Pinnacle Financial Partners Q1 Earnings Call Highlights

Key Points

• Pinnacle closed its merger with Synovus on Jan. 1 and reported diluted EPS of $0.89 (adjusted diluted EPS $2.39), with results including merger-related charges of $275 million; management will reference combined historical figures to frame organic performance.
• Management flagged broad-based organic growth: period-end loans rose $2.1 billion (10% annualized), core deposits increased $1.9 billion (8% annualized), and net interest margin expanded to 3.53% partly due to purchase accounting marks and securities repositioning.
• Integration is running ahead of plan—Pinnacle added 50 revenue producers in Q1 and another 37 in April with an operational conversion targeted by March 2027—and BHG equity income was $31 million in Q1 with expected 2026 BHG contribution of about $105–115 million, supporting roughly $1.1 billion in adjusted non-interest revenue guidance.

Pinnacle Financial Partners NYSE: PNFP opened 2026 as a newly combined company following the close of its merger with Synovus on January 1, with management emphasizing early organic growth, stable credit trends and progress on integration plans during the bank’s first-quarter earnings call.

First-quarter results shaped by merger accounting and expenses

President and CEO Kevin Blair said the company “hit the ground running” in the first 90 days after closing the deal, citing balance sheet growth and revenue performance while acknowledging sizable merger-related charges.

For the first quarter, Pinnacle reported diluted earnings per share of $0.89 and adjusted diluted EPS of $2.39. Blair said results included $275 million of merger-related cost, while “credit remained stable” and key profitability metrics such as adjusted return on tangible common equity and adjusted tangible efficiency remained strong.

Chief Financial Officer Jamie Gregory noted that sequential and year-over-year comparisons were “significantly impacted” by the merger closing on January 1, and said management would reference combined historical figures for legacy Pinnacle and Synovus to frame organic performance.

Loans, deposits and margin: management cites broad-based momentum

Gregory said net interest income totaled $933 million in the first quarter, supported by “excellent balance sheet growth.” Period-end loans (excluding the day-one purchase accounting loan mark) rose $2.1 billion, or 10% annualized, from the combined firm’s fourth-quarter 2025 levels. He said most organic loan growth came from C&I, with contributions across geographic markets and specialty lending lines.

Core deposit growth was also strong. Gregory reported linked-quarter organic core deposit growth of $1.9 billion, or 8% annualized, driven by higher interest-bearing demand deposits and money market accounts and described as broad-based across business units. Total deposit growth was affected by a “strategic reduction of broker deposits,” which Gregory later characterized as a “cost optimization play.”

Net interest margin expanded to 3.53%, in line with prior guidance of 3.45% to 3.55%. Gregory attributed the NIM performance to purchase accounting marks and fixed-rate asset repricing, as well as actions taken in January to reposition part of the legacy Synovus securities portfolio. He said those transactions reduced interest rate risk, supported the bank’s liquidity profile, and eliminated “approximately all” purchase accounting accretion associated with the securities portfolio.

In Q&A, Blair said loan growth was not driven by higher line utilization, noting it was “down a little bit” in the quarter. He said the company added $8.2 billion of commitments versus $4.2 billion of funded loans, which he said could lead to future fund-ups. On pricing, Blair said new-loan yields were “right around 620” and “essentially flat,” while deposit production costs were about 2.62% and up roughly six basis points linked quarter, which he attributed to mix shifting toward money markets.

Fee revenue growth and BHG contribution

Gregory said, on a combined basis, adjusted non-interest revenue increased more than 20% year-over-year and was stable compared with the fourth quarter. He pointed to “strong” year-over-year growth in core banking, wealth management and capital markets fees.

Income from the company’s equity method investment in BHG was $31 million in the quarter, which Gregory said was in line with expectations.

For 2026 guidance, Blair said the bank continues to expect approximately $1.1 billion in adjusted non-interest revenue, including projected BHG investment income of about $105 million to $115 million. Blair described a “slight headwind” versus a prior estimate as being tied to BHG’s strategy to optimize funding and delivery platforms—creating a “modest near-term revenue recognition headwind” but, in management’s view, better positioning BHG for long-term profitability and enterprise value. Gregory later added that the shift involves more distribution through securitizations and loan sales, which brings lower upfront premiums than bank partnership sales but can reduce ongoing costs and improve the predictability of earnings over time.

