In this Report, the words “Pinnacle,” “the Company,” “we,” “us,” and “our” refer to Pinnacle Financial Partners, Inc. together with Pinnacle Bank and Pinnacle's other wholly-owned subsidiaries, except where the context requires otherwise.
FORWARD-LOOKING STATEMENTS
Certain statements made or incorporated by reference in this Report which are not statements of historical fact, including those under “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Report, constitute forward-looking statements within the meaning of, and subject to the protections of, Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements include statements with respect to Pinnacle's beliefs, plans, objectives, goals, targets, expectations, anticipations, assumptions, estimates, intentions and future performance and involve known and unknown risks, many of which are beyond Pinnacle's control and which may cause Pinnacle's actual results, performance or achievements or the financial services industry or economy generally, to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.
All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Pinnacle's use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “predicts,” “could,” “should,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential,” and other similar words and expressions of the future or otherwise regarding the outlook for Pinnacle's future business and financial performance and/or the performance of the financial services industry and economy in general. Forward-looking statements are based on the current beliefs and expectations of Pinnacle's management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this document. Many of these factors are beyond Pinnacle's ability to control or predict. These factors include, but are not limited to:
(1)our ability to realize all of the expected benefits of the Merger and our ability to integrate the two companies as expected;
(2)our ability to realize the expected benefits from our strategic initiatives, including the Merger, or other operational and execution goals in the time period expected, which could negatively affect our future profitability;
(3)competition in the financial services industry, including competition from nontraditional banking institutions such as Fintechs and non-bank lenders;
(4)an economic downturn and contraction, including a recession, and the resulting effects on our capital, financial condition, credit quality, results of operations, and future growth, including that the strength of the current economic environment could be further weakened by persistent or rising inflation, interest rate fluctuations, changes in fiscal and monetary policy, and geopolitical uncertainty;
(5)our ability to attract and retain employees, including as a result of the Merger and as part of our hiring strategy, and the impact of senior leadership transitions and recruitment of experienced financial service providers that are key to our strategic initiatives;
(6)the impact of recent or proposed changes in fiscal, monetary and economic policy, laws, and regulations, or the interpretation or application thereof, and the uncertainty of future implementation and enforcement of these policies and regulations, including persistent inflationary pressures, potential interest rate fluctuations, and potential changes to government policies related to immigration, trade, and government spending;
(7)changes in the interest rate environment, including changes to the federal funds rate, and competition in our primary market area may result in increased funding costs or reduced earning assets yields, thus reducing margins and net interest income;
(8)our strategic implementation of new lines of business, new products and services, and new technologies and the expansion of our existing business opportunities with a renewed focus on innovation;
(9)prolonged periods of inflation and its effects on our business, profitability, and our stock price, as well as the impact on our clients (including the velocity and levels of deposit withdrawals and loan repayment);
(10)changes in BHG's funding model, credit performance, regulatory oversight, auction platform activity, or growth strategy that could reduce and increase volatility in our earnings;
(11)the impact of adverse developments in the banking industry on client confidence, liquidity, and regulatory responses to these developments (including increases in the cost of our deposit insurance assessments and increased regulatory scrutiny), our ability to effectively manage our liquidity risk and any growth plans, and the availability of capital and funding;
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(12)we may be exposed to potential losses in the event of fraud and/or theft, or in the event that a third-party vendor, obligor, or business partner fails to pay amounts due to us under that relationship or under any arrangement that we enter into with them;
(13)changes in the cost and availability of funding due to changes in the deposit market and credit market;
(14)restrictions or limitations on access to funds from historical and alternative sources of liquidity could adversely affect our overall liquidity, which could restrict our ability to make payments on our obligations and our ability to support asset growth and sustain our operations and the operations of Pinnacle Bank;
(15)we may be required to make substantial expenditures to keep pace with regulatory initiatives and the rapid technological changes in the financial services industry;
(16)our current and future information technology system enhancements and operational initiatives, including those related to or involving artificial intelligence, may not be successfully implemented, which could negatively impact our operations;
(17)risks related to the development and use of artificial intelligence in our industry and generally;
(18)our business relationships with, and reliance upon, third parties that have strategic partnerships with us or that provide key components of our business infrastructure, including the costs of services and products provided to us by third parties, and disruptions in service or financial difficulties with a third-party vendor or business relationship;
(19)our enterprise risk management framework, our compliance program, or our corporate governance and supervisory oversight functions may not identify or address risks adequately, which may result in unexpected losses;
(20)our asset quality may deteriorate or our allowance for credit losses may prove to be inadequate or may be negatively affected by credit risk exposures;
(21)the ability of our operational framework to identify and manage risks associated with our business, such as credit risk, compliance risk, reputational risk, cybersecurity risk, and operational risk, including by virtue of our relationships with third-party business partners, as well as our relationships with third-party vendors and other service providers;
(22)if economic conditions worsen or regulatory capital rules are modified, we may be required to undertake initiatives to improve or conserve our capital position;
(23)our ability to identify and address cybersecurity risks such as data security breaches, malware, "denial of service" attacks, "hacking," and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption, or damage of our systems, increased costs, significant losses, or adverse effects to our brand reputation;
(24)the impact on our financial results, brand reputation, and business if we are unable to comply with all applicable federal and state regulations or other supervisory actions or directives and any necessary capital initiatives;
(25)we may not be able to identify suitable bank and non-bank acquisition opportunities as part of our growth strategy and even if we are able to identify attractive acquisition opportunities, we may not be able to complete such transactions on favorable terms or realize the anticipated benefits from such acquisitions;
(26)our ability to receive dividends from our subsidiaries could affect our liquidity, including our ability to pay dividends or take other capital actions;
(27)our corporate responsibility strategies and initiatives, the scope and pace of which could alter our brand reputation and shareholder, employee, client, and third-party relationships;
(28)we could realize losses if we sell assets and the proceeds we receive are lower than the carrying value of such assets;
(29)our ability to obtain regulatory approval to take certain actions, including any dividends on our common or preferred stock, any repurchases of our common or preferred stock, or any other issuance or redemption of any other regulatory capital instruments, as well as any applications in respect to strategic initiatives;
(30)our concentrated operations in the Southeastern U.S. make us vulnerable to local economic conditions, local weather catastrophes, public health issues, and other external events;
(31)the costs and effects of litigation, investigations, or similar matters, or adverse facts and developments related thereto;
(32)the fluctuation in our stock price and general volatility in the stock market;
(33)the effects of any damages to our brand reputation resulting from developments related to any of the items identified above; and
(34)other factors and other information contained in this Report and in other reports and filings that we make with the SEC under the Exchange Act, including, without limitation, those found in "Part II - Item 1A. Risk Factors" of this Report.
For a discussion of these and other risks that may cause actual results to differ from expectations, refer to “Part II - Item 1A. Risk Factors” and other information contained in this Report and our other periodic filings, including quarterly reports on Form 10-Q and current reports on Form 8-K, that we file from time to time with the SEC. All written or oral forward-looking statements that are made by or are attributable to Pinnacle are expressly qualified by this cautionary notice. You should not
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place undue reliance on any forward-looking statements since those statements speak only as of the date on which the statements are made. Pinnacle undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of new information or unanticipated events, except as may otherwise be required by law.
INTRODUCTION AND CORPORATE PROFILE
Pinnacle Financial Partners, Inc. is a financial services company and registered bank holding company headquartered in Atlanta, Georgia. Through its wholly-owned subsidiary, Pinnacle Bank, a Tennessee state-chartered bank that is a member of the Federal Reserve System, the Company provides commercial and consumer banking in addition to a full suite of specialized products and services, including wealth services, treasury management, mortgage services, premium finance, asset-based lending, structured lending, capital markets, and international banking. Pinnacle also provides financial planning and investment advisory services through certain of its wholly-owned subsidiaries.
On January 1, 2026, the Merger closed and on January 2, 2026, Pinnacle Bank became a member bank of the Federal Reserve System and Synovus Bank, a Georgia-chartered bank and wholly-owned subsidiary of Synovus merged with and into Pinnacle Bank, with Pinnacle Bank continuing as the surviving entity and as a wholly-owned subsidiary of Pinnacle. Pinnacle Bank continues to operate under the name “Pinnacle Bank” and remains headquartered in Nashville, Tennessee.
Pinnacle Bank is positioned in some of the highest growth markets in the Southeast, with 388 branches and 505 ATMs across its footprint as of June 30, 2026.
REGULATORY CAPITAL-RELATED DEVELOPMENTS
On March 19, 2026, the Federal Reserve, the FDIC, and the OCC issued a series of proposed rules to revise the U.S. regulatory capital framework to finalize the post-crisis Basel III reforms. Comments were due by June 18, 2026. As a Category IV banking organization, the Company and the Bank would not be required to adopt the new expanded risk-based approach. However, if implemented as proposed, the rules would impact how the Company and the Bank calculate regulatory capital ratios. Effective dates for the revised rules were not proposed. The Company and the Bank will continue to monitor for developments and consider impacts on capital planning.
EXECUTIVE SUMMARY
The following financial review summarizes the significant trends, changes in our business, transactions, and other matters affecting Pinnacle’s results of operations for the three and six months ended June 30, 2026 compared to the same periods in 2025 and financial condition as of June 30, 2026 compared to December 31, 2025. This discussion supplements, and should be read in conjunction with, the unaudited interim consolidated financial statements and notes thereto contained elsewhere in this Report and the consolidated financial statements of Pinnacle, the notes thereto, and management’s discussion and analysis contained in Pinnacle's 2025 Form 10-K.
Management's Discussion and Analysis of Financial Condition and Results of Operations consists of:
•Discussion of Results of Operations - Reviews Pinnacle's financial performance, as well as selected balance sheet items, items from the statements of income, significant transactions, and certain key ratios that illustrate Pinnacle's performance.
•Credit Quality, Capital Resources and Liquidity - Discusses credit quality, market risk, capital resources, and liquidity, as well as performance trends. It also includes a discussion of liquidity policies, how Pinnacle obtains funding, and related performance.
•Additional Disclosures - Discusses additional important matters, including critical accounting policies and non-GAAP financial measures.
