EX-99.1 2 a3q21pnfpearningsrelease.htm EX-99.1 Document

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FOR IMMEDIATE RELEASE
MEDIA CONTACT:Joe Bass, 615-743-8219
FINANCIAL CONTACT:Harold Carpenter, 615-744-3742
WEBSITE: www.pnfp.com

PNFP REPORTS DILUTED EPS OF $1.75, ROAA OF 1.47% AND ROTCE OF 16.98% FOR 3Q2021
Linked quarter loan growth of 2.8% annualized, excluding impact of PPP, loan growth was 15.3% annualized

NASHVILLE, TN, Oct. 12, 2021 - Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $1.75 for the quarter ended Sept. 30, 2021, compared to net income per diluted common share of $1.42 for the quarter ended Sept. 30, 2020, an increase of approximately 23.2 percent. Excluding ORE expense for the three months ended Sept. 30, 2021 and 2020 and gains and losses on the sale of investment securities and FHLB restructuring charges for the three months ended Sept. 30, 2020, net income per diluted common share was $1.75 for the three months ended Sept. 30, 2021, compared to $1.45 for the three months ended Sept. 30, 2020, a year-over-year increase of 20.7 percent.
Net income per diluted common share was $5.05 for the nine months ended Sept. 30, 2021, compared to net income per diluted common share of $2.62 for the nine months ended Sept. 30, 2020, an increase of nearly 93 percent. Excluding gains and losses on the sale of investment securities and other real estate (ORE) expense for the nine months ended Sept. 30, 2021 and 2020 and FHLB restructuring charges for the nine months ended Sept. 30, 2020, net income per diluted common share was $5.04 in 2021, compared to $2.72 in 2020, a year-over-year increase of 85.3 percent.
"Despite the ongoing uncertain economic climate, we continue to experience strong organic growth," said M. Terry Turner, Pinnacle's president and chief executive officer. "Our business model continued to serve us well during the third quarter. Aggregate loans grew at an annualized rate of 2.8 percent for the quarter, after excluding the impact of PPP forgiveness and paydowns of $664.2 million, other loans increased at an annualized rate of 15.3 percent. We continue to see increased lending opportunities as a result of our now two-decade long focus on hiring the best bankers in our markets.
"We successfully recruited 32 new revenue producers to our firm during the third quarter, and our ongoing recruiting pipelines are as strong as I can remember," Turner said. "We also remain very excited about our new markets, which include Atlanta, Huntsville and Birmingham, as well as our recent hires in the equipment finance and franchise lending segments. We believe our 2021 end-of-year loan balances should exceed 2020 end-of-year balances by 2 to 5 percent, or by 9 to 12 percent excluding PPP loans. Our current belief is that our 2022 loan growth, with our new markets and the strength of our hiring over the last few years, should produce low-double digit growth assuming an economic environment similar to the one we operate in presently."

BALANCE SHEET GROWTH:
•Loans at Sept. 30, 2021 were $23.1 billion, an increase of approximately $581.1 million from Sept. 30, 2020, reflecting year-over-year growth of 2.6 percent. Loans at Sept. 30, 2021 increased approximately $160.5 million from June 30, 2021 reflecting linked-quarter annualized growth of 2.8 percent.
◦Loans at Sept. 30, 2021 include approximately $708.7 million of loans issued pursuant to the Small Business Administration’s (SBA’s) Paycheck Protection Program (PPP), compared to $2.3 billion at Sept. 30, 2020
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and $1.4 billion at June 30, 2021. The average yield on these loans was 8.54 percent for the third quarter of 2021, inclusive of $18.5 million of loan fee accretion recognized during the quarter. At Sept. 30, 2021, $29.2 million in SBA PPP loan fees remained, which should be accreted into net interest income over the next nine months as these loans are repaid and/or are forgiven under the PPP.
▪PPP loans decreased by $664.2 million between June 30, 2021 and Sept. 30, 2021.
▪Excluding PPP loans, total loans increased by $824.7 million during the same period, or 15.3 percent on an annualized basis.
◦Average loans were $23.0 billion for the three months ended Sept. 30, 2021, down $193.0 million from the three months ended June 30, 2021, a linked-quarter annualized reduction of 3.3 percent.
▪Excluding the impact of $983.5 million of average PPP loans outstanding during the three months ended Sept. 30, 2021 and $1.9 billion during the three months ended June 30, 2021, average loans were $22.0 billion for the three months ended Sept. 30, 2021, up $752.9 million from $21.3 billion for the three months ended June 30, 2021, a linked-quarter annualized growth rate of 14.2 percent.
◦At Sept. 30, 2021, the remaining discount associated with fair value accounting adjustments on acquired loans was $17.6 million, compared to $20.6 million at June 30, 2021.
•Deposits at Sept. 30, 2021 were $29.4 billion, an increase of $2.8 billion from Sept. 30, 2020, reflecting year-over-year growth of 10.6 percent. Deposits at Sept. 30, 2021 increased $1.2 billion from June 30, 2021, reflecting a linked-quarter annualized growth rate of 16.3 percent.
◦Average deposits were $28.7 billion for the three months ended Sept. 30, 2021, compared to $28.0 billion for the three months ended June 30, 2021, a linked-quarter annualized growth rate of 10.4 percent.
◦Core deposits were $27.2 billion at Sept. 30, 2021, compared to $22.0 billion at Sept. 30, 2020 and $25.9 billion at June 30, 2021. The linked-quarter annualized growth rate of core deposits in the third quarter of 2021 was 20.3 percent.

"During the third quarter, core deposits increased by 23.5 percent over our balances this time last year," Turner said. "We are very pleased that approximately 53 percent of the increase in core deposit balances is attributable to increases in noninterest bearing deposits. Our research indicates these increases come from many different sources, including PPP and quantitative easing as well as our depositors continuing to grow their deposit balances due to the ongoing uncertainties that exist in the economy. Approximately 15 percent of our average deposit growth this year is from new accounts."

