Pinnacle Financial (NASDAQ: PNFP) Q2 net income climbs to $328M
Pinnacle Financial Partners, Inc. reported higher scale and earnings in Q2 2026 following its January 1 merger with Synovus Financial Corp. Total assets reached $129,055 million as of June 30, 2026, up from $57,706 million at December 31, 2025. Loans, net were $87,120 million and deposits $100,898 million, reflecting the enlarged franchise.
For the quarter, net interest income rose to $956 million from $380 million a year earlier, and net income increased to $328 million from $159 million. Net income available to common shareholders was $313 million, or $2.07 per diluted share, versus $155 million, or $2.00, in Q2 2025. Non-interest revenue grew to $247 million, while non-interest expense increased to $721 million, including $51 million of merger-related costs and significantly higher amortization of intangibles.
The Synovus transaction was accounted for as a business combination with Pinnacle as the accounting acquirer. Preliminary consideration totaled $7,575 million and generated $1,630 million of goodwill, plus core deposit and wealth customer relationship intangibles of $848 million and $262 million. The total allowance for credit losses was $1.0 billion, keeping the ACL-to-loans coverage ratio at 1.17%.
Positive
- None.
Negative
- None.
Filing Explained
The completed merger added 73 million common shares, reducing existing holders’ percentage ownership absent offsetting changes.
A Form 10-Q is an unaudited quarterly report covering interim financial statements and updates to risks and liquidity. Pinnacle reports that its merger with Synovus closed on
The merger-related issuance raised common shares from
For the six months ended
The principal open item is the merger accounting: additional information may change estimated fair values and result in retrospective adjustments to goodwill during the measurement period.
Key Figures
Total assets: $129,055 million
Total deposits: $100,898 million
Loans, net: $87,120 million
+6 more
9 metrics
Total assets
$129,055 million
As of June 30, 2026
Total deposits
$100,898 million
As of June 30, 2026
Loans, net
$87,120 million
As of June 30, 2026
Q2 2026 net income
$328 million
Three months ended June 30, 2026
Q2 2026 diluted EPS
$2.07
Net income per common share, diluted, Q2 2026
Net interest income Q2 2026
$956 million
Three months ended June 30, 2026
Merger consideration
$7,575 million
Total preliminary consideration for Synovus merger
Goodwill from Synovus merger
$1,630 million
Preliminary goodwill recorded related to the Merger
Allowance for credit losses
$1.0 billion
Combined ALL and reserve for unfunded commitments at June 30, 2026
Key Terms
Allowance for credit losses, Current expected credit losses, Core deposit intangible, Purchased credit deteriorated loans, +1 more
5 terms
Allowance for credit losses financial
"The ACL represents management’s estimate of expected credit losses"
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
Current expected credit losses financial
"The Company estimates its ACL in accordance with the CECL methodology"
An accounting rule that requires lenders and creditors to estimate and record expected loan losses up front, based on current information and reasonable forecasts, rather than waiting until losses actually occur. Think of it as a bank setting aside a rainy-day fund based on the weather report instead of only after storms hit; for investors this affects reported profits, reserves and capital levels and can change perceptions of a firm’s financial strength.
Core deposit intangible financial
"included an $848 million core deposit intangible asset (CDI)"
Core deposit intangible is an accounting asset that represents the value of customer deposits a bank gains, usually through an acquisition, because those deposits provide a stable, low-cost source of funding. Think of it like paying for a loyal customer list that will save the bank money over time; it is written down over several years and affects reported earnings and the apparent cost of acquiring new funds, so investors watch it to understand future profitability and capital impact.
Purchased credit deteriorated loans financial
"Acquired loans that have experienced more-than-insignificant deterioration"
Financial Difficulty Modifications financial
"When borrowers are experiencing financial difficulty, Pinnacle may make certain loan modifications"
AI-generated analysis. How Rhea-AI works. Not financial advice.
See more from StockTitan in Google Search and AI answers.
Adds StockTitan as a preferred source · opens Google
FAQ
How did Pinnacle Financial (PNFP) perform in Q2 2026 versus Q2 2025?
Pinnacle Financial’s Q2 2026 net income was $328 million, up from $159 million in Q2 2025. Diluted EPS was $2.07 versus $2.00, as higher net interest income offset increased expenses and the impact of additional shares from the Synovus merger.
What were PNFP’s total assets and deposits as of June 30, 2026?
As of June 30, 2026, Pinnacle Financial reported total assets of $129,055 million and total deposits of $100,898 million. These balances increased substantially from $57,706 million in assets and $47,401 million in deposits at December 31, 2025, largely reflecting the Synovus combination.
What was the impact of the Synovus merger on PNFP’s balance sheet and goodwill?
The Synovus merger added acquired assets of $61,332 million and liabilities of $55,387 million, with preliminary consideration of $7,575 million. Pinnacle recorded $1,630 million of goodwill and identifiable intangibles including an $848 million core deposit intangible and a $262 million wealth relationship asset.
How large is Pinnacle Financial’s allowance for credit losses after the merger?
At June 30, 2026, Pinnacle Financial’s allowance for loan losses was $956 million and its reserve for unfunded commitments was $73 million, for a total allowance for credit losses of $1.0 billion. The ACL-to-loans coverage ratio was 1.17%, unchanged from year-end 2025.
What merger-related expenses did PNFP incur in the first half of 2026?
Pinnacle Financial recorded merger-related expenses of $51 million in Q2 2026 and $326 million for the first six months of 2026. These costs primarily reflected advisory fees, equity acceleration expense, and other employee-related items associated with closing and integrating the Synovus transaction.
How did PNFP’s investment securities portfolio and unrealized losses change in 2026?
Securities available for sale increased to $18,153 million at June 30, 2026 from $6,567 million at year-end 2025. Gross unrealized losses on AFS securities were $281 million on $15,583 million of fair value, driven by interest rate movements. Q2 sales of state and municipal securities produced net losses of $29 million.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 10-Q
______________________________
For the quarterly period ended June 30, 2026
Commission file number 1-43038
______________________________
(Exact name of registrant as specified in its charter)
______________________________
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
Registrant’s telephone number, including area code: (706 ) 641-6500
______________________________
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Securities registered pursuant to Section 12(g) of the Act: NONE
_____________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of July 31, 2026, 151,112,640 shares of the registrant's common stock, $1.00 par value, were outstanding.
Table of Contents
| Page | ||||||||||||||
Part I. | Financial Information | |||||||||||||
| Index of Defined Terms | i | |||||||||||||
| Item 1. | Financial Statements (Unaudited) | |||||||||||||
| Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 | 1 | |||||||||||||
| Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2026 and 2025 | 2 | |||||||||||||
| Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2026 and 2025 | 3 | |||||||||||||
| Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and Six Months Ended June 30, 2026 and 2025 | 4 | |||||||||||||
| Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 | 6 | |||||||||||||
| Notes to Unaudited Interim Condensed Consolidated Financial Statements | 7 | |||||||||||||
| Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 44 | ||||||||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 67 | ||||||||||||
| Item 4. | Controls and Procedures | 67 | ||||||||||||
Part II. | Other Information | |||||||||||||
| Item 1. | Legal Proceedings | 68 | ||||||||||||
| Item 1A. | Risk Factors | 68 | ||||||||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 68 | ||||||||||||
| Item 3. | Defaults Upon Senior Securities | 68 | ||||||||||||
| Item 4. | Mine Safety Disclosures | 68 | ||||||||||||
| Item 5. | Other Information | 68 | ||||||||||||
| Item 6. | Exhibits | 69 | ||||||||||||
| Signatures | 70 | |||||||||||||
Table of Contents
PINNACLE FINANCIAL PARTNERS, INC.
INDEX OF DEFINED TERMS
Throughout this discussion, references to "Pinnacle", "we", "our", "us", "the Company" and similar terms refer to the consolidated entity consisting of Pinnacle Financial Partners, Inc. and its subsidiaries unless the context indicates that we refer only to the Parent Company, Pinnacle Financial Partners, Inc. When we refer to the "Bank" or "Pinnacle Bank" we mean our only bank subsidiary, Pinnacle Bank.
ACL – Allowance for credit losses (ALL, reserve on unfunded loan commitments, and reserve, if required, on debt securities and other receivables)
AFS – Available for sale
ALCO – Pinnacle's Asset Liability Management Committee
ALL – Allowance for loan losses
AOCI – Accumulated other comprehensive income (loss)
ASC – Accounting Standards Codification
ASU – Accounting Standards Update
ATM – Automatic teller machine
Basel III – The third Basel Accord developed by the Basel Committee on Banking Supervision to strengthen existing regulatory capital requirements
BHG – Bankers Healthcare Group, LLC
Board – Pinnacle's Board of Directors
BOLI – Bank-owned life insurance policies
bp(s) – Basis point(s)
C&I – Commercial and industrial
CCAR – Comprehensive Capital Analysis and Review
CECL – Current expected credit losses
CET1 – Common Equity Tier 1 Capital defined by Basel III capital rules
CIB – Corporate and Investment Banking
CMO – Collateralized mortgage obligation
CODM – Chief operating decision maker
Company – Pinnacle Financial Partners, Inc. and its wholly-owned subsidiaries, except where the context indicates otherwise
Covered Litigation – Certain Visa litigation for which Visa is indemnified by Visa USA members
CRA – Community Reinvestment Act
CRE – Commercial real estate
DCF – Discounted cash flow
ERM – Enterprise risk management
EVE – Economic value of equity
Exchange Act – Securities Exchange Act of 1934, as amended
FASB – Financial Accounting Standards Board
FDIC – Federal Deposit Insurance Corporation
FDM – Financial Difficulty Modification
i
Table of Contents
Federal Reserve Bank – One of the 12 banks that are the operating arms of the U.S. central bank. They implement the policies of the Federal Reserve Board, supervise bank holding companies and certain banking institutions, and also conduct economic research
Federal Reserve Board – The 7-member Board of Governors that oversees the Federal Reserve System, establishes monetary policy (interest rates, credit, etc.), and monitors the economic health of the country. Its members are appointed by the President, subject to Senate confirmation, and serve 14-year terms
Federal Reserve System or Federal Reserve – The Federal Reserve Board plus 12 Federal Reserve Banks, with each one serving member banks in its own district. The Federal Reserve has broad regulatory powers over the money supply and the credit structure of the economy
FFIEC – Federal Financial Institutions Examination Council
FFIEC Retail Credit Classification Policy – FFIEC Uniform Retail Credit Classification and Account Management Policy
FHLB – Federal Home Loan Bank
FICO – Fair Isaac Corporation
FOMC – Federal Open Market Committee
FRB – Federal Reserve Bank
FTP – Funds transfer pricing
GA DBF – Georgia Department of Banking and Finance
GAAP – Generally Accepted Accounting Principles in the United States of America
HTM – Held to maturity
Interagency Supervisory Guidance – Interagency Supervisory Guidance on Allowance for Loan and Lease Losses Estimation Practices for Loans and Lines of Credit Secured by Junior Liens on 1-4 Family Residential Properties
Legacy Pinnacle - Pinnacle Financial Partners, Inc., a Tennessee corporation
LIHTC – Low Income Housing Tax Credit
LTV – Loan-to-collateral value ratio
MBS – Mortgage-backed security
Merger - The merger of Synovus and Legacy Pinnacle into Steel Newco, Inc., a Georgia corporation, on January 1, 2026, with the name of Steel Newco, Inc. changing thereafter to Pinnacle Financial Partners, Inc.
MPS – Merchant processing servicer(s)
NAICS – North American Industry Classification System
nm – not meaningful
NPA – Non-performing assets
NPL – Non-performing loans
NSF – Non-sufficient funds
OCI – Other comprehensive income (loss)
ORE – Other real estate
Parent Company – Pinnacle Financial Partners, Inc.
Pinnacle – Pinnacle Financial Partners, Inc., a Georgia corporation
Pinnacle Bank – A Tennessee state-chartered bank and wholly-owned subsidiary of Pinnacle, through which Pinnacle conducts its banking operations
Pinnacle's 2025 Form 10-K – Pinnacle's Annual Report on Form 10-K for the year ended December 31, 2025
PCD - Purchase credit deteriorated
PPNR – Pre-provision net revenue
ii
Table of Contents
PSU – Performance share units
Report – This Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026
RSU – Restricted share units
RWA - Risk weighted asset
SBA – Small Business Administration
SBIC – Small Business Investment Company
SEC – U.S. Securities and Exchange Commission
Securities Act – Securities Act of 1933, as amended
SOFR – Secured Overnight Financing Rate
Synovus – Synovus Financial Corp., a Georgia corporation
Synovus Bank – A Georgia state-chartered bank and wholly-owned subsidiary of Synovus, through which Synovus conducted its banking operations that ceased operations subsequent to the Merger
TDFI - Tennessee Department of Financial Institutions
TE – Taxable equivalent
Treasury – United States Department of Treasury
UPB – Unpaid principal balance
U.S. – United States
Visa – The Visa U.S.A., Inc. card association or its affiliates, collectively
Visa Class A shares – Class A shares of common stock issued by Visa are publicly traded shares which are not subject to restrictions on sale
Visa Class B shares – Class B shares of common stock issued by Visa which are subject to restrictions with respect to sale until all of the Covered Litigation has been settled. Class B (B-1 and B-2) shares will be convertible into Visa Class A shares using a then-current conversion ratio upon the lifting of restrictions with respect to sale of Visa Class B shares
Visa derivative – A derivative contract with the purchaser of Visa Class B shares which provides for settlements between the purchaser and Synovus based upon a change in the ratio for conversion of Visa Class B shares into Visa Class A shares
iii
Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
| (in millions, except share and per share data) | June 30, 2026 | December 31, 2025 | |||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ | $ | |||||||||
| Federal funds sold, securities purchased under resale agreements, and interest earning deposits with banks | |||||||||||
| Total cash, cash equivalents, and restricted cash | |||||||||||
| Investment securities held to maturity, net | |||||||||||
| Investment securities available for sale | |||||||||||
Loans held for sale (includes $ | |||||||||||
| Loans, net of deferred fees and costs | |||||||||||
| Allowance for loan losses | ( | ( | |||||||||
| Loans, net | |||||||||||
| Premises, equipment, and software, net | |||||||||||
| Cash surrender value of bank-owned life insurance | |||||||||||
| Goodwill | |||||||||||
| Core deposits and other intangible assets, net | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities | |||||||||||
| Deposits: | |||||||||||
| Non-interest-bearing deposits | $ | $ | |||||||||
| Interest-bearing deposits | |||||||||||
| Total deposits | |||||||||||
| Federal funds purchased and securities sold under repurchase agreements | |||||||||||
| FHLB advances and other borrowings | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Equity | |||||||||||
| Shareholders' equity: | |||||||||||
Preferred stock — no par value per share, liquidation preference $ | |||||||||||
Authorized — | |||||||||||
Issued and outstanding — Dec. 31, 2025 | |||||||||||
Common stock — $ | |||||||||||
Authorized — | |||||||||||
Issued and outstanding — Dec. 31, 2025 | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive income (loss), net | ( | ( | |||||||||
| Retained earnings | |||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
See accompanying notes to unaudited interim condensed consolidated financial statements.