A reading of each section is important to fully understand our financial performance.
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DISCUSSION OF RESULTS OF OPERATIONS
Table 1 - Consolidated Financial Highlights
Three Months Ended June 30, Six Months Ended June 30,
(dollars in millions, except per share data) 2026 2025 Change(1) 2026 2025 Change(1)
Net interest income $ 956 $ 380 151% $ 1,889 $ 746 153 %
Provision for credit losses 63 24 160 139 41 237
Non-interest revenue 247 125 97 531 221 139
Total revenue 1,203 505 138 2,420 967 150
Non-interest expense 721 286 152 1,673 561 198
Income before income taxes 419 195 114 608 365 66
Net income 328 159 104 478 299 59
Less: Preferred stock dividends 15 4 290 30 8 291
Net income available to common shareholders 313 155 101 448 291 53
Net income per common share, basic 2.07 2.01 3 2.97 3.79 (22)
Net income per common share, diluted 2.07 2.00 4 2.96 3.77 (21)
Net interest margin(2) 3.44 % 3.23 % 21 bps 3.48 % 3.22 % 26 bps
Net charge-off ratio(2) 0.22 0.20 2 0.23 0.18 5
Return on average assets(2) 1.06 1.18 (12) 0.79 1.13 (34)
Return on average common equity(2) 9.01 9.72 (71) 6.51 9.26 nm
Efficiency ratio (TE) 59.4 55.2 nm 68.4 56.5 nm
(1) Percentage changes are calculated using unrounded amounts and may differ from calculations based on rounded figures.
(2) Annualized
June 30, 2026 March 31, 2026 Sequential Quarter Change June 30, 2025 Year-Over-Year Change
(dollars in millions)
Loans, net of deferred fees and costs $ 88,076 $ 85,197 $ 2,879 $ 37,105 $ 50,971
Total average loans, quarter 86,406 83,691 2,715 36,968 49,438
Total deposits 100,898 100,103 795 45,022 55,876
Total average deposits, quarter 100,278 99,168 1,110 44,234 56,044
Non-performing assets ratio 0.50 % 0.58 % (8) bps 0.44 % 6 bps
Non-performing loans ratio 0.47 0.54 (7) 0.42 5
Past due loans over 90 days (as a % of loans) 0.01 0.01 — 0.01 —
ACL to loans coverage ratio 1.17 1.19 (2) 1.17 —
CET1 capital ratio 9.93 9.81 12 10.70 (77)
Total shareholders’ equity to total assets ratio 11.49 11.89 (40) 12.11 (62)
Second Quarter 2026 Overview
As the Merger became effective January 1, 2026, reported results reflect Legacy Pinnacle results prior to the completion of the Merger and results for the combined entity from the Merger closing date forward. As such, comparative data in MD&A as of and for the periods ended December 31, 2025 and June 30, 2025 reflect only Legacy Pinnacle.
Net income available to common shareholders for the second quarter of 2026 was $313 million, or $2.07 per diluted common share, compared to $155 million, or $2.00 per diluted common share, for the second quarter of 2025. Net income available to common shareholders for the six months ended June 30, 2026 was $448 million, or $2.96 per diluted common share, compared to $291 million, or $3.77 per diluted common share, for the six months ended June 30, 2025. The increase in net income available to common shareholders for the three and six months ended June 30, 2026 when compared to the same periods in 2025 is primarily due to the Merger. Other impacts to the comparable periods are noted below and throughout this MD&A.
Net interest income for the second quarter June 30, 2026 was $956 million, up $576 million, or 151%, compared to the same period in 2025. Net interest income for the six months ended June 30, 2026 was $1.9 billion, up $1.1 billion, or 153%, compared to the same period in 2025. Net interest income during both the three and six month periods ended June 30, 2026 was
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impacted by purchase accounting marks on the Synovus balance sheet and associated accretion, fixed-asset repricing, the repositioning of our securities portfolio, modest pressure from lower SOFR rates, and, specifically in the second quarter, incremental wholesale funding reliance due to deposit seasonality. Purchase accounting accretion on loans may fluctuate quarter-to-quarter due to prepayments on loans during the respective periods. Net interest margin for the three and six months ended June 30, 2026 was 3.44% and 3.48%, respectively, compared to Legacy Pinnacle margin of 3.23% and 3.22%, respectively, during the same periods in 2025.
Non-interest revenue for the three and six months ended June 30, 2026 was $247 million and $531 million, respectively, up $122 million, or 97%, and $310 million, or 139%, respectively, compared to the same periods in 2025. Nearly all non-interest revenue categories were impacted by the Merger. Outside of the impact of the Merger, increases in both the three and six month periods ended June 30, 2026, when compared to the comparable periods in 2025, are largely the result of growth in core banking fees, wealth management revenues and capital markets income, offset in part by investment securities losses incurred as a result of the repositioning of our securities portfolio post-merger. The three month period ended June 30, 2026 was also negatively impacted by a decline in income from our equity method investment in BHG attributable to its intentional shift in placement strategy.
Non-interest expense for the three and six months ended June 30, 2026 was $721 million and $1.7 billion, up $435 million, or 152%, and $1.1 billion, or 198%, respectively, compared to the same periods in 2025. Merger-related expense for the three and six months ended June 30, 2026 was $51 million and $326 million, respectively. Excluding merger-related expense, non-interest expense during the three and six months ended June 30, 2026, as compared to the same prior year periods, was impacted by higher employment expenses, largely due to increased headcount and increases in equipment, occupancy and software expense primarily the result of software-related costs, some of which will be offset as merger-related synergies are realized.
At June 30, 2026, loans, net of deferred fees and costs, of $88.1 billion increased $48.9 billion from December 31, 2025, primarily driven by the Merger. Outside of the impact of the Merger, we experienced significant C&I loan growth during the six months ended June 30, 2026, a result of balanced growth between our specialty and geographic business units.
Credit metrics at June 30, 2026 included NPAs and NPLs at 50 bps and 47 bps, respectively, and total past due loans at 14 bps as a percentage of total loans. Net charge-offs/average loans for the three and six months ended June 30, 2026 were in line with our expectations at 22 and 23 bps annualized, respectively. The ACL to loans coverage ratio was 1.17% at both June 30, 2026 and December 31, 2025. The reserve was largely impacted by loan growth offset in part by a decline in reserves for individually analyzed credits. The ACL to NPL coverage ratio was 248% at June 30, 2026, compared to 343% at December 31, 2025.
Total period-end deposits at June 30, 2026 increased $53.5 billion compared to December 31, 2025, and were primarily driven by the Merger. Excluding the impact of the Merger, the increase is reflective of an increase in interest-bearing and non-interest-bearing demand deposits and money market accounts.
At June 30, 2026, Pinnacle's' CET1 ratio was 9.93%. Our intent remains to deploy capital generated through earnings to client growth as we proceed through 2026 while building CET1.
More detail on Pinnacle's financial results for the three and six months ended June 30, 2026 may be found in subsequent sections of "Item 2. – Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Report. See also "Part II – Item 1A. – Risk Factors" of this report.
2026 Fundamental Guidance
The outlook is unchanged from what was previously noted in January of 2026, reflects our current expectations and is based on recent trends and client feedback. Underlying our guidance is an expectation of both a stable interest rate and economic environment. Changes to these factors could have a meaningful impact on the guidance provided below:
•end of period loan growth of approximately 9% to 11%, excluding the Day 1 purchase accounting loan mark
•end of period deposit growth of approximately 8% to 10%
•adjusted revenue(1) of approximately $5.0 to $5.2 billion(2)
•adjusted non-interest expense(1) of approximately $2.675 to $2.775 billion(3)
•net charge-off ratio of 0.20% to 0.25% year-to-date annualized
•adjusted effective income tax rate of approximately 20% to 21%(4)
(1) Non-GAAP financial measure; see "Table 14 - Reconciliation of Non-GAAP Financial Measures" of this Report for applicable reconciliation to the most comparable GAAP measure.
(2) Assumes net interest margin of 3.44% - 3.47% and no FOMC action through 2026.
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(3) Includes approximately $185 million of estimated intangible amortization in 2026 along with an assumption that 40% of the expected net cost savings from the Merger will be realized in 2026.
(4) Based on earnings adjusted for merger-related costs.
Loans
The following table compares the composition of the loan portfolio at June 30, 2026, and December 31, 2025.
Table 2 - Loans by Portfolio Class
(dollars in millions) June 30, 2026 December 31, 2025
Commercial, financial and agricultural $ 36,676 41.6 % $ 16,549 42.3 %
Owner-occupied 14,439 16.4 5,747 14.6
Total commercial and industrial(1) 51,115 58.0 22,296 56.9
Investment properties 20,747 23.6 9,496 24.3
1-4 family properties 1,917 2.2 1,284 3.3
Land and development 931 1.0 576 1.4
Total commercial real estate 23,595 26.8 11,356 29.0
Consumer mortgages 8,459 9.6 3,456 8.8
Home equity 3,002 3.4 1,374 3.5
Credit cards 236 0.3 53 0.1
Other consumer loans 1,669 1.9 619 1.7
Total consumer 13,366 15.2 5,502 14.1
Loans, net of deferred fees and costs $ 88,076 100.0 % $ 39,154 100.0 %
(1) Includes senior housing loans of $4.3 billion, $521 million, and $564 million at June 30, 2026, December 31, 2025, and June 30, 2025, respectively, which are primarily classified as owner-occupied in accordance with our underwriting process.
At June 30, 2026, loans, net of deferred fees and costs of $88.1 billion increased $48.9 billion, or 125%, from December 31, 2025, primarily as a result of the Merger. C&I loans remain the largest component of our loan portfolio, representing 58.0% of total loans, while CRE and consumer loans represent 26.8% and 15.2%, respectively. Our portfolio composition is guided by our strategic growth plan, in conjunction with risk oversight of portfolio concentrations.
Total commercial loans (which are comprised of C&I and CRE loans) at June 30, 2026 were $74.7 billion, or 84.8% of the total loan portfolio, compared to $33.7 billion, or 85.9%, at December 31, 2025.
