Investor Call FOURTH QUARTER 2019 January 22, 2020 Time: 8:30 AM CDT - - PowerPoint PPT Presentation
Investor Call FOURTH QUARTER 2019 January 22, 2020 Time: 8:30 AM CDT Webcast: www.pnfp.com (investor relations) Audio only: 877 602 7944 M. TERRY TURNER, PRESIDENT AND CEO HAROLD R. CARPENTER, EVP AND CFO Safe Harbor Statements Forward
FOURTH QUARTER 2019
HAROLD R. CARPENTER, EVP AND CFO
January 22, 2020
Time: 8:30 AM CDT Webcast: www.pnfp.com (investor relations) Audio only: 877‐602‐7944
Safe Harbor Statements
Forward Looking Statements
All statements, other than statements of historical fact, included in this presentation, are forward‐looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "expect," "anticipate," "intend," "may," "should," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward‐looking statements, but other statements not based on historical information may also be considered forward‐looking statements. These forward‐looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: (i) deterioration in the financial condition of borrowers
deposits and retain large, uninsured deposits, including during times when Pinnacle Bank is seeking to lower rates it pays on deposits; (iii) the inability of Pinnacle Financial, or entities in which it has significant investments, like BHG, to maintain the historical growth rate of its, or such entities', loan portfolio; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower‐quality assets; (vi) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on Pinnacle Financial’s results, including as a result of compression to net interest margin; (vii) adverse conditions in the national
differences in interest rates on loans or deposits from those that Pinnacle Financial is modeling or anticipating, including as a result of Pinnacle Bank's inability to better match deposit rates with the changes in the short‐term rate environment, or that affect the yield curve; (ix) the results of regulatory examinations; (x) Pinnacle Financial's ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions; (xi) difficulties and delays in integrating acquired businesses or fully realizing costs savings and other benefits from acquisitions; (xii) BHG's ability to profitably grow its business and successfully execute on its business plans; (xiii) risks of expansion into new geographic or product markets including the recent expansion into the Atlanta, Georgia metro market; (xiv) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including goodwill or the intangible assets; (xv) reduced ability to attract additional financial advisors (or failure of such advisors to cause their clients to switch to Pinnacle Bank), to retain financial advisors (including as a result of the competitive environment for associates) or otherwise to attract customers from other financial institutions; (xvi) deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xvii) inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies, required capital maintenance levels or regulatory requests or directives, particularly if Pinnacle Financial's level of applicable commercial real estate loans were to exceed percentage levels of total capital in guidelines recommended by its regulators; (xviii) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xix) the vulnerability of Pinnacle Bank's network and online banking portals, and the systems of parties with whom Pinnacle Financial contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (xx) the possibility of increased compliance and operational costs as a result of increased regulatory oversight (including by the Consumer Financial Protection Bureau), including oversight of companies in which Pinnacle Financial or Pinnacle Bank have significant investments, like BHG, and the development of additional banking products for Pinnacle Bank's corporate and consumer clients; (xxi) the risks associated with Pinnacle Financial and Pinnacle Bank being a minority investor in BHG, including the risk that the owners of a majority of the equity interests in BHG decide to sell the company if not prohibited from doing so by Pinnacle Financial or Pinnacle Bank; (xxii) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (xxiii) the availability of and access to capital; (xxiv) adverse results (including costs, fines, reputational harm, inability to obtain necessary approvals and/or
which could affect the forward looking statements can be found in Pinnacle Financial's Annual Report on Form 10‐K, Quarterly Reports on Form 10‐Q, and Current Reports on Form 8‐K filed with the SEC and available on the SEC's website at http://www.sec.gov. Pinnacle Financial disclaims any obligation to update or revise any forward‐looking statements contained in this presentation, which speak only as of the date hereof, whether as a result of new information, future events or otherwise.
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Safe Harbor Statements
Non‐GAAP Financial Matters
This presentation contains certain non‐GAAP financial measures, including, without limitation, earnings per diluted share, efficiency ratio and the ratio of noninterest expense to average assets, excluding in certain instances the impact of expenses related to other real estate owned, gains or losses on sale of investment securities, the charges associated with Pinnacle Financial's branch rationalization project, the sale of the remaining portion of Pinnacle Bank's non‐prime automobile portfolio, the revaluation of Pinnacle Financial’s deferred tax assets and other matters for the accounting periods
GAAP capital ratios and performance measures that exclude the impact of goodwill and core deposit intangibles associated with Pinnacle Financial's acquisitions of BNC, Avenue Bank, Magna Bank, CapitalMark Bank & Trust, Mid‐America Bancshares, Inc., Cavalry Bancorp, Inc. and other acquisitions which collectively are less material to the non‐GAAP measure. The presentation of the non‐GAAP financial information is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Because non‐GAAP financial measures presented in this presentation are not measurements determined in accordance with GAAP and are susceptible to varying calculations, these non‐GAAP financial measures, as presented, may not be comparable to other similarly titled measures presented by other companies. Pinnacle Financial believes that these non‐GAAP financial measures facilitate making period‐to‐period comparisons and are meaningful indications of its operating performance. In addition, because intangible assets such as goodwill and the core deposit intangible, and the other items excluded each vary extensively from company to company, Pinnacle Financial believes that the presentation of this information allows investors to more easily compare Pinnacle Financial's results to the results of other companies. Pinnacle Financial's management utilizes this non‐GAAP financial information to compare Pinnacle Financial's operating performance for 2019 versus certain periods in 2018 and to internally prepared projections.
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4Q19 Summary Results of Key GAAP Measures
4 Total Revenues ROTCE Total Deposits (millions) FD EPS Book Value per Share Total Loans
(millions)
NPA/ Loans & OREO Classified Asset Ratio NCOs
0.23% 0.21% 0.13% 0.11% 0.07%
NCOs
18.7% 16.4% 12.9% 12.4% 13.4%
Classified Asset Ratio
0.55% 0.40% 0.55% 0.58% 0.46%
NPA/ Loans & OREO
$6,543 $8,450 $15,633 $17,708 $19,788
Total Loans
(millions) CAGR 33.9%
$6,333 $7,835 $14,838 $16,489 $17,617
Total Core Deposits
(millions) CAGR 32.1%
15.81% 16.34% 16.11% 18.46% 15.49%
ROTCE**
$0.69 $0.83 $0.97 $1.26 $1.27
FD EPS*
CAGR 19.1%
$17.46 $20.06 $23.71 $27.27 $32.45
Tangible Book Value per Share**
CAGR 15.8%
$98,083 $119,761 $219,484 $249,780 $253,566
Total Revenues
CAGR 31.4%
4Q19 Summary Results of Key Non‐GAAP Measures
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*: excluding merger‐related charges, gains and losses on sales of investment securities, ORE expense (income), loss on sale of non‐prime automobile portfolio, branch consolidation adjustment and revaluation of deferred tax assets **: excluding goodwill, core deposit and other intangible assets Note: For a reconciliation of these Non‐GAAP financial measures to the comparable GAAP measures, see slides 43‐45.
