PNFP Reports Diluted EPS of $1.91, ROAA of 1.42% and ROATCE of 17.40% For 3Q2022

NASHVILLE, Tenn.--(BUSINESS WIRE)--Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.91 for the quarter ended Sept. 30, 2022, compared to net income per diluted common share of $1.75 for the quarter ended Sept. 30, 2021, an increase of 9.1 percent. Net income per diluted common share was $5.42 for the nine months ended Sept. 30, 2022, compared to $5.05 for the nine months ended Sept. 30, 2021, an increase of 7.3 percent.

Paycheck Protection Program (PPP) net interest income for the three months ended Sept. 30, 2022 and 2021 was approximately $755,000 and $20.4 million, respectively. PPP net interest income for the nine months ended Sept. 30, 2022 and 2021 was $15.5 million and $66.0 million, respectively. PPP net interest income contributed $0.01 and $0.15 to diluted earnings per common share for the three and nine months ended Sept. 30, 2022, respectively, compared to contributions of $0.20 and $0.64 for the three and nine months ended Sept. 30, 2021, respectively.

"There is little doubt that we continue to operate in a weakening economy," said M. Terry Turner, Pinnacle's president and chief executive officer. "Nevertheless our relentless focus on those items that we believe are most highly correlated with total shareholder returns resulted in year-over-year growth in earnings per diluted share of 9.1 percent, organic revenue growth of 20.2 percent, book value per share accretion of 2.6 percent and tangible book value per share accretion of 3.6 percent.

"The key to our continued strong growth and strong asset quality metrics has been our ability to attract the best bankers in our markets from our competitors. We have hired 118 revenue producers thus far this year, including 53 in the third quarter, so we are well on pace to surpass our hiring successes of the past two years. As a result, we believe we are extremely well positioned to seize the significant opportunities arising from the substantial market disruption we see occurring across our footprint and to continue producing sound growth in what is likely to be a more challenging economic landscape. Our third quarter results increased our belief that our proven and unique business model should continue to produce outsized revenue growth, earnings growth and tangible book value accretion through a more challenging operating environment."

BALANCE SHEET GROWTH:

Total assets at Sept. 30, 2022 were $41.0 billion, an increase of approximately $4.5 billion from Sept. 30, 2021, reflecting a year-over-year increase of 12.3 percent. A further analysis of select balance sheet trends follows:

	Balances at					Balances at
(dollars in thousands)	Sept. 30, 2022		June 30, 2022		Linked-Quarter Annualized % Change	Sept. 30, 2021		Year-over-Year % Change
Loans	$	27,711,694	$	26,333,096	20.9%	$	23,058,461	20.2%
Less: PPP loans		10,723		51,100	(316.1)%		708,722	(98.5)%
Loans excluding PPP loans		27,700,971		26,281,996	21.6%		22,349,739	23.9%
Securities and other interest-earning assets		8,706,453		9,342,543	(27.2)%		9,538,824	(8.7)%
Total interest-earning assets excluding PPP loans	$	36,407,424	$	35,624,539	8.8%	$	31,888,563	14.2%
Core deposits:
Noninterest-bearing deposits		10,567,873		11,058,198	(17.7)%		9,809,691	7.7%
Interest-bearing core deposits(1)		20,180,944		18,953,246	25.9%		17,360,676	16.2%
Noncore deposits and other funding(2)		4,444,868		4,496,117	(4.6)%		3,778,885	17.6%
Total funding	$	35,193,685	$	34,507,561	8.0%	$	30,949,252	13.7%

(1):	Interest-bearing core deposits are interest-bearing deposits, money market accounts, time deposits less than $250,000 and reciprocating time and money market deposits issued through the IntraFi Network.
(2):	Noncore deposits and other funding consists of time deposits greater than $250,000, securities sold under agreements to repurchase, public funds, brokered deposits, FHLB advances and subordinated debt.

"In conjunction with our hiring success in recent years, we again experienced strong growth in loans during the third quarter with an annualized growth rate of 20.9 percent over June 30, 2022 balances," Turner said. "Our core deposits increased during the third quarter by 9.8 percent annualized over the June 30, 2022 balances. Also, during the quarter we got further confirmation regarding the effectiveness of our model based on FDIC summary of deposit data as of June 30, 2022 where we learned that we increased our deposit market share in virtually every market in which we operate. The Nashville MSA was particularly noteworthy where total deposits grew approximately 3.5 percent year-over-year, and we captured 57 percent of all that growth. We believe our longstanding ability to take deposit market share will serve us well in a period where many are forecasting a contraction in M2, which is highly correlated to shrinking deposit balances."

PRE-TAX, PRE-PROVISION NET REVENUE (PPNR) GROWTH:

Pre-tax, pre-provision net revenues (PPNR) for the quarter ended Sept. 30, 2022 were $211.3 million, an increase of 22.3 percent from the $172.8 million recognized in the quarter ended Sept. 30, 2021.

	Three months ended								Nine months ended
	Sept. 30,								Sept. 30,
(dollars in thousands)	2022			2021			% change		2022			2021			% change
Revenues:
Net interest income	$	305,784		$	237,543		28.7	%	$	809,833		$	693,638		16.8	%
Noninterest income		104,805			104,095		0.7	%		333,803			295,011		13.1	%
Total revenues		410,589			341,638		20.2	%		1,143,636			988,649		15.7	%
Noninterest expense		199,253			168,851		18.0	%		577,952			489,687		18.0	%
Pre-tax, pre-provision net revenue (PPNR)		211,336			172,787		22.3	%		565,684			498,962		13.4	%
Adjustments:
Investment (gains) losses on sales of securities, net		(217	)		—		NM			(156	)		(366	)	NM
ORE expense (benefit)		(90	)		(79	)	NM			101			(749	)	NM
Adjusted PPNR	$	211,029		$	172,708		22.2	%	$	565,629		$	497,847		13.6	%

• Revenue per fully diluted common share increased for the 11th consecutive quarter to $5.40 for the three months ended Sept. 30, 2022, compared to $5.14 for the second quarter of 2022 and $4.50 for the third quarter of 2021, a 20.0 percent year-over-year growth rate.
• Net interest income for the quarter ended Sept. 30, 2022 was $305.8 million, compared to $264.6 million for the second quarter of 2022 and $237.5 million for the third quarter of 2021, a year-over-year growth rate of 28.7 percent.
  • Revenues from PPP loans approximated $755,000 in the third quarter of 2022, compared to $4.1 million in the second quarter of 2022 and $20.4 million in the third quarter of 2021. At Sept. 30, 2022, remaining unamortized fees for PPP loans were approximately $333,000.
  • Included in net interest income for the third quarter of 2022 was $1.3 million of discount accretion associated with fair value adjustments, compared to $1.6 million of discount accretion recognized in the second quarter of 2022 and $2.8 million in the third quarter of 2021. There remains $4.4 million of purchase accounting discount accretion as of Sept. 30, 2022.
• Noninterest income for the quarter ended Sept. 30, 2022 was $104.8 million, compared to $125.5 million for the second quarter of 2022 and $104.1 million for the third quarter of 2021, a year-over-year growth rate of 0.7 percent.
  • Wealth management revenues, which include investment, trust and insurance services, were $19.4 million for the third quarter of 2022, compared to $21.8 million for the second quarter of 2022 and $17.3 million reported for the third quarter of 2021, a year-over-year increase of 12.5 percent.
  • Service charges on deposit accounts were $10.9 million for the quarter ended Sept. 30, 2022, compared to $11.6 million for the quarter ended June 30, 2022 and $11.4 million for the quarter ended Sept. 30, 2021. Service charge revenues were negatively impacted by the previously disclosed changes in the firm's insufficient funds and overdraft programs during the third quarter of 2022 by approximately $500,000.
  • Income from the firm's investment in BHG was $41.3 million for the quarter ended Sept. 30, 2022, down from $49.5 million for the quarter ended June 30, 2022 and up from $30.4 million for the quarter ended Sept. 30, 2021. During the third quarter of 2022, BHG placed approximately $555 million in loans with community banks compared to approximately $658 million in the second quarter of 2022. Additionally, BHG completed another securitization during the third quarter of 2022 for approximately $412 million in funding secured by previously funded loans. This was the third securitization completed in 2022.
  • Other noninterest income was $31.8 million for the quarter ended Sept. 30, 2022, compared to $40.4 million for the quarter ended June 30, 2022 and $37.2 million for the quarter ended Sept. 30, 2021, a linked-quarter annualized decrease of 85.4 percent and year-over-year decline of 14.5 percent, respectively.
    • Third quarter 2022 gains from market valuation adjustments in other equity investments decreased to approximately $725,000, compared to $6.7 million in the second quarter of 2022 and $8.6 million in the third quarter of 2021.
• Noninterest expense for the quarter ended Sept. 30, 2022 was $199.3 million, compared to $196.0 million in the second quarter of 2022 and $168.9 million in the third quarter of 2021, reflecting a linked-quarter annualized growth rate of 6.6 percent and a year-over-year increase of 18.0 percent.
  • Salaries and employee benefits were $129.9 million in the third quarter of 2022, compared to $126.6 million in the second quarter of 2022 and $112.4 million in the third quarter of 2021, reflecting a linked-quarter annualized growth rate of 10.4 percent and a year-over-year increase of 15.6 percent.
    • Increase in headcount is a meaningful factor to the growth in compensation. Total full-time equivalent associates amounted to 3,184.5 associates at Sept. 30, 2022, compared to 2,769.5 full-time equivalent associates at Sept. 30, 2021, a year-over-year increase in headcount of 15.0 percent.
    • Costs related to the firm's incentive plans increased to $30.7 million in the third quarter of 2022 compared to $30.2 million in the third quarter of 2021 due to increased personnel as well as increased earnings and PPNR, which are primary factors in determining the costs of the firm's annual cash incentive compensation awards.
  • Noninterest expense categories, other than salaries and employee benefits, were $69.3 million in the third quarter of 2022, compared to $69.4 million in the second quarter of 2022 and $56.4 million in the third quarter of 2021, reflecting a year-over-year increase of 22.9 percent.