Pinnacle actively manages and evaluates credit risk associated with its commercial loans through robust underwriting policies and routine loan monitoring in order to identify and mitigate any weakness as early as possible. Pinnacle's management, along with its Chief Credit Officer and Credit Risk Committee, continually monitors and evaluates commercial concentrations by property class, industry, and relative to regulatory capital. As part of its risk management efforts, Pinnacle monitors its commercial loan portfolio on an ongoing basis to assess credit risks, identify emerging risks, and adjust its lending limits taking into account, among other things, (1) the size, complexity, and level of risk of loans and individual borrowers, (2) changes in the level of credit risk at both the borrower and portfolio level, (3) concentrations of credit risk pertaining to both specific industries and geographies in its loan portfolio, (4) loan structure, collateral location and quality, and project progress, and (5) economic forecasts and industry outlook.
Pinnacle has established recommended credit exposure limits for large C&I commercial lending relationships based on Pinnacle's internal risk ratings for an individual borrower at the time the lending commitment is approved, with the final exposure limit being determined by the appropriate credit approval authority. Limits for large Commercial Real Estate exposures are established at the sponsor level through an annual approval process. Commercial credits are subject to review according to credit risk management monitoring practices as outlined in Pinnacle's loan policy, as well as a sampling process performed by Pinnacle Credit Review to ensure uniform application of policies and procedures and to validate risk rating accuracy. Pinnacle prepares targeted stress tests on a routine basis for its commercial loans. This testing is completed in addition to sensitivity testing completed at the initial extension of credit.
Commercial and Industrial Loans
The C&I loan portfolio represents the largest category of Pinnacle's loan portfolio and is primarily comprised of general middle market and commercial banking clients across a diverse set of industries as well as certain specialized lending verticals. The following table shows the composition of the C&I loan portfolio aggregated by NAICS code. As of June 30, 2026 and December 31, 2025, 92.2% and 89.8%, respectively, of Pinnacle's C&I loans are secured by real estate, business equipment,
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inventory, and other types of collateral. C&I loans at June 30, 2026 grew $28.8 billion from December 31, 2025, primarily as a result of the Merger. Outside of the impact of the Merger, the growth was diverse by geography and supported by specialty lending.
Table 3 - Commercial and Industrial Loans by Industry
June 30, 2026 December 31, 2025
(dollars in millions) NAICS Code Amount %(1) Amount %(1)
Finance and insurance 52 $ 8,882 17.4 % $ 1,559 7.0 %
Health care and social assistance 62 6,196 12.1 1,610 7.2
Retail trade 44-45 3,397 6.6 1,403 6.3
Accommodation and food services 72 3,138 6.1 1,371 6.1
Non classifiable 3,120 6.1 3,226 14.5
Lessors of real estate 5311 3,049 6.0 1,448 6.5
Wholesale trade 42 2,813 5.5 1,048 4.7
Manufacturing 31-33 2,655 5.2 1,174 5.3
Construction 23 2,272 4.4 1,018 4.6
Real estate and rental and leasing other 53 2,131 4.2 1,111 5.0
Professional, scientific, and technical services 54 2,111 4.1 1,137 5.1
Transportation and warehousing 48-49 1,820 3.6 928 4.2
Other services 81 1,805 3.5 886 4.0
Information 51 1,757 3.4 1,452 6.5
Arts, entertainment and recreation 71 1,723 3.4 1,022 4.6
Other industries(2) 1,465 3.0 497 2.1
Educational services 61 1,176 2.3 574 2.6
Public administration 92 973 1.9 448 2.0
Admin, support, waste mgmt, and remediation svcs 56 632 1.2 384 1.7
Total commercial and industrial loans $ 51,115 100.0 % $ 22,296 100.0 %
(1) Loan balance in each category expressed as a percentage of total C&I loans.
(2) Comprised of NAICS industries that are less than 1% of total C&I loans.
At June 30, 2026, $36.7 billion of C&I loans, or 41.6% of the total loan portfolio, represented loans originated for the purpose of financing commercial, financial and agricultural business activities. The primary source of repayment on these loans is revenue generated from products or services offered by the business or organization. The secondary source of repayment is the collateral, which consists primarily of equipment, inventory, accounts receivable, time deposits, cash surrender value of life insurance, and other business assets, or refinance.
At June 30, 2026, $14.4 billion of C&I loans, or 16.4% of the total loan portfolio, represented loans originated for the purpose of financing owner-occupied properties. The financing of owner-occupied facilities is considered a C&I loan even though there is improved real estate as collateral such as senior housing facilities. This treatment is a result of the credit decision process, which focuses on cash flow from operations of the business to repay the debt. The secondary source of repayment on these loans is the underlying real estate. These loans are predominantly secured by owner-occupied and other real estate and, to a lesser extent, other types of collateral.
Commercial Real Estate Loans
CRE consists primarily of income-producing investment properties loans, as well as 1-4 family properties, land and development. Total CRE loans of $23.6 billion increased $12.2 billion from December 31, 2025, largely due to the Merger.
Investment properties loans consist of construction and mortgage loans for income-producing properties and are primarily made to finance multi-family properties, hotels, office buildings, retail, warehouse/industrial and other commercial development properties. Total investment properties loans as of June 30, 2026 were $20.7 billion, or 87.9% of the CRE loan portfolio, and increased $11.3 billion from December 31, 2025 primarily as a result of the Merger.
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The following table shows the principal categories of the investment properties loan portfolio at June 30, 2026 and December 31, 2025.
Table 4 - Investment Properties Loan Portfolio
June 30, 2026 December 31, 2025
(dollars in millions) Amount % (1) Amount % (1)
Multi-Family $ 6,592 31.8 % $ 3,433 36.2 %
Hotels 2,528 12.2 574 6.0
Office Buildings 2,684 12.9 1,176 12.4
Retail 3,658 17.6 1,307 13.8
Warehouse/Industrial 3,294 15.9 2,087 22.0
Other investment property 1,991 9.6 919 9.6
Total investment properties loans $ 20,747 100.0 % $ 9,496 100.0 %
(1) Loan balance in each category expressed as a percentage of total investment properties loans.
1-4 Family Properties Loans
1-4 family properties loans include construction loans to home builders and commercial mortgage loans related to 1-4 family rental properties and are almost always secured by the underlying property being financed by such loans. These properties are primarily located in the markets served by Pinnacle. At June 30, 2026, 1-4 family properties loans totaled $1.9 billion, or 8.1% of the CRE loan portfolio.
Land and Development Loans
Land and development loans include commercial and residential development as well as land acquisition loans and are secured by land held for future development, typically in excess of one year. Properties securing these loans are substantially within markets served by Pinnacle, and loan terms generally include personal guarantees from the principals. Loans in this portfolio are underwritten based on the LTV of the collateral and the capacity of the guarantor(s). At June 30, 2026, land and development loans totaled $931 million, or 4.0% of the CRE loan portfolio.
Consumer Loans
The consumer loan portfolio consists of a wide variety of loan products offered through Pinnacle's banking network, including first and second residential mortgages, home equity and consumer credit card loans, as well as both secured and unsecured loans from third-party lending. Consumer loans were $13.4 billion as of June 30, 2026.
Deposits
Deposits provide the most significant funding source for interest earning assets. The following table shows the composition of period-end deposits as of the dates indicated. See Table 11 - Quarter-to-Date Net Interest Income and Table 12 - Year-to-Date Net Interest Income in this Report for information on average deposits including average rates.
Table 5 - Composition of Period-end Deposits
(dollars in millions) June 30, 2026 %(1) December 31, 2025 %(1) June 30, 2025 %(1)
Non-interest-bearing demand deposits $ 20,657 20.5 % $ 9,051 19.1 % $ 8,663 19.2 %
Interest-bearing demand deposits 28,708 28.4 15,649 33.0 14,301 31.8
Money market accounts 36,343 36.0 16,824 35.5 16,329 36.3
Savings deposits 1,784 1.8 804 1.7 788 1.7
Time deposits 13,406 13.3 5,073 10.7 4,941 11.0
Total deposits $ 100,898 100.0 % $ 47,401 100.0 % $ 45,022 100.0 %
(1) Deposits balance in each category expressed as percentage of total deposits.
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Total period-end deposits at June 30, 2026 were up $53.5 billion, or 113%, compared to December 31, 2025 primarily as a result of the Merger. Excluding the impact of the Merger, the increase is primarily reflective of an increase in interest-bearing and non-interest-bearing demand deposits and money market accounts. Total average deposit costs were 2.14% in the second quarter of 2026.
Non-interest Revenue
The following table shows the principal components of non-interest revenue.
Table 6 - Non-interest Revenue
Three Months Ended June 30, Six Months Ended June 30,
(dollars in millions) 2026 2025 $ Change(1) % Change(1) 2026 2025 $ Change(1) % Change(1)
Core banking fees $ 93 $ 32 $ 61 189 % $ 184 $ 64 $ 120 186 %
Wealth management revenue 85 32 53 163 169 65 104 160
Income from equity method investment 24 26 (2) (8) 55 46 9 18
Capital markets income 18 4 14 403 36 6 30 482
Total loan sales and servicing 9 6 3 65 19 12 7 59
Income from bank-owned life insurance 19 13 6 45 39 23 16 70
Investment securities gains (losses), net (29) — (29) nm (26) (13) (13) (109)
Other non-interest revenue 28 12 16 129 55 18 37 206
Total non-interest revenue $ 247 $ 125 $ 122 97 % $ 531 $ 221 $ 310 139%
(1) Amounts may not total due to rounding and percentage changes are calculated using unrounded amounts and may differ from calculations based on rounded figures.
Three and Six Months Ended June 30, 2026 compared to June 30, 2025
Non-interest revenue for the three and six months ended June 30, 2026 was up $122 million, or 97%, and up $310 million, or 139%, respectively, compared to the same periods in 2025. The increases reflect combined operations following the Merger, which is the primary contributor to higher overall non-interest revenue. The three months ended June 30, 2026 was also impacted by losses from sales of AFS investment securities as a result of ongoing securities portfolio repositioning, partially offset by increases in wealth management revenue and core banking fees. The six months ended June 30, 2026 benefited from increased wealth management revenue, core banking fees, and capital markets income.