65 29 72
Planned Planned‐to‐date Actual‐to‐date
Planned Planned‐to‐date Actual‐to‐date
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PNFP’s Hiring and Engagement Model has been Well Received in NC, SC, and VA
PNFP engaged BNC associates and substantially exceeded its hiring plan
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PNFP is Particularly Advantaged Given the Competitive Landscape
91% of PNFP’s offices are within 2 miles of a Truist Office
9.8% 13.4% 16.0% 20.0% 31.5% 34.5% 43.5% 50.2% 60.1% 61.8% 65.6% 67.0% 75.4% 77.3% 77.9% 79.1% 79.9% 88.0% 91.5% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% SFNC BXS HWC TRMK WSBC HOMB RNST OZK UCBI FCNC.A SSB ABCB SNV CSFL AUB TOWN UBSI BKU PNFP
2-Mile Overlap with Truist vs. Peers (%)
Source: S&P Global
PNFP Primarily Focuses on Top and Bottom Line Growth
PNFP continues to grow revenue/share at a double‐digit pace and faster than peers
*: excluding gains and losses on sales of investment securities and loss on sale of non‐prime automobile portfolio. For a reconciliation of these Non‐GAAP financial measures to the comparable GAAP measures, see slides 43‐45. Note: See slide 46 for peer group utilized in the above analysis. Peer group calculated by aggregating total peer revenues by total peer weighted avg. shares for each quarter. Source: S&P Global
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$10.20 $10.27 $10.49 $10.73 $11.10 $11.43 $11.74 $12.13 $12.42 $12.92 $13.44 $13.54 13.0% 7.3% 5.0% 5.3% 8.8% 11.3% 11.9% 13.0% 11.9% 13.0% 14.5% 11.6% 4.0% 4.5% 3.9% 4.6% 7.2% 6.5% 7.3% 6.2% 4.7% 5.0% 4.3%
0.0% 3.0% 6.0% 9.0% 12.0% 15.0% $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Y/Y Revenue per Share Growth Revenue per Share*
LTM Revenue Per Share Growth* vs. Peers
PNFP LTM Revenue/Share PNFP Y/Y Growth Peer Median Y/Y Growth
Loan & Deposit Growth are Keys to Top and Bottom Line Growth
Loan growth remained strong in 4Q19
$4,130 $4,251 $4,358 $4,436 $4,625 $4,737 $5,690 $6,458 $6,742 $6,998 $8,233 $8,357 $8,558 $9,817 $15,017 $15,520 $15,957 $16,730 $17,259 $17,630 $17,938 $18,611 $19,217 $19,600
4.30% 5.00% 3.50% 4.00% 4.50% 5.00% 5.50% $‐ $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000
Loan Yields Average Loans
(millions) BNCN
9 14.2% 14.6% 18.7% 13.3% 11.7% 0.0% 4.0% 8.0% 12.0% 16.0% 20.0%
Annual Organic Loan Growth
(excludes Day 1 merger impact)
Net Interest Margin Influences Top and Bottom Line Growth
Loan yields continue to hold during this volatile rate environment
Note: Weighted Average EOP Coupon Trends – excluding leases and credit cards and the impact of purchase accounting adjustments and impact from early payoffs which result in immediate recognition
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At December 31, 2019 (*)
36.3% 16.9% 3.8% 4.7% 38.4%
All Loans
LIBOR Prime T‐Bill Fixed Rate <1Y Fixed Rate >1Y
44.9% 20.7% 0.9% 33.3%
C&I
35.1% 3.9% 4.5% 56.2%
CRE
47.3% 27.9% 1.5% 23.2%
Construction
Rate Index End‐of‐Period Weighted Average Coupon New Loans Weighted Average Coupon for the Quarter Origination Mix
YOY Change 1Q19 2Q19 3Q19 4Q19 4Q19 LIBOR 4.79% 4.55% 4.22% (0.57)% 4.83% 4.73% 4.49% 4.13% 42.9%
1‐MO LIBOR 2.51% 2.02% 1.76% (0.75)% 2.50% 2.44% 2.18% 1.79%
Prime 5.70% 5.32% 5.00% (0.70)% 6.07% 6.03% 5.36% 4.98% 24.6%
FFS target 2.50% 2.00% 1.75% (0.75)% 2.50% 2.50% 2.00% 1.75%
Fixed rate 4.49% 4.54% 4.51% 0.02% 5.07% 4.89% 4.65% 4.28 % 29.7%
5‐YR UST 2.51% 1.55% 1.69% (0.82)% 2.53% 2.12% 1.63% 1.61%
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16.3% 11.8% 16.9% 14.6% 7.1%
0.0% 4.0% 8.0% 12.0% 16.0% 20.0%
Annual Organic Deposit Growth
(excludes Day 1 merger impact)
Loan & Deposit Growth are Keys to Top and Bottom Line Growth
Funding loan growth as efficiently as possible is the key to our growth
$4,510 $4,519 $4,655 $4,758 $4,792 $4,885 $5,898 $6,787 $7,037 $7,093 $8,454 $8,791 $9,099 $10,394 $15,828 $16,092 $16,281 $16,949 $18,113 $18,368 $18,358 $18,865 $19,778 $20,079
1.25% 1.25% 1.10%
0.00% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.25% 2.50% 2.75% 3.00% $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 $22,000
EOP FFS Target Cost of Deposits
Deposit Rates
Net Interest Margin Influences Top and Bottom Line Growth
PNFP moved quickly on deposit costs when the Fed moved
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1.38% 1.38% 1.39% 1.40% 1.36% 1.28% 1.22% 1.13% 1.10% 1.00% 1.10% 1.20% 1.30% 1.40% 1.50% Apr19 May19 Jun19 Jul19 Aug19 Sep19 Oct19 Nov19 Dec19
Deposit Rate Tranches
2018 EOP Rates June 30, 2019 EOP Rates
2019 EOP Rates
2019 EOP Rates June 19 to Dec 19 Change in EOP rates
2019 % of Totals Noninterest bearing ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ ‐‐‐ 23.8% Rate sheet 0.21% 0.20% 0.13% 0.11% (0.09)% 13.3% Negotiated 1.57% 1.66% 1.49% 1.32% (0.32)% 36.2% Indexed 2.46% 2.43% 2.01% 1.66% (0.77)% 7.1% CDs 2.04% 2.32% 2.29% 2.19% (0.13)% 19.6% Total 1.16% 1.28% 1.17% 1.04% (0.14)% 100.0%
Top 10 Projects Aggregated Exposure Largest Project in Category Weighted Average of Pro Forma LTV Weighted Average of Original LTC Weighted Average of Pro Forma DSC Construction Portfolio Hotel / Motel 160,316 31,161 65.3% 65.9% 1.68 Medical 237,622 34,468 65.7% 73.5% 1.47 Multifamily 413,419 67,000 56.0% 64.2% 1.31 Professional Office 268,452 50,000 51.3% 61.4% 1.43 Retail 95,794 14,856 67.2% 73.3% 1.35 Storage / Warehouse 311,487 49,696 56.8% 66.1% 1.31 Existing NOO Properties Hotel / Motel 215,903 32,459 63.5% 48.8% 1.88 Medical 192,954 43,400 65.2% 51.7% 1.69 Multifamily 244,691 43,304 58.1% 60.7% 1.45 Professional Office 212,181 37,800 58.7% 58.0% 1.62 Retail 208,337 28,000 63.6% 53.6% 1.45 Storage / Warehouse 232,133 43,330 62.2% 61.7% 1.22 Grand Total $2,793,289 $475,473 61.1% 61.6% 1.49 ‐ 500,000,000 1,000,000,000 1,500,000,000 2,000,000,000 2,500,000,000 3,000,000,000 Non‐owner