REVENUES:
•Revenues for the quarter ended Sept. 30, 2021 were $341.6 million, an increase of $10.2 million from the $331.4 million recognized in the second quarter of 2021, a linked-quarter annualized growth rate of 12.3 percent. Revenues were up $44.0 million from the third quarter of 2020, a year-over-year growth rate of 14.8 percent.
◦Revenue per fully diluted common share was at an all-time record of $4.50 for the three months ended Sept. 30, 2021, compared to $4.37 for the second quarter of 2021 and $3.95 for the third quarter of 2020, a 13.9 percent year-over-year growth rate.
•Net interest income for the quarter ended Sept. 30, 2021 was $237.5 million, compared to $233.2 million for the second quarter of 2021 and $206.6 million for the third quarter of 2020, a year-over-year growth rate of 15.0 percent. Net interest margin was 3.03 percent for the third quarter of 2021, compared to 3.08 percent for the second quarter of 2021 and 2.82 percent for the third quarter of 2020.
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◦Impacting the firm’s net interest margin in the second and third quarters of 2021 and the third quarter of 2020 were both the PPP loans and the firm’s decision early in the pandemic to maintain additional on-balance sheet liquidity. The firm estimates its second and third quarter 2021 net interest margin was negatively impacted by approximately 17 basis points as a result of PPP loans and additional liquidity, compared to approximately 40 basis points for the third quarter 2020.
◦Included in net interest income for the third quarter of 2021 was $2.8 million of discount accretion associated with fair value adjustments, compared to $3.3 million of discount accretion recognized in the second quarter of 2021 and $5.6 million in the third quarter of 2020. The firm's net interest margin was positively impacted by approximately 4 basis points, 3 basis points and 9 basis points, respectively, because of fair value adjustment discount accretion in each of the second and third quarters of 2021 and the third quarter of 2020. There remains $10.8 million of purchase accounting discount accretion as of Sept. 30, 2021.
•Noninterest income for the quarter ended Sept. 30, 2021 was $104.1 million, compared to $98.2 million for the quarter ended June 30, 2021, a linked-quarter annualized increase of 24.0 percent. Compared to $91.1 million for the third quarter of 2020, noninterest income grew 14.3 percent year-over-year.
◦Service charges on deposit accounts were $11.4 million for the third quarter of 2021, compared to $8.9 million for the second quarter of 2021, a linked-quarter annualized increase of more than 100 percent primarily the result of vendor incentives received in the third quarter of 2021. Compared to $9.9 million for the third quarter of 2020, service charges on deposit accounts were up 16.0 percent.
◦Wealth management revenues, which include investment, trust and insurance services, were $17.3 million for the third quarter of 2021, compared to $16.5 million for the second quarter of 2021, a linked-quarter annualized increase of 19.2 percent. Compared to $13.0 million for the third quarter of 2020, wealth management revenues were up 32.7 percent.
◦Income from the firm's investment in BHG was $30.4 million for the quarter ended Sept. 30, 2021, down from $32.1 million for the quarter ended June 30, 2021 and up from $26.4 million for the quarter ended Sept. 30, 2020.
◦Net gains on mortgage loans sold were $7.8 million during the quarter ended Sept. 30, 2021, up from $6.7 million for the quarter ended June 30, 2021. Net gains on mortgage loans sold were down 59.8 percent from $19.5 million during the quarter ended Sept. 30, 2020. The dramatic year-over-year decline continues to be reflective of the unusual market conditions that existed in 2020.
◦Other noninterest income was $37.2 million for the quarter ended Sept. 30, 2021, compared to $33.7 million for the quarter ended June 30, 2021 and $21.7 million for the quarter ended Sept. 30, 2020, a linked-quarter annualized increase of 41.4 percent and year-over-year growth of 71.7 percent. Contributing to this growth were $8.6 million in income on other equity investments during the three months ended Sept. 30, 2021 compared to income of $7.0 million for the three months ended June 30, 2021 and $460,000 during the three months ended Sept. 30, 2020. Additionally, income from SBA loan sales increased by $2.3 million over the same quarter last year.
•Pre-tax, pre-provision net revenues (PPNR) for the quarter ended Sept. 30, 2021 were $172.8 million, an increase of $7.5 million from the $165.3 million recognized in the second quarter of 2021, a linked-quarter annualized growth rate of 18.1 percent. PPNR was up $19.0 million from the third quarter of 2020, a year-over-year growth rate of 12.3 percent.
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◦Excluding gains and losses on the sale of investment securities and ORE expense for the three months ended Sept. 30, 2021 and 2020 and FHLB restructuring charges for the three months ended Sept. 30, 2020, PPNR was $172.7 million, an increase of $8.4 million from the $164.3 million recognized in the second quarter of 2021, a linked-quarter annualized growth rate of 20.5 percent. PPNR, as adjusted, was up $15.8 million from the third quarter of 2020, a year-over-year growth rate of 10.0 percent.

"Several factors contributed to the linked-quarter decline in our net interest margin, which was attributable to the increase in on-balance sheet liquidity driven primarily by forgiveness and paydowns of PPP loans during the quarter," Pinnacle's Chief Financial Officer Harold Carpenter said. "Overall loan yields were up slightly at 4.13 percent in the third quarter. Excluding the impact of PPP loan yields, which had an average yield of 8.54 percent, loan yields decreased by 5 basis points in the third quarter of 2021, which offset a 3 basis point decrease in deposit rates.
"Third quarter was a record-breaking fee quarter for our firm. BHG continues to perform and, we believe, create significant franchise value. Mortgage rebounded in the third quarter as our gain on sale revenues increased by 16 percent from the second quarter. Wealth management had another strong quarter primarily due to broader market appreciation as well as the addition of 10 new wealth management advisors since Sept. 30, 2020. Additionally, excluding our investment in BHG, other equity investments had another big quarter, with these investments contributing $8.6 million to third quarter revenues. That was $1.6 million more than the amount recorded in the second quarter, as several of our venture fund investments experienced increased valuations in their underlying portfolios. Collectively, these investments have contributed $19.0 million more in fee income for the first nine months of 2021 compared to the same period last year."