1
Table of Contents
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (dollar amounts in millions, except per share data, share count in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
Interest income: | |||||||||||||||||||||||
Loans, including fees | $ | $ | $ | $ | |||||||||||||||||||
Investment securities | |||||||||||||||||||||||
Other earning assets | |||||||||||||||||||||||
Total interest income | |||||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||
Deposits | |||||||||||||||||||||||
FHLB advances and other borrowings | |||||||||||||||||||||||
Federal funds purchased and securities sold under repurchase agreements | |||||||||||||||||||||||
Total interest expense | |||||||||||||||||||||||
Net interest income | |||||||||||||||||||||||
Provision for credit losses | |||||||||||||||||||||||
Net interest income after provision for credit losses | |||||||||||||||||||||||
Non-interest revenue: | |||||||||||||||||||||||
Core banking fees | |||||||||||||||||||||||
| Wealth management revenue | |||||||||||||||||||||||
| Income from equity method investment | |||||||||||||||||||||||
Capital markets income | |||||||||||||||||||||||
| Total loan sales and servicing | |||||||||||||||||||||||
Income from bank-owned life insurance | |||||||||||||||||||||||
Investment securities gains (losses), net | ( | ( | ( | ||||||||||||||||||||
Other non-interest revenue | |||||||||||||||||||||||
Total non-interest revenue | |||||||||||||||||||||||
Non-interest expense: | |||||||||||||||||||||||
Salaries and other personnel expense | |||||||||||||||||||||||
Net occupancy, equipment, and software expense | |||||||||||||||||||||||
| Amortization of intangibles | |||||||||||||||||||||||
FDIC insurance and other regulatory fees | |||||||||||||||||||||||
| Merger-related expense | |||||||||||||||||||||||
Other operating expense | |||||||||||||||||||||||
Total non-interest expense | |||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income | |||||||||||||||||||||||
Less: Preferred stock dividends | |||||||||||||||||||||||
Net income available to common shareholders | $ | $ | $ | $ | |||||||||||||||||||
Net income per common share, basic | $ | $ | $ | $ | |||||||||||||||||||
Net income per common share, diluted | |||||||||||||||||||||||
Weighted average common shares outstanding, basic | |||||||||||||||||||||||
Weighted average common shares outstanding, diluted | |||||||||||||||||||||||
See accompanying notes to unaudited interim condensed consolidated financial statements.
2
Table of Contents
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Unamortized holding gains on securities transferred to held to maturity, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||
| Reclassification adjustment for accretion of unrealized holding gains on HTM securities, net of tax | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Net change | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Unrealized gains (losses) on securities available for sale, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||
Change in net unrealized gains (losses) on AFS securities arising during the period, net of tax | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Reclassification adjustment for realized (gains) losses on sale of AFS securities included in net income, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||
Net change | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Unrealized gains (losses) on derivative instruments designated as cash flow hedges, net of tax | |||||||||||||||||||||||||||||||||||||||||||||||
Change in net unrealized gains (losses) on cash flow hedges arising during the period, net of tax | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Net change | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Total other comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to unaudited interim condensed consolidated financial statements.
3
Table of Contents
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
| (in millions, except per share data) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total | |||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of income taxes | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
Cash dividends paid on common stock - $ | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on preferred stock(1) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Compensation expense for restricted share awards, RSUs and PSUs | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of income taxes | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
Cash dividends paid on common stock - $ | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Cash dividends paid on preferred stock - $ | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Restricted shares withheld for taxes and related tax benefit | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Compensation expense for restricted share awards, RSUs and PSUs | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||
4
Table of Contents
| (in millions, except per share data) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total | |||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of income taxes | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock - $ | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on preferred stock(2) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock pursuant to RSU and PSU agreements, net of shares withheld for taxes and related tax benefits | — | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Compensation expense for restricted share awards, RSUs and PSUs | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Issuance of preferred stock related to merger | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock related to merger | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of income taxes | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock - $ | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on preferred stock - $ | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Restricted shares withheld for taxes and related tax benefit | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock pursuant to RSU and PSU agreements, net of shares withheld for taxes and related tax benefits | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Compensation expense for restricted share awards, RSUs and PSUs | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||
(1) For the three months ended June 30, 2026, dividends per share were $0.47 for Series A, $0.52 for Series B, and $16.88 for Series C Preferred Stock.
(2) For the six months ended June 30, 2026, dividends per share were $0.92 for Series A, $1.05 for Series B, and $33.76 for Series C Preferred Stock.
See accompanying notes to unaudited interim condensed consolidated financial statements.
5
Table of Contents
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Six Months Ended June 30, | |||||||||||
| (in millions) | 2026 | 2025 | |||||||||
Operating Activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Depreciation, amortization, and accretion, net | |||||||||||
Provision for credit losses | |||||||||||
Investment securities (gains) losses, net | |||||||||||
Deferred income tax expense (benefit) | ( | ||||||||||
Originations of loans held for sale | ( | ( | |||||||||
Proceeds from sales and payments on loans held for sale | |||||||||||
Gain on sales of loans held for sale, net | ( | ( | |||||||||
| Income from equity method investment | ( | ( | |||||||||
| Dividends received from equity method investment | |||||||||||
Share-based compensation expense | |||||||||||
Decrease (increase) in other assets | ( | ||||||||||
Increase (decrease) in other liabilities | ( | ||||||||||
| Other | ( | ||||||||||
Net cash provided by (used in) operating activities | |||||||||||
Investing Activities | |||||||||||
Acquisition, net of cash acquired(1) | |||||||||||
| Proceeds from maturities and principal collections of investment securities held to maturity | |||||||||||
Proceeds from maturities and principal collections of investment securities available for sale | |||||||||||
Proceeds from sales of investment securities available for sale | |||||||||||
Purchases of investment securities available for sale | ( | ( | |||||||||
Net proceeds from sales of loans | |||||||||||
Net (increase) decrease in loans | ( | ( | |||||||||
Net (purchases) redemptions of Federal Home Loan Bank stock | ( | ||||||||||
Net (purchases) redemptions of Federal Reserve Bank stock | ( | ||||||||||
Net proceeds from settlement (purchases) of bank-owned life insurance policies | ( | ||||||||||
| Increase in other investments, net | ( | ( | |||||||||
Net increase in premises, equipment and software | ( | ( | |||||||||
| Other | ( | ||||||||||
Net cash provided by (used in) investing activities | ( | ( | |||||||||
Financing Activities | |||||||||||
Net increase (decrease) in deposits | |||||||||||
Net increase (decrease) in federal funds purchased and securities sold under repurchase agreements | |||||||||||
Repayments and redemption of FHLB and other borrowings | ( | ( | |||||||||
| Proceeds from FHLB and other borrowings | |||||||||||
Dividends paid to common shareholders | ( | ( | |||||||||
Dividends paid to preferred shareholders | ( | ( | |||||||||
Issuances, net of taxes paid, under equity compensation plans | ( | ( | |||||||||
Net cash provided by (used in) financing activities | |||||||||||
Increase (decrease) in cash and cash equivalents including restricted cash | ( | ||||||||||
Cash, cash equivalents, and restricted cash, at beginning of period | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ | |||||||||
Supplemental Disclosures: | |||||||||||
| Income taxes paid, net of refunds | $ | $ | |||||||||
| Interest paid | |||||||||||
(1) Cash acquired as part of the Merger with Synovus. Refer to Note 2 - Business Combination in this Report, for more detailed information regarding the Merger.
See accompanying notes to unaudited interim condensed consolidated financial statements.
6
Table of Contents
Notes to Unaudited Interim Condensed Consolidated Financial Statements
Note 1 - Basis of Presentation and Accounting Policies
General
Reclassifications
Use of Estimates in the Preparation of Financial Statements
In preparing the consolidated financial statements in accordance with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the respective consolidated balance sheets and the reported amounts of revenue and expense for the periods presented. Actual results could differ significantly from those estimates.
Material estimates that are particularly susceptible to significant change relate to the determination of the ACL, estimates of fair value, income taxes, contingent liabilities and the purchase price allocation associated with the Merger.
Business Combinations
Business combinations are accounted for under the acquisition method, in which the identifiable assets acquired and liabilities assumed are generally measured and recognized at fair value as of the acquisition date, with the excess of the purchase price over the fair value of the net assets acquired capitalized as goodwill. Items such as acquired right-of-use (ROU) lease assets and operating lease liabilities as lessee, employee benefit plans, and income-tax related balances are recognized in accordance with other applicable GAAP, which may result in measurements that differ from fair value. Business combinations are included in the consolidated financial statements from the respective dates of acquisition. Historical reporting periods reflect only the results of Legacy Pinnacle operations. Merger-related expenses are recorded in non-interest expense in the period incurred. Additional information regarding the Merger can be found in Note 2 - Business Combination.
Allowance for Credit Losses (ACL)
The Company estimates its ACL in accordance with the CECL methodology as required by ASC 326. Management assesses the adequacy of the ACL on a quarterly basis. This assessment includes procedures to estimate expected credit losses and to evaluate the appropriateness of the resulting allowance balance. The ACL represents management’s estimate of expected credit losses over the remaining contractual life of loans held for investment as of the balance sheet date.
The ACL is based on management’s evaluation of historical loss experience, current conditions, and reasonable and supportable forecasts of future economic conditions. In developing the estimate, management considers asset quality trends, portfolio composition and concentrations, borrower performance and repayment capacity (including the timing of future payments), collateral values, industry conditions, underwriting standards, risk rating migration, policy exceptions, results of internal and independent loan reviews, peer and regulatory information, and other qualitative factors deemed relevant. The ACL is increased through the provision for credit losses and reduced by charge‑offs, net of recoveries.
7
Table of Contents
Credit Loss Estimation Methodologies
The Company’s loan loss estimation process is designed to reflect the unique risk characteristics of its loan portfolio segments—Commercial & Industrial, Commercial Real Estate, and Consumer—while applying a consistent, principles‑based framework across all segments. Each portfolio segment is further disaggregated into loan classes, which represent the level at which credit risk is evaluated and credit quality is monitored.
Expected credit losses are estimated over the contractual life of the loan, adjusted for expected prepayments and curtailments, using modeling approaches that incorporate key drivers of credit risk, including borrower default risk, exposure at default, and expected loss severity. These estimates rely on forecasted probabilities of default and loss severity assumptions informed by historical loss experience, collateral characteristics, and other relevant loan‑level and portfolio‑level factors.
Macroeconomic conditions are incorporated into the estimation process through forward‑looking forecasts applied across multiple probability‑weighted scenarios representing a range of plausible economic outcomes. Such variables may include, among others, unemployment rates, gross domestic product, commercial and residential property price indices, household debt and financial obligation ratios, and other relevant economic measures. Forecasts of these variables are obtained from independent third‑party sources and used as inputs into the Company’s credit loss models. Collectively, these inputs are used to estimate life‑of‑loan expected credit losses in a manner that is responsive to changes in portfolio composition, credit quality, and the economic environment.
Reasonable and Supportable Forecast Period
Expected credit losses are estimated over a period for which management is able to develop reasonable and supportable economic forecasts. For periods beyond the reasonable and supportable forecast horizon, the Company reverts expected credit losses to long‑term historical averages using a straight‑line methodology. The length of the reasonable and supportable forecast period and the reversion period are evaluated quarterly and may vary based on economic conditions, portfolio characteristics, and modeling considerations.
Qualitative Adjustments
Modeled expected credit losses are supplemented by qualitative adjustments to capture risks not fully reflected in the quantitative models. Qualitative factors may include, among others, changes in portfolio concentrations, lending policies, underwriting practices, competitive conditions, economic forecast limitations, loan maturity extensions, team member experience and turnover, independent loan review results, regulatory developments, and emerging risks that are not represented in historical loss data. These adjustments, in management's judgment, are necessary to reflect losses expected in the portfolio and are based on management's analysis of current and expected economic conditions and their impact to the portfolio.
Individually Analyzed Loans
Loans that do not share similar risk characteristics with collectively evaluated pools are evaluated on an individual basis. Individual evaluations are generally performed for loans that have experienced significant credit deterioration or where repayment is expected to be substantially dependent on the operation or sale of the underlying collateral.
For individually analyzed loans, expected credit losses are measured using either the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral, less estimated selling costs, when the loan is collateral‑dependent.
When management determines that a portion of an individually analyzed loan is uncollectible, the uncollectible amount is written off against the ACL.
Loan Modifications to Borrowers Experiencing Financial Difficulty
The Company modifies loans for borrowers experiencing financial difficulty in the normal course of business. An assessment of financial difficulty is made at the time of modification. Because the effects of most loan modifications are already incorporated into the ACL through the Company’s modeling methodologies, a modification generally does not result in an additional allowance adjustment. When principal forgiveness is granted, the forgiven amount is deemed uncollectible and is written off against the ACL.
Purchased Loans
Loans acquired in a business combination are recognized on the acquisition date at their estimated fair value based on expected future cash flows discounted at a market-based rate of interest and inclusive of adjustments for credit risk, interest rate risk, liquidity and other factors. Acquired loans that have experienced more-than-insignificant deterioration in credit quality since origination are classified as PCD loans. An ACL is established for the initial estimate of expected credit losses on PCD loans as of the acquisition date and recorded through a gross-up adjustment to the loan's amortized cost basis, with no immediate impact to earnings. Subsequent changes in expected credit losses on PCD loans are recognized through the provision
8
Table of Contents
for credit losses. In addition, we adopted ASU 2025-08 as of January 1, 2026, whereby non-PCD loans acquired in a business combination are deemed purchased seasoned loans with an ACL also established for the initial estimate of expected credit losses as of the acquisition date and recorded through a gross-up adjustment to the loans' amortized cost basis. See Note 2 - Business Combination for additional information on loans acquired in a business combination.