Other Construction and Land Development Owner‐occupied CRE Residential Construction Multi‐family Less than $10 million Greater than $10 million, but less than $15 million Greater than $15 million, but less than $20 million Greater than $20 million
Real Estate Portfolio Concentrations aggregated by real estate category and common borrower
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Credit Discipline Impacts Bottom Line
Concentration discipline and granularity offer great protection to bottom line
Largest CRE Projects by Category Granularity of Real Estate Portfolio
‐ Aggregate portfolio volumes by relationship and loan type
**: Excluding gains and losses on sales of investment securities and loss on sale of non‐prime automobile portfolio. For a reconciliation of these Non‐GAAP financial measures to the comparable GAAP measures, see slides 43‐45.
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Fee Income Growth Supports Ongoing Top and Bottom Line Growth
PNFP continues to grow strategic fee businesses
2019Y 2018Y 2017Y
Service charges $36,769 $36,088 $31,499 Investment services 24,187 21,985 15,296 Insurance commissions 9,344 9,331 7,405 Gain on mortgage loans sold, net 24,335 14,564 18,625 Investment gains and losses on sales, net (5,941) (2,254) (8,264) Trust fees 14,184 13,143 8,664 Income from equity method investment 90,111 51,222 37,958 Other: Interchange and other consumer fees 36,158 28,720 18,443 Bank‐owned life insurance 17,361 12,535 5,025 Loan swap fees 4,758 4,043 1,795 SBA loans sales 4,933 4,604 2,879 Gain on other equity investments 2,789 2,778 365 Other 4,838 4,091 6,928 Total noninterest income $263,826 $200,850 $146,618 Noninterest income/Average Assets 1.00% 0.85% 0.86% Noninterest income** $271,303 $203,104 $154,882 Noninterest Income**/Total Average Assets 1.03% 0.86% 0.91%
2019 compared to 2018, expect 8% ‐ 12% growth in 2020
interest rate environment for most of the year, significant hiring of incremental mortgage originators and strong housing markets in which we operate
realized loss on sale of nonprime auto portfolio
in 2020
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BHG Continues to Outperform
Continuous improvements have provided significant opportunity for growth
Loan placements 2019 2018 # of individual Bank buyers 535 460 Gross loan yield to borrower 14.39% 14.66% BHG realized spread 9.12% 9.34%
$605,000 $711,000 $872,000 $1,442,000 $‐ $300,000 $600,000 $900,000 $1,200,000 $1,500,000 $1,800,000 2016 2017 2018 2019 Forecast 2020
Thousands
Total BHG Loan Originations
$193,014 $314,982 $662,764 $88,423 $150,370 $395,138 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000
Forecast at Dec. 31, 2020
Thousands
BHG Total Loans and Borrowings
At Year End
Total Loans on Balance Sheet Total Borrowings
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BHG Continues to Outperform
Continuous improvements have provided significant opportunity for growth
Revenue Sources 2018 2019 2‐3 year Horizon Loan Placements and Originations 81.5% 77.3% 60% Interest Income 11.5% 17.3% 35% Other 7.0% 5.4% 5%
Totals 100% 100% 100%
$77,953 $121,194 $182,461 $0 $50,000 $100,000 $150,000 $200,000 $250,000 2017 2018 2019 Forecast 2020
Thousands
BHG Net Earnings Growth
12% growth
*: Excluding the impact of ORE expense and income, merger‐related expenses and branch consolidation adjustment. **: Excluding the impact of ORE expense and income, securities gains and losses, merger‐related charges, branch consolidation adjustment and loss on the sale of non‐prime automobile portfolio. For a reconciliation of these Non‐GAAP financial measures to the comparable GAAP measures, see slide 43‐45.
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2019Y 2018Y 2017Y Salaries and employee benefits: Salaries $185,845 $161,229 $130,929 Commissions 13,798 12,644 7,573 Cash and equity incentives 68,023 53,990 40,693 Employee benefits and other 45,694 43,810 30,467 Total salaries and benefits 313,359 271,673 209,662 Equipment and occupancy 84,582 74,276 54,092 Other real estate owned, net 4,228 723 1,079 Marketing and other business development 13,251 11,712 8,321 Postage and supplies 8,144 7,815 5,736 Amortization of intangibles 9,908 10,549 8,816 Merger‐related expenses ‐ 8,259 31,843 Other noninterest expense: Deposit related expense 17,017 22,768 13,098 Lending related expense 24,573 19,428 13,403 Wealth management related expense 1,986 1,838 1,271 Other noninterest expense 28,100 23,826 19,239 Total other noninterest expense 71,676 67,860 47,011 Total noninterest expense $505,148 $452,867 $366,560 Efficiency ratio 49.05% 48.32% 53.26% Expense/Total Average Assets 1.91% 1.92% 2.15% Noninterest expense * $497,731 $443,885 $333,638 Efficiency ratio ** 47.98% 47.25% 47.90% Noninterest Expense*/Total Average Assets 1.88% 1.88% 1.96%
Expense Containment Growth Supports Ongoing Top and Bottom Line Growth
PNFP continues to grow strategic fee businesses
Advocate Capital comprising ~45 of the FTE increase
levels for the cash plan in 2019 compared to 2018.
due to increased technology costs and charges related to the closure of five offices in 2Q19
assessments
card related expenses
planned hires, should approximate a mid‐single digit increase over 4Q annualized run rates.