PROFITABILITY:
•Return on average assets was 1.47 percent for the third quarter of 2021, compared to 1.46 percent for the second quarter of 2021 and 1.26 percent for the third quarter of 2020. Third quarter 2021 return on average tangible assets amounted to 1.55 percent, compared to 1.55 percent for the second quarter of 2021 and 1.33 percent for the third quarter of 2020.
◦Excluding the adjustments described above for the three months ended Sept. 30, 2021, June 30, 2021 and Sept. 30, 2020, return on average assets was 1.47 percent for the third quarter of 2021, compared to 1.46 percent for the second quarter of 2021 and 1.28 percent for the third quarter of 2020. Likewise, excluding those same adjustments, the firm’s return on average tangible assets was 1.55 percent for the third quarter of 2021, compared to 1.54 percent for the second quarter of 2021 and 1.36 percent for the third quarter of 2020.
•Return on average equity for the third quarter of 2021 amounted to 10.18 percent, compared to 10.19 percent for the second quarter of 2021 and 8.92 percent for the third quarter of 2020. Excluding preferred stockholders' equity for each of the three months ended Sept. 30, 2021, June 30, 2021 and Sept. 30, 2020, respectively, return on average common equity for the third quarter of 2021 amounted to 10.62 percent, compared to 10.65 percent for the second quarter of 2021 and 9.35 percent for the third quarter of 2020. Third quarter 2021 return on average tangible common equity amounted to 16.98 percent, compared to 17.32 percent for the second quarter of 2021 and 15.85 percent for the third quarter of 2020.
◦Excluding the adjustments described above for the three months ended Sept. 30, 2021, June 30, 2021 and June 30, 2020, return on average tangible common equity amounted to 16.97 percent for the third quarter of 2021, compared to 17.22 percent for the second quarter of 2021 and 16.19 percent for the third quarter of 2020.
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•Book value per share was $65.36 at Sept. 30, 2021, compared to $61.80 at the end of 2020, an annualized growth rate of 7.7 percent thus far this year. Since Dec. 31, 2016, book value per share has grown at a compound annual growth rate of 15.2 percent.
◦Tangible book value per share was $40.98 at Sept. 30, 2021, compared to $37.25 at the end of 2020, an annualized growth rate of 13.4 percent thus far this year. Since Dec. 31, 2016, tangible book value per share has grown at a compound annual growth rate of 15.4 percent.

"Maintaining our profitability at high levels and growing tangible book value predictably and consistently remain significant priorities for our firm," Carpenter said. "We continue to look for ways to leverage our excess liquidity into higher earning assets. We are exploring several options that provide a reasonable return while not resulting in excess risk to tangible book value growth."

MAINTAINING A STRONG BALANCE SHEET:
•Net charge-offs were $9.3 million for the quarter ended Sept. 30, 2021, compared to $10.0 million for the quarter ended June 30, 2021 and $13.1 million for the quarter ended Sept. 30, 2020. Annualized net charge-offs as a percentage of average loans for the quarter ended Sept. 30, 2021 were 0.16 percent, compared to 0.17 percent for the quarter ended June 30, 2021 and 0.23 percent for the quarter ended Sept. 30, 2020.
•Nonperforming assets were 0.24 percent of total loans and ORE at Sept. 30, 2021, compared to 0.27 percent at June 30, 2021 and 0.40 percent at Sept. 30, 2020. Nonperforming assets were $55.1 million at Sept. 30, 2021, compared to $62.7 million at June 30, 2021 and $90.8 million at Sept. 30, 2020.
•The classified asset ratio at Sept. 30, 2021 was 5.6 percent, compared to 6.8 percent at June 30, 2021 and 9.9 percent at Sept. 30, 2020. Classified assets were $196.3 million at Sept. 30, 2021, compared to $233.8 million at June 30, 2021 and $307.8 million at Sept. 30, 2020.
•The allowance for credit losses represented 1.17 percent of total loans at Sept. 30, 2021, compared to 1.20 percent at June 30, 2021 and 1.28 percent at Sept. 30, 2020. Excluding PPP loans, the allowance for credit losses as a percentage of total loans was 1.20 percent at Sept. 30, 2021 compared to 1.27 percent at June 30, 2021 and 1.43 percent at Sept. 30, 2020.
◦The ratio of the allowance for credit losses to nonperforming loans at Sept. 30, 2021 was 575.3 percent, compared to 515.5 percent at June 30, 2021 and 404.3 percent at Sept. 30, 2020.
◦Provision for credit losses was $3.4 million in the third quarter of 2021, compared to $2.8 million in the second quarter of 2021 and was $16.8 million in the third quarter of 2020.

"We continue to be very pleased with our credit performance which we believe is the result of the hard work of our relationship managers and credit officers," Carpenter said. "The big three soundness measurements of net charge-offs, nonperformers and classified assets are all down from the previous quarter. Our allowance for credit losses as a percentage of total loans decreased to 1.17 percent at Sept. 30, 2021, which was slightly less than the same ratio at June 30, 2021. We believe the reduction in this ratio will continue for the next several quarters and, hopefully, with continued steady improvement in the economy, through next year."



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OPERATING LEVERAGE AND OTHER HIGHLIGHTS:
•The firm's efficiency ratio for the third quarter of 2021 was 49.4 percent, compared to 50.1 percent for the second quarter of 2021 and 48.3 percent in the third quarter of 2020. The ratio of noninterest expenses to average assets was 1.87 percent for the third quarter of 2021, compared to 1.90 percent in the second quarter of 2021 and 1.69 percent in the third quarter of 2020.
◦Excluding the adjustments described above for the three months ended Sept. 30, 2021, June 30, 2021 and Sept. 30, 2020, the efficiency ratio was 49.5 percent for the third quarter of 2021, compared to 50.4 percent for the second quarter of 2021 and 47.2 percent for the third quarter of 2020. Excluding ORE expense for 2021 and 2020 and FHLB restructuring charges for 2020, the ratio of noninterest expense to average assets was 1.87 percent for the third quarter of 2021, compared to 1.91 percent for the second quarter of 2021 and 1.65 percent for the third quarter of 2020.
•Noninterest expense for the quarter ended Sept. 30, 2021 was $168.9 million, compared to $166.1 million in the second quarter of 2021 and $143.9 million in the third quarter of 2020, reflecting a year-over-year increase of 17.4 percent. Excluding ORE expense for 2021 and 2020, and FHLB restructuring charges for 2020, noninterest expense for the third quarter of 2021 increased 20.6 percent over the third quarter of 2020 and 1.3 percent over the second quarter of 2021.
◦Salaries and employee benefits were $112.4 million in the third quarter of 2021, compared to $110.8 million in the second quarter of 2021 and $90.1 million in the third quarter of 2020, reflecting a year-over-year increase of 24.8 percent.
▪Incentive costs related to the firm’s annual cash incentive plan amounted to approximately $23.4 million in the third quarter of 2021, compared to $25.5 million in the second quarter of 2021 and $15.2 million in the third quarter of 2020.
▪Incentive costs related to the Company’s equity compensation plans amounted to approximately $6.8 million in the third quarter of 2021 compared to $5.7 million in second quarter of 2021 and $4.4 million in the third quarter of 2020.
◦Noninterest expense categories, other than salaries and employee benefits, were $56.4 million in the third quarter of 2021, compared to $55.3 million in the second quarter of 2021 and $53.7 million in the third quarter of 2020, reflecting a year-over-year increase of 5.0 percent.
•The effective tax rate for the third quarter of 2021 was 19.4 percent, compared to 18.9 percent for the second quarter of 2021 and 19.3 percent for the third quarter of 2020.