Accrued Interest Receivable
Accrued interest receivable is presented in other assets on the consolidated balance sheets. Consistent with ASC 326, the Company generally does not record an ACL for accrued interest receivable, as non‑accrual policies result in timely write‑off of uncollectible accrued interest.
Independent Credit Review
In assessing the adequacy of the ACL, management considers the results of internal and independent loan review processes, including reviews performed by third‑party firms and regulatory examiners. These reviews assist management in identifying loans with elevated credit risk and in evaluating the overall risk profile of the loan portfolio.
Estimation Uncertainty
The estimation of expected credit losses is inherently subjective and requires the use of judgment. Actual credit losses may differ from management’s estimates due to changes in economic conditions, borrower behavior, collateral values, or other factors beyond the Company’s control. Accordingly, future provisions for credit losses may materially differ from those recorded in the current period.
Allowance for Credit Losses on Off‑Balance‑Sheet Credit Exposures
The Company maintains an allowance for credit losses on off‑balance‑sheet credit exposures, including unfunded loan commitments and letters of credit, unless the obligation is unconditionally cancellable by the Company. Expected credit losses are estimated over the contractual term of the exposure, considering the likelihood that the commitment will be funded and the expected credit loss occurs on the resulting funded balance. Loss assumptions for off‑balance‑sheet exposures are generally consistent with those used for similar on‑balance‑sheet loan segments. The allowance for off‑balance‑sheet credit exposures is included in other liabilities, with changes recognized through the provision for credit losses.
9
Table of Contents
Recent Accounting Pronouncements
The following table provides a brief description of accounting standards adopted in 2026 or recently issued and the estimated effect on the Company’s financial statements.
| Standard | Description | Required date of adoption | Effect on Company's financial statements or other significant matters | ||||||||
| Standards Adopted | |||||||||||
| ASU 2025-06 —Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software | In September 2025, the FASB issued ASU 2025-06 to clarify and modernize the accounting for costs related to internal-use software. The ASU removes all references to project stages throughout ASC 350-40 and clarifies the threshold entities should apply to begin capitalizing costs. The ASU addresses investor feedback that the current guidance for software costs is outdated and not relevant given the evolution of software development. The ASU requires disclosures under ASC 360-10 be applied to all capitalized software costs accounted for under ASC 350-40, regardless of how those costs are presented in the financial statements. Early adoption is permitted, including adoption in an interim period but must be applied as of the beginning of the annual period that includes that interim period. The ASU may be adopted prospectively, retrospectively; or on a modified transition approach. | January 1, 2028 | The Company has early adopted this standard on a prospective basis as of January 1, 2026 for both annual and interim reporting periods therein. The adoption of this standard did not have a material impact to the consolidated financial statements. | ||||||||
| ASU 2025-08 —Financial Instruments—Credit Losses (Topic 326) —Purchased Loans | In November 2025, the FASB issued ASU 2025-08 to expand the population of acquired financial assets subject to the gross-up approach in Topic 326. In accordance with the amendments in this ASU, loans (excluding credit cards) acquired without credit deterioration and deemed "seasoned" are purchased seasoned loans and accounted for using the gross-up approach at acquisition. All non-purchased credit deteriorated ("non-PCD") loans (excluding credit cards) that are acquired in a business combination are deemed seasoned. Other non-PCD loans (excluding credit cards) are seasoned if they were purchased at least 90 days after origination and the acquirer was not involved in the origination of the loans. The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments in this ASU should be applied prospectively to loans that are acquired on or after the initial application date. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. | January 1, 2027 | The Company has early adopted this standard on a prospective basis as of January 1, 2026 for both annual and interim reporting periods therein. Accordingly, the initial estimate of expected credit losses of $ | ||||||||
| Standard | Description | Required date of adoption | Effect on Company's financial statements or other significant matters | ||||||||
| Standards Issued But Not Yet Adopted | |||||||||||
| ASU 2024-03, Income Statement (Topic 220): Disaggregation of Income Statement Expenses | In November 2024, the FASB issued ASU 2024-03 to improve the disclosures over expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The ASU addresses investors requests for more disaggregated expense information to better understand an entity's performance, better assess the entity's prospects for future cash flows, and compare an entity's performance over time and with that of other entities. This ASU requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. Retrospective application in all prior periods is permitted. | January 1, 2027 | The Company will prospectively adopt for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. | ||||||||
10
Table of Contents
Note 2 - Business Combination
Description of the Transaction
On January 1, 2026, the transaction contemplated by the Merger Agreement dated as of July 24, 2025 (the Merger Agreement) by and among Pinnacle Financial Partners, a Tennessee corporation (Legacy Pinnacle), Synovus Financial Corp., and Steel Newco Inc., a newly formed Georgia corporation (Newco) closed. As such and pursuant to the terms and conditions of the Merger Agreement, Legacy Pinnacle and Synovus merged with and into Newco, with Newco continuing as the surviving corporation and subsequently being renamed Pinnacle Financial Partners, Inc. Upon completion of the Merger, the separate corporate existence of Legacy Pinnacle and Synovus ceased, and Newco (now Pinnacle Financial Partners, Inc.) became the parent company for the combined organization. Following the completion of the Merger and after Pinnacle Bank becoming a member bank of the Federal Reserve System on January 2, 2026, Synovus Bank merged with and into Pinnacle Bank, with Pinnacle Bank continuing as the surviving bank and the separate existence of Synovus Bank ceasing.
Pursuant to the terms and conditions of the Merger Agreement, (a) each share of common stock, par value $1.00 per share, of Synovus (Synovus Common Stock) outstanding immediately prior to the effective time of the Merger was converted into the right to receive 0.5237 shares of the common stock of Newco (Newco Common Stock) and (b) each share of common stock, par value $1.00 per share, of Legacy Pinnacle outstanding immediately prior to the Merger was converted into the right to receive one share of Newco Common Stock. Holders of Synovus Common Stock received cash in lieu of fractional shares.
Pursuant to the terms and conditions of the Merger Agreement (i) each share of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D, no par value, of Synovus outstanding immediately prior to the Merger was converted into the right to receive one share of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A, no par value, of Newco; (ii) each share of Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E, no par value, of Synovus outstanding immediately prior to the Merger was converted into the right to receive one share of Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B, no par value, of Newco; (iii) each share of 6.75 % Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series C, no par value, of Legacy Pinnacle (Legacy Pinnacle Preferred Stock) outstanding immediately prior to the Merger was converted into the right to receive one share of 6.75 % Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series C, no par value, of Newco (Newco Series C Preferred Stock); and (iv) each outstanding depositary share representing a 1/40th interest in a share of Legacy Pinnacle Preferred Stock (Legacy Pinnacle Depositary Shares) was converted into a depositary share representing a 1/40th interest in a share of Newco Series C Preferred Stock.
The transaction was accounted for as a business combination in accordance with Topic 805, Business Combinations, ASC 805, with Pinnacle as the accounting acquirer.
Preliminary Purchase Price Allocation
The purchase price has been allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of January 1, 2026. The purchase price allocation is preliminary as of June 30, 2026, and subject to adjustment during the measurement period (not to exceed one year from the acquisition date). While we believe the information available on January 1, 2026 provides a reasonable basis for estimating fair value, we may obtain additional information and evidence during the measurement period that would result in changes to the estimated fair value amounts. Valuations subject to change include, but are not limited to loans, premises, equipment, software, core deposits, certain identifiable intangible assets, certain deposits, deferred tax assets and liabilities, certain other assets and certain other liabilities. Any measurement period adjustments will be recorded retrospectively as adjustments to goodwill. As of June 30, 2026, the Company has recorded goodwill of $1.6 billion related to the Merger. Goodwill is calculated as the excess of the fair value of consideration transferred over the fair value of the net assets acquired and will not be deductible for tax purposes. The fair value of the net assets acquired is presented below and included an $848 million core deposit intangible asset (CDI) and a $262 million wealth customer relationship intangible asset which are included in "identifiable intangible assets". Refer to Note 6 - Goodwill and Other Intangible Assets in this Report for additional information.
11
Table of Contents
| (in millions) | |||||
| Assets acquired: | |||||
| Cash and cash equivalents | $ | ||||
| Investment securities | |||||
| Loans held for sale | |||||
| Loans | |||||
| Allowance for loan losses | ( | ||||
| Loans, net | |||||
| Premises, equipment, and software | |||||
| Cash surrender value of bank-owned life insurance | |||||
| Identifiable intangible assets | |||||
| Other assets | |||||
| Total assets acquired | $ | ||||
| Liabilities assumed: | |||||
| Deposits | $ | ||||
| Federal funds purchased, and securities sold under repurchase agreements | |||||
| FHLB advances and other borrowings | |||||
| Other liabilities | |||||
| Total liabilities assumed | $ | ||||
| Net assets acquired | $ | ||||
| Consideration: | |||||
| Fair value of common stock issued | $ | ||||
| Fair value of preferred stock issued | |||||
| Fair value of equity awards | |||||
| Total preliminary consideration | $ | ||||
| Preliminary goodwill | $ | ||||
As previously stated, Pinnacle recorded approximately $1.6 billion of preliminary estimated goodwill, as reflected in the purchase price allocation table above. This goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired and reflects the expected benefits of combining operations of Legacy Pinnacle and Synovus. These benefits include anticipated cost savings and operating efficiencies resulting from the integration of overlapping corporate functions and systems, revenue growth opportunities arising from complementary geographic markets and expanded product offerings, and the value of the assembled workforce and management expertise.
As back office functions which include loan and deposit processing have not been integrated, Pinnacle is in the process of finalizing its valuation analysis and calculations in sufficient detail necessary to arrive at the required estimates of the fair value of Synovus' assets acquired or liabilities assumed. Further, Pinnacle is in the process of identifying all adjustments necessary to conform Synovus' accounting policies to Pinnacle's accounting policies. As more information becomes available differences could be identified between the accounting policies of the two companies that, when conformed, could have a material impact on the combined company's financial information. Accordingly, the amounts recorded for current and deferred tax assets and liabilities are also considered provisional as the Company continues to evaluate the nature and extent of permanent and temporary differences between the book and tax bases of the assets acquired and liabilities assumed. During the three months ended June 30, 2026, Pinnacle refined purchase accounting estimates primarily impacting deferred tax assets and other borrowings that resulted in a net increase to preliminary goodwill of approximately $1 million.
The following is a description of the methods used to estimate the fair value of significant assets acquired and liabilities assumed above.
Cash and cash equivalents: The carrying amount of these assets is a reasonable estimate of fair value based on the short-term nature of these assets.
Investment Securities: Fair values for securities are based on quoted market prices, where available. If quoted market prices are not available, fair value estimates are based on observable inputs obtained from market transactions in similar securities.
12
Table of Contents
Loans: Fair values for loans were based on a discounted cash flow methodology that includes lifetime credit loss expectations for loans, current interest rates and liquidity. The fair value adjustment excluded certain immaterial loan portfolios such as credit cards.
Intangible assets: Core deposit intangibles represent the low cost of funding that core deposits acquired provide relative to the Company's marginal cost of funds. The fair value was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, net maintenance cost of the deposit base, alternative cost of funds and the interest costs associated with customer deposits. The CDI is being amortized using the sum-of-the-years digits method over approximately 10 years.
The wealth customer relationship intangible asset will be amortized based on the use of straight-line methodology over approximately 14 years. Client relationship intangibles are valued using a discounted cash flow methodology that reflects the estimated value of the future net earnings from the relationships which includes adjustments for estimated attrition.
Premises: Land and buildings held for use were valued at appraised values, which reflect considerations of recent disposition values for similar property types with adjustments for characteristics of individual properties.
Borrowings: The fair values of long-term debt instruments are estimated based on quoted market prices for the instrument if available, or by using discounted cash flow analyses, based on current incremental borrowing rates for similar types of instruments.
Pro Forma Financial Information (Unaudited)
The following table presents certain unaudited pro forma condensed combined financial information for the results of operations for the three and six months ended June 30, 2025, as if Synovus had been acquired on January 1, 2025 by Pinnacle. The unaudited pro forma results include the estimated impact of amortizing and accreting certain purchase accounting adjustments such as intangible assets as well as fair value adjustments to loans, borrowings, and owned and leased premises and equipment. Pro forma combined results also include the adjustments for the elimination of Synovus’ net deferred origination fees accretion and intangible amortization. The unaudited pro forma adjustments are based upon available information and certain assumptions that Pinnacle (as the accounting acquirer) believes are reasonable. The following unaudited pro forma condensed combined financial information does not reflect the costs of any integration activities or benefits that may result from the realization of future cost savings from operating efficiencies. Certain reclassifications have also been made to align Pinnacle’s and Synovus’ historical financial statement presentation. The unaudited pro forma information is provided for illustrative purposes only and is not necessarily indicative of the results that would have occurred had the acquisition been consummated on January 1, 2025 nor is it indicative of future results.
| Unaudited Pro Forma | |||||||||||||||||||||||
| (in millions) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| 2025 | 2025 | ||||||||||||||||||||||
Net interest income | $ | $ | |||||||||||||||||||||
| Total non-interest revenue | $ | $ | |||||||||||||||||||||
| Net income available to common shareholders | $ | $ | |||||||||||||||||||||
13
Table of Contents
Note 3 - Equity Method Investment
A summary of BHG's financial position as of June 30, 2026 and December 31, 2025 and results of operations as of and for the three and six months ended June 30, 2026 and 2025, were as follows:
| As of | |||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||
| (in millions) | |||||||||||
| Assets | $ | $ | |||||||||
| Liabilities | $ | $ | |||||||||
| Equity interests | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||
Note 4 - Securities
The amortized cost, gross unrealized gains and losses, and estimated fair values of debt securities at June 30, 2026 and December 31, 2025 are summarized below.
