.22 %5.28 %5.22 %5.15 %
Securities2.85 %3.00 %3.20 %3.37 %3.22 %3.11 %
Total earning assets4.58 %4.78 %4.85 %4.94 %4.85 %4.76 %
Total deposits, including non-interest bearing1.10 %1.25 %1.25 %1.20 %1.08 %0.97 %
Securities sold under agreements to repurchase0.48 %0.45 %0.49 %0.54 %0.50 %0.44 %
FHLB advances2.10 %2.15 %2.14 %2.10 %2.18 %2.16 %
Subordinated debt and other borrowings4.04 %4.22 %5.34 %5.44 %5.33 %5.29 %
Total deposits and interest-bearing liabilities1.29 %1.40 %1.43 %1.37 %1.27 %1.15 %
Capital and other ratios (8):
Pinnacle Financial ratios:
Stockholders' equity to total assets15.7 %15.6 %15.7 %15.9 %15.8 %15.9 %
Common equity Tier one9.7 %9.6 %9.5 %9.4 %9.6 %9.4 %
Tier one risk-based9.7 %9.6 %9.5 %9.4 %9.6 %9.4 %
Total risk-based13.2 %13.2 %12.0 %12.0 %12.2 %12.1 %
Leverage9.1 %8.9 %9.1 %9.0 %8.9 %8.8 %
Tangible common equity to tangible assets9.6 %9.4 %9.4 %9.3 %9.1 %9.0 %
Pinnacle Bank ratios:
Common equity Tier one11.2 %11.1 %10.3 %10.4 %10.5 %10.3 %
Tier one risk-based11.2 %11.1 %10.3 %10.4 %10.5 %10.3 %
Total risk-based12.2 %12.1 %11.3 %11.4 %11.5 %11.4 %
Leverage10.5 %10.4 %9.8 %9.9 %9.8 %9.6 %
Construction and land development loans
as a percentage of total capital (19)
83.6 %79.9 %82.6 %84.1 %85.2 %87.8 %
Non-owner occupied commercial real estate and
multi-family as a percentage of total capital (19)
268.3 %272.8 %288.9 %282.5 %277.7 %287.6 %
This information is preliminary and based on company data available at the time of the presentation.