PNFP has long‐targeted top quartile profitability and consistently delivered
Targets adjusted in Q3 2019 to focus on critical return metrics
Operating range 4Q19 ACTUALS 4Q19 ACTUALS (Non GAAP)* Return on Average Assets 1.45% to 1.65% 1.38% 1.39% Return on Average Tangible Common Equity 16.5% to 19.0% 15.41% 15.49% Tangible Equity Ratio 8.75% to 9.75% 9.58% 9.58%
*: PNFP Non GAAP excludes merger‐related charges, gains and losses on sales of investment securities, ORE expense (income), loss on sale of non‐prime automobile portfolio, branch consolidation adjustment and revaluation of deferred tax assets ^: Tangible common equity excludes goodwill, core deposit and other intangible assets Note: For a reconciliation of these Non‐GAAP financial measures to the comparable GAAP measures, see slides 43‐45. Note: See slide 46 for peer group utilized in the above analysis.
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1.34% 1.35% 1.56% 1.54% 1.69% 1.62% 1.39% 1.27% 1.02% 1.53% 1.52% 1.55% 1.62% 1.38% 0.97% 0.89% 1.35% 1.18% 1.23% 1.37% 1.18% 1.04% 1.41% 1.35% 1.39% 0.13%
0.80% 0.90% 1.00% 1.10% 1.20% 1.30% 1.40% 1.50% 1.60% 1.70%
ROAA
PNFP Non GAAP* PNFP GAAP Peer Median Top Quartile
2016 2017 2018 1Q19 2Q19 3Q19 4Q19
16.11% 15.29% 18.57% 17.87% 19.28% 18.31% 15.49% 15.26% 11.57% 18.18% 17.60% 17.74% 18.28% 15.41% 11.93% 11.02% 15.31% 14.70% 15.09% 14.74% 14.83% 12.98% 18.42% 15.50% 15.77% 1.27%
0.00% 5.00% 10.00% 15.00% 20.00%
ROTCE^
PNFP Non GAAP* PNFP GAAP Peer Median Top Quartile
2016 2017 2018 1Q19 2Q19 3Q19 4Q19
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PNFP’s Entry into Atlanta – The Southeast’s Economic Center
Atlanta offers great opportunities for PNFP and its Shareholders
Current Market Target Market New Market
PNFP’s Entry into Atlanta – The Southeast’s Economic Center
Atlanta offers great opportunities for PNFP and its Shareholders
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Source: S&P Global Market Intelligence.
Atlanta Deposit Market Share: 2009 Current Atlanta Deposit Market Share
Rank Institution (ST) Number of Branches Deposits in Market ($mm) Market Share (%) 1 Truist Financial Corp. (NC) 215 56,246 32.5 2 Bank of America Corporation (NC) 126 33,282 19.2 3 Wells Fargo & Co. (CA) 166 31,032 17.9 4 JPMorgan Chase & Co. (NY) 86 5,676 3.3 5 Synovus Financial Corp. (GA) 44 5,344 3.1 6 Ameris Bancorp (GA) 63 4,782 2.8 7 Regions Financial Corp. (AL) 65 3,632 2.1 8 PNC Financial Services Group (PA) 61 3,213 1.9 9 United Community Banks Inc. (GA) 33 2,946 1.7 10 Cadence Bancorp. (TX) 8 2,653 1.5 11 Renasant Corp. (MS) 29 2,345 1.4 12 Bank OZK (AR) 40 2,139 1.2 13 Atlantic Capital Bcshs Inc. (GA) 2 1,870 1.1 14 CenterState Bank Corp. (FL) 13 1,629 0.9 15 Fifth Third Bancorp (OH) 31 1,545 0.9 16 First Horizon National Corp. (TN) 9 1,169 0.7 17 First Citizens BancShares Inc. (NC) 18 1,126 0.7 18 East West Bancorp Inc. (CA) 3 1,112 0.6 19 United Bank Corp. (GA) 15 1,048 0.6 20 MetroCity Bankshares Inc. (GA) 8 927 0.5 Total (1‐20) 1,060 166,320 96.2 Total (1‐75) 1,175 172,978 100.0 Rank Institution (ST) Number of Branches Deposits in Market ($mm) Market Share (%) 1 SunTrust Banks Inc. (GA) 200 26,912 23.4 2 Wells Fargo & Co. (CA) 200 21,596 18.8 3 Bank of America Corp. (NC) 160 16,263 14.1 4 BB&T Corp. (NC) 88 6,160 5.35 5 Synovus Financial Corp. (GA) 61 5,259 4.6 6 Regions Financial Corp. (AL) 73 3,419 3.0 7 Royal Bank of Canada 56 2,444 2.1 8 United Community Banks Inc. (GA) 40 2,158 1.9 9 Georgian Bancorp. Inc. (GA) 5 1,960 1.7 10 Fidelity Southern Corp. (GA) 24 1,559 1.4 11 Silverton Bridge Bank NA (GA) 1 1,511 1.3 12 Crescent Banking Co. (GA) 11 951 0.8 13 Brand Group Holdings Inc. (GA) 6 928 0.8 14 Buckhead Community Bancorp Inc. (GA) 6 797 0.7 15 WGNB Corp. (GA) 16 765 0.7 16 JPMorgan Chase & Co. (NY) 56 717 0.6 17 Security Bank Corp. (GA) 4 640 0.6 18 Henry County Bancshares Inc. (GA) 7 628 0.6 19 United Bank Corp. (GA) 15 591 0.5 20 Community Financial Holding Co. Inc. (GA) 3 434 0.4 Total (1‐20) 1,032 95,692 83.1 Total (1‐142) 1,448 115,116 100.0
Acquired or closed Entered ATL via meaningful M&A
60% of
the to top 20 20 bank banks in in 2009 2009 ar are no no lo longer in in mark market et
PNFP’s Entry into Atlanta – The Southeast’s Economic Center The competitive landscape is ripe for Pinnacle’s distinctive model
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PNFP’s Entry into Atlanta – The Southeast’s Economic Center Pinnacle’s execution in Nashville provides the roadmap
0% 5% 10% 15% 20% Pinnacle Bank Bank of America Suntrust Regions Bank First Tennessee
FDIC Deposits
Greenwich 2Q19 Market Report
Bank D Bank A
Pinnacle
Bank B Bank C 0% 5% 10% 15% 20% 25% 30% 20 40 60 80 100