| June 30, 2026 | |||||||||||||||||||||||
| (in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
| Securities held to maturity: | |||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Government agency securities | ( | ||||||||||||||||||||||
| Mortgage-backed securities | ( | ||||||||||||||||||||||
| State and municipal securities | ( | ||||||||||||||||||||||
| Asset-backed securities | ( | ||||||||||||||||||||||
| Corporate notes and other | ( | ||||||||||||||||||||||
Total securities held to maturity(1) | $ | $ | $ | ( | $ | ||||||||||||||||||
| Allowance for credit losses- securities held to maturity | $ | ( | |||||||||||||||||||||
| Securities HTM, net of allowance for credit losses | $ | ||||||||||||||||||||||
| Securities available for sale: | |||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | ( | $ | ||||||||||||||||||
| U.S. Government agency securities | ( | ||||||||||||||||||||||
| Mortgage-backed securities | ( | ||||||||||||||||||||||
| State and municipal securities | ( | ||||||||||||||||||||||
| Corporate notes and other | ( | ||||||||||||||||||||||
Total securities available for sale(2) | $ | $ | $ | ( | $ | ||||||||||||||||||
14
Table of Contents
| December 31, 2025 | |||||||||||||||||||||||
| (in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||
| Securities held to maturity: | |||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Government agency securities | ( | ||||||||||||||||||||||
| Mortgage-backed securities | ( | ||||||||||||||||||||||
| State and municipal securities | ( | ||||||||||||||||||||||
| Asset-backed securities | ( | ||||||||||||||||||||||
| Corporate notes and other | ( | ||||||||||||||||||||||
Total securities held to maturity(1) | $ | $ | $ | ( | $ | ||||||||||||||||||
| Allowance for credit losses- securities held to maturity | $ | ( | |||||||||||||||||||||
| Securities HTM, net of allowance for credit losses | $ | ||||||||||||||||||||||
| Securities available for sale: | |||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Government agency securities | ( | ||||||||||||||||||||||
| Mortgage-backed securities | ( | ||||||||||||||||||||||
| State and municipal securities | ( | ||||||||||||||||||||||
| Corporate notes and other | ( | ||||||||||||||||||||||
Total securities available for sale(2) | $ | $ | $ | ( | $ | ||||||||||||||||||
(1) The amounts reported exclude accrued interest receivable on debt securities HTM of $25 million and $26 million at June 30, 2026 and December 31, 2025, respectively, which are presented as a component of other assets on the consolidated balance sheets. The amortized cost basis of debt securities HTM includes a net premium of $12 million and $16 million at June 30, 2026 and December 31, 2025, respectively, related to the unamortized portion of unrealized net gains on the transferred debt securities HTM.
Pinnacle has entered into various fair value hedging transactions to mitigate the impact of changing interest rates on the fair values of available for sale securities. See Note 9 - Derivative Instruments and Hedging Activities for disclosure of the gains and losses recognized on derivative instruments and the cumulative fair value hedging adjustments to the carrying amount of the hedged securities.
At June 30, 2026 and December 31, 2025, debt securities with carrying values of $7.6 billion and $4.1 billion, respectively, were pledged to secure certain derivative contracts, public funds and other deposits and repurchase agreements, as required by law or contractual agreements.
Gross unrealized losses on investment securities AFS and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2026 and December 31, 2025 are presented below.
| June 30, 2026 | |||||||||||||||||||||||||||||||||||
| Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||||
| (in millions) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
| U.S. Government agency securities | ( | ( | |||||||||||||||||||||||||||||||||
| Mortgage-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
| State and municipal securities | ( | ( | |||||||||||||||||||||||||||||||||
| Corporate notes and other | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
15
Table of Contents
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||||
| (in millions) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| U.S. Government agency securities | ( | ( | |||||||||||||||||||||||||||||||||
| Mortgage-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
| State and municipal securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Corporate notes and other | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
As shown in the tables above, at June 30, 2026, Pinnacle had approximately $281 million in gross unrealized losses with an approximate fair value of $15.6 billion of AFS securities. For any securities classified as AFS that are in an unrealized loss position at the balance sheet date, Pinnacle assesses whether it intends to sell the security, or more-likely-than-not will be required to sell the security, before recovery of its amortized cost basis which would require a write-down to fair value through net income. Because Pinnacle currently does not intend to sell those AFS securities that have an unrealized loss at June 30, 2026, and it is not more-likely-than-not that Pinnacle will be required to sell the securities before recovery of their amortized cost basis, which may be maturity, Pinnacle has determined that no write-down is necessary. In addition, Pinnacle evaluates whether any portion of the decline in fair value of AFS securities is the result of credit deterioration of the issuers, which would require the recognition of an allowance for credit losses. Such evaluations consider the extent to which the amortized cost of the security exceeds its fair value, changes in credit ratings and any other known adverse conditions related to the specific security. The unrealized losses associated with the AFS securities at June 30, 2026 are driven by changes in interest rates and are not due to the credit quality of the securities and accordingly, no allowance for credit losses is considered necessary related to AFS securities at June 30, 2026. These securities will continue to be monitored as part of Pinnacle's ongoing evaluation of credit quality. Management evaluates the financial performance of the issuers on a quarterly basis to determine if it is probable that the issuers can make all contractual principal and interest payments.
The allowance for credit losses on HTM securities is measured on a collective basis by major security type, Pinnacle has a zero loss expectation for U.S. treasury securities in addition to U.S. Government agency securities and mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and accordingly, no allowance for credit losses is estimated for these securities. Credit losses on HTM state and municipal securities and corporate notes and other securities are estimated using third-party probability of default and loss given default models driven primarily by macroeconomic factors over a reasonable and supportable period of twenty-four months with an eight month reversion to average loss factors. At both June 30, 2026 and December 31, 2025, the estimated allowance for credit losses on HTM securities was $2
The amortized cost and fair value by contractual maturity of debt securities HTM and debt securities AFS at June 30, 2026 are shown below. The expected life of MBSs or CMOs may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. For purposes of the maturity table, MBSs and CMOs, which are not due at a single maturity date, have been classified based on the final contractual maturity date.
| June 30, 2026 | |||||||||||||||||||||||||||||
| (in millions) | Within One Year | 1 to 5 Years | 5 to 10 Years | More Than 10 Years | Total | ||||||||||||||||||||||||
| Securities HTM: | |||||||||||||||||||||||||||||
| U.S. Treasury securities | |||||||||||||||||||||||||||||
| Amortized cost | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Fair value | |||||||||||||||||||||||||||||
| U.S. Government agency securities | |||||||||||||||||||||||||||||
| Amortized cost | |||||||||||||||||||||||||||||
| Fair value | |||||||||||||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||||||||
| Amortized cost | |||||||||||||||||||||||||||||
| Fair value | |||||||||||||||||||||||||||||
16
Table of Contents
| June 30, 2026 | |||||||||||||||||||||||||||||
| (in millions) | Within One Year | 1 to 5 Years | 5 to 10 Years | More Than 10 Years | Total | ||||||||||||||||||||||||
| State and municipal securities | |||||||||||||||||||||||||||||
| Amortized cost | |||||||||||||||||||||||||||||
| Fair value | |||||||||||||||||||||||||||||
| Asset-backed securities | |||||||||||||||||||||||||||||
| Amortized cost | |||||||||||||||||||||||||||||
| Fair value | |||||||||||||||||||||||||||||
| Corporate notes and other | |||||||||||||||||||||||||||||
| Amortized cost | |||||||||||||||||||||||||||||
| Fair value | |||||||||||||||||||||||||||||
| Securities AFS: | |||||||||||||||||||||||||||||
| U.S. Treasury securities | |||||||||||||||||||||||||||||
| Amortized cost | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Fair value | |||||||||||||||||||||||||||||
| U.S. Government agency securities | |||||||||||||||||||||||||||||
| Amortized cost | |||||||||||||||||||||||||||||
| Fair value | |||||||||||||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||||||||
| Amortized cost | |||||||||||||||||||||||||||||
| Fair value | |||||||||||||||||||||||||||||
| State and municipal securities | |||||||||||||||||||||||||||||
| Amortized cost | |||||||||||||||||||||||||||||
| Fair value | |||||||||||||||||||||||||||||
| Corporate notes and other | |||||||||||||||||||||||||||||
| Amortized cost | |||||||||||||||||||||||||||||
| Fair value | |||||||||||||||||||||||||||||
During the second quarter of 2026, as part of ongoing strategic repositioning of the investment securities portfolio, Pinnacle sold at amortized cost $974 million of state and municipal securities, which resulted in realized net losses of $29 million.
Gross gains and gross losses on sales of securities AFS for the three and six months ended June 30, 2026 and 2025 are presented below. The specific identification method is used to reclassify gains and losses out of accumulated other comprehensive income (loss) at the time of sale.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
Gross realized gains on sales(1) | $ | $ | $ | $ | |||||||||||||||||||
| Gross realized losses on sales | ( | ( | ( | ||||||||||||||||||||
| Investment securities gains (losses), net | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
17
Table of Contents
Note 5 - Loans and Allowance for Loan Losses
Aging and Non-Accrual Analysis
The following tables provide a summary of current, accruing past due, and non-accrual loans by portfolio class as of June 30, 2026 and December 31, 2025.
| June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Current | Accruing 30-89 Days Past Due | Accruing 90 Days or Greater Past Due | Total Accruing Past Due | Non-accrual with an ALL | Non-accrual without an ALL | Total | |||||||||||||||||||||||||||||||||||||
| Commercial, financial and agricultural | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Owner-occupied | ||||||||||||||||||||||||||||||||||||||||||||
| Total commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||
| Investment properties | ||||||||||||||||||||||||||||||||||||||||||||
| 1-4 family properties | ||||||||||||||||||||||||||||||||||||||||||||
| Land and development | ||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||
| Consumer mortgages | ||||||||||||||||||||||||||||||||||||||||||||
| Home equity | ||||||||||||||||||||||||||||||||||||||||||||
| Credit cards | ||||||||||||||||||||||||||||||||||||||||||||
| Other consumer loans | ||||||||||||||||||||||||||||||||||||||||||||
| Total consumer | ||||||||||||||||||||||||||||||||||||||||||||
Loans, net of deferred fees and costs(1)(2) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Current | Accruing 30-89 Days Past Due | Accruing 90 Days or Greater Past Due | Total Accruing Past Due | Non-accrual with an ALL | Non-accrual without an ALL | Total | |||||||||||||||||||||||||||||||||||||
| Commercial, financial and agricultural | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Owner-occupied | ||||||||||||||||||||||||||||||||||||||||||||
| Total commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||
| Investment properties | ||||||||||||||||||||||||||||||||||||||||||||
| 1-4 family properties | ||||||||||||||||||||||||||||||||||||||||||||
| Land and development | ||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||
| Consumer mortgages | ||||||||||||||||||||||||||||||||||||||||||||
| Home equity | ||||||||||||||||||||||||||||||||||||||||||||
| Credit cards | ||||||||||||||||||||||||||||||||||||||||||||
| Other consumer loans | ||||||||||||||||||||||||||||||||||||||||||||
| Total consumer | ||||||||||||||||||||||||||||||||||||||||||||
Loans, net of deferred fees and costs(1)(2) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
(2) Loans are presented net of deferred loan fees and costs totaling $344 million and $314 million at June 30, 2026 and December 31, 2025, respectively.
Pledged Loans
Loans with carrying values of $38.3 billion and $15.7 billion were pledged as collateral for borrowings and capacity at June 30, 2026 and December 31, 2025, respectively, to the FHLB and Federal Reserve Bank.
18
Table of Contents
Portfolio Segment Risk Factors
The risk characteristics and collateral information of each portfolio segment are as follows:
Commercial and Industrial Loans - The C&I loan portfolio is comprised of general middle market and commercial banking clients across a diverse set of industries, as well as certain specialized lending verticals including specialty finance, senior housing, financial institutions group and health care. In accordance with Pinnacle's lending policy, each loan undergoes a detailed underwriting process, which incorporates uniform underwriting standards and oversight in proportion to the size and complexity of the lending relationship. These loans are generally secured by collateral such as business equipment, inventory, and real estate. Credit decisions on loans in the C&I portfolio are based on cash flow from the operations of the business as the primary source of repayment of the debt, with underlying real estate or other collateral being the secondary source of repayment.
Commercial Real Estate Loans - CRE loans primarily consist of income-producing investment properties loans. Additionally, CRE loans include 1-4 family properties loans as well as land and development loans. 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. 1-4 family properties loans include construction loans to homebuilders 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. 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 our preference is to obtain some level of recourse from project sponsors. Loans in this portfolio are underwritten based on the LTV of the collateral and the capacity of the guarantor(s).
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 home improvement loans, student, and personal loans from third-party lending ("other consumer loans"). Together, consumer mortgages and home equity comprise the majority of Pinnacle's consumer loans and are secured by first and second liens on residential real estate primarily located in the markets served by Pinnacle. The primary source of repayment for all consumer loans is generally the personal income of the borrower(s).
Credit Quality Indicators
The credit quality of the loan portfolio is reviewed and updated no less frequently than annually using the standard asset classification system utilized by the federal banking agencies. These classifications are divided into three groups: Not Criticized (Pass), Special Mention, and Classified or Adverse rating (Substandard, Doubtful, and Loss) and are defined as follows:
Pass - loans which are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell in a timely manner, of any underlying collateral.
Special Mention - loans which have potential weaknesses that deserve management's close attention. These loans are not adversely classified and do not expose an institution to sufficient risk to warrant an adverse classification.
Substandard - loans which are inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Loans with this classification are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful - loans which have all the weaknesses inherent in loans categorized as Substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently known facts, conditions, and values.
Loss - loans which are considered by management to be uncollectible and of such little value that their continuance on the institution's books as an asset, without establishment of a specific valuation allowance or charge-off, is not warranted. Pinnacle fully reserves for any loans rated as Loss.
In the following tables, consumer loans are generally assigned a risk grade similar to the classifications described above; however, upon reaching 90 days and 120 days past due, they are generally downgraded to Substandard and Loss, respectively, in accordance with the FFIEC Retail Credit Classification Policy. Additionally, in accordance with Interagency Supervisory Guidance, the risk grade classifications of consumer loans (consumer mortgages and home equity) secured by junior liens on 1-4 family residential properties also consider available information on the payment status of any associated senior liens with other financial institutions.