14

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands, except per share data)DecemberSeptemberJuneMarchDecemberSeptember
201920192019201920182018
Per share data:
Earnings  – basic$1.26  1.45  1.31  1.22  1.24  1.22  
Earnings - basic, excluding the adjustments noted below$1.27  1.45  1.43  1.24  1.26  1.22  
Earnings  – diluted$1.26  1.44  1.31  1.22  1.23  1.21  
Earnings - diluted, excluding the adjustments noted below$1.27  1.45  1.42  1.24  1.25  1.21  
Common dividends per share$0.16  0.16  0.16  0.16  0.16  0.14  
Book value per common share at quarter end (9)
$56.89  55.97  54.29  52.63  51.18  50.05  
Tangible book value per common share at quarter end (9)
$32.45  31.60  30.26  28.61  27.27  26.21  
Revenue per diluted share$3.32  3.64  3.39  3.09  3.19  3.11  
Revenue per diluted share, excluding the adjustments noted below$3.32  3.63  3.47  3.12  3.22  3.11  
Noninterest expense per diluted share$1.71  1.74  1.67  1.48  1.54  1.47  
Noninterest expense per diluted share, excluding the adjustments noted below$1.70  1.73  1.59  1.48  1.53  1.47  
Investor information:
Closing sales price on last trading day of quarter$64.00  56.75  57.48  54.70  46.10  60.15  
High closing sales price during quarter$64.80  61.14  59.23  59.55  61.04  66.20  
Low closing sales price during quarter$54.58  50.78  52.95  46.35  44.03  60.05  
Other information:
Gains on residential mortgage loans sold:
Residential mortgage loan sales:
Gross loans sold$  322,228  302,473  291,813  193,830  236,861  278,073  
Gross fees (10)
$  9,953  9,392  8,485  5,695  6,184  7,756  
Gross fees as a percentage of loans originated3.09 %3.11 %2.91 %2.94 %2.61 %2.79 %
Net gain on residential mortgage loans sold$  6,044  7,402  6,011  4,878  3,141  3,902  
Investment gains (losses) on sales of securities, net (15)
$  68  417  (4,466) (1,960) (2,295) 11  
Brokerage account assets, at quarter end (11)
$  4,636,441  4,355,429  4,287,985  4,122,980  3,763,911  3,998,774  
Trust account managed assets, at quarter end$  2,942,811  2,530,356  2,425,791  2,263,095  2,055,861  2,074,027  
Core deposits (12)
$  17,617,479  17,103,470  16,503,686  16,340,763  16,489,173  16,076,859  
Core deposits to total funding (12)
76.2 %74.7 %74.9 %77.1 %79.0 %78.3 %
Risk-weighted assets$  23,911,064  23,370,342  22,706,512  22,001,959  21,137,263  20,705,547  
Number of offices 111  114  114  114  114  115  
Total core deposits per office$  158,716  150,030  144,769  143,340  144,642  139,799  
Total assets per full-time equivalent employee$  11,180  11,217  11,241  10,997  10,897  10,917  
Annualized revenues per full-time equivalent employee$  404.6  449.8  441.0  415.9  427.5  424.9  
Annualized expenses per full-time equivalent employee$  208.1  214.8  216.9  199.0  206.2  201.0  
Number of employees (full-time equivalent)2,487.0  2,456.0  2,361.0  2,324.0  2,297.0  2,249.5  
Associate retention rate (13)
92.8 %93.2 %93.0 %92.8 %92.3 %91.1 %
This information is preliminary and based on company data available at the time of the presentation.



15

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
Three Months Ended
Year Ended
(dollars in thousands, except per share data)
DecemberSeptemberDecemberDecemberDecember
20192019201820192018
Net interest income$  194,172  195,806  190,215  766,142  736,342  
Noninterest income59,462  82,619  57,270  263,826  200,850  
 Total revenues253,634  278,425  247,485  1,029,968  937,192  
Less: Investment (gains) losses on sales of securities, net(68) (417) 2,295  5,941  2,254  
             Loss on sale of non-prime automobile portfolio—  â€”  â€”  1,536  â€”  
Total revenues excluding the impact of adjustments noted above253,566  278,008  249,780  1,037,445  939,446  
Noninterest expense130,470  132,941  119,409  505,148  452,867  
Less: Other real estate (ORE) expense804  655  631  4,228  723  
Merger-related charges —  â€”  â€”  â€”  8,259  
Branch consolidation expense—  â€”  â€”  3,189  â€”  
Noninterest expense excluding the impact of adjustments noted above129,666  132,286  118,778  497,731  443,885  
Adjusted pre-tax pre-provision income(14)
$  123,900  145,722  131,002  539,714  495,561  
Noninterest income59,462  82,619  57,270  263,826  200,850  
Less: Income from equity method investment68  417  (2,295) (5,941) (2,254) 
Investment (gains) and losses on sales of securities, net12,312  32,248  17,936  90,111  51,222  
Noninterest income excluding the impact of adjustments noted above47,082  49,954  41,629  179,656  151,882  
Efficiency ratio (4)
51.44 %47.75 %48.25 %49.05 %48.32 %
Adjustments as noted above(0.30)%(0.17)%(0.70)%(1.07)%(1.07)%
Efficiency ratio (excluding adjustments noted above)51.14 %47.58 %47.55 %47.98 %47.25 %
Total average assets$  27,604,774  27,134,163  24,616,733  26,435,154  23,554,028  
Noninterest income to average assets (1)
0.85 %1.21 %0.92 %1.00 %0.85 %
Adjustments as noted above— %(0.01)%0.04 %0.03 %0.01 %
Noninterest income (excluding adjustments noted above) to average assets (1)
0.85 %1.20 %0.96 %1.03 %0.86 %
Noninterest expense to average assets (1)
1.88 %1.94 %1.92 %1.91 %1.92 %
Adjustments as noted above(0.02)%(0.01)%(0.01)%(0.03)%(0.04)%
Noninterest expense (excluding adjustments noted above) to average assets (1)
1.86 %1.93 %1.91 %1.88 %1.88 %
This information is preliminary and based on company data available at the time of the presentation.