Lead Relationships as % of Market Excellent Client Satisfaction
Key Drivers of Satisfaction
Client Score Q2 ’18 R4Q Q2 ’19 R4Q Overall Client Satisfaction
82% 91%
Ease of Doing Business
88% 97%
Values Long-Term Relationships
90% 97%
NPS/Promoters
82% 87%
Overall Digital Experience
80% 82%
Relationship Manager Overall Satisfaction with Relationship Manager
93% 95%
Responsiveness and Prompt Follow-up on Requests
94% 94%
Knowledge of Cash Management Services
90% 89%
Provides Advice to Help Business Grow
77% 83%
Effectively Coordinates Product Specialists
81% 83%
Frequency of Visits
69% 71%
Understanding of Your Industry
70% 81%
Effectiveness in Demonstrating Data and Analytics
Cash Management Overall Product Capability
71% 86%
Accuracy of Operations
81% 93%
Customer Service Professional
89% 94%
Market Execution
Client Score Q2 ’18 R4Q Q2 ’19 R4Q Market Penetration Customers 27% 31% Lead as % of Total Market 23% 26% Lead as % of Customers 86% 84% Non-Customer Contact & Perceptions Favorable Overall Impression 25% 47% Willingness To Extend Credit 100% 27% Proactively Provides Advice 76% 64% Ease of Doing Business 76% 50% Bank You Can Trust 55% 50% Cash Management Capabilities 60% 64% Customer Product Cross-Sell Primary Business Checking Accounts 92% 85% Cash Management - Overall 83% 88% Loans/Lines of Credit 52% 62% Commercial Real Estate Mortgages 17% 16%
Leading Neutral Trailing
NOTE: Greenwich Associates data and findings are proprietary and confidential and peer names or results may not be shared or cited in public sources
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PNFP’s Entry into Atlanta – The Southeast’s Economic Center Pinnacle intends to invest in order to seize this “once‐in‐a‐generation” opportunity
5 Year Build‐out Targets
We remain committed to long‐term shareholder value creation through top and bottom line growth
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2020 Focus Items
High single‐digit to low double‐digit annualized loan growth Grow core deposits while managing funding costs Low double‐digit fee growth EPS growth in top quartile of peer group
Long‐term Shareholder Value Creation Thesis
Hiring revenue producers Emphasizing revenue growth over expense cutting Growing tangible book value
25
FOURTH QUARTER 2019
Supplemental Information
Chart
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Balance Sheet – Loan Portfolio
Amts. 4Q19 % 4Q19 Amts. 3Q19 % 3Q19 Amts. 4Q18 %s 4Q18 Amts. 4Q17 %s 4Q17 C&I $6,290.3 31.8% $6,002.3 30.5% $5,271.4 29.8% $4,141.3 26.5% CRE – Owner Occ. 2,669.8 13.5% 2,595.8 13.4% 2,653.4 15.0% 2,460.0 15.7% Total C&I & O/O CRE $8,960.1 45.3% $8,598.1 43.9% 7,924.8 44.8% 6,601.3 42.2% CRE – Investment 4,418.7 22.3% 4,443.7 23.0% 3,855.6 21.8% 3,564.0 22.8% CRE – Multifamily and other 620.8 3.1% 669.7 3.5% 655.9 3.7% 645.6 4.1% C&D and Land 2,430.5 12.3% 2,253.3 11.6% 2,072.5 11.7% 1,908.3 12.2% Total CRE & Construction $7,470.0 37.7% $7,366.7 38.1% 6,584.0 37.2% 6,117.9 39.1% Consumer RE 3,068.6 15.5% 3,025.5 15.6% 2,844.4 16.0% 2,561.2 16.4% Consumer and other 289.3 1.5% 355.3 2.4% 354.3 2.0% 352.7 2.3% Total Other $3,357.9 17.0% $3,380.8 18.0% 3,198.7 18.0% 2,913.9 18.7% Total loans $19,788.0 100.0% $19,345.6 100.0% $17,707.5 100.0% $15,633.1 100.0%
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Balance Sheet – Loan Portfolio
TOTAL PINNACLE TENNESSEE LOANS CAROLINAS/ VA LOANS OTHER UNIT LOANS* Amts. 4Q19 Amts. 4Q18 Amts. 4Q19 Amts. 4Q18 Amts. 4Q19 Amts. 4Q18 Amts. 4Q19 Amts. 4Q18 C&I $6,290.3 $5,271.4 $4,635.5 $4,147.8 $906.1 $731.9 $748.7 $391.7 CRE – Owner Occ. 2,669.8 2,653.4 1,562.2 1,533.4 965.7 1,037.0 141.9 83.0 Total C&I & O/O CRE $8,960.1 $7,924.8 $6,197.7 $5,681.2 $1,871.8 $1,768.9 $890.6 $474.7 CRE – Investment 4,418.7 3,855.6 1,821.3 1,603.1 2,539.4 2,187.1 58.0 65.4 CRE – Multifamily and other 620.8 655.9 493.5 439.6 125.5 211.9 1.8 4.4 C&D and Land 2,430.5 2,072.5 1,387.4 1,238.6 1,020.2 808.9 22.9 25.0 Total CRE & Construction $7,470.0 $6,584.0 $3,702.2 $3,281.3 $3,685.1 $3,207.9 $82.7 $94.8 Consumer RE 3,068.6 2,844.4 1,662.3 1,300.3 1,248.5 1,193.4 157.9 350.7 Consumer and other 289.3 354.3 159.1 155.5 43.7 89.6 86.4 109.2 Total Other $3,357.9 $3,198.7 $1,821.4 $1,455.8 $1,292.2 $1,283.0 $244.3 $459.9 Total Loans $19,788.0 $17,707.5 $11,721.3 $10,418.3 $6,849.1 $6,259.8 $1,217.6 $1,029.4 Average Ticket Size (in ‘000s) $283.2 $253.5 $398.9 $384.4 $206.6 $190.1 $165.7 $105.0
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Note: Percentages noted in red text represent year‐over‐year growth rates. *: Represents mortgage, associate banking, automobile finance and various other business lines.