Core banking fees consists of account analysis fees on deposit accounts, NSF fees, credit and debit card interchange fees, merchant revenue, letter/line of credit fees, rent on safe deposit boxes and all other service charges. These fees were $93 million and $184 million during the three and six months ended June 30, 2026, respectively. Excluding the impact from the Merger, card fees, service charges on deposit accounts, and line of credit non-usage fees were the primarily drivers for the increases during the periods.
Wealth management revenue consists primarily of fees derived from trust income, brokerage revenue, and insurance revenue. Wealth management revenue was $85 million and $169 million for the three and six months ended June 30, 2026, respectively. Excluding the impact of the Merger, wealth management revenue increased primarily due to increases in brokerage commissions and overall trust fees.
Income from equity method investment is comprised solely of income derived from our 49% equity method investment in BHG. BHG is engaged in facilitating originations of commercial and consumer loans largely to skilled professionals throughout the United States. The loans are either financed by secured borrowings or sold to independent financial institutions and investors. Income from equity method investment decreased $2 million, or 8%, during the three months ended June 30, 2026 as compared to the same period in 2025, primarily the result of an intentional shift in placement strategy by BHG. During the six months ended June 30, 2026 as compared to the same period in 2025, income from our equity method investment in BHG increased $9 million, or 18%, largely the result of increases in gains on sales of commercial and consumer loans through BHG's platforms, partially offset by the aforementioned intentional shift in placement strategy. Earnings from BHG are likely to fluctuate from period-to-period, based on volumes and the distribution of loans across their delivery platforms.
Capital markets income, which primarily includes fee income from client derivative transactions, arranger/syndication fees, debt capital market transactions, M&A advisory fees, foreign exchange, as well as other miscellaneous income from capital
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market transactions, increased to $18 million and $36 million in the three and six months ended June 30, 2026, respectively. Outside of the impact of the Merger, capital markets income increased primarily due to higher syndication fees, client derivative transactions and M&A advisory fees in the three and six months ended June 30, 2026, partially offset by a decrease in foreign exchange related income during the same periods.
Total loan sales and servicing consisting of net gains on loan origination/sales activities were $9 million and $19 million for the three and six months ended June 30, 2026, respectively. Excluding the impact of the Merger, total loan sales were negatively impacted by lower mortgage loan origination fees during the three and six months ended June 30, 2026.
Income from BOLI was $19 million and $39 million for the three and six months ended June 30, 2026, respectively, and includes increases in the cash surrender value of policies and proceeds from insurance benefits. The increase for the three and six months ended June 30, 2026 compared to the same periods in 2025 was primarily driven by the impact of the Merger. Outside of the Merger, income from BOLI in the three months ended June 30, 2026, was impacted by lower proceeds from insurance benefits, while the six months ended June 30, 2026 was impacted by the aforementioned lower proceeds from insurance benefits, partially offset by an increase in cash surrender value appreciation income.
The main components of other non-interest revenue are fees for commercial sponsorship income, including transaction and servicing fees associated with certain third-party lending relationships, earnings from other equity investments, earnings from tax credit investments, general processing charges, and other miscellaneous items. The three and six months ended June 30, 2026 increased $16 million and $37 million, respectively, compared to the same periods in 2025, largely due to the Merger. Excluding the Merger impact, other non-interest revenue in the three months ended June 30, 2026 increased largely due to higher income from tax credit investments, substantially from the sale of an investment, and higher ORE rental income, partially offset by lower commercial sponsorship income, while other non-interest income in the six months ended June 30, 2026 increased primarily due to higher general processing charges and the aforementioned increase in income from tax credit investments and ORE rental income, partially offset by a decrease in the aforementioned commercial sponsorship income.
Non-interest Expense
The following table summarizes the components of non-interest expense.
Table 7 - Non-interest Expense
Three Months Ended June 30, Six Months Ended June 30,
(dollars in millions) 2026 2025 $ Change(1) % Change(1) 2026 2025 $ Change(1) % Change(1)
Salaries and other personnel expense $ 378 $ 180 $ 198 110 % $ 774 $ 351 $ 423 120 %
Net occupancy, equipment, and software expense 102 44 58 133 199 86 113 130
Amortization of intangibles 46 1 45 nm 94 3 91 nm
FDIC insurance and other regulatory fees 20 8 12 167 43 18 25 133
Merger-related expense 51 — 51 nm 326 — 326 nm
Other operating expense 124 53 71 132 237 103 134 131
Total non-interest expense $ 721 $ 286 $ 435 152 % $ 1,673 $ 561 $ 1,112 198 %
(1) Amounts may not total due to rounding and percentage changes are calculated using unrounded amounts and may differ from calculations based on rounded figures.
Three and Six Months Ended June 30, 2026 compared to June 30, 2025
Non-interest expense for the three and six months ended June 30, 2026 was up $435 million, or 152%, and up $1.1 billion, or 198%, respectively, compared to the same periods in 2025. The increases reflect combined operations following the Merger, which is the primary contributor to higher overall non-interest expense. Merger-related expense for the three months ended June 30, 2026 was $51 million, while the six months ended June 30, 2026 was $326 million and included merger-related equity acceleration costs. Excluding merger-related expense, non-interest expense during the three and six months ended June 30, 2026 as compared to the same prior year periods was impacted by higher employment expenses, largely due to increased headcount.
Salaries and other personnel expense increased $198 million and $423 million, respectively, for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, primarily due to the impact of the Merger. Outside of the impact of the Merger, salaries and other personnel expenses were impacted by increased headcount. During the
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quarter, in addition to the impact of the Merger, we added 74 revenue producer hires as well as team members associated with certain critical support functions, such as technology, operations, and security.
Also contributing to total salaries and employee benefits in the three and six months ended June 30, 2026 were cash and equity incentives of $74 million and $150 million, respectively, compared to $48 million and $83 million, respectively, in the comparable prior year periods. We believe that cash and equity incentives are a valuable tool in motivating a team member base that is focused on providing our clients effective financial advice and increasing shareholder value. As a result, and unlike many other financial institutions, the majority of our bank's non-commissioned team members are participants in our annual cash incentive plan in 2026 with a minimum targeted bonus equal to 10% of each team member's annual salary, and nearly all of our bank's team members are participating in our equity compensation plans in 2026. Under the 2026 annual cash incentive plan, the targeted level of incentive payments require achievement of a certain soundness threshold and a targeted level of annual revenue and annual diluted earnings per common share (in each case subject to certain adjustments). To the extent that the soundness threshold is met and revenue and diluted earnings per common share are above or below the targeted amount, the aggregate incentive payments will be increased or decreased. Historically, we have paid between 0% and 125% of our targeted incentives.
Net occupancy, equipment, and software expense was $102 million and $199 million for the three and six months ended June 30, 2026, respectively. Excluding the impact of the Merger, ongoing investments in technology were the primary contributor to increases in these costs.
Amortization of intangibles for the three and six months ended June 30, 2026 was $46 million and $94 million, respectively, and included amortization associated with a core deposit intangible and a wealth customer relationship intangible created as a result of the Merger.
FDIC insurance and other regulatory fees were $20 million and $43 million for the three and six months ended June 30, 2026, respectively. FDIC insurance and other regulatory fees increased largely due to a higher base assessment rate as a result of the Merger.
Merger-related expenses were $51 million and $326 million for the three and six months ended June 30, 2026, respectively. During the three months ended June 30, 2026, these expenses included $19 million in employee-related costs, $13 million in advisory fees, $5 million related to contract terminations, $3 million each in travel expenses and lease terminations / branch closures, respectively, and $8 million in other costs, while the six months ended June 30, 2026 included $117 million in advisory fees, $110 million in other employee-related costs, $70 million in equity acceleration expense, and $29 million in other costs.
Other operating expense includes advertising, travel, professional, insurance, network and communication, software platform expenses, other taxes, subscriptions and dues, restructuring charges, other loan and ORE expense, postage and freight, training, business development, donations, supplies, and other miscellaneous expense. Other operating expense for the three and six months ended June 30, 2026 was $124 million and $237 million, respectively. Excluding the impact of the Merger, other operating expense during the three months ended June 30, 2026 was impacted by increases in ORE expense, software platform expense, which includes third-party data processing fees, and business development expense, partially offset by a decrease in professional fees, while the increase during the six months ended June 30, 2026 was driven by increases in the same aforementioned expenses, partially offset by decreases in certain franchise tax accruals and professional fees.
Income Tax Expense
Income tax expense was $91 million and $36 million for the three months ended June 30, 2026 and 2025, respectively, representing effective tax rates of 21.7% and 18.5%, respectively. Income tax expense was $130 million and $66 million for the six months ended June 30, 2026 and 2025, respectively, representing effective tax rates of 21.4% and 18.1%, respectively.
The effective tax rate was higher for the three and six months ended June 30, 2026, compared to the same periods in the prior year primarily due to certain merger-related expenses which were not deductible for income tax purposes as well as the sale of certain state and municipal securities which decreased the benefit of tax-exempt interest income in the current year. Comparability to the prior period was also affected by varying levels of pre-tax income as well as changes in the timing and mix of discrete tax items, including tax benefits from share-based compensation, the accrual and release of valuation allowances and changes in reserves for uncertain tax positions.
CREDIT QUALITY, CAPITAL RESOURCES AND LIQUIDITY
Credit Quality
Pinnacle diligently monitors the quality of its loan portfolio by industry, property type, and geography through a thorough portfolio review process and our analytical risk management tools. Such credit surveillance efforts are part of a broader credit risk management framework which includes Board oversight, as well as management-level committee oversight at varying
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levels across the portfolio. This includes an enterprise risk appetite framework, which helps ensure an expansive view across a myriad of credit risks within the portfolio.
At June 30, 2026, credit metrics included NPAs and NPLs at 50 bps and 47 bps, respectively, and total past due loans at 14 bps as a percentage of total loans. Net charge-offs were $48 million, or 22 bps annualized, and $97 million, or 23 bps annualized for the three and six months ended June 30, 2026.
The table below includes selected credit quality metrics.