"As anticipated, expenses were essentially flat when compared to the second quarter of 2021," Carpenter said. "We continue to accrue our annual cash incentives at the maximum award level and increased our equity incentive accruals to an estimated above-target award. We believe total expenses for the fourth quarter of 2021 should be flat to down from the amounts reported in the second and third quarters of 2021. Looking to 2022, we believe our expense growth should range between 8 to 11 percent in comparison to 2021."

BOARD OF DIRECTORS DECLARES DIVIDENDS
On Oct. 12, 2021, Pinnacle Financial's Board of Directors approved a quarterly cash dividend of $0.18 per common share to be paid on Nov. 26, 2021 to common shareholders of record as of the close of business on Nov. 5, 2021. Additionally, the Board
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of Directors approved a quarterly dividend of approximately $3.8 million, or $16.88 per share (or $0.422 per depositary share), on Pinnacle Financial's 6.75 percent Series B Non-Cumulative Perpetual Preferred Stock payable on Dec. 1, 2021 to shareholders of record at the close of business on Nov. 16, 2021. The amount and timing of any future dividend payments to both preferred and common shareholders will be subject to the approval of Pinnacle's Board of Directors.

WEBCAST AND CONFERENCE CALL INFORMATION
Pinnacle will host a webcast and conference call at 8:30 a.m. CT on Oct. 13, 2021, to discuss third quarter 2021 results and other matters. To access the call for audio only, please call 1-877-602-7944. For the presentation and streaming audio, please access the webcast on the investor relations page of Pinnacle's website at www.pnfp.com.
For those unable to participate in the webcast, it will be archived on the investor relations page of Pinnacle's website at www.pnfp.com for 90 days following the presentation.
Pinnacle Financial Partners provides a full range of banking, investment, trust, mortgage and insurance products and services designed for businesses and their owners and individuals interested in a comprehensive relationship with their financial institution. The firm is the No. 1 bank in the Nashville-Murfreesboro-Franklin MSA, according to 2021 deposit data from the FDIC. Pinnacle earned a spot on the 2021 list of 100 Best Companies to Work For® in the U.S., its fifth consecutive appearance. American Banker recognized Pinnacle as one of America’s Best Banks to Work For eight years in a row and No. 1 among banks with more than $10 billion in assets in 2020.
Pinnacle owns a 49 percent interest in Bankers Healthcare Group (BHG), which provides innovative, hassle-free financial solutions to healthcare practitioners and other licensed professionals. Great Place to Work and FORTUNE ranked BHG No. 1 on its 2020 list of Best Workplaces in New York State in the small/medium business category.
The firm began operations in a single location in downtown Nashville, TN in October 2000 and has since grown to approximately $36.5 billion in assets as of Sept. 30, 2021. As the second-largest bank holding company headquartered in Tennessee, Pinnacle operates in 14 primarily urban markets across the Southeast.
Additional information concerning Pinnacle, which is included in the Nasdaq Financial-100 Index, can be accessed at www.pnfp.com.
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Forward-Looking Statements
All statements, other than statements of historical fact, included in this press release, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "expect," "anticipate," "intend," "may," "should," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: (i) deterioration in the financial condition of borrowers of Pinnacle Bank and its subsidiaries or BHG resulting in significant increases in loan losses and provisions for those losses and, in the case of BHG, substitutions; (ii) the effects of new outbreaks of COVID-19, including actions taken by governmental officials to curb the spread of the virus, and the resulting impact on general economic and financial market conditions and on Pinnacle Financial's and its customers' business, results of operations, asset quality and financial condition; (iii) further public acceptance of the vaccines that were developed against the virus as well as the decisions of governmental agencies with respect to vaccines including recommendations related to booster shots and requirements that seek to mandate that individuals receive or employers require that their employees receive the vaccine; (iv) those vaccines' efficacy against the virus, including new variants; (v) the inability of Pinnacle Financial, or entities in which it has significant investments, like BHG, to maintain the long-term historical growth rate of its, or such entities', loan portfolio; (vi) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (vii) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower-quality assets; (viii) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on Pinnacle Financial’s results, including as a result of compression to net interest margin; (ix) adverse conditions in the national or local economies including in Pinnacle Financial's markets throughout Tennessee, North Carolina, South Carolina, Georgia, Alabama and Virginia, particularly in commercial and residential real estate markets; (x) fluctuations or differences in interest rates on loans or deposits from those that Pinnacle Financial is modeling or anticipating, including as a result of Pinnacle Bank's inability to better match deposit rates with the changes in the short-term rate environment, or that affect the yield curve; (xi) the results of regulatory examinations; (xii) Pinnacle Financial's ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions; (xiii) difficulties and delays in integrating acquired businesses or fully realizing costs savings and other benefits from acquisitions; (xiv) BHG's ability to profitably grow its business and successfully execute on its business plans; (xv) risks of expansion into new geographic or product markets; (xvi) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits, including during times when Pinnacle Bank is seeking to lower rates it pays on deposits; (xvii) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including goodwill or other intangible assets; (xviii) the ineffectiveness of Pinnacle Bank's hedging strategies, or the unexpected counterparty failure or hedge failure of the underlying hedges; (xix) reduced ability to attract additional financial advisors (or failure of such advisors to cause their clients to switch to Pinnacle Bank), to retain financial advisors (including as a result of the competitive environment for associates) or otherwise to attract customers from other financial institutions; (xx) deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xxi) inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies, required capital maintenance levels or regulatory requests or directives, particularly if Pinnacle Bank's level of applicable commercial real estate loans were to exceed percentage levels of total capital in guidelines recommended by its regulators; (xxii) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xxiii) the vulnerability of Pinnacle Bank's network and online banking portals, and the systems of parties with whom Pinnacle Bank contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (xxiv) the possibility of increased compliance and operational costs as a result of increased regulatory oversight (including by the Consumer Financial Protection Bureau), including oversight of companies in which Pinnacle Financial or Pinnacle Bank have significant investments, like BHG, and the development of additional banking products for Pinnacle Bank's corporate and consumer clients; (xxv) the risks associated with Pinnacle Financial and Pinnacle Bank being a minority investor in BHG, including the risk that the owners of a majority of the equity interests in BHG decide to sell the company or all or a portion of their ownership interests in BHG (triggering a similar sale by Pinnacle Financial and Pinnacle Bank) if not prohibited from doing so by Pinnacle Financial or Pinnacle Bank; (xxvi) the possibility of increased personal or corporate tax rates and the resulting reduction in our and our customers' businesses as a result of any such increases; (xxvii) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (xxviii) the availability of and access to capital; (xxix) adverse results (including costs, fines, reputational harm, inability to obtain necessary approvals and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of Pinnacle Bank's participation in and execution of government programs related to the COVID-19 pandemic; and (xxx) general competitive, economic, political and market conditions. Additional factors which could affect the forward looking statements can be found in Pinnacle Financial's Annual Report on Form 10-K for the year ended December 31, 2020, and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC and available on the SEC's website at http://www.sec.gov. Pinnacle
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Financial disclaims any obligation to update or revise any forward-looking statements contained in this press release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Matters
This release contains certain non-GAAP financial measures, including, without limitation, earnings per diluted common share, PPNR, efficiency ratio and the ratio of noninterest expense to average assets, excluding in certain instances the impact of expenses related to other real estate owned, gains or losses on sale of investment securities, FHLB restructuring charges, hedge termination charges and other matters for the accounting periods presented. This release also includes non-GAAP financial measures which exclude the impact of loans originated under the PPP. This release may also contain certain other non-GAAP capital ratios and performance measures that exclude the impact of goodwill and core deposit intangibles associated with Pinnacle Financial's acquisitions of BNC, Avenue Bank, Magna Bank, CapitalMark Bank & Trust, Mid-America Bancshares, Inc., Cavalry Bancorp, Inc. and other acquisitions which collectively are less material to the non-GAAP measure as well as the impact of Pinnacle Financial's Series B Preferred Stock. The presentation of the non-GAAP financial information is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Because non-GAAP financial measures presented in this release are not measurements determined in accordance with GAAP and are susceptible to varying calculations, these non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures presented by other companies.