19
Table of Contents
The following table summarizes each loan portfolio class by risk grade and origination year as of June 30, 2026 and December 31, 2025 as required under CECL.
| June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term Loans Amortized Cost Basis by Origination Year | Revolving Loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||||||||
| Commercial, financial and agricultural | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial, financial and agricultural | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total owner-occupied | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Investment properties | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total investment properties | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1-4 family properties | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total 1-4 family properties | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
20
Table of Contents
| June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term Loans Amortized Cost Basis by Origination Year | Revolving Loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Amortized Cost Basis | Total | |||||||||||||||||||||||||||||||||||||||||||||
| Land and development | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total land and development | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Consumer mortgages | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer mortgages | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Home equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total home equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit cards | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total credit cards | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other consumer loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total other consumer loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Loans, net of deferred fees and costs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
21
Table of Contents
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term Loans Amortized Cost Basis by Origination Year | Revolving Loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Amortized Cost Basis | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial, financial and agricultural | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial, financial and agricultural | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Owner-occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total owner-occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Investment properties | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total investment properties | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1-4 family properties | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total 1-4 family properties | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Land and development | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total land and development | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
22
Table of Contents
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term Loans Amortized Cost Basis by Origination Year | Revolving Loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Amortized Cost Basis | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
| Consumer mortgages | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer mortgages | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Home equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total home equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit cards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total credit cards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other consumer loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total other consumer loans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Loans, net of deferred fees and costs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Current YTD Period: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
23
Table of Contents
Rollforward of Allowance for Loan Losses
The following tables detail the changes in the ALL by loan segment for the three and six months ended June 30, 2026 and 2025. During the three and six months ended June 30, 2026 and 2025, Pinnacle had no significant transfers to loans held for sale.
| As Of and For the Three Months Ended June 30, 2026 | |||||||||||||||||||||||
| (in millions) | Commercial & Industrial | Commercial Real Estate | Consumer | Total | |||||||||||||||||||
| Allowance for loan losses: | |||||||||||||||||||||||
| Beginning balance at March 31, 2026 | $ | $ | $ | $ | |||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | |||||||||||||||||||
| Recoveries | |||||||||||||||||||||||
| Provision for (reversal of) loan losses | |||||||||||||||||||||||
| Ending balance at June 30, 2026 | $ | $ | $ | $ | |||||||||||||||||||
| As Of and For the Three Months Ended June 30, 2025 | |||||||||||||||||||||||
| (in millions) | Commercial & Industrial | Commercial Real Estate | Consumer | Total | |||||||||||||||||||
| Allowance for loan losses: | |||||||||||||||||||||||
| Beginning balance at March 31, 2025 | $ | $ | $ | $ | |||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | |||||||||||||||||||
| Recoveries | |||||||||||||||||||||||
| Provision for (reversal of) loan losses | |||||||||||||||||||||||
| Ending balance at June 30, 2025 | $ | $ | $ | $ | |||||||||||||||||||
| As Of and For the Six Months Ended June 30, 2026 | |||||||||||||||||||||||
| (in millions) | Commercial & Industrial | Commercial Real Estate | Consumer | Total | |||||||||||||||||||
| Allowance for loan losses: | |||||||||||||||||||||||
| Beginning balance at December 31, 2025 | $ | $ | $ | $ | |||||||||||||||||||
| Purchased credit deteriorated loans | |||||||||||||||||||||||
| Purchased seasoned loans | |||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | |||||||||||||||||||
| Recoveries | |||||||||||||||||||||||
| Provision for (reversal of) loan losses | ( | ||||||||||||||||||||||
| Ending balance at June 30, 2026 | $ | $ | $ | $ | |||||||||||||||||||
| As Of and For the Six Months Ended June 30, 2025 | |||||||||||||||||||||||
| (in millions) | Commercial & Industrial | Commercial Real Estate | Consumer | Total | |||||||||||||||||||
| Allowance for loan losses: | |||||||||||||||||||||||
| Beginning balance at December 31, 2024 | $ | $ | $ | $ | |||||||||||||||||||
| Charge-offs | ( | ( | ( | ||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||
| Provision for (reversal of) loan losses | ( | ||||||||||||||||||||||
| Ending balance at June 30, 2025 | $ | $ | $ | $ | |||||||||||||||||||
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 increased $571 million compared to the December 31, 2025 ACL of $458 million, which consisted of an ALL of $442 million and a reserve for unfunded commitments of $16 million, primarily due to the merger. The ACL to loans coverage ratio was 1.17 % at June 30, 2026, compared to 1.17 % at December 31, 2025. The June 30, 2026 ACL ratio was impacted by net loan growth and a deterioration in the economic forecast. The Company includes qualitative adjustments, as appropriate, intended to capture the impact of uncertainties in the quantitative estimate.
24
Table of Contents
The ACL is estimated using a two-year reasonable and supportable forecast period. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made, the Company reverts on a straight-line basis back to the historical rates over a one-year period. Pinnacle utilizes multiple economic forecast scenarios sourced from a reputable third-party provider that are probability-weighted internally. The current scenarios include a consensus baseline forecast, an upside scenario reflecting stronger growth than the baseline, a downside scenario that reflects adverse economic conditions, and an additional adverse scenario that assumes consistent slow growth that is less optimistic than the baseline. The economic scenarios are intended to capture differing trajectories for the macroeconomic environment over the forecast horizon. At June 30, 2026, the probability‑weighted economic outlook reflected a modest softening relative to December 31, 2025. Consistent with industry practice, the unemployment rate is referenced as a general indicator of labor market conditions and broader economic trends reflected in the scenarios. The probability‑weighted forecast incorporated an average unemployment rate of 5.0 % over the forecast period at June 30, 2026, compared to 4.6 % at December 31, 2025. See Note 1 - Basis of Presentation and Accounting Policies for additional details around the ACL estimation process.
Financial Difficulty Modifications
When borrowers are experiencing financial difficulty, Pinnacle may make certain loan modifications as part of its loss mitigation strategies to maximize expected payment. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" of Pinnacle's 2025 Form 10-K for additional information regarding accounting policies for FDMs.
The following tables present the amortized cost of FDM loans by loan portfolio class that were modified during the three and six months ended June 30, 2026 and 2025. Tables within this section exclude loans that were paid-off or are otherwise no longer in the loan portfolio as of the period end.
| Three Months Ended June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Interest Rate Reduction | Term Extension | Payment Delay | Payment Deferral and Term Extension | Total | Percentage of Total by Financing Class | |||||||||||||||||||||||||||||||||||||||||
| Commercial, financial and agricultural | $ | $ | $ | $ | $ | % | |||||||||||||||||||||||||||||||||||||||||
| Total commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Investment properties | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||||||||||||||
| Consumer mortgages | |||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||||||||||||||||||||
| Total FDMs | $ | $ | $ | $ | $ | % | |||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Interest Rate Reduction | Term Extension | Payment Delay | Payment Deferral and Term Extension | Total | Percentage of Total by Financing Class | |||||||||||||||||||||||||||||||||||||||||
| Commercial, financial and agricultural | $ | $ | $ | $ | $ | % | |||||||||||||||||||||||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Investment properties | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||||||||||||||
| Consumer mortgages | |||||||||||||||||||||||||||||||||||||||||||||||
| Other consumer loans | |||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||||||||||||||||||||
| Total FDMs | $ | $ | $ | $ | $ | % | |||||||||||||||||||||||||||||||||||||||||
25
Table of Contents
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Interest Rate Reduction | Term Extension | Payment Delay and Term Extension | Total | Percentage of Total by Financing Class | ||||||||||||||||||||||||||||||||||||||||||
| Commercial, financial and agricultural | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
| Total commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Investment properties | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||||||||||||||
| Total FDMs | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Interest Rate Reduction | Term Extension | Payment Delay and Term Extension | Total | Percentage of Total by Financing Class | ||||||||||||||||||||||||||||||||||||||||||
| Commercial, financial and agricultural | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
| Total commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||
| Investment properties | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||||||||||||||
| Total FDMs | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
The following tables present the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2026 and 2025.
| Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | Weighted Average Interest Rate Reduction | Weighted Average Term Extension (in months) | Weighted Average Payment Delay (in months) | Weighted Average Interest Rate Reduction | Weighted Average Term Extension and Payment Delay (in months) | Weighted Average Payment Delay (in months) | |||||||||||||||||||||||||||||||||||||||||
| Commercial, financial and agricultural | % | % | |||||||||||||||||||||||||||||||||||||||||||||
| Owner-occupied | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Investment properties | |||||||||||||||||||||||||||||||||||||||||||||||
| Consumer mortgages | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Other consumer loans | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | Weighted Average Interest Rate Reduction | Weighted Average Term Extension (in months) | Weighted Average Payment Delay (in months) | Weighted Average Interest Rate Reduction | Weighted Average Term Extension (in months) | Weighted Average Payment Deferral (in months) | |||||||||||||||||||||||||||||||||||||||||
| Commercial, financial and agricultural | % | — | % | — | |||||||||||||||||||||||||||||||||||||||||||
| Investment properties | |||||||||||||||||||||||||||||||||||||||||||||||
During the three and six months ended June 30, 2026, there were no no no
26
Table of Contents
Pinnacle monitors the performance of FDMs to understand the effectiveness of its modification efforts. The following tables provide a summary of current, accruing past due, and non-accrual loans on an amortized cost basis by loan portfolio class that have been modified during the 12 months prior to June 30, 2026 and June 30, 2025, respectively.
| As of June 30, 2026 | |||||||||||||||||||||||||||||||||||
| (in millions) | Current | Accruing 30-89 Days Past Due | Accruing 90 Days or Greater Past Due | Non-accrual | Total | ||||||||||||||||||||||||||||||
| Commercial, financial and agricultural | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Owner-occupied | |||||||||||||||||||||||||||||||||||
| Total commercial and industrial | |||||||||||||||||||||||||||||||||||
| Investment properties | |||||||||||||||||||||||||||||||||||
| Total commercial real estate | |||||||||||||||||||||||||||||||||||
| Consumer mortgages | |||||||||||||||||||||||||||||||||||
| Other consumer loans | |||||||||||||||||||||||||||||||||||
| Total consumer | |||||||||||||||||||||||||||||||||||
| Total FDMs | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| As of June 30, 2025 | |||||||||||||||||||||||||||||||||||
| (in millions) | Current | Accruing 30-89 Days Past Due | Accruing 90 Days or Greater Past Due | Non-accrual | Total | ||||||||||||||||||||||||||||||
| Commercial, financial and agricultural | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Investment properties | |||||||||||||||||||||||||||||||||||
| Total FDMs | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Note 6 - Goodwill and Other Intangible Assets
During the first quarter of 2026, in connection with the Merger, Pinnacle reorganized its management reporting structure into two major reportable business segments: Banking and Wealth. Prior to the Merger, the Company operated through a single operating and reporting segment. In connection with these changes, goodwill of $1.8 billion was reallocated to the Banking and Wealth reporting units using a relative fair value approach. Changes to the carrying amount of goodwill by reporting unit for the six months ended June 30, 2026 are provided in the following table.
| (in millions) | Banking | Wealth | Total | |||||||||||||||||
| Change in goodwill from reallocation | $ | $ | $ | |||||||||||||||||
| Goodwill acquired during the year (preliminary allocation) | ||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | |||||||||||||||||
Effective January 1, 2026, Pinnacle merged with Synovus. In connection with the Merger, Pinnacle has recorded $1.6 billion of goodwill based on preliminary fair value estimates of assets acquired and liabilities assumed in the business combination as of June 30, 2026. Refer to Note 2 - Business Combination and Note 12 - Segment Reporting in this Report for additional information.
Additionally, in connection with the Merger, Pinnacle recorded a core deposit intangible asset of $848 million and a wealth customer relationship intangible asset of $262 million on the merger date. The CDI is being amortized using the sum-of-the years-digits method over approximately 10 years. The wealth customer relationship intangible is being amortized on a straight-line basis over its estimated useful life of approximately 14 years.
27
Table of Contents
The following table shows the gross carrying amount and accumulated amortization of other intangible assets as of June 30, 2026 and December 31, 2025.
| (in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | ||||||||||||||
| June 30, 2026 | |||||||||||||||||
| CDI | $ | $ | ( | $ | |||||||||||||
| Wealth Customer Relationships | ( | ||||||||||||||||
| Client Relationships | ( | ||||||||||||||||
| Other | |||||||||||||||||
| Total other intangible assets | $ | $ | ( | $ | |||||||||||||
| December 31, 2025 | |||||||||||||||||
| CDI | $ | $ | ( | $ | |||||||||||||
| Client Relationships | ( | ||||||||||||||||
| Other | |||||||||||||||||
| Total other intangible assets | $ | $ | ( | $ | |||||||||||||
The estimated amortization expense of other intangible assets for the next five years is as follows:
| (in millions) | Amortization Expense | ||||
| Remainder of 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
28
Table of Contents
Note 7 - Shareholders' Equity and Other Comprehensive Income (Loss)
Repurchases of Common Stock
On January 1, 2026, the Board of Directors approved share repurchases of up to $400 million of common stock in 2026. During the three and six months ended June 30, 2026, Pinnacle did not repurchase shares of common stock.
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes)
The following table illustrates activity within the balances in accumulated other comprehensive income (loss) by component for the three and six months ended June 30, 2026 and 2025.
| Changes in Accumulated Other Comprehensive Income (Loss) by Component (Net of Income Taxes) | |||||||||||||||||||||||
| (in millions) | Net unamortized holding (losses) gains on AFS securities transferred to HTM | Net unrealized gains (losses) on securities AFS(1) | Net unrealized gains (losses) on cash flow hedges | Total | |||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | ( | ||||||||||||||||||||
| Amounts reclassified from AOCI | ( | ||||||||||||||||||||||
| Net current period other comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Balance at March 31, 2025 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||||||||
| Amounts reclassified from AOCI | ( | ( | |||||||||||||||||||||
| Net current period other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Balance at December 31, 2025 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | ( | ||||||||||||||||||||
| Amounts reclassified from AOCI | ( | ||||||||||||||||||||||
| Net current period other comprehensive income (loss) | ( | ( | ( | ( | |||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Balance at December 31, 2024 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||||||||
| Amounts reclassified from AOCI | ( | ||||||||||||||||||||||
| Net current period other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Note 8 - Fair Value Accounting
See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies and Note 18- Fair Value of Financial Instruments" of Pinnacle's 2025 Form 10-K for a description of valuation methodologies for assets and liabilities measured at fair value on a recurring and non-recurring basis.