Table 8 - Credit Quality Metrics
(dollars in millions) June 30, 2026 December 31, 2025 June 30, 2025
Non-performing loans $ 415 $ 133 $ 157
ORE and Other Assets 29 8 5
Non-performing assets $ 444 $ 141 $ 162
Loans, net of deferred fees and costs $ 88,076 $ 39,154 $ 37,105
Non-performing loans as a % of total loans 0.47 % 0.34 % 0.42 %
Non-performing assets as a % of total loans and ORE 0.50 0.36 0.44
Loans 90 days past due and still accruing $ 9 $ 3 $ 5
As a % of total loans 0.01 % 0.01 % 0.01 %
Total past due loans and still accruing $ 127 $ 57 $ 53
As a % of total loans 0.14 % 0.14 % 0.14 %
FDMs $ 146 $ 61 $ 54
Net charge-offs, quarter 48 27 19
Net charge-offs/average loans, quarter (annualized) 0.22 % 0.28 % 0.20 %
Net charge-offs, year-to-date $ 97 $ 77 $ 33
Net charge-offs/average loans, year-to-date (annualized) 0.23 % 0.21 % 0.18 %
Provision for (reversal of) loan losses, quarter $ 62 $ 34 $ 23
Provision for (reversal of) unfunded commitments, quarter 1 — 1
Provision for (reversal of) credit losses, quarter $ 63 $ 34 $ 24
Provision for (reversal of) loan losses, year-to-date 133 107 40
Provision for (reversal of) unfunded commitments, year-to-date 6 — 1
Provision for (reversal of) credit losses, year-to-date 139 107 41
Allowance for loan losses $ 956 $ 442 $ 422
Reserve for unfunded commitments 73 16 13
Allowance for credit losses $ 1,029 $ 458 $ 435
ACL to loans coverage ratio 1.17 % 1.17 % 1.17 %
ALL to loans coverage ratio 1.09 1.13 1.14
ACL/NPLs 248.18 343.19 277.05
ALL/NPLs 230.52 331.09 268.58
Non-performing Assets
Total NPAs were $444 million at June 30, 2026. Excluding the increase resulting from the Merger, NPAs were largely impacted during the quarter by two senior housing relationships.
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Criticized and Classified Loans
Our loan ratings are aligned to federal banking regulators' definitions of pass and criticized categories, which include special mention, substandard, doubtful, and loss. Substandard accruing and non-accruing loans, doubtful, and loss loans are often collectively referred to as classified. Special mention, substandard, doubtful, and loss loans are often collectively referred to as criticized and classified loans. The following table presents a summary of criticized and classified loans. Criticized and classified loans at June 30, 2026 increased $1.1 billion compared to December 31, 2025, due to the impact of the Merger. Outside of the impact of the Merger, criticized and classified loans have decreased during 2026 due to upward migration and the paydown of several commercial credits.
Table 9 - Criticized and Classified Loans
(dollars in millions) June 30, 2026 December 31, 2025
Special mention $ 917 $ 494
Substandard 862 185
Doubtful 11 —
Loss 22 —
Criticized and Classified loans $ 1,812 $ 679
As a % of total loans 2.1 % 1.7 %
Provision for (Reversal of) Credit Losses and Allowance for Credit Losses
The provision for credit losses was $63 million and $139 million, respectively, for the three and six months ended June 30, 2026 compared to a provision of $24 million and $41 million for the three and six months ended June 30, 2025, respectively. The increase was primarily attributable to the impact of the Merger. Excluding the impact of the Merger, provision was primarily driven by net loan growth, partially offset by a reduction in the individually analyzed reserves. Net charge-offs for the three and six months ended June 30, 2026 were $48 million and $97 million, respectively, as compared to $19 million and $33 million for the three and six months ended June 30, 2025, respectively.
The ALL of $956 million and the reserve for unfunded commitments of $73 million, which is recorded in other liabilities, comprise the total ACL of $1.0 billion at June 30, 2026. The ACL to loans coverage ratio was 1.17% at June 30, 2026, compared to 1.19% at March 31, 2026, reflecting the impact of net loan growth and a reduction in the individually analyzed reserves. The ACL to NPL coverage ratio was 248% at June 30, 2026 compared to 343% at December 31, 2025, reflecting the increase in nonperforming loan balances following the Merger, partially offset by growth in the ACL balance over the period.
Capital Resources
Pinnacle and Pinnacle Bank are required to comply with capital adequacy standards established by our primary federal regulator, the Federal Reserve. Pinnacle and Pinnacle Bank measure capital adequacy using the standardized approach under Basel III. Beyond adhering to regulatory capital standards, Pinnacle also maintains a rigorous capital management and adequacy framework, which includes oversight by both the ALCO and the Board. This effort involves monitoring and managing our capital position in alignment with our Board’s risk appetite framework and with a Board-approved annual capital plan, with a focus on applicable regulatory capital ratios. Our ALCO serves to provide management level oversight within this framework, which may include establishing target operating ranges for certain capital measures, such as CET1, as a means to provide further clarity over the management of our capital position.
At June 30, 2026, Pinnacle and Pinnacle Bank's capital levels remained strong and exceeded well-capitalized requirements currently in effect. The following table presents certain ratios used to measure Pinnacle and Pinnacle Bank's capitalization.
Table 10 - Capital Ratios
(dollars in millions) June 30, 2026 December 31, 2025
CET1 capital
Pinnacle Financial $ 9,979 $ 5,060
Pinnacle Bank 10,755 5,173
Tier 1 risk-based capital
Pinnacle Financial 10,760 5,278
Pinnacle Bank 10,755 5,174
Total risk-based capital
Pinnacle Financial 12,254 6,033
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Table 10 - Capital Ratios
(dollars in millions) June 30, 2026 December 31, 2025
Pinnacle Bank 11,849 5,620
CET1 capital ratio
Pinnacle Financial 9.93 % 10.88 %
Pinnacle Bank 10.73 11.13
Tier 1 risk-based capital ratio
Pinnacle Financial 10.71 11.34
Pinnacle Bank 10.73 11.13
Total risk-based capital to risk-weighted assets ratio
Pinnacle Financial 12.20 12.97
Pinnacle Bank 11.83 12.09
Leverage ratio
Pinnacle Financial 8.96 9.57
Pinnacle Bank 8.97 9.39
At June 30, 2026, Pinnacle's CET1 ratio was 9.93%. For additional information on regulatory capital requirements, see "Part II - Item 8. Financial Statements and Supplementary Data - Note 20 - Regulatory Matters" to the consolidated financial statements of Pinnacle's 2025 Form 10-K. Management reviews the Company's capital position on an ongoing basis and believes, based on internal capital analyses and earnings projections, that Pinnacle is well positioned to meet relevant regulatory capital standards.
On January 1, 2026, the Board of Directors approved a capital plan that included an anticipated quarterly common stock dividend of $0.50 per share for 2026 and authorized share repurchases of up to $400 million of common stock. During the three and six months ended June 30, 2026, Pinnacle did not repurchase shares of common stock.
As Pinnacle is registered as a bank holding company and has elected to be treated as a financial holding company, we are subject to comprehensive supervision and regulation by the Federal Reserve and are subject to its regulatory reporting requirements. The Federal Reserve also requires bank holding companies meeting certain asset size thresholds, such as us, to establish and maintain a risk committee of its board of directors and appoint a chief risk officer, each meeting certain requirements.
Upon completion of the Merger, Pinnacle surpassed the $100 billion threshold and is now designated as a Category IV large financial institution according to U.S. regulatory guidelines. This new classification subjects us to the Federal Reserve's enhanced prudential standards, designed to ensure risk management capabilities grow in line with our systemic footprint including but not limited to additional rigorous capital planning such as stress testing under the CCAR process, liquidity risk management, resolution planning, and additional governance and reporting requirements. Refer to "Part II – Item 1A. Risk Factors," of this Report for further information.
Dividends
Pinnacle has historically paid a quarterly cash dividend to the holders of its common stock. Management and the Board of Directors closely monitor current and projected capital levels, liquidity (including dividends from subsidiaries), financial markets and other economic trends, as well as regulatory requirements regarding the payment of dividends.
Pinnacle's ability to pay dividends on its common stock and preferred stock is primarily dependent upon dividends and distributions that it receives from its bank and non-banking subsidiaries, which are restricted by various regulations administered by federal and state bank regulatory authorities.
Pinnacle declared common stock dividends of $75 million, or $0.50 per common share, and $150 million, or $1.00 per common share, respectively, for the three and six months ended June 30, 2026, compared to $19 million, or $0.24 per common share, and $38 million, or $0.48 per common share, respectively, for the three and six months ended June 30, 2025. In addition, Pinnacle declared dividends on its preferred stock of $15 million and $30 million, respectively, for the three and six months ended June 30, 2026, compared to $4 million and $8 million, respectively, for the three and six months ended June 30, 2025.
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Liquidity
Liquidity represents the extent to which Pinnacle has readily available sources of funding to meet the needs of depositors, borrowers, and creditors; to support asset growth; and to otherwise sustain operations of Pinnacle and its subsidiaries, at a reasonable cost, on a timely basis, and without adverse consequences. ALCO monitors Pinnacle's economic, competitive, and regulatory environment and is responsible for measuring, monitoring, and reporting on liquidity and funding risk.
In accordance with Pinnacle policies and regulatory guidance, ALCO evaluates contractual and anticipated cash flows under normal and stressed conditions to properly manage the Company’s liquidity profile. Pinnacle places an emphasis on maintaining numerous sources of current and contingent liquidity to meet its obligations to depositors, borrowers, and creditors on a timely basis. Liquidity is generated through various sources, including, but not limited to, maturities and repayments of loans by clients, maturities and sales of investment securities, and growth in consumer and commercial deposits.
Pinnacle Bank also generates liquidity through the issuance of brokered certificates of deposit and money market accounts. Pinnacle Bank accesses funds from a broad geographic base to diversify its sources of funding and liquidity. Pinnacle Bank also has the capacity to access funding through its membership in the FHLB system and the Federal Reserve. Management continuously monitors and maintains appropriate levels of liquidity to provide adequate funding sources to manage client deposit withdrawals, loan requests, and other funding demands.