16

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
Three Months EndedYear Ended
(dollars in thousands, except per share data)DecemberSeptemberDecemberDecemberDecember
20192019201820192018
Net income$  96,079  110,521  95,318  400,881  359,440  
Merger-related charges—  â€”  â€”  â€”  8,259  
Investment (gains) losses on sales of securities, net(68) (417) 2,295  5,941  2,254  
Sale of non-prime automobile portfolio—  â€”  â€”  1,536  â€”  
ORE expense (income)804  655  (631) 4,228  723  
Branch consolidation expense—  â€”  â€”  3,189  â€”  
Tax effect on adjustments noted above (18)
(192) (62) (435) (3,893) (2,937) 
Net income excluding adjustments noted above $  96,623  110,697  96,547  411,882  367,739  
Basic earnings per share$  1.26  1.45  1.24  5.25  4.66  
Adjustment due to merger-related charges—  â€”  â€”  â€”  0.11  
Adjustment due to investment (gains) losses on sales of securities, net—  (0.01) 0.03  0.08  0.03  
Adjustment due to sale of non-prime automobile portfolio—  â€”  â€”  0.02  â€”  
Adjustment due to ORE expense (income)0.01  0.01  â€”  0.05  0.01  
Adjustment due to branch consolidation expense—  â€”  â€”  0.04  â€”  
Adjustment due to tax effect on adjustments noted above (18)
—  â€”  (0.01) (0.05) (0.04) 
Basic earnings per share excluding adjustments noted above$  1.27  1.45  1.26  5.39  4.77  
Diluted earnings per share$  1.26  1.44  1.23  5.22  4.64  
Adjustment due to merger-related charges—  â€”  â€”  â€”  0.11  
Adjustment due to investment (gains) losses on sales of securities, net—  (0.01) 0.03  0.08  0.03  
Adjustment due to sale of non-prime automobile portfolio—  â€”  â€”  0.02  â€”  
Adjustment due to ORE expense (income)0.01  0.01  â€”  0.05  0.01  
Adjustment due to branch consolidation expense—  â€”  â€”  0.04  â€”  
Adjustment due to tax effect on adjustments noted above (18)
—  0.01  (0.01) (0.04) (0.04) 
Diluted earnings per share excluding the adjustments noted above$  1.27  1.45  1.25  5.37  4.75  
Noninterest expense per diluted share$  1.71  1.74  1.54  6.58  5.85  
Adjustments as noted above(0.01) (0.01) (0.01) (0.10) (0.12) 
Noninterest expense (excluding adjustments noted above) per diluted share$  1.70  1.73  1.53  6.48  5.73  
Revenue per diluted share$  3.32  3.64  3.19  13.42  12.10  
Adjustments as noted above—  (0.01) 0.03  0.09  0.03  
Revenue per diluted share (excluding adjustments noted above) per diluted share$  3.32  3.63  3.22  13.51  12.13  
Equity method investment (17)
Fee income from BHG, net of amortization$  12,312  32,248  17,936  90,111  51,222  
Funding cost to support investment2,345  2,366  2,354  9,489  8,732  
Pre-tax impact of BHG9,967  29,882  15,582  80,622  42,490  
Income tax expense at statutory rates2,605  7,811  4,073  21,075  11,107  
Earnings attributable to BHG$  7,362  22,071  11,509  59,547  31,383  
Basic earnings per share attributable to BHG$  0.10  0.29  0.15  0.78  0.41  
Diluted earnings per share attributable to BHG$  0.10  0.29  0.15  0.78  0.41  
This information is preliminary and based on company data available at the time of the presentation.