"We are very pleased with our PPNR results for the third quarter," said Harold R. Carpenter, Pinnacle's chief financial officer. "We continue to overcome the headwinds from declines in residential mortgage lending, the winding down of PPP lending, declining stock market valuations and the broader impact of inflation. Loan growth, as well as the impact of the rising short-term rate environment, contributed to an increase of $41.2 million in net interest income in the third quarter of 2022 as compared to the second quarter of 2022.

"We anticipated fee revenues to decrease in the third quarter, since the second quarter included all-time high marks from BHG and other fee categories, with significant contributions from market valuation adjustments for other equity investments that we own. Although BHG reported less revenue, they had another extremely strong quarter. Market valuation adjustments from our other equity investments fell by $5.9 million between the second and third quarters. We now estimate our total 2022 revenues (net interest income and noninterest income) should approximate a high-teens percentage increase over that of 2021.

"As to expenses, compensation costs increased approximately 15.6 percent over the same quarter last year, due primarily to increased opportunities to hire the best bankers and investment professionals in our markets. We are optimistic that our hiring model will continue to provide us even more opportunities to add revenue producers this year. Including the impact of inflation and the acquisition of JB&B Capital, LLC in the first quarter of this year, our expenses, comparing the third quarter of 2022 to the same quarter in 2021, have increased by 18.0 percent. We now estimate our total 2022 noninterest expense should approximate a high-teens percentage increase over that of 2021."

SOUNDNESS AND PROFITABILITY:

	Three months ended							Nine months ended
	Sept. 30, 2022		June 30, 2022		Sept. 30, 2021			Sept. 30, 2022		Sept. 30, 2021
Net interest margin	3.47	%	3.17	%	3.03	%		3.18	%	3.05	%
Efficiency ratio	48.53	%	50.26	%	49.42	%		50.54	%	49.53	%
Return on average assets	1.42	%	1.46	%	1.47	%		1.40	%	1.45	%
Return on average tangible common equity (TCE)	17.40	%	17.62	%	16.98	%		16.89	%	17.15	%

	As of
	Sept. 30, 2022			June 30, 2022			Sept. 30, 2021
Stockholder's equity to total assets		13.0	%		13.2	%		14.2	%
Tangible common equity to tangible assets		8.3	%		8.4	%		9.0	%
Book value per common share	$	67.07		$	66.74		$	65.36
Tangible book value per common share	$	42.44		$	42.08		$	40.98
Annualized net loan charge-offs to avg. loans (1)		0.16	%		0.01	%		0.16	%
Nonperforming assets to total loans, ORE and other nonperforming assets (NPAs)		0.15	%		0.09	%		0.24	%
Classified asset ratio (Pinnacle Bank) (2)		2.60	%		2.90	%		5.60	%
Allowance for credit losses (ACL) to total loans		1.04	%		1.03	%		1.17	%
ACL to total loans, excluding PPP		1.04	%		1.04	%		1.20	%

(1):	Annualized net loan charge-offs to average loans ratios are computed by annualizing quarterly net loan charge-offs and dividing the result by average loans for the quarter.
(2):	Classified assets as a percentage of Tier 1 capital plus allowance for credit losses.

• Net interest margin was 3.47 percent for the third quarter of 2022, compared to 3.17 percent for the second quarter of 2022 and 3.03 percent for the third quarter of 2021. Net interest margin for the nine months ended Sept. 30, 2022 was 3.18 percent compared to 3.05 percent for the nine months ended Sept. 30, 2021.
  • PPP loans impacted the firm's net interest margin beginning in the second quarter of 2020 and have continued to impact net interest margin through the third quarter of 2022. Additionally, the firm's decision early in the pandemic to maintain additional on-balance sheet liquidity also impacted net interest margin in each of fiscal years 2020 and 2021. The firm estimates its second and third quarter 2022 net interest margin was negatively impacted by approximately 12 and 9 basis points, respectively, compared to approximately 12 basis points in each of the second and third quarter of 2021 as a result of these factors.
• Provision for credit losses was $27.5 million in the third quarter of 2022 compared to $12.9 million in the second quarter of 2022 and $3.4 million in the third quarter of 2021. Net charge-offs were $11.0 million for the quarter ended Sept. 30, 2022, compared to $877,000 for the quarter ended June 30, 2022 and $9.3 million for the quarter ended Sept. 30, 2021. Annualized net loan charge-offs for the third quarter of 2022 were 0.16 percent.
• Nonperforming assets were $41.9 million at Sept. 30, 2022, compared to $23.7 million at June 30, 2022 and $55.1 million at Sept. 30, 2021, down 24.0 percent over the same quarter last year. The ratio of the allowance for credit losses to nonperforming loans at Sept. 30, 2022 was 844.5 percent, compared to 1,762.6 percent at June 30, 2022 and 575.3 percent at Sept. 30, 2021.
• Classified assets were $107.9 million at Sept. 30, 2022, compared to $112.5 million at June 30, 2022 and $196.3 million at Sept. 30, 2021, down 45.0 percent over the same quarter last year.

"During the third quarter, our net interest margin increased by approximately 30 basis points, our efficiency ratio improved by 173 basis points, and our return metrics were basically consistent with our strong second quarter results," Carpenter said. "We are also pleased that our tangible book value per share increased again this quarter, despite the impact of rising rates on our investment securities portfolio. Our credit metrics declined slightly in the quarter but remain strong in comparison to historical metrics, which we believe is the result of our credit officers continuing to remain active in proactively conducting portfolio reviews and fine tuning underwriting given forecasts for a weakening economy.

"We believe we have the most experienced bankers in our markets and, as a result, believe this experience translates into a client base of seasoned borrowers. We have long shown that we can grow our franchise organically, which we also believe enhances long-term credit soundness. Furthermore, we operate in many of the best banking markets in the nation where the local economies seem to be better weathering the current economic challenges."

BOARD OF DIRECTORS DECLARES DIVIDENDS

On Oct. 18, 2022, Pinnacle Financial's Board of Directors approved a quarterly cash dividend of $0.22 per common share to be paid on Nov. 25, 2022 to common shareholders of record as of the close of business on Nov. 4, 2022. Additionally, the Board of Directors approved a quarterly dividend of approximately $3.8 million, or $16.88 per share (or $0.422 per depositary share), on Pinnacle Financial's 6.75 percent Series B Non-Cumulative Perpetual Preferred Stock payable on Dec. 1, 2022 to shareholders of record at the close of business on Nov. 16, 2022. The amount and timing of any future dividend payments to both preferred and common shareholders will be subject to the approval of Pinnacle's Board of Directors.