Pinnacle continues to proactively manage its liquidity position and maintain robust contingent liquidity across various forms of funding which include immediately available funds as well as funds we expect to be available within short notice. Liquidity sources include primary sources such as FHLB borrowing capacity, FRB cash reserves, and unencumbered securities, while secondary sources consist of the Federal Reserve discount window, Fed Funds lines, and other sources. At June 30, 2026, contingent sources of liquidity totaled approximately $36.3 billion, and based on currently pledged collateral, Pinnacle Bank had access to FHLB funding of $5.6 billion, subject to FHLB credit policies.
In addition to bank level liquidity management, Pinnacle must manage liquidity at the Parent Company level for various operating needs, including the servicing of debt, the payment of dividends on our common stock and preferred stock, payment of general corporate expense, and potential capital infusions into subsidiaries. The primary source of liquidity for Pinnacle consists of dividends from Pinnacle Bank, which is governed by certain rules and regulations of the TDFI and the Federal Reserve Bank. Pinnacle's ability to receive dividends from Pinnacle Bank in future periods will depend on a number of factors, including, without limitation, Pinnacle Bank's future profits, asset quality, liquidity, and overall condition. In addition, both the TDFI and Federal Reserve Bank may require approval to pay dividends, based on certain regulatory statutes and limitations.
On May 19, 2026, Pinnacle completed the issuance of $750 million aggregate principal amount of its 5.596% Fixed Rate/Floating Rate Senior Notes which mature on May 19, 2032. These notes bear interest from and including May 19, 2026, to, but excluding, May 19, 2031, this note will bear interest at the rate of 5.596% per annum. From and including May 19, 2031, to, but excluding May 19, 2032, this note will bear interest at a floating rate per annum equal to Compounded SOFR plus 1.70%. Interest on the notes will be payable quarterly in arrears on August 19, 2031, November 19, 2031, February 19, 2032 and at the stated maturity. The Company may redeem these notes, in whole or in part, at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest, if any, to but excluding the redemption date. The notes are not redeemable at the option or election of holders. For more information, see Pinnacle's Current Report on Form 8-K dated May 19, 2026.
Pinnacle presently believes that the sources of liquidity discussed above, including existing liquid funds on hand, are sufficient to meet its anticipated funding needs. However, if economic conditions were to significantly deteriorate, regulatory capital requirements for Pinnacle or Pinnacle Bank were to increase as a result of regulatory directives or otherwise, or Pinnacle believes it is prudent to enhance current liquidity levels, then Pinnacle may seek additional liquidity from external sources. Furthermore, Pinnacle may, from time to time, take advantage of attractive market opportunities to refinance, retire, or repurchase its existing debt, redeem or issue its preferred stock, repurchase shares, or strengthen its liquidity or capital position.
Earning Assets and Sources of Funds
Average earning assets were $110.8 billion in the first six months of 2026. Average earning assets were primarily affected by the Merger. Excluding the impact of the merger, the increase in average earnings assets was driven by organic loan growth.
Average interest-bearing liabilities were $85.2 billion for the first six months of 2026. Excluding the effect of the Merger, the increase in average interest-bearing liabilities largely resulted from increases in total average deposits, mainly average money market and average interest-bearing demand, along with increases in short-term and long-term borrowings. Average non-interest bearing deposits grew modestly during the first six months of 2026, outside of the impact of the Merger.
Net interest income for the six months ended June 30, 2026 was $1.9 billion, up $1.1 billion, compared to the same period in 2025. Beyond the impact of the Merger, net interest income during the first six months of 2026 was primarily impacted by loan growth. Taxable-equivalent net interest margin for the first six months of 2026 was 3.48% compared to Legacy Pinnacle
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margin of 3.22% during the comparable period of 2025 reflecting the combined legacy balance sheets and purchase accounting marks on the Synovus balance sheet during the period.
Net Interest Income
The following tables set forth the major components of net interest income and the related annualized yields and rates for the three and six months ended June 30, 2026 and 2025.
Table 11 - Quarter-to-Date Net Interest Income
Three Months Ended June 30,
2026 2025
(dollars in millions) Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate
Assets
Interest earning assets:
Loans, net of deferred fees and costs(1)(2) $ 86,406 $ 1,317 6.11 % $ 36,968 $ 578 6.26 %
Tax-exempt securities(2)(3) 2,536 26 4.03 3,361 32 3.87
Taxable securities(3) 17,720 187 4.22 5,625 67 4.78
Interest-earning deposits with banks 4,975 41 3.30 2,524 26 4.20
Federal funds sold and securities purchased under resale agreements 128 1 5.14 77 2 10.97
Other earning assets(4) 902 8 3.68 253 3 5.16
Total interest earning assets $ 112,667 $ 1,580 5.62 % $ 48,808 $ 708 5.82 %
Goodwill 3,479 1,849
Core deposits and other intangible assets, net 1,069 21
Other assets(5) 6,972 3,146
Total assets $ 124,187 $ 53,824
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits $ 30,025 $ 188 2.51 % $ 14,221 $ 115 3.23 %
Money market accounts 34,383 229 2.67 16,024 124 3.09
Savings deposits 1,813 2 0.35 792 1 0.43
Time deposits 13,371 115 3.46 4,710 45 3.88
Total interest-bearing deposits 79,592 534 2.69 35,747 285 3.19
Federal funds purchased and securities sold under repurchase agreements 343 1 1.51 256 1 1.92
FHLB advances and other borrowings 6,505 77 4.72 2,266 29 5.21
Total interest-bearing liabilities $ 86,440 $ 612 2.84 % $ 38,269 $ 315 3.30 %
Non-interest-bearing demand deposits 20,686 8,487
Other liabilities 2,339 466
Total equity 14,722 6,602
Total liabilities and equity $ 124,187 $ 53,824
Net interest income and net interest margin, taxable equivalent(2)(6) $ 968 3.44 % $ 393 3.23 %
Less: taxable-equivalent adjustment 12 13
Net interest income $ 956 $ 380
(1) Average loans are shown net of unearned income. NPLs are included. Interest income includes fees as follows: Second Quarter 2026 — $22 million, and Second Quarter 2025 — $10 million.
(2) Reflects taxable-equivalent adjustments, using the statutory federal tax rate of 21%, in adjusting interest on tax-exempt loans and securities to a taxable-equivalent basis.
(3) Securities are included on an amortized cost basis with yield and net interest margin calculated accordingly.
(4) Includes loans held for sale, trading account assets, and FHLB and Federal Reserve Bank Stock.
(5) As a result of the Merger, certain immaterial changes were made to integrate the presentation of the legacy banks' yield on investment securities, which included presenting the average balance of unrealized losses on investment securities available for sale of $263 million as a component of other assets for the Second Quarter 2026.
(6) The net interest margin is calculated by dividing annualized net interest income-taxable equivalent (TE) by average total interest earning assets.
Amounts may not total due to rounding and yield/rates are calculated using unrounded amounts and may differ from calculations based on rounded figures.
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Table 12 - Year-to-Date Net Interest Income
Six Months Ended June 30,
2026 2025
(dollars in millions) Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate
Assets
Interest earning assets:
Loans, net of deferred fees and costs(1)(2) $ 85,056 $ 2,583 6.12 % $ 36,507 $ 1,134 6.25 %
Tax-exempt securities(2)(3) 2,938 60 4.01 3,305 62 3.82
Taxable securities(3) 16,785 358 4.26 5,530 129 4.70
Interest-earning deposits with other banks 5,098 88 3.49 2,584 55 4.32
Federal funds sold and securities purchased under resale agreements 138 4 5.64 68 4 11.13
Other earning assets(4) 805 15 3.84 254 7 5.11
Total interest earning assets $ 110,820 $ 3,108 5.65 % $ 48,248 $ 1,391 5.81 %
Goodwill 3,529 1,849
Core deposits and other intangible assets, net 1,074 21
Other assets(5) 7,302 3,060
Total assets $ 122,725 $ 53,178
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing demand deposits $ 30,012 $ 374 2.51 % $ 14,179 $ 226 3.22 %
Money market accounts 33,889 443 2.63 15,784 242 3.09
Savings deposits 1,821 3 0.37 798 2 0.44
Time deposits 13,516 235 3.50 4,521 88 3.94
Total interest-bearing deposits 79,238 1,055 2.68 35,282 558 3.19
Federal funds purchased and securities sold under repurchase agreements 344 2 1.49 243 2 1.86
FHLB advances and other borrowings 5,619 136 4.87 2,286 59 6.23
Total interest-bearing liabilities $ 85,201 $ 1,193 2.82 % $ 37,811 $ 619 3.30 %
Non-interest-bearing demand deposits 20,479 8,347
Other liabilities 2,390 461
Total equity 14,655 6,559
Total liabilities and equity $ 122,725 $ 53,178
Net interest income and net interest margin, taxable equivalent (2)(6) $ 1,915 3.48 % $ 772 3.22 %
Less: taxable-equivalent adjustment 26 26
Net interest income $ 1,889 $ 746
(1) Average loans are shown net of unearned income. NPLs are included. Interest income includes fees as follows: 2026 - $37 million, 2025 - $20 million.
(2) Reflects taxable-equivalent adjustments, using the statutory federal income tax rate of 21%, in adjusting interest on tax-exempt loans and securities to a taxable-equivalent basis.
(3) Securities are included on an amortized cost basis with yield and net interest margin calculated accordingly.
(4) Includes loans held for sale, trading account assets, and FHLB and Federal Reserve Bank stock.
(5) As a result of the Merger, certain immaterial changes were made to integrate the presentation of the legacy banks' yield on investment securities, which included presenting the average balance of unrealized losses on investment securities available for sale of $181 million as a component of other assets during 2026.
(6) The net interest margin is calculated by dividing annualized net interest income (TE) by average total interest earnings assets.
Amounts may not total due to rounding and yield/rates are calculated using unrounded amounts and may differ from calculations based on rounded figures.