Pinnacle Financial believes that these non-GAAP financial measures facilitate making period-to-period comparisons and are meaningful indications of its operating performance. In addition, because intangible assets such as goodwill and the core deposit intangible, and the other items excluded each vary extensively from company to company, Pinnacle Financial believes that the presentation of this information allows investors to more easily compare Pinnacle Financial's results to the results of other companies. Pinnacle Financial's management utilizes this non-GAAP financial information to compare Pinnacle Financial's operating performance for 2021 versus certain periods in 2020 and to internally prepared projections.

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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS – UNAUDITED
 (dollars in thousands, except for share and per share data)September 30, 2021December 31, 2020September 30, 2020
ASSETS
Cash and noninterest-bearing due from banks$155,965 $203,296 $179,231 
Restricted cash104,157 223,788 247,761 
Interest-bearing due from banks3,206,383 3,522,224 2,604,646 
Federal funds sold and other— 12,141 11,687 
Cash and cash equivalents3,466,505 3,961,449 3,043,325 
Securities purchased with agreement to resell500,000 — — 
Securities available-for-sale, at fair value4,634,653 3,586,681 3,463,422 
Securities held-to-maturity (fair value of $1.0 billion, $1.1 billion and $1.1 billion, net of allowance for credit losses of $161,000, $191,000 and $191,000 at Sept. 30, 2021, Dec. 31, 2020 and Sept. 30, 2020, respectively)989,237 1,028,359 1,039,650 
Consumer loans held-for-sale55,273 87,821 82,748 
Commercial loans held-for-sale49,121 31,200 12,290 
Loans23,058,461 22,424,501 22,477,409 
Less allowance for credit losses(268,635)(285,050)(288,645)
Loans, net22,789,826 22,139,451 22,188,764 
Premises and equipment, net288,833 290,001 287,711 
Equity method investment333,764 308,556 289,301 
Accrued interest receivable89,137 104,078 101,762 
Goodwill1,819,811 1,819,811 1,819,811 
Core deposits and other intangible assets35,876 42,336 44,713 
Other real estate owned8,415 12,360 19,445 
Other assets1,463,485 1,520,757 1,431,989 
Total assets$36,523,936 $34,932,860 $33,824,931 
LIABILITIES AND STOCKHOLDERS' EQUITY 
Deposits: 
Noninterest-bearing$9,809,691 $7,392,325 $7,050,670 
Interest-bearing5,767,286 5,689,095 4,995,769 
Savings and money market accounts11,381,033 11,099,523 10,513,645 
Time2,411,797 3,524,632 3,983,872 
Total deposits29,369,807 27,705,575 26,543,956 
Securities sold under agreements to repurchase148,240 128,164 127,059 
Federal Home Loan Bank advances888,493 1,087,927 1,287,738 
Subordinated debt and other borrowings542,712 670,575 670,273 
Accrued interest payable11,838 24,934 26,101 
Other liabilities371,048 411,074 382,496 
Total liabilities31,332,138 30,028,249 29,037,623 
Preferred stock, no par value, 10.0 million shares authorized; 225,000 shares non-cumulative perpetual preferred stock, Series B, liquidation preference $225.0 million, issued and outstanding at Sept. 30, 2021, Dec. 31, 2020 and Sept. 30, 2020, respectively217,126 217,126 217,126 
Common stock, par value $1.00; 180.0 million shares authorized; 76.1 million, 75.9 million and 75.8 million shares issued and outstanding at Sept. 30, 2021, Dec. 31, 2020 and Sept. 30, 2020, respectively76,115 75,850 75,835 
Additional paid-in capital3,038,800 3,028,063 3,023,430 
Retained earnings1,748,491 1,407,723 1,312,929 
Accumulated other comprehensive income, net of taxes111,266 175,849 157,988 
Total stockholders' equity5,191,798 4,904,611 4,787,308 
Total liabilities and stockholders' equity$36,523,936 $34,932,860 $33,824,931 
This information is preliminary and based on company data available at the time of the presentation.
10