Integration progress, hiring momentum and conversion timeline

Blair repeatedly highlighted recruiting as a core driver of growth, saying Pinnacle added 50 experienced revenue producers during the quarter and that momentum continued into April with another 37 new hires or accepted offers. He said integration is progressing “ahead of plan” and that major technology and systems decisions are “largely complete,” with the company still targeting an operational and brand conversion by March 2027.

Responding to questions about the go-to-market approach, Blair said the combined organization is moving toward the “Pinnacle model,” including rapid hiring of revenue producers and a decentralized framework. He said about 40% of first-quarter producer hires were in the legacy Synovus footprint, which he described as about a 50% increase over what would have been done in the same period last year, and said the model has been well received by Synovus bankers.

On retention, Blair said the company tracks voluntary turnover with a 7% target and said the combined organization is “right on that target” through the first 90 days, adding that some departures were retirements.

Blair also referenced external recognition, noting that legacy Pinnacle ranked first nationally in Coalition Greenwich “Best Bank” awards earned and Synovus ranked sixth, which he said Coalition Greenwich described as rare in bank mergers. Blair added that Pinnacle was ranked No. 12 on Fortune’s 100 Best Companies to Work For list, marking its 10th consecutive year on the list, and that the company joined the KBW Nasdaq Bank Index (BKX) during the quarter.

Credit trends, reserves and capital priorities

Gregory said credit remained “very healthy” in the first quarter. Net charge-offs were $49 million, or 23 basis points, compared with 25 basis points for the combined firm in the fourth quarter and 19 basis points for the combined firm in 2025. The non-performing asset ratio was 0.58%, which Gregory said was “largely impacted” by two senior housing relationships that were previously rated, have specific reserves, and “should be resolved this year.”

The allowance for credit losses ended the quarter at 1.19%, up from 1.17% for legacy Pinnacle at the end of December. Gregory attributed the increase to net loan growth, deterioration in the economic forecast and more individually analyzed loans, partially offset by a decline in qualitative reserves. On the economic assumptions, Gregory said the company used Moody’s updated forecast and adjusted scenario weightings to put more emphasis on slow-growth outcomes due to uncertainty.

On portfolio disclosures, Gregory said Pinnacle’s non-depository financial institution (NDFI) loan exposure is approximately $7.3 billion and that about $700 million of legacy Pinnacle music catalog loans were reclassified into NDFI from general C&I during the quarter. In Q&A, Blair said NDFI exposure was about 9% of loans and emphasized that the category is not homogeneous; he said private credit exposure within the NDFI portfolio was about $1.7 billion, or less than 2% of total loans, and described the bank’s positioning as senior secured with structural protections.

Capital-wise, Gregory said the common equity Tier 1 ratio ended the quarter at 9.8% and that the bank intends to deploy capital generated through earnings to client growth during 2026 while building CET1 toward the low end of its target range, with a stated target of about 10.25%. He said share repurchases are planned only after reaching the low end of that target. Gregory also said the most recent capital NPR proposal could have an estimated 60 basis point positive impact to CET1. Regarding Basel III-related proposals, he said the estimated benefit from risk-weighted asset changes would be driven largely by commercial lending and residential mortgages, though he stressed the bank would wait for final rules before making capital deployment decisions.

Blair closed the call by reiterating that management’s 2026 outlook was unchanged, and said first-quarter performance supported confidence in the company’s growth model and integration trajectory. Blair also noted that Jennifer Demba, identified on the call as senior director of investor relations, will retire in June.

About Pinnacle Financial Partners NYSE: PNFP

Pinnacle Financial Partners NYSE: PNFP is a bank holding company headquartered in Nashville, Tennessee, that provides a broad range of commercial and consumer banking services. Founded in 2000, the company operates through a network of banking offices and digital channels to serve individuals, small and middle-market businesses, and institutional clients. Pinnacle’s business model emphasizes relationship-based banking and tailored financial solutions for commercial borrowers and deposit customers.

The company’s product and service offerings include commercial and residential lending, treasury and payment solutions, deposit accounts, mortgage services, and cash management.

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