Pinnacle Financial Partners, Inc. Q3 FY2024 earnings call

• Shareholder Value Dashboard: GAAP and non-GAAP measures strong; balance sheet volumes (loans up 6%, earning assets up 12%, core deposits up 9% linked quarter annualized); asset quality strong. - Market Share: Strong share gains in Tennessee markets (Nashville, Knoxville, Chattanooga, Memphis) and Carolinas/Virginia via acquisition and organic growth; commercial market share leads in multiple markets. - Culture and Hiring: Emphasized strong culture as a key driver; continuing to hire top talent, with 37 new revenue producers in Q3; focus on attracting and retaining market-best talent. - Loan and Deposit Growth: Focus on C&I and private bankers; deposits indexed to fed funds to prepare for rate environment; loan growth expectations adjusted based on market conditions.

Loans: Increased by $539 million during the quarter (6.4% linked quarter annualized); C&I and owner-occupied commercial real estate loans grew ~$706 million (17% linked quarter annualized). 2024 loan growth guidance revised to a range of 7% to 8%. Deposits: Excluding brokered, deposits increased by $887 million in Q3; noninterest-bearing deposits showed volume growth; ~50% of deposits are indexed to fed funds. NIM: Posted 3.22% in Q3, expected to be flattish in Q4. Fees: Excluding loss on sale of securities in Q2, fee revenues were up 8.3% QoQ; guidance for fee revenues (excluding DSG) raised to a range of 23% to 26% growth for 2024. BHG: Originations approached $1 billion in Q3; BSG building inventory; spreads holding in higher rate environment.

• Loan Growth: 2024 loan growth guidance revised to 7%-8% growth; 2025 outlook tied to yield curve and loan demand. - Deposit Growth: Maintaining deposit volume forecast with 7%-9% growth estimate; deposits indexed to fed funds. - NIM: Expected to be flattish in Q4; net interest income growth expected in Q4. - Fee Revenues: Raised guidance for 2024 fee revenues to 23%-26% growth over 2023.

• Interest Rate Risks: Impact of rate cuts on net interest margin and income; deposit and loan beta performance; need to mitigate rate cut impacts. - Credit Risks: Off-balance sheet loan losses with lagging nature compared to on-balance sheet loans; different reserve calculations for on and off-balance sheet loans. - Market Volatility: Uncertainty around yield curve, election impact, and economic conditions affecting loan demand and margin performance.

Q: Brett Rabatin from Hovde Group on margin expectations and DDA growth A: Harold Carpenter discussed margin being flattish in Q4, need for balance sheet hedges, and DDA having seasonality but expecting lift from market share gains Q: Russell Gunther on M&A strategy and BHG revenue outlook A: Terry Turner stated unlikely to acquire banks due to organic growth success; Harold Carpenter mentioned BHG 2025 revenue expected to be mid-single to high single-digit Q: Jared Shaw's representative on BHG reserves and credit trends A: Harold Carpenter explained lag in off-balance sheet losses vs on-balance sheet, with on-balance being a leading indicator Q: Stephen Scouten on index deposits and culture vs large banks A: Harold Carpenter and Terry Turner addressed index deposit client relationships and culture continuing to propel growth despite size Q: Ben Gerlinger on hired personnel impact and expense growth A: Harold Carpenter and Terry Turner discussed hired personnel bringing mixed deposit and loan relationships, and focusing on revenue growth over expense growth Q: Anthony Elian on yield curve impact and 2025 revenue outlook A: Harold Carpenter talked about neutral balance sheet aiding through inverted yield curve, hopeful for better yield curve in 2025 Q: Catherine Mealor on NII outlook and fee growth A: Harold Carpenter mentioned NII growth tied to loan growth, and fees expected to grow with core business in 2025 Q: Samuel Varga on private banker hires and investment services A: Terry Turner and Harold Carpenter discussed private bankers bringing assets under management, with investment services line growing from such hires Q: Brian Martin on loan repricing, CRE mix, deposit growth, tax rate A: Harold Carpenter explained loan repricing, CRE mix expectations, deposit growth from verticals, and tax rate expected to be ~20% Q: Tim Mitchell on deposit maturity, loan renewal targets A: Harold Carpenter discussed deposit maturity schedule and adjusted loan renewal targets for better competitiveness