29
Table of Contents
The following table presents assets and liabilities measured at estimated fair value on a recurring basis.
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Level 1 | Level 2 | Level 3 | Total Estimated Fair Value | Level 1 | Level 2 | Level 3 | Total Estimated Fair Value | ||||||||||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Trading securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Asset-backed securities | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other investments | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total trading securities | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Securities available for sale: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury securities | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| U.S. Government agency securities | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage-backed securities | ||||||||||||||||||||||||||||||||||||||||||||||||||
| State and municipal securities | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate notes and other | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total securities available for sale | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Mortgage loans held for sale | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Other investments | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Mutual funds held in rabbi trusts | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Mutual funds held in rabbi trusts | ||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Option
Pinnacle has elected the fair value option for certain mortgage loans held for sale related to the portfolio acquired in the Merger on January 1, 2026, primarily to ease the operational burden required to maintain hedge accounting for these loans. Pinnacle is still able to achieve effective economic hedges on mortgage loans held for sale without the time and expense needed to manage a hedge accounting program.
Mortgage loans held for sale are initially measured at fair value under the fair value option election with subsequent changes in fair value recognized in total loan sales and servicing income on the consolidated statements of income.
The following table summarizes the difference between the fair value and the UPB of mortgage loans held for sale and the changes in fair value of these loans. An immaterial portion of these changes in fair value was attributable to instrument-specific credit risk. Pinnacle recorded no
| Mortgage Loans Held for Sale | |||||||||||
| (in millions) | As of June 30, 2026 | ||||||||||
| Fair value | $ | ||||||||||
| Unpaid principal balance | |||||||||||
| Fair value less aggregate unpaid principal balance | $ | ||||||||||
Activity for Level 3 Assets
See "Part II - Item 8. Financial Statements and Supplementary Data - Note 18 - Fair Value of Financial Instruments" of Pinnacle's 2025 Form 10-K for a description of the valuation techniques and significant inputs for Level 3 assets and liabilities that are measured at fair value on a recurring and non-recurring basis. During the three and six months ended June 30, 2026 and
30
Table of Contents
2025, Pinnacle did not have any transfers in or out of Level 3 in the fair value hierarchy. The following tables provide rollforwards of Level 3 assets measured at fair value on a recurring basis.
| Three Months Ended June 30, 2026 | ||||||||||||||||||||||||||
| (in millions) | Other Investments | |||||||||||||||||||||||||
| Ending balance at March 31, 2026 | $ | |||||||||||||||||||||||||
| Total gains (losses) realized/unrealized: | ||||||||||||||||||||||||||
| Included in earnings | ||||||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||||
| Settlements | ( | |||||||||||||||||||||||||
| Ending balance at June 30, 2026 | $ | |||||||||||||||||||||||||
| Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at June 30, 2026 | $ | |||||||||||||||||||||||||
| Three Months Ended June 30, 2025 | ||||||||||||||||||||||||||
| (in millions) | Other Investments | |||||||||||||||||||||||||
| Beginning balance at March 31, 2025 | $ | |||||||||||||||||||||||||
| Total gains (losses) realized/unrealized: | ||||||||||||||||||||||||||
| Included in earnings | ||||||||||||||||||||||||||
| Purchases | ||||||||||||||||||||||||||
| Settlements | ( | |||||||||||||||||||||||||
| Ending balance at June 30, 2025 | $ | |||||||||||||||||||||||||
| Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at June 30, 2025 | $ | |||||||||||||||||||||||||
| Six Months Ended June 30, 2026 | ||||||||||||||||||||||||||
| (in millions) | Other Investments | |||||||||||||||||||||||||
| Beginning balance at December 31, 2025 | $ | |||||||||||||||||||||||||
| Impact from the Merger | ||||||||||||||||||||||||||
| Total gains (losses) realized/unrealized: | ||||||||||||||||||||||||||
| Included in earnings | ||||||||||||||||||||||||||
| Purchases | ||||||||||||||||||||||||||
| Settlements | ( | |||||||||||||||||||||||||
| Ending balance at June 30, 2026 | $ | |||||||||||||||||||||||||
| Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at June 30, 2026 | $ | |||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||
| (in millions) | Other Investments | |||||||||||||||||||||||||
| Beginning balance at December 31, 2024 | $ | |||||||||||||||||||||||||
| Total gains (losses) realized/unrealized: | ||||||||||||||||||||||||||
| Included in earnings | ||||||||||||||||||||||||||
| Purchases | ||||||||||||||||||||||||||
| Settlements | ( | |||||||||||||||||||||||||
| Ending balance at June 30, 2025 | $ | |||||||||||||||||||||||||
| Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at June 30, 2025 | $ | |||||||||||||||||||||||||
31
Table of Contents
The following table presents assets measured at fair value on a non-recurring basis, as of the dates indicated, for which there was a fair value adjustment.
| June 30, 2026 | ||||||||||||||||||||||||||||||||||||||
| (in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||||
Collateral dependent loans (1) | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Other real estate | ||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| (in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||||
Collateral dependent loans (1) | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Other real estate | ||||||||||||||||||||||||||||||||||||||
(1) The carrying values of collateral dependent loans at June 30, 2026 and December 31, 2025 are net of valuation allowances of $33 million and $32 million, respectively.
Fair Value of Financial Instruments
The following tables present the carrying and estimated fair values of financial instruments at June 30, 2026 and December 31, 2025. This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash, cash equivalents, and restricted cash, the carrying amount is a reasonable estimate of fair value due the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as non-interest bearing demand, and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity. The fair values represent management’s best estimates based on a range of methodologies and assumptions. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies and Note 18 - Fair Value of Financial Instruments" to the consolidated financial statements of Pinnacle's 2025 Form 10-K for a description of how fair value measurements are determined.
| June 30, 2026 | |||||||||||||||||||||||||||||
| (in millions) | Carrying Value | Fair Value(1) | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
| Financial assets | |||||||||||||||||||||||||||||
| Securities purchased with agreement to resell | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Investment securities held to maturity | |||||||||||||||||||||||||||||
| Loans held for sale | |||||||||||||||||||||||||||||
| Loans, net | |||||||||||||||||||||||||||||
| Financial liabilities | |||||||||||||||||||||||||||||
| Deposits and securities sold under agreements to repurchase | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| FHLB advances and other borrowings | |||||||||||||||||||||||||||||
(1) Estimated fair values are consistent with an exit price concept.
| December 31, 2025 | |||||||||||||||||||||||||||||
| (in millions) | Carrying Value | Fair Value(1) | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
| Financial assets | |||||||||||||||||||||||||||||
| Securities purchased with agreement to resell | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Investment securities held to maturity | |||||||||||||||||||||||||||||
| Loans held for sale | |||||||||||||||||||||||||||||
| Loans, net | |||||||||||||||||||||||||||||
| Financial liabilities | |||||||||||||||||||||||||||||
| Deposits and securities sold under agreements to repurchase | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| FHLB advances and other borrowings | |||||||||||||||||||||||||||||
(1) Estimated fair values are consistent with an exit price concept.
32
Table of Contents
Note 9 - Derivative Instruments and Hedging Activities
Pinnacle utilizes derivative instruments to manage its exposure to various types of interest rate risk, exposures related to liquidity and credit risk, and to facilitate client transactions. The primary types of derivative instruments utilized by Pinnacle consist of interest rate swaps and options, interest rate lock commitments made to prospective mortgage loan clients, commitments to sell fixed-rate mortgage loans, and foreign currency exchange contracts. Interest rate lock commitments represent derivative instruments since it is intended that such loans will be sold. Pinnacle also provides foreign currency exchange services, primarily forward contracts, with counterparties to allow commercial clients to mitigate exchange rate risk. Pinnacle covers its risk by entering into an offsetting foreign currency exchange forward contract. Pinnacle enters into risk participation agreements with financial institution counterparties where we are either a participant or a lead bank so that the risk of default on the interest rate swaps is shared. Pinnacle either pays or receives a fee depending on the participation type. As of June 30, 2026, Pinnacle has risk participation agreements with a total notional amount of $1.8 billion. Additionally, Pinnacle enters into swaps to facilitate customer transactions and meet their financing needs. Upon entering into these instruments to meet customer needs, Pinnacle enters into offsetting positions in order to minimize the risk to Pinnacle. These swaps qualify as derivatives, but are not designated as hedging instruments.
On June 28, 2024, Pinnacle executed a credit default swap (CDS) with a counterparty with a notional amount of $87 million. The CDS notional amount is equal to 5 % of a reference pool of $1.7 billion in first lien consumer real estate - mortgage loans whereby the counterparty will assume the first loss position for these loans up to approximately $87 million in aggregate losses. Pinnacle will pay to the counterparty an annual loss protection fee equal to 7.95 % of the corresponding notional amount of the CDS for as long as the loans in the reference pool remain outstanding. The notional amount of the CDS will decline over time as the loans in the reference portfolio are paid down, mature or the counterparty absorbs the first loss portion of losses on those loans. On December 22, 2025, Pinnacle executed a CDS with a notional amount of $80 million. The CDS notional amount is equal to 12.5 % of a reference pool of commercial subscription lines of credit whereby the counterparty will assume first loss position for these loans up to approximately $80 million in aggregate losses. Pinnacle will pay to the counterparty an annual loss protection fee equal to 4.94 % of the corresponding notional amount until the scheduled termination date of December 22, 2030, subject to early termination criteria not being met. The notional amount of the CDS will fluctuate until the replenishment cut-off date, December 22, 2028, subject to early termination criteria not being met, at which time the reference pool will decline over time. Each CDS qualifies as a derivative, but is not designated as a hedging instrument.
See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" to the consolidated financial statements of Pinnacle's 2025 Form 10-K for additional information regarding accounting policies for derivatives.
Hedging Derivatives
Cash flow hedging relationships mitigate exposure to the variability of future cash flows or other forecasted transactions. The hedging strategy converts the SOFR-based variable interest rate on forecasted borrowings to a fixed interest rate and is used in an effort to protect Pinnacle from floating interest rate variability. The contracts effectively modify Pinnacle's exposure to interest rate risk by utilizing receive fixed/pay index-based variable rate interest rate swaps and floors. Pinnacle also uses interest rate caps to mitigate the impact of changing deposit rates of federal funds based deposit accounts.
For cash flow hedges, gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss), net of the tax impact, and subsequently reclassified into earnings when the hedged transaction affects earnings with the impacts recorded in the same income statement line item used to present the earnings effect of the hedged item. When a cash flow hedge relationship is discontinued but the hedged cash flows, or forecasted transactions, are still expected to occur, gains or losses that were accumulated in OCI are amortized into earnings over the same periods in which the hedged transactions are still expected to affect earnings. If, however, it is probable the forecasted transactions will no longer occur, the remaining accumulated amounts in OCI for the impacted cash flow hedges are immediately recognized in earnings.
Pinnacle utilizes interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on the fair values of fixed rate callable securities available for sale. The hedging strategy on securities converts the fixed interest rates to variable interest rates based on SOFR or federal funds rates. These derivatives are designated as partial term hedges of selected cash flows covering specified periods of time prior to the call dates of the hedged securities. Pinnacle has also entered into portfolio layer method fair value hedges on certain available for sale securities. Under the portfolio layer method, the hedged item is designated as a hedged layer of a closed portfolio of available for sale securities that is anticipated to remain outstanding throughout the hedge period. Pinnacle also utilizes interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on FHLB advances, other borrowings and deposits.The changes in fair value of the fair value hedges are recorded through earnings with an offset against changes in the fair value of the hedged item within net interest income in the consolidated statements of income. All components of each derivative instrument’s gain (loss) are included in the assessment of hedge effectiveness.
33
Table of Contents
Derivatives not designated as hedges include those that are entered into as either economic hedges to facilitate client needs or as part of Pinnacle's overall risk management strategy. Economic hedges are those that do not qualify to be treated as a fair value hedge or cash flow hedge for accounting purposes but are necessary to economically manage the risk exposure associated with the assets and liabilities of Pinnacle. For derivative instruments that are not designated as hedging instruments, changes in the fair value of the derivatives are recognized in earnings immediately.
Counterparty Credit Risk and Collateral
Entering into derivative contracts potentially exposes Pinnacle to the risk of counterparties’ failure to fulfill their legal obligations, including, but not limited to, potential amounts due or payable under each derivative contract. Notional principal amounts are often used to express the volume of these transactions, but the amounts potentially subject to credit risk are much smaller. Pinnacle assesses the credit risk of its dealer counterparties by regularly monitoring publicly available credit rating information, evaluating other market indicators, and periodically reviewing detailed financials. Dealer collateral requirements are determined via risk-based policies and procedures and in accordance with existing agreements. Pinnacle seeks to minimize dealer credit risk by dealing with highly rated counterparties and by obtaining collateral for exposures above certain predetermined limits. Management closely monitors credit conditions within the client swap portfolio, which management deems to be of higher risk than dealer counterparties. Collateral is secured at origination and credit-related fair value adjustments are recorded against the asset value of the derivative as deemed necessary based upon an analysis, which includes consideration of the current asset value of the swap, client risk rating, collateral value, and client standing with regards to its swap contractual obligations and other related matters. Such asset values fluctuate based upon changes in interest rates regardless of changes in notional amounts and changes in client specific risk.
Collateral Requirements
Pinnacle's derivative instruments with certain counterparties contain legally enforceable netting that allow multiple transactions to be settled into a single amount. The fair value hedge and interest rate swaps (swaps) assets and liabilities are presented at gross fair value before the application of bilateral collateral and master netting agreements, but after the initial margin posting and daily variation margin payments made with central clearinghouse organizations. Total fair value hedge and swaps assets and liabilities are adjusted to take into consideration the effects of legally enforceable master netting agreements and cash collateral received or paid.
Certain derivative transactions have collateral requirements, both at the inception of the trade and as the value of each derivative position changes. As of June 30, 2026 and December 31, 2025, Pinnacle had recorded the right to reclaim cash collateral of $10 million and $36 million, respectively. As of June 30, 2026 and December 31, 2025, Pinnacle had recorded the obligation to return cash collateral of $100 million and $62 million, respectively.
For derivatives cleared through central clearing houses, the variation margin payments made are legally characterized as settlements of the derivatives. As a result, these variation margin payments are netted against the fair value of the respective derivative contracts in the consolidated balance sheets and related disclosures.