17

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
Three Months Ended
Year Ended
(dollars in thousands, except per share data)
DecemberSeptemberDecemberDecemberDecember
20192019201820192018
Return on average assets (1)
1.38 %1.62 %1.54 %1.52 %1.53 %
Adjustments as noted above0.01 %— %0.02 %0.04 %0.03 %
Return on average assets excluding adjustments noted above (1)
1.39 %1.62 %1.56 %1.56 %1.56 %
Tangible assets:
Total assets$  27,805,496  27,547,834  25,031,044  27,805,496  25,031,044  
Less:   Goodwill(1,819,811) (1,830,652) (1,807,121) (1,819,811) (1,807,121) 
Core deposit and other intangible assets(51,130) (39,349) (46,161) (51,130) (46,161) 
Net tangible assets$  25,934,555  25,677,833  23,177,762  25,934,555  23,177,762  
Tangible equity:
Total stockholders' equity$  4,355,748  4,294,630  3,965,940  4,355,748  3,965,940  
Less: Goodwill(1,819,811) (1,830,652) (1,807,121) (1,819,811) (1,807,121) 
Core deposit and other intangible assets(51,130) (39,349) (46,161) (51,130) (46,161) 
Net tangible common equity$  2,484,807  2,424,629  2,112,658  2,484,807  2,112,658  
Ratio of tangible common equity to tangible assets9.58 %9.44 %9.12 %9.58 %9.12 %
Average tangible assets:
Average assets$  27,604,774  27,134,163  24,616,733  26,435,154  23,554,028  
Less: Average goodwill(1,830,370) (1,825,429) (1,807,121) (1,817,596) (1,807,533) 
Average core deposit and other intangible assets(38,746) (40,794) (47,711) (41,953) (51,650) 
Net average tangible assets$  25,735,658  25,267,940  22,761,901  24,575,605  21,694,845  
Return on average assets (1)
1.38 %1.62 %1.54 %1.52 %1.53 %
Adjustment due to goodwill, core deposit and other intangible assets0.10 %0.12 %0.12 %0.11 %0.13 %
Return on average tangible assets (1)
1.48 %1.74 %1.66 %1.63 %1.66 %
Adjustments as noted above0.01 %— %0.03 %0.05 %0.03 %
Return on average tangible assets excluding adjustments noted above (1)
1.49 %1.74 %1.69 %1.68 %1.69 %
Average tangible stockholders' equity:
Average stockholders' equity$  4,343,246  4,265,006  3,939,927  4,186,955  3,836,412  
Less:   Average goodwill(1,830,370) (1,825,429) (1,807,121) (1,817,596) (1,807,533) 
 Average core deposit and other intangible assets(38,746) (40,794) (47,711) (41,953) (51,650) 
Net average tangible common equity$  2,474,130  2,398,783  2,085,095  2,327,406  1,977,229  
Return on average common equity (1)
8.78 %10.28 %9.60 %9.57 %9.37 %
Adjustment due to goodwill, core deposit and other intangible assets6.63 %8.00 %8.54 %7.65 %8.81 %
Return on average tangible common equity (1)
15.41 %18.28 %18.14 %17.22 %18.18 %
Adjustments as noted above0.08 %0.03 %0.32 %0.48 %0.39 %
Return on average tangible common equity excluding adjustments noted above (1)
15.49 %18.31 %18.46 %17.70 %18.57 %
Book value per common share at quarter end$  56.89  55.97  51.18  56.89  51.18  
Adjustment due to goodwill, core deposit and other intangible assets(24.44) (24.37) (23.91) (24.44) (23.91) 
Tangible book value per common share at quarter end (9)
$  32.45  31.60  27.27  32.45  27.27  
This information is preliminary and based on company data available at the time of the presentation.


18

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. 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.

19