Balance Sheet – Loan Portfolio
TOTAL PINNACLE C&I & O/O CRE CRE & CONSTRUCTION OTHER LOANS* Amts. 4Q19 Amts. 4Q18 Amts. 4Q19 Amts. 4Q18 Amts. 4Q19 Amts. 4Q18 Amts. 4Q19 Amts. 4Q18 Nashville $6,393.4 $5,972.7 $3,055.4 $3,004.1 $2,275.4 $2,101.1 $1,062.6 $867.5 Knoxville 1,766.6 1,549.8 1,075.7 944.4 497.8 450.2 193.1 155.2 Music and Entertainment 468.1 294.4 344.9 187.1 20.7 22.5 102.5 84.8 Chattanooga 1,421.4 1,262.2 842.1 769.6 320.9 279.9 258.3 212.7 Memphis 1,671.8 1,339.2 879.5 776.0 587.3 427.6 204.9 135.6 Total Tennessee $11,721.3 $10,418.3 $6,197.7 $5,681.2 $3,702.2 $3,281.3 $1,821.4 $1,455.8 Greensboro/Highpoint 1,679.9 1,597.1 582.5 575.7 825.7 728.4 271.7 293.0 Charlotte 2,019.0 1,811.2 495.8 458.3 1,129.8 980.9 393.4 372.0 Raleigh 1,199.6 1,043.6 236.5 258.8 814.4 641.7 148.7 143.1 Charleston 891.2 830.0 177.5 152.9 422.2 383.5 291.5 293.6 Greenville 412.5 418.7 113.1 115.9 245.7 258.7 53.7 44.1 Roanoke 527.9 462.3 160.6 122.9 235.0 202.7 132.4 136.7 SBA 119.0 96.9 105.8 84.5 12.4 12.0 0.8 0.5 Total Carolina/VA $6,849.1 $6,259.8 $1,871.8 $1,768.9 $3,685.1 $3,207.9 $1,292.2 $1,283.0 Other 1,217.6 1,029.4 890.6 474.7 82.7 94.8 244.3 459.9 Total $19,788.0 $17,707.5 $8,960.1 $7,924.8 $7,470.0 $6,584.0 $3,357.9 $3,198.7
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Note: Percentages noted in red text represent year‐over‐year growth rates. *: Represents mortgage, associate banking, automobile finance and various other business lines.
Balance Sheet – Loan Portfolio
Amts. 4Q19 % 4Q19 Amts. 3Q19 % 3Q19 Amts. 4Q18 % 4Q18 Amts. 4Q17 % 4Q17 Residential – Spec $367.9 1.9% $360.0 1.9% $352.3 2.0% $278.7 1.8% Residential – Custom 124.1 0.6% 129.1 0.7% 134.2 0.8% 95.9 0.6% Residential – Condo 1.2 0.0% 1.0 0.0% ‐ 0.0% 0.6 0.0% Commercial Construct. 1,515.6 7.7% 1,369.1 7.1% 1,132.5 6.4% 1,057.3 6.8% Land Dev– Residential 259.2 1.3% 243.3 1.3% 165.9 0.9% 157.5 1.0% Land Dev – Commercial 105.3 0.5% 92.2 0.5% 167.8 0.9% 208.9 1.3% Land Dev – Mixed Use 3.8 0.0% 4.4 0.0% 39.2 0.2% 25.7 0.2% Land – Unimproved 53.3 0.3% 54.2 0.3% 80.6 0.5% 83.7 0.5% Total Construction and Land Dev. $2,430.5 12.3% $2,253.3 11.6% $2,072.5 11.7% $1,908.3 12.2%
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Balance Sheet – Loan Portfolio
TOTAL PINNACLE TENNESSEE LOANS CAROLINAS/VA LOANS OTHER UNIT LOANS Amts. 4Q19 Amts. 4Q18 Amts. 4Q19 Amts. 4Q18 Amts. 4Q19 Amts. 4Q18 Amts. 4Q19 Amts. 4Q18 Residential – Spec $367.9 $352.3 $258.5 $255.8 $108.0 $96.5 $1.5 $ ‐ Residential – Custom 124.1 134.2 72.5 88.6 50.4 45.6 1.3 ‐ Residential – Condo 1.2 ‐ 1.2 ‐ ‐ ‐ ‐ ‐ Commercial Construct. 1,515.6 1,132.5 790.9 644.0 720.3 487.1 4.4 1.4 Land Dev– Residential 259.2 165.9 158.6 105.6 87.4 44.1 13.2 16.2 Land Dev – Commercial 105.3 167.8 65.6 80.8 38.9 83.3 0.8 3.7 Land Dev – Mixed Use 3.8 39.2 3.2 4.8 0.6 34.4 ‐ ‐ Land – Unimproved 53.3 80.6 36.9 58.9 14.7 18.0 1.6 3.7 Total Construction and Land Dev. $2,430.5 $2,072.5 $1,387.4 $1,238.5 $1,020.2 $809.0 $22.9 $25.0 Average Ticket Size (in ‘000s) $609.8 $506.2 $666.4 $582.3 $556.3 $430.5 $326.9 $284.3
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Balance Sheet – Loan Portfolio
Total NOO and Multifamily Total Construction Total NOO and Construction Amts. 4Q19 Amts. 3Q19 Amts. 4Q18 Amts. 4Q19 Amts. 3Q19 Amts. 4Q18 Amts. 4Q19 Amts. 3Q19 Amts. 4Q18 Multifamily $620.8 $669.7 $655.9 $471.3 $430.0 $390.3 $1,092.1 $1,099.7 $1,046.2 Hospitality 771.6 782.1 708.8 62.8 39.0 118.6 834.4 821.1 827.4 Retail 1,376.7 1,336.4 1,205.8 168.7 143.1 153.5 1,545.4 1,479.5 1,359.3 Office 703.3 795.7 682.2 154.3 87.4 102.2 857.6 883.1 784.4 Warehouse 758.7 708.1 611.5 354.7 294.7 139.6 1,113.4 1,002.8 751.1 Medical 398.8 396.3 281.9 153.0 135.5 104.1 551.8 531.8 386.0 Other 409.6 425.1 365.40 1,065.7 1,123.6 1,064.2 1,475.3 1,548.7 1,429.6 Total $5,039.5 $5,113.4 $4,511.5 $2,430.5 $2,253.3 $2,072.5 $7,470.0 $7,366.7 $6,584.0 Average Ticket Size (in ‘000s) $1,759.1 $1,789.4 $1,599.8 $609.8 $551.5 $506.2 $1,091.0 $1,061.9 $952.3
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Balance Sheet – Loan Portfolio
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Balance Sheet – Loan Portfolio
‐0.10% ‐0.05% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% CRE Construction C&I Net commercial charge
Net Commercial Loan Charge Offs by Loan Type
2017 2018 2019 ‐0.50% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% Consumer RE Consumer and other Net consumer charge offs
Net Consumer Loan Charge Offs by Loan Type
2017 2018 2019
Balance Sheet – Loan Portfolio
Description 4Q19 3Q19 2Q19 1Q19 4Q18 3Q18