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. CT on Oct. 19, 2022, to discuss third quarter 2022 results and other matters. To access the call for audio only, please call 1-877-209-7255. 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 2022 deposit data from the FDIC, is listed by Forbes among the top 25 banks in the nation and earned a spot on the 2022 list of 100 Best Companies to Work For® in the U.S., its sixth consecutive appearance. Pinnacle was also listed in Fortune magazine as the second best company to work for in the U.S. for women. American Banker recognized Pinnacle as one of America's Best Banks to Work For nine years in a row and No. 1 among banks with more than $11 billion in assets in 2021.

Pinnacle owns a 49 percent interest in Bankers Healthcare Group (BHG), which provides innovative, hassle-free financial solutions to healthcare practitioners and other licensed professionals. Great Place to Work and FORTUNE ranked BHG No. 4 on its 2021 list of Best Workplaces in New York State in the small/medium business category.

The firm began operations in a single location in downtown Nashville, TN in October 2000 and has since grown to approximately $41.0 billion in assets as of Sept. 30, 2022. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 15 primarily urban markets across the Southeast.

Additional information concerning Pinnacle, which is included in the Nasdaq Financial-100 Index, can be accessed at www.pnfp.com.

Forward-Looking Statements

All statements, other than statements of historical fact, included in this press release, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "expect," "anticipate," "intend," "may," "should," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: (i) deterioration in the financial condition of borrowers of Pinnacle Bank and its subsidiaries or BHG, including as a result of the negative impact of inflationary pressures on our and BHG's customers and their businesses resulting in significant increases in loan losses and provisions for those losses and, in the case of BHG, substitutions; (ii) 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; (iii) adverse conditions in the national or local economies including in Pinnacle Financial's markets throughout Tennessee, North Carolina, South Carolina, Georgia, Alabama and Virginia, particularly in commercial and residential real estate markets; (iv) the inability of Pinnacle Financial, or entities in which it has significant investments, like BHG, to maintain the long-term historical growth rate of its, or such entities', loan portfolio; (v) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits, including during times when Pinnacle Bank is seeking to limit the rates it pays on deposits; (vi) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (vii) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower-quality assets; (viii) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on Pinnacle Financial's results, including as a result of compression to net interest margin; (ix) the effects of new outbreaks of COVID-19, including actions taken by governmental officials to curb the spread of the virus, and the resulting impact on general economic and financial market conditions and on Pinnacle Financial's and its customers' business, results of operations, asset quality and financial condition; (x) the efficacy of vaccines against the COVID-19 virus, including new variants; (xi) the results of regulatory examinations; (xii) Pinnacle Financial's ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions; (xiii) difficulties and delays in integrating acquired businesses or fully realizing costs savings and other benefits from acquisitions; (xiv) BHG's ability to profitably grow its business and successfully execute on its business plans; (xv) risks of expansion into new geographic or product markets; (xvi) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including goodwill or other intangible assets; (xvii) the ineffectiveness of Pinnacle Bank's hedging strategies, or the unexpected counterparty failure or hedge failure of the underlying hedges; (xviii) 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; (xix) deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xx) inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies, required capital maintenance levels or regulatory requests or directives, particularly if Pinnacle Bank's level of applicable commercial real estate loans were to exceed percentage levels of total capital in guidelines recommended by its regulators; (xxi) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xxii) the vulnerability of Pinnacle Bank's network and online banking portals, and the systems of parties with whom Pinnacle Bank contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (xxiii) 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; (xxiv) the risks associated with Pinnacle Financial and Pinnacle Bank being a minority investor in BHG, including the risk that the owners of a majority of the equity interests in BHG decide to sell the company or all or a portion of their ownership interests in BHG (triggering a similar sale by Pinnacle Financial and Pinnacle Bank); (xxv) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (xxvi) fluctuations in the valuations of Pinnacle Financial's equity investments and the ultimate success of such investments; (xxvii) the availability of and access to capital; (xxviii) adverse results (including costs, fines, reputational harm, inability to obtain necessary approvals and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of Pinnacle Bank's participation in and execution of government programs related to the COVID-19 pandemic; and (xxix) general competitive, economic, political and market conditions. Additional factors which could affect the forward looking statements can be found in Pinnacle Financial's Annual Report on Form 10-K for the year ended December 31, 2021, and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC and available on the SEC's website at http://www.sec.gov. Pinnacle Financial disclaims any obligation to update or revise any forward-looking statements contained in this press release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Matters

This release contains certain non-GAAP financial measures, including, without limitation, earnings per diluted common share, PPNR, efficiency ratio and the ratio of noninterest expense to average assets, excluding in certain instances the impact of expenses related to other real estate owned, gains or losses on sale of investment securities and other matters for the accounting periods presented. This release also includes non-GAAP financial measures which exclude the impact of loans originated and forgiven and repaid under the PPP. This release may also contain certain other non-GAAP capital ratios and performance measures that exclude the impact of goodwill and core deposit intangibles associated with Pinnacle Financial's acquisitions of BNC, Avenue Bank, Magna Bank, CapitalMark Bank & Trust, Mid-America Bancshares, Inc., Cavalry Bancorp, Inc. and other acquisitions which collectively are less material to the non-GAAP measure as well as the impact of Pinnacle Financial's Series B Preferred Stock. The presentation of the non-GAAP financial information is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Because non-GAAP financial measures presented in this release are not measurements determined in accordance with GAAP and are susceptible to varying calculations, these non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures presented by other companies.