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED
(dollars in thousands, except for share and per share data)Three months endedNine months ended
 September 30, 2021June 30, 2021September 30, 2020September 30, 2021September 30, 2020
Interest income:
Loans, including fees$233,857 $232,788 $224,482 $694,017 $687,183 
Securities
Taxable8,986 8,359 8,276 25,073 28,133 
Tax-exempt15,873 16,546 15,001 47,917 43,421 
Federal funds sold and other2,152 1,543 1,429 5,014 5,258 
Total interest income260,868 259,236 249,188 772,021 763,995 
Interest expense:
Deposits12,139 13,861 28,401 43,468 112,826 
Securities sold under agreements to repurchase57 56 77 185 286 
FHLB advances and other borrowings11,129 12,094 14,116 34,730 50,080 
Total interest expense23,325 26,011 42,594 78,383 163,192 
Net interest income237,543 233,225 206,594 693,638 600,803 
Provision for credit losses3,382 2,834 16,758 13,451 194,635 
Net interest income after provision for credit losses234,161 230,391 189,836 680,187 406,168 
Noninterest income:
Service charges on deposit accounts11,435 8,906 9,854 28,648 25,796 
Investment services9,648 8,997 6,734 26,836 21,944 
Insurance sales commissions2,557 2,406 2,284 8,188 7,755 
Gains on mortgage loans sold, net7,814 6,700 19,453 28,180 47,655 
Investment gains on sales, net— 366 651 366 986 
Trust fees5,049 5,062 3,986 14,798 12,114 
Income from equity method investment30,409 32,071 26,445 91,430 59,245 
Other noninterest income37,183 33,699 21,658 96,565 58,901 
Total noninterest income104,095 98,207 91,065 295,011 234,396 
Noninterest expense:
Salaries and employee benefits112,406 110,824 90,103 325,958 244,470 
Equipment and occupancy23,712 23,321 21,622 70,253 64,626 
Other real estate, net(79)(657)1,795 (749)7,098 
Marketing and other business development3,325 2,652 2,321 8,326 7,714 
Postage and supplies2,083 2,115 1,761 6,004 5,821 
Amortization of intangibles2,088 2,167 2,417 6,461 7,416 
Other noninterest expense25,316 25,718 23,833 73,434 66,005 
Total noninterest expense168,851 166,140 143,852 489,687 403,150 
Income before income taxes169,405 162,458 137,049 485,511 237,414 
Income tax expense 32,828 30,668 26,404 91,716 35,969 
Net income136,577 131,790 110,645 393,795 201,445 
Preferred stock dividends(3,798)(3,798)(3,798)(11,394)(3,798)
Net income available to common shareholders$132,779 $127,992 $106,847 $382,401 $197,647 
Per share information:
Basic net income per common share$1.76 $1.70 $1.42 $5.07 $2.62 
Diluted net income per common share$1.75 $1.69 $1.42 $5.05 $2.62 
Weighted average common shares outstanding:
Basic75,494,286 75,481,198 75,240,664 75,449,900 75,417,663 
Diluted75,836,142 75,809,974 75,360,033 75,760,618 75,544,677 
This information is preliminary and based on company data available at the time of the presentation.
11