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Market Risk Analysis
In the normal course of business, Pinnacle is exposed to certain forms of market risk, most notably risks arising from fluctuations in interest rates. To aid in the management of such risks, the Company leverages certain modeling techniques and simulation analysis in an effort to measure the sensitivity of Pinnacle’s earning assets and liabilities and the potential implications for our income statement and balance sheet. In particular, the Company uses simulation modeling to measure the sensitivity of net interest income to changes in market interest rates. These simulations are used to determine a baseline net interest income projection and the sensitivity of the income profile based on changes in interest rates. These simulations incorporate numerous assumptions and factors, including, but not limited to, changes in market rates, in the size or composition of the balance sheet, and in repricing characteristics as well as client behaviors for both loans and deposits. This also includes estimates for deposit repricing characteristics which, for purposes of the sensitivity estimates provided below, relies upon a constant, through-the-cycle total deposit cost beta of approximately 50% as of the most recently reported period. Such assumptions are generally based on historical observations and future expectations. This process is reviewed and updated on an ongoing basis in a manner consistent with Pinnacle’s ALCO governance framework.
The Risk Committee of the Board has chartered the ALCO and approved related policies to aid in the management and governance of various risks, including interest rate risk. The ALCO has an established limit framework for interest rate risk, which is monitored on an ongoing basis and is in alignment with the tolerances and limits as established by the Board. Additionally, Pinnacle’s ERM framework establishes a Board-approved risk appetite statement, which includes certain quantitative measurements for interest rate risk and helps to ensure management operates within the Board’s established appetite.
Pinnacle has modeled its baseline net interest income forecast assuming an interest rate projection that is flat to June 30, 2026 interest rate curves, with the federal funds rate at the Federal Reserve’s targeted range of 3.50% to 3.75% and the prime rate of 6.75% as of June 30, 2026. Pinnacle has modeled the impact of an immediate change in market interest rates across the yield curve of 100 and 200 bps to determine the sensitivity of net interest income for the next 12 months. As illustrated in the table below, the net interest income sensitivity derived from this simulation suggests that net interest income is projected to increase by 4.3% and 2.2% if interest rates increased by 200 and 100 bps, respectively. Net interest income is projected to decrease by 1.7% and 2.8% if interest rates decreased by 100 and 200 bps, respectively.
The following table represents the estimated sensitivity of net interest income at June 30, 2026, with comparable information for December 31, 2025.
Table 13 - Twelve Month Net Interest Income Sensitivity
Estimated % Change in Net Interest Income as Compared to Unchanged Rates (for the next 12 months)
Change in Interest Rates (in bps) June 30, 2026 December 31, 2025
+200 4.3% 0.3%
+100 2.2 0.1
-100 (1.7) 1.2
-200 (2.8) 1.7
While all of the above estimates are reflective of the general interest rate sensitivity of Pinnacle, local market conditions, the realized growth and remixing of the balance sheet, the timing and lags associated with various interest rate relationships, as well as numerous other factors could individually, or collectively, have a significant impact on both the estimated sensitivity and the realized level of net interest income in a given period. Additionally, should there be differences between realized deposit betas for a given level of rates as compared to the Company's estimates for through-the-cycle betas, this may also have a significant impact on our reported sensitivity and the realized level of net interest income.
The net interest income simulation model is the primary tool utilized to evaluate potential interest rate risks over a short to medium term time horizon. Pinnacle also evaluates potential longer-term interest rate risk through modeling and evaluation of the sensitivity of the Company's EVE. The EVE measurement process estimates the net fair value of assets, liabilities, and off-balance sheet financial instruments under various interest rate scenarios. Management uses EVE sensitivity analyses as an additional means of measuring interest rate risk and incorporates this form of analysis within its governance and limits framework.
Pinnacle is also subject to market risk in certain of its fee income business lines which is ultimately captured in non-interest revenue. Wealth management revenue, which include trust, brokerage, and asset management fees, and capital markets income can be affected by risk in the securities markets, primarily the equity securities market. A significant portion of the fees from wealth management and capital markets products are determined based upon a percentage of asset values. Weaker securities markets and lower equity values have an adverse impact on the fees generated by these operations. Trading account assets,
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maintained to facilitate brokerage client activity, are also subject to market risk; however, trading activities are limited and subject to risk policy limits. Additionally, Pinnacle utilizes various tools to measure and manage price risk in its trading portfolio.
Mortgage banking income, which is included in total loan sales and servicing, is also subject to market risk. Mortgage loan originations are sensitive to levels of mortgage interest rates and therefore, mortgage banking income can be negatively impacted during a period of sustained elevated interest rates as we have been experiencing through the cycle. The extension of commitments to clients to fund mortgage loans also subjects Pinnacle to market risk. This risk is primarily created by the time periods between making the commitment, closing, and delivering the loan. Pinnacle seeks to minimize its exposure by utilizing various risk management tools, including forward sales commitments and other economic hedges.
Derivative Instruments for Interest Rate Risk Management
Pinnacle utilizes derivative instruments to manage its exposure to various types of structural interest rate risks by executing end-user derivative transactions designated as hedges. Hedging relationships may be designated as either a cash flow hedge, which mitigates risk exposure to the variability of future cash flows or other forecasted transactions, or a fair value hedge, which mitigates risk exposure to adverse changes in the fair market value of a fixed rate asset or liability due to changes in market interest rates.
Critical Accounting Policies
The accounting and financial reporting policies of Pinnacle are in accordance with GAAP and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. Pinnacle has identified certain of its accounting policies as “critical accounting policies,” consisting of those related to business combinations, the allowance for credit losses and income taxes. In determining which accounting policies are critical in nature, Pinnacle has identified the policies that require significant judgment or involve complex estimates. It is management's practice to discuss critical accounting policies with the Board of Directors' Audit Committee on a periodic basis, including the development, selection, implementation, and disclosure of the critical accounting policies. The application of these policies has a significant impact on Pinnacle's unaudited interim condensed consolidated financial statements. Pinnacle's financial results could differ significantly if different judgments or estimates are used in the application of these policies.
Business Combinations
The acquisition method of accounting generally requires that the identifiable assets acquired and liabilities assumed in business combinations are recorded at fair value as of the acquisition date. The determination of fair value often involves the use of internal or third-party valuation techniques, such as discounted cash flow analyses or appraisals. Particularly, the valuation techniques used to estimate the fair value of loans and the core deposit intangible asset acquired in the Merger include estimates related to discount rates, credit risk, and other relevant factors, which are inherently subjective. The valuation methodologies used to estimate the fair values of the significant assets acquired and liabilities assumed from the Merger are described in "Part I - Item 1. Financial Statements - Note 2. Business Combination" herein.
Allowance for Credit Losses
The ACL is a critical accounting estimate that requires significant judgments and assumptions, which are inherently subjective. The use of different estimates or assumptions could have a significant impact on the provision for credit losses, ACL, financial condition, and results of operations. The economic and business climate in any given industry or market is difficult to gauge and can change rapidly, and the effects of those changes can vary by borrower.
In accordance with CECL, the ACL, which includes both the allowance for loan losses and the allowance for credit losses on unfunded loan commitments, represents management's best estimate of expected losses over the life of loans adjusted for prepayments, and over the life of loan commitments expected to fund. This evaluation requires significant management judgment and is based upon relevant available information related to historical default and loss experience, current and projected economic conditions, and other portfolio-specific and environmental risk factors. Losses are predicted over a reasonable and supportable forecast period, and at the end of the reasonable and supportable period losses revert to long term historical averages. The allowance for credit losses on loans is measured on a collective basis for pools of loans with similar risk characteristics, and for loans that do not share similar risk characteristics with the collectively evaluated pools, evaluations are performed on an individual basis. There are factors beyond our control, such as changes in projected economic conditions, real estate markets or particular industry conditions which may materially impact asset quality and the adequacy of the allowance for credit losses on loans and thus the resulting provision for credit losses. The allowance is adjusted through provision for credit losses and decreased by charge-offs, net of recoveries of amounts previously charged-off. See "Part I - Item 1. Financial Statements - Note 1. Basis of Presentation and Accounting Policies" and "Part I - Item 1. Financial Statements - Note 5. Loans and Allowance for Loan Losses".
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Income Taxes
The calculation of Pinnacle's income tax provision is complex and requires the use of estimates and judgments in its determination. As part of Pinnacle's overall business strategy, management must consider tax laws and regulations that apply to the specific facts and circumstances under consideration. As such, the Company is often required to exercise significant judgment regarding the interpretation of these tax laws and regulations, in which Pinnacle's anticipated and actual liability could significantly vary based upon the taxing authority’s interpretation. Specifically, significant estimates in accounting for income taxes relate to the valuation of deferred tax assets and liabilities, estimates of the realizability of deferred tax assets, including income tax credits and NOLs, and the need for a valuation allowance, the calculation of taxable income, the estimation of uncertain tax positions and the determination of temporary differences between book and tax bases. Adjustments to these items may occur due to modifications in tax rates, newly enacted laws, issuance of tax regulations, resolution of items with taxing authorities, alterations to interpretative statutory, judicial, and regulatory guidance that affects the Company’s tax positions, changes in the Company's tax accounting methods or elections, or other facts and circumstances. Management closely monitors tax developments and the potential timing of these changes in order to evaluate the effect they may have on the Company’s overall tax position and the estimates and judgments used in determining the income tax provision and records adjustments as necessary.
Non-GAAP Financial Measures
The measures entitled adjusted non-interest revenue, adjusted non-interest expense, adjusted revenue TE, adjusted tangible efficiency ratio, adjusted PPNR, adjusted net income available to common shareholders, adjusted net income per common share, diluted, adjusted return on average assets, adjusted return on average common equity, return on average tangible common equity, adjusted return on average tangible common equity, and tangible common equity ratio, are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. The most comparable GAAP measures to these measures are total non-interest revenue, total non-interest expense, total revenue, efficiency ratio-TE, PPNR, net income available to common shareholders, net income per common share, diluted, return on average assets, return on average common equity, and the ratio of total Pinnacle shareholders' equity to total assets, respectively.