Pinnacle Financial believes that these non-GAAP financial measures facilitate making period-to-period comparisons and are meaningful indications of its operating performance. In addition, because intangible assets such as goodwill and the core deposit intangible, and the other items excluded each vary extensively from company to company, Pinnacle Financial believes that the presentation of this information allows investors to more easily compare Pinnacle Financial's results to the results of other companies. Pinnacle Financial's management utilizes this non-GAAP financial information to compare Pinnacle Financial's operating performance for 2022 versus certain periods in 2021 and to internally prepared projections.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(dollars in thousands, except for share and per share data)	September 30, 2022			December 31, 2021			September 30, 2021
ASSETS
Cash and noninterest-bearing due from banks	$	168,010		$	188,287		$	155,965
Restricted cash		18,636			82,505			104,157
Interest-bearing due from banks		1,616,878			3,830,747			3,206,383
Cash and cash equivalents		1,803,524			4,101,539			3,466,505
Securities purchased with agreement to resell		528,999			1,000,000			500,000
Securities available-for-sale, at fair value		3,542,601			4,914,194			4,634,653
Securities held-to-maturity (fair value of $2.5 billion, $1.2 billion, and $1.0 billion, net of allowance for credit losses of $1.6 million, $161 and $161 at Sept. 30, 2022, Dec. 31, 2021 and Sept. 30, 2021, respectively)		2,938,417			1,155,958			989,237
Consumer loans held-for-sale		45,509			45,806			55,273
Commercial loans held-for-sale		15,413			17,685			49,121
Loans		27,711,694			23,414,262			23,058,461
Less allowance for credit losses		(288,088	)		(263,233	)		(268,635	)
Loans, net		27,423,606			23,151,029			22,789,826
Premises and equipment, net		320,273			288,182			288,833
Equity method investment		425,892			360,833			333,764
Accrued interest receivable		110,170			98,813			89,137
Goodwill		1,846,466			1,819,811			1,819,811
Core deposits and other intangible assets		35,666			33,819			35,876
Other real estate owned		7,787			8,537			8,415
Other assets		1,955,795			1,473,193			1,463,485
Total assets	$	41,000,118		$	38,469,399		$	36,523,936
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	10,567,873		$	10,461,071		$	9,809,691
Interest-bearing		7,549,510			6,530,015			5,767,286
Savings and money market accounts		12,712,809			12,179,663			11,381,033
Time		2,859,857			2,133,784			2,411,797
Total deposits		33,690,049			31,304,533			29,369,807
Securities sold under agreements to repurchase		190,554			152,559			148,240
Federal Home Loan Bank advances		889,248			888,681			888,493
Subordinated debt and other borrowings		423,834			423,172			542,712
Accrued interest payable		10,202			12,504			11,838
Other liabilities		454,119			377,343			371,048
Total liabilities		35,658,006			33,158,792			31,332,138
Preferred stock, no par value, 10.0 million shares authorized; 225,000 shares non-cumulative perpetual preferred stock, Series B, liquidation preference $225.0 million, issued and outstanding at Sept. 30, 2022, Dec. 31, 2021 and Sept. 30, 2021, respectively		217,126			217,126			217,126
Common stock, par value $1.00; 180.0 million shares authorized; 76.4 million, 76.1 million and 76.1 million shares issued and outstanding at Sept. 30, 2022, Dec. 31, 2021, and Sept. 30, 2021, respectively		76,413			76,143			76,115
Additional paid-in capital		3,066,527			3,045,802			3,038,800
Retained earnings		2,224,736			1,864,350			1,748,491
Accumulated other comprehensive income (loss), net of taxes		(242,690	)		107,186			111,266
Total stockholders' equity		5,342,112			5,310,607			5,191,798
Total liabilities and stockholders' equity	$	41,000,118		$	38,469,399		$	36,523,936
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(dollars in thousands, except for share and per share data)	Three months ended									Nine months ended
	September 30, 2022			June 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
Interest income:
Loans, including fees	$	315,935		$	252,182		$	233,857		$	795,164		$	694,017
Securities
Taxable		18,204			12,725			8,986			41,977			25,073
Tax-exempt		21,408			19,898			15,873			58,752			47,917
Federal funds sold and other		16,217			7,571			2,152			26,864			5,014
Total interest income		371,764			292,376			260,868			922,757			772,021
Interest expense:
Deposits		55,189			18,181			12,139			83,620			43,468
Securities sold under agreements to repurchase		182			82			57			320			185
FHLB advances and other borrowings		10,609			9,539			11,129			28,984			34,730
Total interest expense		65,980			27,802			23,325			112,924			78,383
Net interest income		305,784			264,574			237,543			809,833			693,638
Provision for credit losses		27,493			12,907			3,382			43,120			13,451
Net interest income after provision for credit losses		278,291			251,667			234,161			766,713			680,187
Noninterest income:
Service charges on deposit accounts		10,906			11,616			11,435			33,552			28,648
Investment services		10,780			13,205			9,648			34,676			26,836
Insurance sales commissions		2,928			2,554			2,557			9,518			8,188
Gains on mortgage loans sold, net		1,117			2,150			7,814			7,333			28,180
Investment gains on sales, net		217			—			—			156			366
Trust fees		5,706			6,065			5,049			17,744			14,798
Income from equity method investment		41,341			49,465			30,409			124,461			91,430
Other noninterest income		31,810			40,447			37,183			106,363			96,565
Total noninterest income		104,805			125,502			104,095			333,803			295,011
Noninterest expense:
Salaries and employee benefits		129,910			126,611			112,406			378,373			325,958
Equipment and occupancy		27,886			26,921			23,712			80,343			70,253
Other real estate, net		(90	)		86			(79	)		101			(749	)
Marketing and other business development		4,958			4,759			3,325			13,494			8,326
Postage and supplies		2,795			2,320			2,083			7,486			6,004
Amortization of intangibles		1,951			2,051			2,088			5,873			6,461
Other noninterest expense		31,843			33,290			25,316			92,282			73,434
Total noninterest expense		199,253			196,038			168,851			577,952			489,687
Income before income taxes		183,843			181,131			169,405			522,564			485,511
Income tax expense		35,185			36,004			32,828			99,669			91,716
Net income		148,658			145,127			136,577			422,895			393,795
Preferred stock dividends		(3,798	)		(3,798	)		(3,798	)		(11,394	)		(11,394	)
Net income available to common shareholders	$	144,860		$	141,329		$	132,779		$	411,501		$	382,401
Per share information:
Basic net income per common share	$	1.91		$	1.87		$	1.76		$	5.43		$	5.07
Diluted net income per common share	$	1.91		$	1.86		$	1.75		$	5.42		$	5.05
Weighted average common shares outstanding:
Basic		75,761,930			75,751,296			75,494,286			75,723,129			75,449,900
Diluted		75,979,056			75,940,500			75,836,142			75,945,469			75,760,618
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 SHAREHOLDERS' EQUITY (Unaudited)
(dollars and shares in thousands)	Preferred Stock Amount			Common Stock					Additional Paid- in Capital			Retained Earnings			Accumulated Other Comp. Income (Loss), net			Total Shareholders' Equity
				Shares		Amounts
Balance at December 31, 2020	$	217,126		75,850		$	75,850		$	3,028,063		$	1,407,723		$	175,849		$	4,904,611
Exercise of employee common stock options & related tax benefits		—		32			32			672			—			—			704
Preferred dividends paid ($50.64 per share)		—		—			—			—			(11,394	)		—			(11,394	)
Common dividends paid ($0.54 per share)		—		—			—			—			(41,633	)		—			(41,633	)
Issuance of restricted common shares, net of forfeitures		—		194			194			(194	)		—			—			—
Restricted shares withheld for taxes & related tax benefits		—		(49	)		(49	)		(3,697	)		—			—			(3,746	)
Issuance of common stock pursuant to restricted stock unit (RSU) and performance stock unit (PSU) agreements, net of shares withheld for taxes & related tax benefits		—		88			88			(3,878	)		—			—			(3,790	)
Compensation expense for restricted shares & performance stock units		—		—			—			17,834			—			—			17,834
Net income		—		—			—			—			393,795			—			393,795
Other comprehensive loss		—		—			—			—			—			(64,583	)		(64,583	)
Balance at September 30, 2021	$	217,126		76,115		$	76,115		$	3,038,800		$	1,748,491		$	111,266		$	5,191,798
Balance at December 31, 2021	$	217,126		76,143		$	76,143		$	3,045,802		$	1,864,350		$	107,186		$	5,310,607
Exercise of employee common stock options & related tax benefits		—		14			14			264			—			—			278
Preferred dividends paid ($50.64 per share)		—		—			—			—			(11,394	)		—			(11,394	)
Common dividends paid ($0.66 per share)		—		—			—			—			(51,115	)		—			(51,115	)
Issuance of restricted common shares, net of forfeitures		—		207			207			(169	)		—			—			38
Restricted shares withheld for taxes & related tax benefits		—		(46	)		(46	)		(4,657	)		—			—			(4,703	)
Issuance of common stock pursuant to RSU and PSU agreements, net of shares withheld for taxes & related tax benefits		—		95			95			(5,595	)		—			—			(5,500	)
Compensation expense for restricted shares & performance stock units		—		—			—			30,882			—			—			30,882
Net income		—		—			—			—			422,895			—			422,895
Other comprehensive loss		—		—			—			—			—			(349,876	)		(349,876	)
Balance at September 30, 2022	$	217,126		76,413		$	76,413		$	3,066,527		$	2,224,736		$	(242,690	)	$	5,342,112

