Pinnacle's Merger Payoff: Earnings Jump, Hiring Surge, and 9% Loan Growth Ahead

Date of Call: Jan 22, 2026

Financials Results

• EPS: Pinnacle adjusted diluted EPS of $1.45, stable quarter-over-quarter and increased 16% year-over-year; Legacy Pinnacle grew adjusted diluted EPS by 22% in 2025, legacy Synovus by 28%
• Operating Margin: Pinnacle's net interest margin increased 1 basis point to 3.27%; Synovus' NIM up 4 basis points sequentially to 3.45%

Guidance:

• Loan growth expected to be $91B to $93B, up 9% to 11% versus year-end 2025.
• Total deposits expected to grow to $106.5B to $108.5B, up 8% to 10%.
• Adjusted revenue outlook of $5B to $5.2B in 2026.
• Net interest margin estimated in the 3.45% to 3.55% range.
• Adjusted noninterest revenue expected to be ~$1.1B.
• Adjusted noninterest expense expected to be $2.7B to $2.8B.
• Expect to hire 250 new producers in 2026.
• Target CET1 ratio of 10.25% to 10.75%.
• Tax rate expected to be 20% to 21%.
• Net charge-offs estimated at 20 to 25 basis points for the year.

Business Commentary:

Revenue and Earnings Growth:

• Pinnacle Financial Partners reported a 22% increase in adjusted diluted earnings per share for legacy Pinnacle and 28% for legacy Synovus in 2025.
• This growth was driven by a strong focus on client experience, resulting in high Net Promoter Scores, and the successful integration of Synovus, contributing to revenue producer hiring and balance sheet growth.

Loan and Deposit Growth:

• Loans grew by 3% quarter-over-quarter and 10% year-over-year, while core deposits also increased by 3% quarter-over-quarter and 10% year-over-year.
• This growth was attributed to strong recruiting efforts, particularly in existing geographic markets, and the ongoing hiring of new revenue producers.

Merger and Integration Impact:

• The merger between Pinnacle and Synovus was completed in 160 days, demonstrating swift integration and execution of the Pinnacle operating model.
• The merger aimed to combine strengths and foster a collaborative culture, enhancing growth and operational efficiency, and is expected to yield significant revenue synergies over time.

Capital Management and Future Outlook:

• The combined company's CET1 ratio is expected to be around 10% by the end of the first quarter, with a target ratio of 10.25% to 10.75% for 2026.
• Pinnacle plans to hire 250 new producers in 2026, targeting loan growth of 9% to 11% and deposit growth of 8% to 10%, driven by continued revenue producer hiring and market expansion.

Sentiment Analysis:

Overall Tone: Positive

• Kevin Blair stated: "We entered 2026 from a position of strength, commercially, financially, culturally and strategically." He expressed confidence in the team and the merger, noting "our momentum is real, our integration is on schedule, and our culture is strong and aligned." Management reaffirmed commitment to outperformance and strong growth, highlighting strong financial results and a clear path forward.

Q&A:

• Question from Ebrahim Poonawala (Bank of America): What can the combined banks not do today that will be possible post conversion next year? Also, how are you handling new banker hiring and client onboarding on systems?
  Response: Management clarified that conversion in Q1 2027 does not hinder new business origination. They will manage a dual-system workforce temporarily, onboarding new clients and bankers onto the appropriate legacy platforms until migration to a unified end-state platform.

• Question from John Pancari (Evercore): What is the confidence in achieving 11% loan growth given competitive pressures and uncertainty?
  Response: Confidence is high due to strong Q4 performance, positive client sentiment, and a proven hiring model. Growth will come from existing hires, recent producers building their books, and specialty verticals, not from economic cycles.

• Question from Jared David Shaw (Barclays Capital): What is embedded in fee income guidance for capital markets, and how long to integrate fee income lines?
  Response: Capital markets fees are expected to show double-digit growth in 2026, with revenue synergies already being realized through cross-platform activities like swaps, syndication, and M&A advisory.

• Question from Benjamin Gerlinger (Citi): Where will additional revenue producers come from geographically, and is there risk of loan growth outpacing deposit growth?
  Response: Hiring will occur across the 9-state footprint, leveraging disruption and a strong employer brand. If loans grow faster than deposits initially, higher-cost wholesale funding will be used, but this is already factored into guidance.

• Question from Bernard Von Gizycki (Deutsche Bank): Can you update on NIM drivers and timing for revenue synergies?
  Response: The NIM range of 3.45%-3.55% incorporates purchase accounting benefits and fixed-rate repricing, offset by liquidity needs and rate cuts. Revenue synergies start immediately, with $100M-$130M expected over three years, already impacting 2026 guidance.

• Question from Michael Rose (Raymond James): What is the strategy for higher hold limits and outlook for specialty businesses?
  Response: Higher hold limits provide incremental capacity but not a step-change; they allow slightly larger loans on balance sheet. Specialty businesses like equipment finance and asset-based lending will be cross-sold, contributing significantly to growth.

• Question from Catherine Mealor (KBW): What is the timing for further build in liquidity and deposit cost expectations?
  Response: A $1B debt issuance is planned in 2026 to manage liquidity. Deposit costs are expected to decline rationally, supported by client relationship migrations, not promotional campaigns.