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands)SeptemberJuneMarchDecemberSeptemberJune
202120212021202020202020
Balance sheet data, at quarter end:
Commercial and industrial loans$7,079,431 6,771,254 6,355,119 6,239,588 6,144,949 6,293,709 
Commercial real estate - owner occupied loans2,954,519 2,817,689 2,869,785 2,802,227 2,748,075 2,708,306 
Commercial real estate - investment loans4,597,736 4,644,551 4,782,712 4,565,040 4,648,457 4,822,537 
Commercial real estate - multifamily and other loans621,471 724,253 790,469 638,344 571,995 561,481 
Consumer real estate  - mortgage loans3,540,439 3,335,537 3,086,916 3,099,172 3,041,019 3,042,604 
Construction and land development loans3,096,961 2,791,611 2,568,969 2,901,746 2,728,439 2,574,494 
Consumer and other loans459,182 440,124 411,322 379,515 343,461 294,545 
Paycheck protection program loans708,722 1,372,916 2,221,409 1,798,869 2,251,014 2,222,624 
Total loans23,058,461 22,897,935 23,086,701 22,424,501 22,477,409 22,520,300 
Allowance for credit losses(268,635)(273,747)(280,881)(285,050)(288,645)(285,372)
Securities5,623,890 5,326,908 4,691,364 4,615,040 4,503,072 4,358,313 
Total assets36,523,936 35,412,309 35,299,705 34,932,860 33,824,931 33,342,112 
Noninterest-bearing deposits9,809,691 8,926,200 8,103,943 7,392,325 7,050,670 6,892,864 
Total deposits29,369,807 28,217,603 28,292,940 27,705,575 26,543,956 25,521,829 
Securities sold under agreements to repurchase148,240 177,661 172,117 128,164 127,059 194,553 
FHLB advances888,493 888,304 888,115 1,087,927 1,287,738 1,787,551 
Subordinated debt and other borrowings542,712 671,994 671,002 670,575 670,273 717,043 
Total stockholders' equity5,191,798 5,101,231 4,959,524 4,904,611 4,787,308 4,695,647 
Balance sheet data, quarterly averages:
Total loans$22,986,835 23,179,803 22,848,086 22,524,683 22,493,192 22,257,168 
Securities5,451,232 5,036,786 4,666,269 4,567,872 4,420,280 4,194,811 
Federal funds sold and other3,743,074 3,143,078 3,356,199 3,621,623 3,279,248 2,618,832 
Total earning assets32,181,141 31,359,667 30,870,554 30,714,178 30,192,720 29,070,811 
Total assets35,896,130 35,053,772 34,659,132 34,436,765 33,838,716 32,785,391 
Noninterest-bearing deposits9,247,382 8,500,465 7,620,665 7,322,393 6,989,439 6,432,010 
Total deposits28,739,871 28,013,659 27,620,784 27,193,256 26,352,823 24,807,032 
Securities sold under agreements to repurchase164,837 173,268 143,586 121,331 147,211 191,084 
FHLB advances888,369 888,184 934,662 1,250,848 1,515,879 2,213,769 
Subordinated debt and other borrowings586,387 674,162 673,662 673,419 715,138 706,657 
Total stockholders' equity5,176,625 5,039,608 4,953,656 4,852,373 4,765,864 4,499,438 
Statement of operations data, for the three months ended:
Interest income$260,868 259,236 251,917 257,047 249,188 251,738 
Interest expense23,325 26,011 29,047 36,062 42,594 51,081 
Net interest income237,543 233,225 222,870 220,985 206,594 200,657 
Provision for credit losses3,382 2,834 7,235 9,180 16,758 72,832 
Net interest income after provision for credit losses234,161 230,391 215,635 211,805 189,836 127,825 
Noninterest income104,095 98,207 92,709 83,444 91,065 72,954 
Noninterest expense168,851 166,140 154,696 161,305 143,852 127,105 
Income before taxes169,405 162,458 153,648 133,944 137,049 73,674 
Income tax expense32,828 30,668 28,220 23,068 26,404 11,230 
Net income136,577 131,790 125,428 110,876 110,645 62,444 
Preferred stock dividends(3,798)(3,798)(3,798)(3,798)(3,798)— 
Net income available to common shareholders$132,779 127,992 121,630 107,078 106,847 62,444 
Profitability and other ratios:
Return on avg. assets (1)
1.47 %1.46 %1.42 %1.24 %1.26 %0.77 %
Return on avg. equity (1)
10.18 %10.19 %9.96 %8.78 %8.92 %5.58 %
 Return on avg. common equity (1)
10.62 %10.65 %10.41 %9.19 %9.35 %5.66 %
Return on avg. tangible common equity (1)
16.98 %17.32 %17.16 %15.37 %15.85 %9.77 %
Common stock dividend payout ratio (16)
11.13 %11.73 %13.69 %15.84 %16.49 %16.41 %
Net interest margin (2)
3.03 %3.08 %3.02 %2.97 %2.82 %2.87 %
Noninterest income to total revenue (3)
30.47 %29.63 %29.38 %27.41 %30.59 %26.66 %
Noninterest income to avg. assets (1)
1.15 %1.12 %1.08 %0.96 %1.07 %0.89 %
Noninterest exp. to avg. assets (1)
1.87 %1.90 %1.81 %1.86 %1.69 %1.56 %
Efficiency ratio (4)
49.42 %50.13 %49.02 %52.99 %48.33 %46.45 %
Avg. loans to avg. deposits
79.98 %82.74 %82.72 %82.83 %85.35 %89.72 %
Securities to total assets
15.40 %15.04 %13.29 %13.21 %13.31 %13.07 %
This information is preliminary and based on company data available at the time of the presentation.

12

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
(dollars in thousands)Three months endedThree months ended
September 30, 2021September 30, 2020
 Average BalancesInterestRates/ YieldsAverage BalancesInterestRates/ Yields
Interest-earning assets
Loans (1) (2)
$22,986,835 $233,857 4.13 %$22,493,192 $224,482 4.04 %
Securities
Taxable2,868,212 8,986 1.24 %2,226,008 8,276 1.48 %
Tax-exempt (2)
2,583,020 15,873 2.93 %2,194,272 15,001 3.29 %
Federal funds sold and other3,743,074 2,152 0.23 %3,279,248 1,429 0.17 %
Total interest-earning assets32,181,141 $260,868 3.32 %30,192,720 $249,188 3.38 %
Nonearning assets
Intangible assets1,857,039 1,866,082 
Other nonearning assets1,857,950 1,779,914 
Total assets$35,896,130 $33,838,716 
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking5,591,119 2,453 0.17 %4,784,627 3,733 0.31 %
Savings and money market11,359,595 5,300 0.19 %10,312,876 8,374 0.32 %
Time2,541,775 4,386 0.68 %4,265,881 16,294 1.52 %
Total interest-bearing deposits19,492,489 12,139 0.25 %19,363,384 28,401 0.58 %
Securities sold under agreements to repurchase164,837 57 0.14 %147,211 77 0.21 %
Federal Home Loan Bank advances888,369 4,558 2.04 %1,515,879 6,945 1.82 %
Subordinated debt and other borrowings586,387 6,571 4.45 %715,138 7,171 3.99 %
Total interest-bearing liabilities21,132,082 23,325 0.44 %21,741,612 42,594 0.78 %
Noninterest-bearing deposits9,247,382 — — 6,989,439 — — 
Total deposits and interest-bearing liabilities30,379,464 $23,325 0.30 %28,731,051 $42,594 0.59 %
Other liabilities340,041 341,801 
Stockholders' equity 5,176,625 4,765,864 
Total liabilities and stockholders' equity$35,896,130 $33,838,716 
Net  interest  income 
$237,543 $206,594 
Net interest spread (3)
2.88 %2.60 %
Net interest margin (4)
3.03 %2.82 %
(1) Average balances of nonperforming loans are included in the above amounts.
(2) Yields computed on tax-exempt instruments on a tax equivalent basis and included $8.5 million of taxable equivalent income for the three months ended Sept. 30, 2021 compared to $7.3 million for the three months ended Sept. 30, 2020. The tax-exempt benefit has been reduced by the projected impact of tax-exempt income that will be disallowed pursuant to IRS Regulations as of and for the then current period presented.
(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the three months ended Sept. 30, 2021 would have been 3.02% compared to a net interest spread of 2.79% for the three months ended Sept. 30, 2020.
(4) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.
This information is preliminary and based on company data available at the time of the presentation.  