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
(dollars in thousands)	September			June		March		December		September		June
	2022			2022		2022		2021		2021		2021
Balance sheet data, at quarter end:
Commercial and industrial loans	$	9,738,271		9,244,708		8,213,204		7,703,428		7,079,431		6,771,254
Commercial real estate - owner occupied loans		3,426,271		3,243,018		3,124,275		3,048,822		2,954,519		2,817,689
Commercial real estate - investment loans		5,122,127		4,909,598		4,707,761		4,607,048		4,597,736		4,644,551
Commercial real estate - multifamily and other loans		1,042,854		951,998		718,822		614,656		621,471		724,253
Consumer real estate - mortgage loans		4,271,913		4,047,051		3,813,252		3,680,684		3,540,439		3,335,537
Construction and land development loans		3,548,970		3,386,866		3,277,029		2,903,017		3,096,961		2,791,611
Consumer and other loans		550,565		498,757		487,499		485,489		459,182		440,124
Paycheck protection program loans		10,723		51,100		157,180		371,118		708,722		1,372,916
Total loans		27,711,694		26,333,096		24,499,022		23,414,262		23,058,461		22,897,935
Allowance for credit losses		(288,088	)	(272,483	)	(261,618	)	(263,233	)	(268,635	)	(273,747	)
Securities		6,481,018		6,553,893		6,136,109		6,070,152		5,623,890		5,326,908
Total assets		41,000,118		40,121,292		39,400,378		38,469,399		36,523,936		35,412,309
Noninterest-bearing deposits		10,567,873		11,058,198		10,986,194		10,461,071		9,809,691		8,926,200
Total deposits		33,690,049		32,595,303		32,295,814		31,304,533		29,369,807		28,217,603
Securities sold under agreements to repurchase		190,554		199,585		219,530		152,559		148,240		177,661
FHLB advances		889,248		1,289,059		888,870		888,681		888,493		888,304
Subordinated debt and other borrowings		423,834		423,614		423,319		423,172		542,712		671,994
Total stockholders' equity		5,342,112		5,315,239		5,280,950		5,310,607		5,191,798		5,101,231
Balance sheet data, quarterly averages:
Total loans	$	27,021,031		25,397,389		23,848,533		23,225,735		22,986,835		23,179,803
Securities		6,542,026		6,446,774		6,143,664		5,813,636		5,451,232		5,036,786
Federal funds sold and other		2,600,978		2,837,679		4,799,946		4,356,113		3,743,074		3,143,078
Total earning assets		36,164,035		34,681,842		34,792,143		33,395,484		32,181,141		31,359,667
Total assets		40,464,649		38,780,786		38,637,221		37,132,078		35,896,130		35,053,772
Noninterest-bearing deposits		10,926,069		10,803,439		10,478,403		10,240,393		9,247,382		8,500,465
Total deposits		33,108,415		31,484,100		31,538,985		30,034,026		28,739,871		28,013,659
Securities sold under agreements to repurchase		215,646		216,846		179,869		141,781		164,837		173,268
FHLB advances		1,010,865		1,095,531		888,746		888,559		888,369		888,184
Subordinated debt and other borrowings		426,267		427,191		441,755		484,389		586,387		674,162
Total stockholders' equity		5,403,244		5,316,219		5,331,405		5,262,586		5,176,625		5,039,608
Statement of operations data, for the three months ended:
Interest income	$	371,764		292,376		258,617		259,193		260,868		259,236
Interest expense		65,980		27,802		19,142		20,430		23,325		26,011
Net interest income		305,784		264,574		239,475		238,763		237,543		233,225
Provision for credit losses		27,493		12,907		2,720		2,675		3,382		2,834
Net interest income after provision for credit losses		278,291		251,667		236,755		236,088		234,161		230,391
Noninterest income		104,805		125,502		103,496		100,723		104,095		98,207
Noninterest expense		199,253		196,038		182,661		170,417		168,851		166,140
Income before taxes		183,843		181,131		157,590		166,394		169,405		162,458
Income tax expense		35,185		36,004		28,480		32,866		32,828		30,668
Net income		148,658		145,127		129,110		133,528		136,577		131,790
Preferred stock dividends		(3,798	)	(3,798	)	(3,798	)	(3,798	)	(3,798	)	(3,798	)
Net income available to common shareholders	$	144,860		141,329		125,312		129,730		132,779		127,992
Profitability and other ratios:
Return on avg. assets (1)		1.42	%	1.46	%	1.32	%	1.39	%	1.47	%	1.46	%
Return on avg. equity (1)		10.64	%	10.66	%	9.53	%	9.78	%	10.18	%	10.19	%
Return on avg. common equity (1)		11.08	%	11.12	%	9.94	%	10.20	%	10.62	%	10.65	%
Return on avg. tangible common equity (1)		17.40	%	17.62	%	15.63	%	16.13	%	16.98	%	17.32	%
Common stock dividend payout ratio (15)		12.34	%	12.63	%	12.94	%	10.65	%	11.13	%	11.73	%
Net interest margin (2)		3.47	%	3.17	%	2.89	%	2.96	%	3.03	%	3.08	%
Noninterest income to total revenue (3)		25.53	%	32.17	%	30.18	%	29.67	%	30.47	%	29.63	%
Noninterest income to avg. assets (1)		1.03	%	1.30	%	1.09	%	1.08	%	1.15	%	1.12	%
Noninterest exp. to avg. assets (1)		1.95	%	2.03	%	1.92	%	1.82	%	1.87	%	1.90	%
Efficiency ratio (4)		48.53	%	50.26	%	53.26	%	50.20	%	49.42	%	50.13	%
Avg. loans to avg. deposits		81.61	%	80.67	%	75.62	%	77.33	%	79.98	%	82.74	%
Securities to total assets		15.81	%	16.34	%	15.57	%	15.78	%	15.40	%	15.04	%
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
(dollars in thousands)	Three months ended									Three months ended
	September 30, 2022									September 30, 2021
	Average Balances			Interest			Rates/ Yields			Average Balances			Interest			Rates/ Yields
Interest-earning assets
Loans (1) (2)	$	27,021,031		$	315,935		4.73	%		$	22,986,835		$	233,857		4.13	%
Securities
Taxable		3,436,460			18,204		2.10	%			2,868,212			8,986		1.24	%
Tax-exempt (2)		3,105,566			21,408		3.28	%			2,583,020			15,873		2.93	%
Interest-bearing due from banks		1,491,338			8,666		2.31	%			3,088,027			1,181		0.15	%
Resell agreements		920,786			5,616		2.42	%			500,000			432		0.34	%
Federal funds sold		—			—		—	%			—			—		—	%
Other		188,854			1,935		4.06	%			155,047			539		1.38	%
Total interest-earning assets		36,164,035		$	371,764		4.20	%			32,181,141		$	260,868		3.32	%
Nonearning assets
Intangible assets		1,883,350									1,857,039
Other nonearning assets		2,417,264									1,857,950
Total assets	$	40,464,649								$	35,896,130
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking		6,763,990			18,008		1.06	%			5,591,119			2,453		0.17	%
Savings and money market		12,765,435			29,347		0.91	%			11,359,595			5,300		0.19	%
Time		2,652,921			7,834		1.17	%			2,541,775			4,386		0.68	%
Total interest-bearing deposits		22,182,346			55,189		0.99	%			19,492,489			12,139		0.25	%
Securities sold under agreements to repurchase		215,646			182		0.34	%			164,837			57		0.14	%
Federal Home Loan Bank advances		1,010,865			5,762		2.26	%			888,369			4,558		2.04	%
Subordinated debt and other borrowings		426,267			4,847		4.51	%			586,387			6,571		4.45	%
Total interest-bearing liabilities		23,835,124			65,980		1.10	%			21,132,082			23,325		0.44	%
Noninterest-bearing deposits		10,926,069			—		—				9,247,382			—		—
Total deposits and interest-bearing liabilities		34,761,193		$	65,980		0.75	%			30,379,464		$	23,325		0.30	%
Other liabilities		300,212									340,041
Stockholders' equity		5,403,244									5,176,625
Total liabilities and stockholders' equity	$	40,464,649								$	35,896,130
Net interest income				$	305,784								$	237,543
Net interest spread (3)							3.10	%								2.88	%
Net interest margin (4)							3.47	%								3.03	%
(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 $10.8 million of taxable equivalent income for the three months ended September 30, 2022 compared to $8.5 million for the three months ended September 30, 2021. The tax-exempt benefit has been reduced by the projected impact of tax-exempt income that will be disallowed pursuant to IRS Regulations as of and for the then current period presented.
(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the three months ended September 30, 2022 would have been 3.44% compared to a net interest spread of 3.02% for the three months ended September 30, 2021.
(4) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
(dollars in thousands)	Nine months ended									Nine months ended
	September 30, 2022									September 30, 2021
	Average Balances			Interest			Rates/ Yields			Average Balances			Interest			Rates/ Yields
Interest-earning assets
Loans (1) (2)	$	25,433,939		$	795,164		4.27	%		$	23,005,416		$	694,017		4.11	%
Securities
Taxable		3,400,046			41,977		1.65	%			2,575,720			25,073		1.30	%
Tax-exempt (2)		2,978,901			58,752		3.18	%			2,478,584			47,917		3.11	%
Interest-bearing due from banks		2,050,401			12,580		0.82	%			2,913,215			2,450		0.11	%
Resell agreements		1,175,119			10,674		1.21	%			331,502			842		0.34	%
Federal funds sold		—			—		—	%			13,321			—		—	%
Other		179,293			3,610		2.69	%			157,496			1,722		1.46	%
Total interest-earning assets		35,217,699		$	922,757		3.61	%			31,475,254		$	772,021		3.38	%
Nonearning assets
Intangible assets		1,876,614									1,859,183
Other nonearning assets		2,206,600									1,873,106
Total assets	$	39,300,913								$	35,207,543
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking		6,560,068			26,741		0.54	%			5,504,133			7,460		0.18	%
Savings and money market		12,479,841			43,542		0.47	%			11,323,160			17,670		0.21	%
Time		2,272,063			13,337		0.78	%			2,839,449			18,338		0.86	%
Total interest-bearing deposits		21,311,972			83,620		0.52	%			19,666,742			43,468		0.30	%
Securities sold under agreements to repurchase		204,251			320		0.21	%			160,641			185		0.15	%
Federal Home Loan Bank advances		998,828			15,467		2.07	%			903,569			13,553		2.01	%