34
Table of Contents
The following table reflects the estimated fair value of derivative instruments included in other assets and other liabilities on the consolidated balance sheets along with their respective notional amounts on a gross basis.
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Estimated Fair Value | Estimated Fair Value | ||||||||||||||||||||||||||||||||||
| (in millions) | Notional Amount | Derivative Assets | Derivative Liabilities | Notional Amount | Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||||
| Derivatives in cash flow hedging relationships: | |||||||||||||||||||||||||||||||||||
| Interest rate contracts | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Total cash flow hedges | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Derivatives in fair value hedging relationships: | |||||||||||||||||||||||||||||||||||
| Interest rate contracts | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Total fair value hedges | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Total derivatives designated as hedging instruments | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
| Interest rate contracts | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Mortgage derivatives - interest rate lock commitments | |||||||||||||||||||||||||||||||||||
| Mortgage derivatives - forward commitments to sell fixed-rate mortgage loans | |||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | |||||||||||||||||||||||||||||||||||
| Visa derivative | |||||||||||||||||||||||||||||||||||
| Credit default swap | |||||||||||||||||||||||||||||||||||
| Total derivatives not designated as hedging instruments | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
35
Table of Contents
The following table presents the effect of hedging derivative instruments in the consolidated statements of income and the total amounts for the respective line item affected for the three and six months ended June 30, 2026 and 2025.
| Three Months Ended June 30, 2026 | |||||||||||||||||||||||||||||
| Interest Income | Interest Expense | ||||||||||||||||||||||||||||
| (in millions) | Loans, including fees | Investment securities | Deposits | FHLB advances and other borrowings | |||||||||||||||||||||||||
| Total interest income/expense amounts presented in the consolidated statements of income | $ | $ | $ | $ | |||||||||||||||||||||||||
| Gain (loss) on fair value hedging relationships: | |||||||||||||||||||||||||||||
| Recognized on derivatives | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||
| Recognized on hedged items | |||||||||||||||||||||||||||||
| Pre-tax income (loss) recognized on fair value hedges | $ | $ | $ | $ | |||||||||||||||||||||||||
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||
| Interest Income | Interest Expense | ||||||||||||||||||||||||||||
| (in millions) | Loans, including fees | Investment securities | Deposits | FHLB advances and other borrowings | |||||||||||||||||||||||||
| Total interest income/expense amounts presented in the consolidated statements of income | $ | $ | $ | $ | |||||||||||||||||||||||||
| Gain (loss) on fair value hedging relationships: | |||||||||||||||||||||||||||||
| Recognized on derivatives | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
| Recognized on hedged items | ( | ||||||||||||||||||||||||||||
| Pre-tax income (loss) recognized on fair value hedges | $ | $ | $ | $ | |||||||||||||||||||||||||
| Six Months Ended June 30, 2026 | |||||||||||||||||||||||||||||
| Interest Income | Interest Expense | ||||||||||||||||||||||||||||
| (in millions) | Loans, including fees | Investment securities | Deposits | FHLB advances and other borrowings | |||||||||||||||||||||||||
| Total interest income/expense amounts presented in the consolidated statements of income | $ | $ | $ | $ | |||||||||||||||||||||||||
| Gain (loss) on fair value hedging relationships: | |||||||||||||||||||||||||||||
| Recognized on derivatives | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||
| Recognized on hedged items | |||||||||||||||||||||||||||||
| Pre-tax income (loss) recognized on fair value hedges | $ | $ | $ | $ | |||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||
| Interest Income | Interest Expense | ||||||||||||||||||||||||||||
| (in millions) | Loans, including fees | Investment securities | Deposits | FHLB advances and other borrowings | |||||||||||||||||||||||||
| Total interest income/expense amounts presented in the consolidated statements of income | $ | $ | $ | $ | |||||||||||||||||||||||||
| Gain (loss) on fair value hedging relationships: | |||||||||||||||||||||||||||||
| Recognized on derivatives | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
| Recognized on hedged items | ( | ||||||||||||||||||||||||||||
| Pre-tax income (loss) recognized on fair value hedges | $ | $ | $ | $ | |||||||||||||||||||||||||
36
Table of Contents
The following table presents the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of the hedged assets/(liabilities) in fair value hedging relationships.
| June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||
| (in millions) | Hedged Items Currently Designated | Hedged Items Currently Designated | |||||||||||||||||||||||||||
| Line item on the balance sheet | Carrying Amount of Assets/(Liabilities) | Hedge Accounting Basis Adjustment | Carrying Amount of Assets/(Liabilities) | Hedge Accounting Basis Adjustment | |||||||||||||||||||||||||
Securities available for sale(1)(2) | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||
| Interest-bearing deposits | ( | ( | |||||||||||||||||||||||||||
| FHLB advances and other borrowings | ( | ( | ( | ( | |||||||||||||||||||||||||
(1) In April 2022, interest rates swaps designated as fair value hedges with notional amounts totaling $164 million and market values totaling $14 million were terminated. Approximately $986,000 in gains were recognized at the time of termination and the remaining $3 million at June 30, 2026 will be accreted as additional interest income on the previously hedged available for sale mortgage backed and municipal securities over the same period as existing purchase discounts or premiums on these securities.
(2) Carrying amount represents amortized cost.
The pre-tax effect of changes in fair value from derivative instruments not designated as hedging instruments in the consolidated statements of income for the three and six months ended June 30, 2026 and 2025 is presented below.
| Gain (Loss) Recognized in Consolidated Statements of Income | ||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
| (in millions) | Location in Consolidated Statements of Income | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||||||||||
| Mortgage derivatives - interest rate lock commitments | Total loan sales and servicing | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Mortgage derivatives - forward commitments to sell fixed-rate mortgage loans | Total loan sales and servicing | |||||||||||||||||||||||||||||||
| Foreign exchange contracts | Capital markets income | ( | ||||||||||||||||||||||||||||||
| Visa derivative | Other non-interest expense | |||||||||||||||||||||||||||||||
37
Table of Contents
Note 10 - Net Income Per Common Share
The following table displays a reconciliation of the information used in calculating basic and diluted net income per common share for the three and six months ended June 30, 2026 and 2025. Diluted net income per common share incorporates the potential impact of contingently issuable shares such as those related to restricted share units (RSUs), and performance share units (PSUs), including awards which require future service and meeting certain performance and market metrics as a condition of delivery of the underlying common stock. During periods where the effect of these instruments is antidilutive, meaning their inclusion would increase earnings per share, they are excluded from the calculation.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (dollar amounts in millions, except per share data, share count in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Basic Net Income Per Common Share: | |||||||||||||||||||||||
| Net income available to common shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||||||||
| Net income per common share, basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted Net Income Per Common Share: | |||||||||||||||||||||||
| Net income available to common shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||||||||
| Effect of dilutive outstanding equity-based awards | |||||||||||||||||||||||
| Weighted average diluted common shares | |||||||||||||||||||||||
| Net income per common share, diluted | $ | $ | $ | $ | |||||||||||||||||||
Anti-dilutive shares (1) | |||||||||||||||||||||||
Note 11 - Commitments and Contingencies
In the normal course of business, Pinnacle enters into commitments to extend credit such as loan commitments and letters of credit to meet the financing needs of its clients. Pinnacle uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Commitments to extend credit are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Pinnacle also has commitments to fund certain tax credits, CRA partnerships, and other investments.
The contractual amount of these financial instruments represents Pinnacle's maximum credit risk should the counterparty draw upon the commitment, and should the counterparty subsequently fail to perform according to the terms of the contract. Since many of the commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements. Additionally, certain commitments (primarily consumer) can generally be canceled by providing notice to the borrower.
The ACL associated with unfunded commitments and letters of credit is recorded within other liabilities on the consolidated balance sheets. At June 30, 2026 and December 31, 2025, the ACL for unfunded commitments was $73 million and $16 million, respectively. Additionally, an immaterial amount of unearned fees relating to letters of credit are recorded within other liabilities on the consolidated balance sheets.
38
Table of Contents
| (in millions) | June 30, 2026 | December 31, 2025 | |||||||||
| Letters of credit | $ | $ | |||||||||
| Commitments to fund commercial and industrial loans | |||||||||||
| Commitments to fund commercial real estate, construction, and land development loans | |||||||||||
| Commitments under home equity lines of credit | |||||||||||
| Unused credit card lines | |||||||||||
| Other loan commitments | |||||||||||
| Total letters of credit and unfunded lending commitments | $ | $ | |||||||||
Legal Proceedings
Pinnacle and its subsidiaries are subject to various legal proceedings, claims, and disputes that arise in the ordinary course of its business. Additionally, in the ordinary course of business, Pinnacle and its subsidiaries are subject to regulatory and governmental examinations, information gathering requests, inquiries, and investigations. Pinnacle, like many other financial institutions, has been the target of legal actions and other proceedings asserting claims for damages and related relief for losses. These actions include, but are not limited to, mortgage loan and other loan put-back claims, claims and counterclaims asserted by individual clients related to their accounts or relationships, allegations of violations of state and federal laws, and regulations relating to banking practices, including putative class action matters. In addition to actual damages, if Pinnacle does not prevail in such asserted legal actions, credit-related litigation could result in additional write-downs or charge-offs of assets, which could adversely affect Pinnacle's results of operations during the period in which the write-down or charge-off were to occur.
At least quarterly, Pinnacle carefully examines and considers each legal matter using then available information, and, in those situations where Pinnacle determines that a particular legal matter presents loss contingencies that are both probable and reasonably estimable, Pinnacle establishes an appropriate reserve. An event is considered to be probable if the future event is likely to occur. In the absence of a determination that a loss contingency is both probable and reasonably estimable, no accrual is made. Once established, accruals are adjusted to reflect developments related to these matters. While the final outcome of any legal proceeding is inherently uncertain, based on the information currently available, advice of counsel, and available insurance coverage, management believes that the amounts accrued with respect to legal matters as of June 30, 2026 are adequate.
In addition, where Pinnacle determines that there is a reasonable possibility of a loss in respect of legal matters, Pinnacle considers whether it is able to estimate the total reasonably possible loss or range of loss. Under GAAP, an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely,” and an event is “remote” if the “chance of the future event or events occurring is slight.” In many situations, Pinnacle may be unable to estimate reasonably possible losses due to the difficulty of predicting outcome of legal matters and the preliminary nature of the legal matters, as well as a variety of other factors and uncertainties. Those matters for which a meaningful estimate is not possible are not included within this estimated range and, therefore, this range does not represent our maximum loss exposure. For those legal matters where Pinnacle is able to estimate a range of reasonably possible losses, management currently estimates the aggregate range from our outstanding litigation is from zero to $30 million in excess of the amounts accrued, if any, related to those matters. This estimated aggregate range is based upon information currently available to Pinnacle, and the actual losses could prove to be lower or higher. As there are further developments in these legal matters, Pinnacle will reassess these matters, and the estimated range of reasonably possible losses may change as a result of this assessment. Based on Pinnacle's current knowledge and advice of counsel, management presently does not believe that the liabilities arising from these legal matters will have a material adverse effect on Pinnacle's consolidated financial condition, results of operations, or cash flows. However, in light of the significant uncertainties involved and the large or indeterminate damages sought in some of these matters, it is possible that the ultimate resolution of these legal matters could have a material adverse effect on Pinnacle's results of operations or financial condition for any particular period.
Any estimate or determination relating to the future resolution of litigation, regulatory or governmental examinations, information gathering requests, inquiries, investigations, or similar matters is inherently uncertain and involves significant judgment. This is particularly true in the early stages of a legal matter, when legal issues and facts have not been well articulated, reviewed, analyzed, and vetted through discovery, preparation for trial or hearings, substantive and productive mediation or settlement discussions, or other actions. It is also particularly true with respect to class action and similar claims involving multiple defendants, matters with complex procedural requirements or substantive issues or novel legal theories, and examinations, investigations, and other actions conducted or brought by regulatory and governmental agencies, in which the normal adjudicative process is not applicable. Accordingly, we usually are unable to determine whether a favorable or unfavorable outcome is remote, reasonably likely, or probable, or to estimate the amount or range of a probable or reasonably likely loss, until relatively late in the course of a legal matter, sometimes not until a number of years have elapsed. Accordingly,
39
Table of Contents
our judgments and estimates relating to claims will change from time to time in light of developments, and actual outcomes will differ from our estimates. These differences may be material.
Note 12 - Segment Reporting
Pinnacle's business segments are based on the products and services provided or the clients served and reflect the manner in which financial information is evaluated by the chief operating decision maker. Pinnacle's CODM is the Chief Executive Officer. The CODM primarily utilizes revenue and non-interest expense directly attributable to a respective segment as well as actual versus expected credit losses when assessing performance and allocating resources.
During the first quarter of 2026 in connection with the Merger, Pinnacle reorganized its management reporting structure into two major reportable business segments: Banking and Wealth. The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to GAAP. As a result, reported segment results are not necessarily comparable with similar information reported by other financial institutions.
The Banking operating segment includes both commercial and consumer banking services and insurance. Commercial banking services are provided to corporations and other business clients and include a wide array of lending and cash management products. Consumer banking services include direct lending and depository services. Insurance provides insurance brokerage services to individuals and businesses covering corporate and personal property and casualty products, as well as group health and life insurance products. Additionally, the Banking segment provides treasury management solutions and payment processing services.
The Wealth segment provides a broad array of planning and advisory services, brokerage services, investment management, and trust services to individual, corporate, and institutional clients. Personal and institutional trust services provide advisory, investment management and trustee services to institutions, affluent and high-net-worth individuals. Family office services provide integrated, customized wealth management for ultra-high-net-worth, multigenerational families and other fee-only services such as estate administration, trust tax planning and custody. Brokerage services includes businesses that operate under the Company’s charter, through a broker/dealer and as a registered investment advisor. It generates revenue through fee-only arrangements, net interest income and other fee-only services (retail brokerage, investment banking and financial advisory services) as well as Pinnacle Asset Management.
Functional activities such as treasury, technology, operations, marketing, finance, enterprise risk, legal, human resources, corporate communications, executive management, among others, are included in Treasury and Corporate Other. In addition, certain assets, liabilities, revenue, and expense not allocated or attributable to a particular business segment, such as Pinnacle's third-party consumer loans, loans held for sale, BHG, and consumer and small business card, as well as certain reconciling items in order to translate segment results that are based on management accounting practices into consolidated results are also included in Treasury and Corporate Other.