Loans secured by real estate: Construction, land development, and other loans: 1‐4 family residential construction loans $578,443 $575,975 $564,339 $575,753 $541,253 $523,300 Other construction loans and all land development and other land loans 1,852,040 1,677,328 1,553,630 1,521,817 1,531,202 1,535,709 Loans included in the 100% test $2,430,483 $2,253,303 $2,117,969 $2,097,570 $2,072,455 $2,059,009 Secured by multifamily (5 or more) residential properties $631,616 $686,385 $726,744 $706,097 $671,156 $718,953 Loans secured by other nonfarm nonresidential properties 4,418,658 4,443,687 4,252,098 4,107,953 3,855,643 3,818,055 Financed real estate not secured by real estate 317,949 306,738 310,371 136,306 154,527 145,880 Loans included in the 300% test $7,798,706 $7,690,113 $7,407,182 $7,047,926 $6,753,781 $6,741,897
2,Total Risk‐Based Capital $2,906,853 $2,818,988 $2,563,617 $2,495,127 $2,432,419 $2,344,597 % of Total Risk‐Based Capital 100% Test – Construction and Land Development 84% 80% 83% 84% 85% 88% 300% Test – Construction and Land Development + NOOCRE + Multifamily 268% 273% 289% 283% 278% 288%
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Balance Sheet – Deposit Portfolio
TOTAL DEPOSITS CORE DEPOSITS NONCORE DEPOSITS TOTAL PINNACLE TRANSACTION AND MMDA CDs PUBLIC FUNDS and OTHER DEPOSITS 4Q19 4Q18 4Q19 4Q18 4Q19 4Q18 4Q19 4Q18 Nashville $7,844.6 $7,161.9 $6,990.3 $6,368.6 $561.4 $502.1 $292.9 $291.2 Knoxville 1,640.7 1,485.4 1,459.2 1,396.1 128.3 58.6 53.2 30.7 Music and Entertainment 383.0 307.6 376.2 304.5 1.8 1.6 5 1.5 Memphis 1,004.7 1,068.8 796.6 922.6 154.8 118.7 53.3 27.5 Chattanooga 1,053.2 871.5 925.4 789.9 58.9 48.1 68.9 33.5 Total Tennessee $11,926.2 $10,895.2 $10,547.7 $9,781.7 $905.2 $729.1 $473.3 $384.4 Greensboro/Highpoint 1,997.0 2,012.3 1,587.8 1,666.8 272.6 252.4 136.6 93.1 Charlotte 1,279.1 1,105.4 956.6 831.0 201 190.8 121.5 83.6 Charleston 971.4 892.4 764.3 680.5 169 174.8 38.1 37.1 Raleigh 629.0 581.1 553.9 491.2 54 52.2 21.1 37.7 Roanoke 643.6 583.7 490.3 452.3 130.7 115.0 22.6 16.4 Greenville 339.7 378.5 219.2 267.3 84.2 78.0 36.3 33.2 Total Carolinas / VA $5,859.8 $5,553.4 $4,572.1 $4,389.1 $911.5 $863.2 $376.2 $301.1 Other 2,394.9 2,400.4 639.0 621.3 42.0 104.8 1,713.9 1,674.3 Total $20,180.9 $18,849.0 $15,758.8 $14,792.1 $1,858.7 $1,697.1 $2,563.4 $2,359.8
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Note: Percentages noted in red text represent year‐over‐year growth rates.
Balance Sheet – Bond Portfolio
Conservative bond portfolio
36 2.7% 2.0% 36.0% 5.0% 4.1% 50.2% Agency/Treasury Corporates MBS Asset Backed CMOs Municipals
Portfolio: December 31, 2019
Total Investments $3.729 billion Net Unrealized Gain (Loss) $37.6 million
Quarter Duration
4Q19 4.8% 2.9% 3Q19 4.4% 3.0% 2Q19 4.1% 3.2% 1Q19 3.7% 3.4% 4Q18 3.6% 3.2% 3Q18 4.4% 3.1% 2Q18 3.9% 2.9% 1Q18 3.5% 2.9% 4Q17 3.5% 2.7% 3Q17 3.5% 2.6% 2Q17 3.3% 2.5% 1Q17 3.4% 2.4%
37 Note: See slide 46 for peer group utilized in the above analysis. Source: S&P Global
60% 65% 70% 74% 77% 40% 35% 30% 26% 23%
Effective Bond Portfolio Composition End of Period
Fixed Rate Variable Rate
0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00%
$250 $350 $450 $550 $650 $750 $850
Average Yield Average Balances ($ in millions) Quarterly Avg. FFS and Cash
Avg FFS and Cash Yield on FFS and Cash
2.85 13.41 ‐ 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 ‐ 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4
% of Total Assets Bond Yields
PNFP ‐ Bond Yields Peer Median ‐ Bond Yields PNFP ‐ % of Total Assets Peer Median ‐ % of Total Assets
Balance Sheet – Bond Portfolio
Asset Quality
(*) > 30 days past due (**) Excludes past due loans rated substandard
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(000S)
AS A % OF TOTAL LOANS
AS A % OF TOTAL LOANS
AS A % OF TOTAL LOANS
Past Due Loans (*)
Nonaccrual loans $25,841 0.13% $39,548 0.20% $35,306 0.20% Accruing loans 35,963 0.18% 45,591 0.24% 60,537 0.34%
Total past due $61,804 0.31% $85,139 0.44% $95,843 0.54% NPLs and > 90 days
$2,278 0.01% $2,047 0.01% $3,388 0.02% Consumer RE 24,835 0.13% 23,862 0.12% 28,069 0.16% CRE – Owner Occupied 11,654 0.06% 11,908 0.06% 17,190 0.10% CRE – Investment 7,001 0.04% 10,683 0.06% 12,143 0.07% Total real estate $45,940 0.23% 48,500 0.25% 64,083 0.36% C&I 16,631 0.08% 26,438 0.14% 23,850 0.13% Other 649 0.00% 776 0.00% 1,459 0.01%
Total loans $63,220 0.32% $75,714 0.39% $89,392 0.50% Classified loans and ORE
Substandard commercial loans $314,732 1.59% $306,920 1.59% $242,799 1.37% Doubtful commercial loans 1 0.00% 1 0.00% ‐ 0.00% Other impaired loans 25,482 0.13% 25,859 0.12% 24,914 0.14% 90 days past due and accruing (**) 1,615 0.01% 2,385 0.01% 1,558 0.01% Other real estate 29,487 0.15% 30,049 0.16% 15,165 0.09% Other repossessed assets ‐ 0.00% ‐ 0.00% 228 0.00%
Total $371,318 1.88% $363,214 1.80% $284,665 1.61%
Pinnacle Bank classified asset ratio 13.4% 13.5% 12.4%
$3,500 $4,500 $5,500 $6,500 $7,500
Other Income* (BOLI, Equity Investments, etc.)