• Question from Casey Haire (Autonomous): What is the success rate on recent hires and pipeline for 250 targets? Also, any other balance sheet actions post bond portfolio restructuring?
  Response: Hiring success rates remain consistent; the pipeline is strong as Synovus adopts Pinnacle's rigorous hiring model. Other balance sheet actions are being evaluated but are not material to the earnings outlook.

• Question from Anthony Elian (JPMorgan): What are updated assumptions on loan marks and deposit beta?
  Response: Loan marks are expected with ~2/3 from long-duration residential mortgages; PAA benefits are reduced. Deposit beta is estimated at 45%-50% for the easing cycle, consistent with historical trends.

• Question from John McDonald (Truist Securities): What are updated thoughts on long-term earnings power and EPS run rate?
  Response: Management is confident in 2026 guidance exceeding consensus, with merger math slightly headwinded by lower rates but offset by stronger growth. The long-term outlook is positive due to a large advantaged footprint and sustainable hiring model.

• Question from David Chiaverini (Jefferies): How will loan growth accelerate through the year, and what changes in loan pricing?
  Response: Loan growth should be mid-to-high single digits in H1 and high single digits to low double digits in H2. Loan spreads declined ~10 bps recently due to mix, but production volume is strong.

• Question from Christopher Marinac (Janney Montgomery Scott): Are deposit incentives different for the combined company?
  Response: Incentives are aligned company-wide on revenue and EPS growth, not individual production buckets. Deposit growth is a key component of achieving top-line targets.

Contradiction Point 1

Strategy for Funding and Liquidity Management

It directly impacts the company's funding strategy for loan growth and its margin outlook, which is crucial for understanding financial stability and planning.

If loan growth outpaces deposit growth, how will funding be managed? - Ben Gerlinger (Citi)

20260122-2025 Q4: If loans grow before deposits, the company will use higher-cost wholesale funding to bridge the gap. This is already embedded in the margin outlook. - Kevin Blair(CEO) and Jamie Gregory(CFO)

How are near-term cash balances allocated, and will reductions prioritize loan growth or wholesale funding reduction? - Jared Shaw (Wells Fargo)

2023Q2: The firm plans to use broker deposits to fund loan growth and reduce the wholesale funding book. This process will occur consistently over the next six months to into the first part of next year. - Harold Carpenter(CFO)

Contradiction Point 2

Outlook for Net Interest Margin (NIM)

It involves changes in financial forecasts regarding the net interest margin, a key metric for assessing a bank's profitability and interest rate risk.

How have changes to the securities portfolio and interest rates affected NIM drivers and assumptions? - Bernard Von Gizycki (Deutsche Bank)

20260122-2025 Q4: The 2026 NIM guidance of 3.45%-3.55% already incorporates lower Synovus book yields due to rate declines... - Kevin Blair(CEO)

What is the margin outlook and progression, and are there loan book floors if interest rates decrease? - Stephen Scouten (Piper Sandler)

2023Q2: The net interest margin is expected to decline in Q3 and Q4, but net interest income should be flat to up. - Harold Carpenter(CFO)

Contradiction Point 3

BHG (Bankers Healthcare Group) Growth Outlook

It pertains to conflicting expectations for BHG's 2026 growth trajectory, affecting investor perceptions of the company's future earnings potential.

Besides the bond portfolio restructure, are there other balance sheet initiatives, and are there any updates on the BHG liquidity event? - Casey Haire (Autonomous)

20260122-2025 Q4: The outlook for 2026 is 25%-35% growth, showing their focus on core business. - Kevin Blair(CEO)

Will BHG growth continue into 2026 at a slower pace than the 80–90% in 2025? - Catherine Mealor (Keefe, Bruyette, & Woods, Inc.)

2025Q3: Yes, BHG will grow in 2026. Quarterly run rates are expected to be consistent into next year, leading to a more reasonable annual growth rate. - Harold Carpenter(CFO)

Contradiction Point 4

Hiring Model and Growth Targets

It involves differing views on the achievability of specific revenue producer hiring targets, impacting expectations for company growth and staffing strategy.

What are the geographic sources of additional revenue, and are there opportunities beyond the current footprint? - Ben Gerlinger (Citi)

20260122-2025 Q4: The opportunity is ample, and the targets of 250 in 2026 and 275 in 2027 are viewed as achievable with no significant risk. - Kevin Blair(CEO)

Are there sufficient revenue producers matching the Pinnacle model to meet the 300 RM hiring target, and what hiring pace increase is expected in 2026 and 2027? - Jared David Shaw (Barclays Bank PLC)

2025Q3: There may not be 300 currently, but there will be over time as Pinnacle hires from competitors and those competitors backfill. - M. Turner(CEO)

Contradiction Point 5

Capital Strategy and Share Repurchase Timing

It reflects inconsistencies in the capital strategy, specifically regarding the timing for initiating share buybacks, which is vital for shareholder returns and capital management.

When will the new $400 million share repurchase authorization begin? - Ebrahim Poonawala (Bank of America)

20260122-2025 Q4: Given the capital ratios and the timing of earnings impacts from merger expenses, share repurchases are unlikely in Q1 2026 and also unlikely in Q2 2026. - Jamie Gregory(CFO)

Will the post-deal capital strategy change, and do you plan to maintain higher capital for client comfort? - Casey Haire (Autonomous Research Limited)

2025Q3: No significant change in capital strategy is planned... If growth targets aren’t met, buybacks could be an option. - Harold Carpenter(CFO)