Pinnacle uses a centralized FTP methodology to attribute appropriate net interest income to its business segments. The intent of the FTP methodology is to transfer interest rate risk from the business segments by providing matched duration funding of assets and liabilities. The result is to centralize the financial impact, management, and reporting of interest rate risk in the Treasury and Corporate Other function, where it can be centrally monitored and managed. Treasury and Corporate Other charges (credits) an internal cost of funds for assets held in (or pays for funding provided by) each business segment. The process for determining FTP is based on a number of factors and assumptions, including prevailing market interest rates, the expected lives of various assets and liabilities, and the Company's broader funding profile.
Provision for (reversal of) credit losses is allocated to segments based on the balance of loans managed by the segments during the period. By comparison, the consolidated provision for (reversal of) credit losses is determined based on the ACL model using methodologies described in "Note 1 - Basis of Presentation and Accounting Policies" herein, with the difference between the consolidated provision for (reversal of) credit losses and the business segments' provision for (reversal of) credit losses reflected in Treasury and Corporate Other.
The following tables present certain financial information for each reportable business segment for the three and six months ended June 30, 2026 and 2025 and as of June 30, 2026 and December 31, 2025. The application and development of management reporting methodologies is a dynamic process and is subject to periodic enhancements. As these enhancements are
40
Table of Contents
made, financial results presented by each reportable business segment may be periodically revised. Loan and deposit transfers occur from time to time between reportable business segments primarily to maintain the migration of clients and relationship managers between segments; however, prior period loan and deposit balances and any related net interest income and FTP are not adjusted for transfers.
| Three Months Ended June 30, 2026 | |||||||||||||||||||||||||||||||||||
| (in millions) | Banking | Wealth | Treasury and Corporate Other | Pinnacle Consolidated | |||||||||||||||||||||||||||||||
| Net interest income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Provision for (reversal of) credit losses | |||||||||||||||||||||||||||||||||||
| Net interest income after provision for credit losses | |||||||||||||||||||||||||||||||||||
| Core banking fees | |||||||||||||||||||||||||||||||||||
| Wealth management revenue | |||||||||||||||||||||||||||||||||||
| Capital markets income | |||||||||||||||||||||||||||||||||||
| Total loan sales and servicing | |||||||||||||||||||||||||||||||||||
| Other non-interest revenue | |||||||||||||||||||||||||||||||||||
| Total non-interest revenue | |||||||||||||||||||||||||||||||||||
| Salaries and other personnel expense | |||||||||||||||||||||||||||||||||||
| Occupancy, equipment and software expense | |||||||||||||||||||||||||||||||||||
Other operating expense(1)(2) | |||||||||||||||||||||||||||||||||||
| Total non-interest expense | |||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||
| (in millions) | Banking | Wealth | Treasury and Corporate Other | Pinnacle Consolidated | |||||||||||||||||||||||||||||||
| Net interest income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Provision for (reversal of) credit losses | |||||||||||||||||||||||||||||||||||
| Net interest income after provision for credit losses | |||||||||||||||||||||||||||||||||||
| Core banking fees | |||||||||||||||||||||||||||||||||||
| Wealth management revenue | |||||||||||||||||||||||||||||||||||
| Capital markets income | |||||||||||||||||||||||||||||||||||
| Total loan sales and servicing | |||||||||||||||||||||||||||||||||||
| Other non-interest revenue | |||||||||||||||||||||||||||||||||||
| Total non-interest revenue | |||||||||||||||||||||||||||||||||||
| Salaries and other personnel expense | |||||||||||||||||||||||||||||||||||
| Occupancy, equipment and software expense | |||||||||||||||||||||||||||||||||||
Other operating expense(1) | |||||||||||||||||||||||||||||||||||
| Total non-interest expense | |||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
(1) Other operating expense for Banking and Wealth primarily includes software platform expense, professional fees, and FDIC insurance and other regulatory fees.
(2) Treasury and Corporate Other includes $48 million of the total merger-related expense of $51 million incurred during the period.
41
Table of Contents
| Six Months Ended June 30, 2026 | |||||||||||||||||||||||||||||||||||
| (in millions) | Banking | Wealth | Treasury and Corporate Other | Pinnacle Consolidated | |||||||||||||||||||||||||||||||
| Net interest income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Provision for (reversal of) credit losses | |||||||||||||||||||||||||||||||||||
| Net interest income after provision for credit losses | |||||||||||||||||||||||||||||||||||
| Core banking fees | |||||||||||||||||||||||||||||||||||
| Wealth management revenue | |||||||||||||||||||||||||||||||||||
| Capital markets income | |||||||||||||||||||||||||||||||||||
| Total loan sales and servicing | |||||||||||||||||||||||||||||||||||
| Other non-interest revenue | |||||||||||||||||||||||||||||||||||
| Total non-interest revenue | |||||||||||||||||||||||||||||||||||
| Salaries and other personnel expense | |||||||||||||||||||||||||||||||||||
| Occupancy, equipment and software expense | |||||||||||||||||||||||||||||||||||
Other operating expense(1)(2) | |||||||||||||||||||||||||||||||||||
| Total non-interest expense | |||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||||||
| (in millions) | Banking | Wealth | Treasury and Corporate Other | Pinnacle Consolidated | |||||||||||||||||||||||||||||||
| Net interest income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Provision for (reversal of) credit losses | |||||||||||||||||||||||||||||||||||
| Net interest income after provision for credit losses | |||||||||||||||||||||||||||||||||||
| Core banking fees | |||||||||||||||||||||||||||||||||||
| Wealth management revenue | |||||||||||||||||||||||||||||||||||
| Capital markets income | |||||||||||||||||||||||||||||||||||
| Total loan sales and servicing | |||||||||||||||||||||||||||||||||||
| Other non-interest revenue | |||||||||||||||||||||||||||||||||||
| Total non-interest revenue | |||||||||||||||||||||||||||||||||||
| Salaries and other personnel expense | |||||||||||||||||||||||||||||||||||
| Occupancy, equipment and software expense | |||||||||||||||||||||||||||||||||||
Other operating expense(1) | |||||||||||||||||||||||||||||||||||
| Total non-interest expense | |||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
(1) Other operating expense for Banking and Wealth primarily includes software platform expense, professional fees, and FDIC insurance and other regulatory fees.
(2) Treasury and Corporate Other includes $319 million of the total merger-related expense of $326 million incurred during the period.
42
Table of Contents
| June 30, 2026 | |||||||||||||||||||||||||||||||||||
| (dollars in millions) | Banking | Wealth | Treasury and Corporate Other | Pinnacle Consolidated | |||||||||||||||||||||||||||||||
| Loans, net of deferred fees and costs | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Deposits | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Full-time equivalent employees | |||||||||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| (dollars in millions) | Banking | Wealth | Treasury and Corporate Other | Pinnacle Consolidated | |||||||||||||||||||||||||||||||
| Loans, net of deferred fees and costs | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Deposits | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Full-time equivalent employees | |||||||||||||||||||||||||||||||||||
43
Table of Contents
ITEM 2. – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
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;
44
Table of Contents
(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
45
Table of Contents
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.
46
Table of Contents
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
47
Table of Contents
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.
48
Table of Contents
(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,
49
Table of Contents
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 | % | |||||||||||||||||||||
(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.
50
Table of Contents
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.
51
Table of Contents
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
52
Table of Contents
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
53
Table of Contents
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
54
Table of Contents
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.
55
Table of Contents
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 | |||||||||
56
Table of Contents
| 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.
57
Table of Contents
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
58
Table of Contents
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.
59
Table of Contents
| 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.
60
Table of Contents
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,
61
Table of Contents
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".
62
Table of Contents
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.
63
Table of Contents
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. | |||||||||||||||||||||||
64
Table of Contents
| 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. | |||||||||||||||||||||||
65
Table of Contents
| 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. | |||||||||||||||||||||||||||||
66
Table of Contents
| 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. | |||||||||||||||||||||||||||||
ITEM 3. – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information presented in the Market Risk Analysis section of the Management's Discussion and Analysis of Financial Condition and Results of Operations section of this Report is incorporated herein by reference.
ITEM 4. – CONTROLS AND PROCEDURES
On January 1, 2026, Pinnacle completed its previously announced merger with Synovus and commenced an evaluation of the design and operating effectiveness of internal controls over financial reporting related to the combined entities. The evaluation of changes to processes, technology systems, and other components of internal control over financial reporting related to the Merger is ongoing.
Except for the changes made in connection with the Merger, there were no other changes to Pinnacle's internal control over financial reporting during the quarter ended June 30, 2026, that materially affected, or would be reasonably likely to materially affect, Pinnacle's internal control over financial reporting.
In connection with the preparation of this Quarterly Report on Form 10-Q, an evaluation was carried out by Pinnacle's management, with the participation of Pinnacle's Chief Executive Officer and Chief Financial Officer, of the effectiveness of Pinnacle's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on that evaluation, Pinnacle's Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2026, Pinnacle's disclosure controls and procedures were effective.
67
Table of Contents
PART II. – OTHER INFORMATION
ITEM 1. – LEGAL PROCEEDINGS
See "Part I - Item 1. Financial Statements and Supplementary Data - Note 11 - Commitments and Contingencies" of this Report.
ITEM 1A. – RISK FACTORS
In addition to the other information set forth in this Report, in evaluating an investment in the Company's securities, investors should consider carefully, among other things, the risk factors previously disclosed in "Part I - Item IA - Risk Factors” of Pinnacle's Form 10-Q for the quarterly period ended March 31, 2026 which could materially affect the Company's business, financial position, results of operations, cash flows, or future results. Please be aware that these risks may change over time and other risks may prove to be important in the future. New risks may emerge at any time, and we cannot predict such risks or estimate the extent to which they may affect our business, financial condition or results of operations, or the trading price of our securities.
There are no material changes during the period covered by this Report to the risk factors previously disclosed in our Form 10-Q for the quarterly period ended March 31, 2026.
ITEM 2. – UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS
(a) None.
(b) None.
(c) Issuer Purchases of Equity Securities:
On January 1, 2026 the Board of Directors approved share repurchases of up to $400 million of common stock in 2026. During the six months ended June 30, 2026, Pinnacle did not repurchase shares of common stock.
ITEM 3. – DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. – MINE SAFETY DISCLOSURES
None.
ITEM 5. – OTHER INFORMATION
(a) None.
(b) None.
(c) During the second quarter, M. Terry Turner , non-executive Chair of the Board , adopted a written trading plan (the “Plan”) intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended. The Plan was adopted on May 7, 2026 and provides for the potential sale of 379,182 shares of Company common stock. The Plan is scheduled to terminate on May 7, 2027 , or earlier upon the sale of all shares covered by the Plan or upon the occurrence of certain other specified events. All transactions under the Plan will be executed by an independent broker-dealer. The Plan does not permit Mr. Turner to exercise any subsequent influence over the timing or amount of sales thereunder. No other director or executive officer of the Company adopted , terminated
68
Table of Contents
ITEM 6. – EXHIBITS
| Exhibit Number | Description | |||||||
| 3.1 | Amended and Restated Articles of Incorporation of Pinnacle Financial Partners, Inc., incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K12B filed on January 2, 2026. | |||||||
| 3.2 | Restated Bylaws of Pinnacle Financial Partners, Inc., incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K12B filed on January 2, 2026. | |||||||
| 3.3 | Amendment to Bylaws of Pinnacle Financial Partners, Inc., incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on July 31, 2026. | |||||||
| 4.1 | Senior Indenture, dated February 13, 2012, between Pinnacle Financial Partners, Inc., as successor to Synovus Financial Corp., and The Bank of New York Mellon Trust Company, N.A., incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on May 19, 2026. | |||||||
| 4.2 | Supplemental Indenture, dated as of January 1, 2026, to the Senior Indenture, among the Pinnacle Financial Partners, Inc., Synovus Financial Corp., and The Bank of New York Mellon Trust Company, N.A., incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on May 19, 2026. | |||||||
| 10.1 | Second Amendment to Letter Agreement by and among Robert A. McCabe, Jr., Pinnacle Financial Partners, Inc. and Pinnacle Bank dated as of July 29, 2026, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on July 31, 2026. | |||||||
| 10.2 | Pinnacle Financial Partners, Inc. 2026 Omnibus Plan (incorporated by reference to Annex B of the Company’s Proxy Statement on Schedule 14A, filed with the SEC on April 9, 2026).* | |||||||
| 10.3 | Form of Restricted Stock Unit Agreement for restricted stock awards with a three (3) year vesting period under the Pinnacle Financial Partners, Inc. 2026 Omnibus Plan.* | |||||||
| 10.4 | Form of Restricted Stock Unit Agreement for restricted stock awards with a five (5) year vesting period under the Pinnacle Financial Partners, Inc. 2026 Omnibus Plan.* | |||||||
| 10.5 | Form of Cash-Settled Restricted Stock Unit Agreement for cash-settled restricted stock awards under the Pinnacle Financial Partners, Inc. 2026 Omnibus Plan.* | |||||||
| 10.6 | Form of Retention Restricted Stock Unit Agreement for restricted stock awards under the Pinnacle Financial Partners, Inc. 2026 Omnibus Plan.* | |||||||
| 10.7 | Form of Director Restricted Stock Unit Agreement for restricted stock awards to directors under the Pinnacle Financial Partners, Inc. 2026 Omnibus Plan.* | |||||||
| 10.8 | Pinnacle Bank Change of Control Severance Plan for executive officers, effective as of May 1, 2026.* | |||||||
| 10.9 | Pinnacle Financial Partners, Inc. Corporate Bonus Plan, effective January 1, 2026.* | |||||||
| 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101 | Interactive Data File | |||||||
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). | |||||||
*: Indicates management contracts and compensatory plans and arrangements.
69
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| PINNACLE FINANCIAL PARTNERS, INC. | |||||||||||
| August 4, 2026 | By: | /s/ Andrew Jamieson Gregory, Jr. | |||||||||
| Date | Andrew Jamieson Gregory, Jr. | ||||||||||
| Chief Financial Officer | |||||||||||
| (Duly Authorized Officer and Principal Financial Officer) | |||||||||||
70