Subordinated debt and other borrowings		431,681			13,517		4.19	%			644,417			21,177		4.39	%
Total interest-bearing liabilities		22,946,732			112,924		0.66	%			21,375,369			78,383		0.49	%
Noninterest-bearing deposits		10,737,610			—		—				8,462,129			—		—
Total deposits and interest-bearing liabilities		33,684,342		$	112,924		0.45	%			29,837,498		$	78,383		0.35	%
Other liabilities		266,018									312,598
Stockholders' equity		5,350,553									5,057,447
Total liabilities and stockholders' equity	$	39,300,913								$	35,207,543
Net interest income				$	809,833								$	693,638
Net interest spread (3)							2.95	%								2.89	%
Net interest margin (4)							3.18	%								3.05	%
(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 $28.8 million of taxable equivalent income for the nine months ended September 30, 2022 compared to $23.7 million for the nine months ended September 30, 2021. The tax-exempt benefit has been reduced by the projected impact of tax-exempt income that will be disallowed pursuant to IRS Regulations as of and for the then current period presented.
(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the nine months ended September 30, 2022 would have been 3.16% compared to a net interest spread of 3.03% for the nine months ended September 30, 2021.
(4) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
(dollars in thousands)	September			June		March		December		September		June
	2022			2022		2022		2021		2021		2021
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans	$	34,115		15,459		26,616		31,569		46,692		53,105
ORE and other nonperforming assets (NPAs)		7,787		8,237		8,437		8,537		8,415		9,602
Total nonperforming assets	$	41,902		23,696		35,053		40,106		55,107		62,707
Past due loans over 90 days and still accruing interest	$	6,757		3,840		1,605		1,607		1,914		1,810
Accruing troubled debt restructurings (5)	$	2,228		2,279		2,317		2,354		2,397		2,428
Accruing purchase credit deteriorated loans	$	8,759		9,194		12,661		13,086		12,158		12,400
Net loan charge-offs	$	10,983		877		2,958		8,077		9,281		9,968
Allowance for credit losses to nonaccrual loans		844.5	%	1,762.6	%	982.9	%	833.8	%	575.3	%	515.5	%
As a percentage of total loans:
Past due accruing loans over 30 days		0.13	%	0.11	%	0.11	%	0.09	%	0.09	%	0.07	%
Potential problem loans		0.21	%	0.32	%	0.41	%	0.47	%	0.60	%	0.74	%
Allowance for credit losses		1.04	%	1.03	%	1.07	%	1.12	%	1.17	%	1.20	%
Nonperforming assets to total loans, ORE and other NPAs		0.15	%	0.09	%	0.14	%	0.17	%	0.24	%	0.27	%
Classified asset ratio (Pinnacle Bank) (7)		2.6	%	2.9	%	3.6	%	4.1	%	5.6	%	6.8	%
Annualized net loan charge-offs to avg. loans (6)		0.16	%	0.01	%	0.05	%	0.14	%	0.16	%	0.17	%
Interest rates and yields:
Loans		4.73	%	4.07	%	3.94	%	4.04	%	4.13	%	4.11	%
Securities		2.66	%	2.29	%	2.12	%	2.08	%	2.04	%	2.25	%
Total earning assets		4.20	%	3.49	%	3.11	%	3.20	%	3.32	%	3.42	%
Total deposits, including non-interest bearing		0.66	%	0.23	%	0.13	%	0.14	%	0.17	%	0.20	%
Securities sold under agreements to repurchase		0.34	%	0.15	%	0.13	%	0.15	%	0.14	%	0.13	%
FHLB advances		2.26	%	1.92	%	2.04	%	2.04	%	2.04	%	2.03	%
Subordinated debt and other borrowings		4.51	%	4.04	%	4.00	%	4.23	%	4.45	%	4.52	%
Total deposits and interest-bearing liabilities		0.75	%	0.34	%	0.23	%	0.26	%	0.30	%	0.35	%
Capital and other ratios (7):
Pinnacle Financial ratios:
Stockholders' equity to total assets		13.0	%	13.2	%	13.4	%	13.8	%	14.2	%	14.4	%
Common equity Tier one		10.0	%	10.2	%	10.5	%	10.9	%	10.5	%	10.5	%
Tier one risk-based		10.7	%	10.9	%	11.2	%	11.7	%	11.3	%	11.3	%
Total risk-based		12.6	%	12.9	%	13.3	%	13.8	%	14.0	%	14.5	%
Leverage		9.7	%	9.8	%	9.5	%	9.7	%	9.3	%	9.2	%
Tangible common equity to tangible assets		8.3	%	8.4	%	8.5	%	8.8	%	9.0	%	9.0	%
Pinnacle Bank ratios:
Common equity Tier one		11.1	%	11.0	%	11.4	%	11.9	%	11.7	%	11.9	%
Tier one risk-based		11.1	%	11.0	%	11.4	%	11.9	%	11.7	%	11.9	%
Total risk-based		11.8	%	11.7	%	12.1	%	12.6	%	12.5	%	13.1	%
Leverage		10.1	%	9.9	%	9.6	%	9.9	%	9.7	%	9.6	%
Construction and land development loans as a percentage of total capital (18)		85.4	%	87.4	%	87.4	%	79.1	%	89.3	%	80.1	%
Non-owner occupied commercial real estate and multi-family as a percentage of total capital (18)		244.0	%	250.2	%	243.7	%	234.1	%	252.4	%	248.8	%
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
(dollars in thousands, except per share data)	September			June		March		December		September		June
	2022			2022		2022		2021		2021		2021
Per share data:
Earnings per common share - basic	$	1.91		1.87		1.66		1.72		1.76		1.70
Earnings per common share - basic, excluding non-GAAP adjustments	$	1.91		1.87		1.66		1.71		1.76		1.69
Earnings per common share - diluted	$	1.91		1.86		1.65		1.71		1.75		1.69
Earnings per common share - diluted, excluding non-GAAP adjustments	$	1.91		1.86		1.65		1.70		1.75		1.68
Common dividends per share	$	0.22		0.22		0.22		0.18		0.18		0.18
Book value per common share at quarter end (8)	$	67.07		66.74		66.30		66.89		65.36		64.19
Tangible book value per common share at quarter end (8)	$	42.44		42.08		41.65		42.55		40.98		39.77
Revenue per diluted common share	$	5.40		5.14		4.52		4.47		4.50		4.37
Revenue per diluted common share, excluding non-GAAP adjustments	$	5.40		5.14		4.52		4.46		4.50		4.37
Investor information:
Closing sales price of common stock on last trading day of quarter	$	81.10		72.31		92.08		95.50		94.08		88.29
High closing sales price of common stock during quarter	$	87.66		91.42		110.41		104.72		98.00		92.94
Low closing sales price of common stock during quarter	$	68.68		68.56		90.46		90.20		83.84		84.25
Closing sales price of depositary shares on last trading day of quarter	$	25.33		25.19		26.72		28.21		28.14		29.13
High closing sales price of depositary shares during quarter	$	26.23		26.44		28.53		28.99		29.23		29.13
Low closing sales price of depositary shares during quarter	$	24.76		24.75		25.63		27.42		28.00		27.38
Other information:
Residential mortgage loan sales:
Gross loans sold	$	181,139		239,736		270,793		352,342		347,664		394,299
Gross fees (9)	$	3,189		6,523		5,700		10,098		11,215		15,552
Gross fees as a percentage of loans originated		1.76	%	2.72	%	2.11	%	2.87	%	3.23	%	3.94	%
Net gain on residential mortgage loans sold	$	1,117		2,150		4,066		4,244		7,814		6,700
Investment gains (losses) on sales of securities, net (14)	$	217		—		(61	)	393		—		366
Brokerage account assets, at quarter end (10)	$	7,220,405		6,761,480		7,158,939		7,187,085		6,597,152		6,344,416
Trust account managed assets, at quarter end	$	4,162,639		4,207,406		4,499,911		4,720,290		4,155,510		3,640,932
Core deposits (11)	$	30,748,817		30,011,444		30,398,683		29,316,911		27,170,367		25,857,639
Core deposits to total funding (11)		87.4	%	87.0	%	89.9	%	89.5	%	87.8	%	86.3	%
Risk-weighted assets	$	35,281,315		33,366,074		31,170,258		29,349,534		27,945,624		26,819,277
Number of offices		120		119		119		118		117		116
Total core deposits per office	$	256,240		252,197		255,451		248,448		232,225		222,911
Total assets per full-time equivalent employee	$	12,875		13,052		13,186		13,541		13,188		13,087
Annualized revenues per full-time equivalent employee	$	511.5		509.0		465.5		474.1		489.4		491.3
Annualized expenses per full-time equivalent employee	$	248.2		255.8		247.9		238.0		241.9		246.3
Number of employees (full-time equivalent)		3,184.5		3,074.0		2,988.0		2,841.0		2,769.5		2,706.0
Associate retention rate (12)		93.6	%	93.3	%	93.1	%	93.4	%	93.4	%	93.3	%
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
	Three months ended								Nine months ended
(dollars in thousands, except per share data)	September			June		September			September		September
	2022			2022		2021			2022		2021
Net interest income	$	305,784		264,574		237,543			809,833		693,638
Noninterest income		104,805		125,502		104,095			333,803		295,011
Total revenues		410,589		390,076		341,638			1,143,636		988,649
Less: Investment (gains) losses on sales of securities, net		(217	)	—		—			(156	)	(366	)
Total revenues excluding the impact of adjustments noted above	$	410,372		390,076		341,638			1,143,480		988,283
Noninterest expense	$	199,253		196,038		168,851			577,952		489,687
Less: ORE expense (benefit)		(90	)	86		(79	)		101		(749	)
Noninterest expense excluding the impact of adjustments noted above	$	199,343		195,952		168,930			577,851		490,436
Pre-tax income	$	183,843		181,131		169,405			522,564		485,511
Provision for credit losses		27,493		12,907		3,382			43,120		13,451
Pre-tax pre-provision net revenue		211,336		194,038		172,787			565,684		498,962
Adjustments noted above		(307	)	86		(79	)		(55	)	(1,115	)
Adjusted pre-tax pre-provision net revenue (13)	$	211,029		194,124		172,708			565,629		497,847
Noninterest income	$	104,805		125,502		104,095			333,803		295,011
Less: Adjustments as noted above		(217	)	—		—			(156	)	(366	)
Noninterest income excluding the impact of adjustments noted above	$	104,588		125,502		104,095			333,647		294,645
Efficiency ratio (4)		48.53	%	50.26	%	49.42	%		50.54	%	49.53	%
Adjustments as noted above		0.05	%	(0.03	) %	0.03	%		(0.01	) %	0.10	%
Efficiency ratio (excluding adjustments noted above) (4)		48.58	%	50.23	%	49.45	%		50.53	%	49.63	%
Total average assets	$	40,464,649		38,780,786		35,896,130			39,300,913		35,207,543
Noninterest income to average assets (1)		1.03	%	1.30	%	1.15	%		1.14	%	1.12	%