Management believes that these non-GAAP financial measures provide meaningful additional information about Pinnacle to assist management and investors in evaluating Pinnacle's operating results, financial strength, the performance of its business, and the strength of its capital position. However, these non-GAAP financial measures have inherent limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of operating results or capital position as reported under GAAP. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant items and other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies. Adjusted non-interest revenue and adjusted revenue TE are measures used by management to evaluate non-interest revenue and total revenue exclusive of items not indicative of ongoing operations that could impact period-to-period comparisons. Adjusted non-interest expense and the adjusted tangible efficiency ratio are measures utilized by management to measure the success of expense management initiatives focused on reducing recurring controllable operating costs. Adjusted net income available to common shareholders, adjusted net income per common share, diluted, adjusted return on average assets, adjusted return on average common equity, and adjusted PPNR are measures used by management to evaluate operating results exclusive of items that are not indicative of ongoing operations and impact period-to-period comparisons. Return on average tangible common equity and adjusted return on average tangible common equity are measures used by management to compare Pinnacle's performance with other financial institutions because it calculates the return available to common shareholders without the impact of intangible assets and their related amortization, thereby allowing management to evaluate the performance of the business consistently. The tangible common equity ratio is used by stakeholders to assess our capital position. Tangible book value per common share is used by stakeholders to assess our financial stability and value. The computations of these measures are set forth in the tables below.
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Management does not provide a reconciliation for forward-looking non-GAAP financial measures where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the occurrence and the financial impact of various items that have not yet occurred, are out of Pinnacle's control, or cannot be reasonably predicted. For the same reasons, Pinnacle’s management is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
Table 14 - Reconciliation of Non-GAAP Financial Measures
Three Months Ended Six Months Ended
(dollars in millions) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Adjusted non-interest revenue
Total non-interest revenue $ 247 $ 125 $ 531 $ 221
Investment securities (gains) losses, net 29 — 26 13
Fair value adjustment on non-qualified deferred compensation (6) — (5) —
Adjusted non-interest revenue $ 270 $ 125 $ 552 $ 234
Adjusted non-interest expense
Total non-interest expense $ 721 $ 286 $ 1,673 $ 561
Valuation adjustment to Visa derivative (2) — (3) —
Merger-related expense (51) — (326) —
Fair value adjustment on non-qualified deferred compensation (6) — (5) —
Adjusted non-interest expense $ 662 $ 286 $ 1,339 $ 561
Adjusted revenue (TE) and adjusted tangible efficiency ratio
Adjusted non-interest expense $ 662 $ 286 $ 1,339 $ 561
Amortization of intangibles (46) (1) (94) (3)
Adjusted tangible non-interest expense $ 616 $ 285 $ 1,245 $ 558
Net interest income $ 956 $ 380 $ 1,889 $ 746
Taxable equivalent adjustment 12 13 26 26
Net interest income (TE) $ 968 $ 393 $ 1,915 $ 772
Net interest income $ 956 $ 380 $ 1,889 $ 746
Total non-interest revenue 247 125 531 221
Total revenue $ 1,203 $ 505 $ 2,420 $ 967
Taxable equivalent adjustment 12 13 26 26
Total (TE) revenue $ 1,215 $ 518 $ 2,446 $ 993
Investment securities (gains) losses, net 29 — 26 13
Fair value adjustment on non-qualified deferred compensation (6) — (5) —
Adjusted revenue (TE) $ 1,238 $ 518 $ 2,467 $ 1,006
Efficiency ratio (TE)(1) 59.4 % 55.2 % 68.4 % 56.5 %
Adjusted tangible efficiency ratio(1) 49.8 54.9 50.5 55.5
Adjusted pre-provision net revenue
Net interest income $ 956 $ 380 $ 1,889 $ 746
Total non-interest revenue 247 125 531 221
Total non-interest expense (721) (286) (1,673) (561)
Pre-provision net revenue (PPNR) $ 482 $ 219 $ 747 $ 406
Adjusted revenue (TE) $ 1,238 $ 518 $ 2,467 $ 1,006
Adjusted non-interest expense (662) (286) (1,339) (561)
Adjusted PPNR $ 576 $ 232 $ 1,128 $ 445
(1) Amounts have been calculated using whole dollar values.
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Table 14 - Reconciliation of Non-GAAP Financial Measures, continued
Three Months Ended Six Months Ended
(dollar amounts in millions, except per share data, share count in thousands) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Adjusted net income available to common shareholders and adjusted diluted earnings per share
Net income available to common shareholders $ 313 $ 155 $ 448 $ 291
Valuation adjustment to Visa derivative 2 — 3 —
Investment securities (gains) losses, net 29 — 26 13
Merger-related expense(1) 51 — 326 —
Tax effect of adjustments(2) (16) — (60) (3)
Adjusted net income available to common shareholders $ 379 $ 155 $ 743 $ 301
Weighted average common shares outstanding, diluted 151,468 77,277 151,470 77,212
Net income per common share, diluted(3) $ 2.07 $ 2.00 $ 2.96 $ 3.77
Adjusted net income per common share, diluted(3) 2.50 2.00 4.90 3.90
(1) A portion of this item was non-taxable.
(2) A blended tax rate of 16.4% was applied to merger-related expense which takes into consideration the deductibility and non-deductibility of certain merger-related expense items for tax purposes and an assumed 24% marginal rate was applied to all other adjusted items for 2026. For 2025 an assumed marginal tax rate of 25% was applied.
(3) Amounts have been calculated using whole dollar values.
Table 14 - Reconciliation of Non-GAAP Financial Measures, continued
Three Months Ended Six Months Ended
(dollars in millions) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Adjusted return on average assets (annualized)
Net income $ 328 $ 159 $ 478 $ 299
Valuation adjustment to Visa derivative 2 — 3 —
Investment securities (gains) losses, net 29 — 26 13
Merger-related expense(1) 51 — 326 —
Tax effect of adjustments(2) (16) — (60) (3)
Adjusted net income $ 394 $ 159 $ 773 $ 309
Net income annualized(3) 1,316 638 964 603
Adjusted net income annualized(3) 1,580 638 1,559 623
Total average assets $ 124,187 $ 53,824 $ 122,725 $ 53,178
Return on average assets (annualized)(3) 1.06 % 1.18 % 0.79 % 1.13 %
Adjusted return on average assets (annualized)(3) 1.27 1.18 1.27 1.17
(1) A portion of this item was non-taxable.
(2) A blended tax rate of 16.4% was applied to merger-related expense which takes into consideration the deductibility and non-deductibility of certain merger-related expense items for tax purposes and an assumed 24% marginal rate was applied to all other adjusted items for 2026. For 2025 an assumed marginal tax rate of 25% was applied.
(3) Amounts have been calculated using whole dollar values.
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Table 14 - Reconciliation of Non-GAAP Financial Measures, continued
Three Months Ended Six Months Ended
(dollars in millions) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025
Adjusted return on average common equity, return on average tangible common equity, and adjusted return on average tangible common equity (annualized)
Net income available to common shareholders $ 313 $ 155 $ 448 $ 291
Valuation adjustment to Visa derivative 2 — 3 —
Investment securities (gains) losses, net 29 — 26 13
Merger-related expense(1) 51 — 326 —
Tax effect of adjustments(2) (16) — (60) (3)
Adjusted net income available to common shareholders $ 379 $ 155 $ 743 $ 301
Adjusted net income available to common shareholders annualized(3) $ 1,520 $ 622 $ 1,498 $ 607
Amortization of intangibles, annualized net of tax(2)(3) 142 4 145 4
Adjusted net income available to common shareholders excluding amortization of intangibles annualized(3) $ 1,662 $ 626 $ 1,643 $ 611
Net income available to common shareholders annualized(3) $ 1,255 $ 622 $ 903 $ 587
Amortization of intangibles, annualized net of tax(2)(3) 142 4 145 4
Net income available to common shareholders excluding amortization of intangibles annualized(3) $ 1,397 $ 626 $ 1,048 $ 591
Total average Pinnacle Financial Partners shareholders' equity less preferred stock $ 13,941 $ 6,385 $ 13,874 $ 6,342
Average goodwill (3,479) (1,849) (3,529) (1,849)
Average other intangible assets, net (1,069) (21) (1,074) (21)
Total average Pinnacle Financial Partners tangible shareholders' equity less preferred stock $ 9,393 $ 4,515 $ 9,271 $ 4,472
Return on average common equity (annualized)(3) 9.01 % 9.72 % 6.51 % 9.26 %
Adjusted return on average common equity (annualized)(3) 10.90 9.72 10.78 9.56
Return on average tangible common equity (annualized)(3) 14.89 13.84 11.30 13.23
Adjusted return on average tangible common equity (annualized)(3) 17.70 13.84 17.70 13.66
(1) A portion of this item was non-taxable.
(2) A blended tax rate of 16.4% was applied for 2026 which takes into consideration the deductibility and non-deductibility of certain merger-related expense items for tax purposes, with the exception of amortization of intangibles which applied an assumed 24% marginal rate. For 2025 an assumed marginal tax rate of 25% was applied.
(3) Amounts have been calculated using whole dollar values.
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Table 14 - Reconciliation of Non-GAAP Financial Measures, continued
(In millions, except per share data, share count in thousands) June 30, 2026 December 31, 2025 June 30, 2025
Tangible common equity ratio
Total assets $ 129,055 $ 57,706 $ 54,801
Goodwill (3,479) (1,849) (1,849)
Other intangible assets, net (1,045) (30) (19)
Tangible assets $ 124,531 $ 55,827 $ 52,933
Total equity $ 14,828 $ 7,044 $ 6,637
Goodwill (3,479) (1,849) (1,849)
Other intangible assets, net (1,045) (30) (19)
Preferred stock, no par value (781) (217) (217)
Tangible common equity $ 9,523 $ 4,948 $ 4,552
Total equity to total assets ratio(1) 11.49 % 12.21 % 12.11 %
Tangible common equity ratio(1) 7.65 8.86 8.60
Tangible common equity $ 9,523 $ 4,948 $ 4,552
Common shares outstanding 151,111 77,662 77,548
Book value per common share (1) $ 92.96 $ 87.90 $ 82.79
Tangible book value per common share (1) $ 63.02 $ 63.71 $ 58.70
(1) Amounts have been calculated using whole dollar values.
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