Yr/Yr Growth 4.8%
Fee Income Growth Supports Ongoing Top and Bottom Line Growth
PNFP continues to grow strategic fee businesses
$‐ $10,000 $20,000 $30,000
Income from Equity Method Investment
(BHG)
Yr/Yr Growth 75.9%
$9,000 $10,000 $11,000 $12,000 $13,000
Wealth Management Fees
(Investment, Trust, Insurance)
Yr/Yr Growth 7.3%
$14,000 $16,000 $18,000 $20,000
Deposit‐Related Fees (Service Charges, Interchange)
$4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000
Lending‐Related Fees (Mortgage, Swaps, SBA)
Yr/Yr Growth 41.0% 0.70% 0.80% 0.90% 1.00% 1.10% 1.20% 1.30% Fees / Avg Assets GAAP Fees / Avg Assets Adjusted* Yr/Yr Growth 6.5%
*: Excludes gains and losses on sales of investment securities and loss on sale of non‐prime automobile portfolio. For a reconciliation of these Non‐GAAP financial measures to the comparable GAAP measures, see slides 43‐45.
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40 $393.1 $228.8 $412.8 $205.0 $419.9 $202.3 $424.9 $201.0 $427.5 $206.2 $415.9 $199.0 $441.0 $216.9 $449.8 $214.8 $404.6 $208.1 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 Annualized REV/ Associate Annualized EXP/ Associate
4Q17 to 4Q19
(increase of $11,500/ associate)
4Q17 to 4Q19
(decrease of $20,700/ associate) 86% 88% 90% 92% 94%
Employee Retention^
Retention % 1.00% 1.25% 1.50% 1.75% 2.00% 2.25% 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
Noninterest Expense / Avg Assets GAAP Noninterest Expense / Avg Assets Adjusted**
**: Excludes the impact of ORE expense and income, branch consolidation adjustment and merger‐related charges. For a reconciliation of these Non‐GAAP financial measures to the comparable GAAP measures, see slide 43‐45. ^: Associate retention rate is computed by dividing the number of associates employed at quarter end less the number of associates that have resigned in the last 12 months by the number of associates employed at quarter
Expenses are Leveraged to Produce Top and Bottom Line Growth
Leveraging our associate base is the key to efficiency
Income Statement – Discount Accretion, Income Tax Rate and Share Repurchase Program
Life to date accretion approximates original
in accretion income in future periods. Continue to pursue tax initiatives to reduce firm’s ETR.
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4Q19 3Q19 2Q19 1Q19 4Q18 # of shares repurchased 228,533 199,032 130,888 543,585 405,200 Value of shares $12.9 $11.1m $7.4m $30.0m $20.7m
$56.54 $55.57 $56.31 $55.25 $51.07
Share Repurchase Program
15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00%
Core Income Tax Effective Tax Rate Trends
Income tax as % of pre‐tax income, excluding discrete items Blended statutory tax rate ‐ $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000
Actual/Anticipated Discount Accretion Through Dec 2020 (in thousands)
$62 mm $40 mm $23 mm
Income Statement – Mortgage Volumes
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% $25,000 $75,000 $125,000 $175,000 $225,000 $275,000 $325,000
Purchase Money Refinance Gross fees as a % of loans originated
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Income Statement – Reconciliation of Non‐GAAP Financial Measures
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Income Statement – Reconciliation of Non‐GAAP Financial Measures
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Income Statement – Reconciliation of Non‐GAAP Financial Measures
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Peer Group
Institution Name Ticker City, State
Pinnacle Financial Partners PNFP Nashville, TN Associated Banc‐Corp ASB Green Bay, WI BancorpSouth, Inc. BXS Tupelo, MS Bank of the Ozarks, Inc. OZRK Little Rock, AR Chemical Financial Corporation CHFC Midland, MI Cullen/Frost Bankers, Inc. CFR San Antonio, TX F.N.B. Corporation FNB Pittsburgh, PA First Horizon National Corporation FHN Memphis, TN Fulton Financial Corporation FULT Lancaster, PA Hancock Holding Company HWC Gulfport, MS IBERIABANK Corporation IBKC Lafayette, LA MB Financial, Inc. MBFI Chicago, IL Old National Bancorp ONB Evansville, IN PacWest Bancorp PACW Beverly Hills, CA Prosperity Bancshares, Inc. PB Houston, TX Sterling Bancorp STL Montebello, NY Synovus Financial Corp. SNV Columbus, GA TCF Financial Corporation TCF Wayzata, MN Trustmark Corporation TRMK Jackson, MS UMB Financial Corporation UMBF Kansas City, MO Umpqua Holdings Corporation UMPQ Portland, OR United Bankshares, Inc. UBSI Charleston, WV Valley National Bancorp VLY Wayne, NJ Western Alliance Bancorporation WAL Phoenix, AZ Wintrust Financial Corporation WTFC Rosemont, IL
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FOURTH QUARTER 2019
HAROLD R. CARPENTER, EVP AND CFO