Adjustments as noted above		—	%	—	%	—	%		—	%	—	%
Noninterest income (excluding adjustments noted above) to average assets (1)		1.03	%	1.30	%	1.15	%		1.14	%	1.12	%
Noninterest expense to average assets (1)		1.95	%	2.03	%	1.87	%		1.97	%	1.86	%
Adjustments as noted above		—	%	—	%	—	%		—	%	—	%
Noninterest expense (excluding adjustments noted above) to average assets (1)		1.95	%	2.03	%	1.87	%		1.97	%	1.86	%
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
	Three months ended
(dollars in thousands, except per share data)	September			June		March		December		September		June
	2022			2022		2022		2021		2021		2021
Net income available to common shareholders	$	144,860		141,329		125,312		129,730		132,779		127,992
Investment (gains) losses on sales of securities, net		(217	)	—		61		(393	)	—		(366	)
ORE expense (benefit)		(90	)	86		105		37		(79	)	(657	)
Tax effect on adjustments noted above (17)		80		(22	)	(43	)	93		21		267
Net income available to common shareholders excluding adjustments noted above	$	144,633		141,393		125,435		129,467		132,721		127,236
Basic earnings per common share	$	1.91		1.87		1.66		1.72		1.76		1.70
Adjustment due to investment (gains) losses on sales of securities, net		—		—		—		(0.01	)	—		—
Adjustment due to ORE expense (benefit)		—		—		—		—		—		(0.01	)
Adjustment due to tax effect on adjustments noted above (17)		—		—		—		—		—		—
Basic earnings per common share excluding adjustments noted above	$	1.91		1.87		1.66		1.71		1.76		1.69
Diluted earnings per common share	$	1.91		1.86		1.65		1.71		1.75		1.69
Adjustment due to investment (gains) losses on sales of securities, net		—		—		—		(0.01	)	—		—
Adjustment due to ORE expense (benefit)		—		—		—		—		—		(0.01	)
Adjustment due to tax effect on adjustments noted above (17)		—		—		—		—		—		—
Diluted earnings per common share excluding the adjustments noted above	$	1.91		1.86		1.65		1.70		1.75		1.68
Revenue per diluted common share	$	5.40		5.14		4.52		4.47		4.50		4.37
Adjustments as noted above		—		—		—		(0.01	)	—		—
Revenue per diluted common share excluding adjustments noted above	$	5.40		5.14		4.52		4.46		4.50		4.37
Book value per common share at quarter end (8)	$	67.07		66.74		66.30		66.89		65.36		64.19
Adjustment due to goodwill, core deposit and other intangible assets		(24.63	)	(24.66	)	(24.65	)	(24.34	)	(24.38	)	(24.42	)
Tangible book value per common share at quarter end (8)	$	42.44		42.08		41.65		42.55		40.98		39.77
Paycheck Protection Program (PPP)
PPP net interest income	$	755		4,060		10,690		15,131		20,420		24,618
Income tax expense at statutory rates (17)		197		1,061		2,794		3,955		5,338		6,435
Earnings attributable to PPP		558		2,999		7,896		11,176		15,082		18,183
Basic earnings per common share attributable to PPP	$	0.01		0.04		0.10		0.15		0.20		0.24
Diluted earnings per common share attributable to PPP	$	0.01		0.04		0.10		0.15		0.20		0.24
Equity method investment (16)
Fee income from BHG, net of amortization	$	41,341		49,465		33,655		30,844		30,409		32,071
Funding cost to support investment		3,891		1,998		666		388		379		1,230
Pre-tax impact of BHG		37,450		47,467		32,989		30,456		30,030		30,841
Income tax expense at statutory rates (17)		9,789		12,408		8,623		7,961		7,850		8,062
Earnings attributable to BHG	$	27,661		35,059		24,366		22,495		22,180		22,779
Basic earnings per common share attributable to BHG	$	0.37		0.46		0.32		0.30		0.29		0.30
Diluted earnings per common share attributable to BHG	$	0.36		0.46		0.32		0.30		0.29		0.30
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
		Nine months ended
(dollars in thousands, except per share data)		September 30,
		2022			2021
Net income available to common shareholders		$	411,501		382,401
Investment (gains) losses on sales of securities, net			(156	)	(366	)
ORE expense (benefit)			101		(749	)
Tax effect on adjustments noted above (17)			14		291
Net income available to common shareholders excluding adjustments noted above		$	411,460		381,577
Basic earnings per common share		$	5.43		5.07
Adjustment due to investment (gains) losses on sales of securities, net			—		—
Adjustment due to ORE expense (benefit)			—		(0.01	)
Adjustment due to tax effect on adjustments noted above (17)			—		—
Basic earnings per common share excluding adjustments noted above		$	5.43		5.06
Diluted earnings per common share			5.42		5.05
Adjustment due to investment (gains) losses on sales of securities, net			—		—
Adjustment due to ORE expense (benefit)			—		(0.01	)
Adjustment due to tax effect on adjustments noted above (17)			—		—
Diluted earnings per common share excluding the adjustments noted above		$	5.42		5.04
Revenue per diluted common share		$	15.06		13.05
Adjustments as noted above			—		(0.01	)
Revenue per diluted common share excluding adjustments noted above		$	15.06		13.04
Paycheck Protection Program (PPP)
PPP net interest income			15,505		65,951
Income tax expense at statutory rates (17)			4,052		17,240
Earnings attributable to PPP		$	11,453		48,711
Basic earnings per common share attributable to PPP		$	0.15		0.65
Diluted earnings per common share attributable to PPP		$	0.15		0.64
Equity method investment (16)
Fee income from BHG, net of amortization		$	124,461		91,430
Funding cost to support investment			6,555		2,814
Pre-tax impact of BHG			117,906		88,616
Income tax expense at statutory rates (17)			30,821		23,164
Earnings attributable to BHG		$	87,085		65,452
Basic earnings per common share attributable to BHG		$	1.15		0.87
Diluted earnings per common share attributable to BHG		$	1.15		0.86
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
	Three months ended								Nine months ended
(dollars in thousands, except per share data)	September			June		September			September			September
	2022			2022		2021			2022			2021
Return on average assets (1)		1.42	%	1.46	%	1.47	%			1.40	%	1.45	%
Adjustments as noted above		—	%	—	%	—	%			—	%	—	%
Return on average assets excluding adjustments noted above (1)		1.42	%	1.46	%	1.47	%			1.40	%	1.45	%
Tangible assets:
Total assets	$	41,000,118		40,121,292		36,523,936			$	41,000,118		36,523,936
Less: Goodwill		(1,846,466	)	(1,846,466	)	(1,819,811	)			(1,846,466	)	(1,819,811	)
Core deposit and other intangible assets		(35,666	)	(37,617	)	(35,876	)			(35,666	)	(35,876	)
Net tangible assets	$	39,117,986		38,237,209		34,668,249			$	39,117,986		34,668,249
Tangible common equity:
Total stockholders' equity	$	5,342,112		5,315,239		5,191,798			$	5,342,112		5,191,798
Less: Preferred stockholders' equity		(217,126	)	(217,126	)	(217,126	)			(217,126	)	(217,126	)
Total common stockholders' equity		5,124,986		5,098,113		4,974,672				5,124,986		4,974,672
Less: Goodwill		(1,846,466	)	(1,846,466	)	(1,819,811	)			(1,846,466	)	(1,819,811	)
Core deposit and other intangible assets		(35,666	)	(37,617	)	(35,876	)			(35,666	)	(35,876	)
Net tangible common equity	$	3,242,854		3,214,030		3,118,985			$	3,242,854		3,118,985
Ratio of tangible common equity to tangible assets		8.29	%	8.41	%	9.00	%			8.29	%	9.00	%
Average tangible assets:
Average assets	$	40,464,649		38,780,786		35,896,130			$	39,300,913		35,207,543
Less: Average goodwill		(1,846,466	)	(1,851,137	)	(1,819,811	)			(1,842,777	)	(1,819,811	)
Average core deposit and other intangible assets		(36,884	)	(31,409	)	(37,228	)			(33,837	)	(39,372	)
Net average tangible assets	$	38,581,299		36,898,240		34,039,091			$	37,424,299		33,348,360
Return on average assets (1)		1.42	%	1.46	%	1.47	%			1.40	%	1.45	%
Adjustment due to goodwill, core deposit and other intangible assets		0.07	%	0.08	%	0.08	%			0.07	%	0.08	%
Return on average tangible assets (1)		1.49	%	1.54	%	1.55	%			1.47	%	1.53	%
Adjustments as noted above		—	%	—	%	—	%			—	%	—	%
Return on average tangible assets excluding adjustments noted above (1)		1.49	%	1.54	%	1.55	%			1.47	%	1.53	%
Average tangible common equity:
Average stockholders' equity	$	5,403,244		5,316,219		5,176,625			$	5,350,553		5,057,447
Less: Average preferred equity		(217,126	)	(217,126	)	(217,126	)			(217,126	)	(217,126	)
Average common equity		5,186,118		5,099,093		4,959,499				5,133,427		4,840,321
Less: Average goodwill		(1,846,466	)	(1,851,137	)	(1,819,811	)			(1,842,777	)	(1,819,811	)
Average core deposit and other intangible assets		(36,884	)	(31,409	)	(37,228	)			(33,837	)	(39,372	)
Net average tangible common equity	$	3,302,768		3,216,547		3,102,460			$	3,256,813		2,981,138
Return on average equity (1)		10.64	%	10.66	%	10.18	%			10.28	%	10.11	%
Adjustment due to average preferred stockholders' equity		0.44	%	0.46	%	0.44	%			0.44	%	0.45	%
Return on average common equity (1)		11.08	%	11.12	%	10.62	%			10.72	%	10.56	%
Adjustment due to goodwill, core deposit and other intangible assets		6.32	%	6.50	%	6.36	%			6.17	%	6.59	%
Return on average tangible common equity (1)		17.40	%	17.62	%	16.98	%			16.89	%	17.15	%
Adjustments as noted above		(0.03	) %	0.01	%	(0.01	) %			—	%	(0.04	) %
Return on average tangible common equity excluding adjustments noted above (1)		17.37	%	17.63	%	16.97	%			16.89	%	17.11	%
Allowance for credit losses on loans as a percent of total loans		1.04	%	1.03	%	1.17	%			1.04	%	1.17	%
Impact of excluding PPP loans from total loans		—	%	0.01	%	0.03	%			—	%	0.03	%
Allowance as adjusted for the above exclusion of PPP loans from total loans		1.04	%	1.04	%	1.20	%			1.04	%	1.20	%
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED

 

1. Ratios are presented on an annualized basis.

2. Net interest margin is the result of net interest income on a tax equivalent basis divided by average interest earning assets.

3. Total revenue is equal to the sum of net interest income and noninterest income.

4. Efficiency ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.

5. Troubled debt restructurings include loans where the Company, as a result of the borrower's financial difficulties, has granted a credit concession to the borrower (i.e., interest only payments for a significant period of time, extending the maturity of the loan, etc.). All of these loans continue to accrue interest at the contractual rate. Troubled debt restructurings do not include, beginning with the quarter ended March 31, 2020, loans for which the Company has granted a deferral of interest and/or principal or other modification pursuant to the guidance issued by the FDIC providing for relief under the Coronavirus Aid, Relief and Economic Security Act.

6. 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.

7. Capital ratios are calculated using regulatory reporting regulations enacted for such period and are defined as follows:

Equity to total assets - End of period total stockholders' equity as a percentage of end of period assets.

Tangible common equity to tangible assets - End of period total stockholders' equity less end of period preferred stock, goodwill, core deposit and other intangibles as a percentage of end of period assets less end of period goodwill, core deposit and other intangibles.

Leverage - Tier I capital (pursuant to risk-based capital guidelines) as a percentage of adjusted average assets.

Tier I risk-based - Tier I capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.

Total risk-based - Total capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.

Classified asset - Classified assets as a percentage of Tier 1 capital plus allowance for credit losses.

Tier I common equity to risk weighted assets - Tier 1 capital (pursuant to risk-based capital guidelines) less the amount of any preferred stock or subordinated indebtedness that is considered as a component of Tier 1 capital as a percentage of total risk-weighted assets.

8. Book value per common share computed by dividing total common stockholders' equity by common shares outstanding. Tangible book value per common share computed by dividing total common stockholders' equity, less goodwill, core deposit and other intangibles by common shares outstanding.

9. Amounts are included in the statement of operations in "Gains on mortgage loans sold, net", net of commissions paid on such amounts.

10. At fair value, based on information obtained from Pinnacle's third party broker/dealer for non-FDIC insured financial products and services.

11. 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.

12. 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.

13. Adjusted pre-tax, pre-provision net revenue excludes the impact of ORE expenses and income and investment gains and losses on sales of securities.

14. 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.

15. The dividend payout ratio is calculated as the sum of the annualized dividend rate for dividends paid on common shares divided by the trailing 12-months fully diluted earnings per common share as of the dividend declaration date.

16. 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.

17. Tax effect calculated using the blended statutory rate of 26.14 percent.

18. Calculated using the same guidelines as are used in the Federal Financial Institutions Examination Council's Uniform Bank Performance Report.

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Contacts

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