13

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
(dollars in thousands)Nine months ended Nine months ended
September 30, 2021September 30, 2020
 Average BalancesInterestRates/ YieldsAverage BalancesInterestRates/ Yields
Interest-earning assets
Loans (1) (2)
$23,005,416 $694,017 4.11 %$21,589,858 $687,183 4.33 %
Securities
Taxable2,575,720 25,073 1.30 %2,103,023 28,133 1.79 %
Tax-exempt (2)
2,478,584 47,917 3.11 %2,041,199 43,421 3.41 %
Federal funds sold and other3,415,534 5,014 0.20 %2,239,102 5,258 0.31 %
Total interest-earning assets31,475,254 $772,021 3.38 %27,973,182 $763,995 3.75 %
Nonearning assets
Intangible assets1,859,183 1,868,118 
Other nonearning assets1,873,106 1,787,377 
Total assets$35,207,543 $31,628,677 
Interest-bearing liabilities
Interest-bearing deposits:
Interest checking5,504,133 7,460 0.18 %4,391,319 16,456 0.50 %
Savings and money market11,323,160 17,670 0.21 %9,201,302 37,713 0.55 %
Time2,839,449 18,338 0.86 %4,298,814 58,657 1.82 %
Total interest-bearing deposits19,666,742 43,468 0.30 %17,891,435 112,826 0.84 %
Securities sold under agreements to repurchase160,641 185 0.15 %159,783 286 0.24 %
Federal Home Loan Bank advances903,569 13,553 2.01 %1,918,371 26,854 1.87 %
Subordinated debt and other borrowings644,417 21,177 4.39 %698,464 23,226 4.44 %
Total interest-bearing liabilities21,375,369 78,383 0.49 %20,668,053 163,192 1.05 %
Noninterest-bearing deposits8,462,129 — — 6,063,783 — — 
Total deposits and interest-bearing liabilities29,837,498 $78,383 0.35 %26,731,836 $163,192 0.82 %
Other liabilities312,598 335,274 
Stockholders' equity 5,057,447 4,561,567 
Total liabilities and stockholders' equity$35,207,543 $31,628,677 
Net  interest  income 
$693,638 $600,803 
Net interest spread (3)
2.89 %2.70 %
Net interest margin (4)
3.05 %2.97 %
(1) Average balances of nonperforming loans are included in the above amounts.
(2) Yields computed on tax-exempt instruments on a tax equivalent basis and included $23.7 million of taxable equivalent income for the nine months ended Sept. 30, 2021 compared to $21.3 million for the nine months ended Sept. 30, 2020. The tax-exempt benefit has been reduced by the projected impact of tax-exempt income that will be disallowed pursuant to IRS Regulations as of and for the then current period presented.
(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the nine months ended Sept. 30, 2021 would have been 3.03% compared to a net interest spread of 2.93% for the nine months ended Sept. 30, 2020.
(4) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.
This information is preliminary and based on company data available at the time of the presentation.

14

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands)SeptemberJuneMarchDecemberSeptemberJune
202120212021202020202020
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans$46,692 53,105 72,135 73,836 71,390 62,562 
ORE and other nonperforming assets (NPAs)
8,415 9,602 10,651 12,360 19,445 22,105 
Total nonperforming assets$55,107 62,707 82,786 86,196 90,835 84,667 
Past due loans over 90 days and still accruing interest$1,914 1,810 2,833 2,362 1,313 1,982 
Accruing troubled debt restructurings (5)
$2,397 2,428 2,460 2,494 2,588 3,274 
Accruing purchase credit deteriorated loans$12,158 12,400 13,904 14,091 14,346 14,616 
Net loan charge-offs$9,281 9,968 11,397 10,775 13,057 5,384 
Allowance for credit losses to nonaccrual loans575.3 %515.5 %389.4 %386.1 %404.3 %456.1 %
As a percentage of total loans:
Past due accruing loans over 30 days0.09 %0.07 %0.09 %0.19 %0.11 %0.09 %
Potential problem loans (6)
0.60 %0.74 %0.70 %0.77 %0.96 %1.12 %
Allowance for credit losses (20)
1.17 %1.20 %1.22 %1.27 %1.28 %1.27 %
Nonperforming assets to total loans, ORE and other NPAs0.24 %0.27 %0.36 %0.38 %0.40 %0.38 %
    Classified asset ratio (Pinnacle Bank) (8)
5.6 %6.8 %7.3 %8.1 %9.9 %11.2 %
Annualized net loan charge-offs to avg. loans (7)
0.16 %0.17 %0.20 %0.19 %0.23 %0.10 %
Wtd. avg. commercial loan internal risk ratings (6)
46.046.145.245.145.245.1
Interest rates and yields:
Loans4.13 %4.11 %4.11 %4.20 %4.04 %4.16 %
Securities2.04 %2.25 %2.29 %2.27 %2.38 %2.59 %
Total earning assets3.32 %3.42 %3.41 %3.44 %3.38 %3.58 %
Total deposits, including non-interest bearing0.17 %0.20 %0.26 %0.33 %0.43 %0.55 %
Securities sold under agreements to repurchase0.14 %0.13 %0.20 %0.21 %0.21 %0.20 %
FHLB advances2.04 %2.03 %1.95 %2.00 %1.82 %1.73 %
Subordinated debt and other borrowings4.45 %4.52 %4.22 %4.13 %3.99 %4.42 %
Total deposits and interest-bearing liabilities0.30 %0.35 %0.40 %0.49 %0.59 %0.74 %
Capital and other ratios (8):
Pinnacle Financial ratios:
Stockholders' equity to total assets14.2 %14.4 %14.0 %14.0 %14.2 %14.1 %
Common equity Tier one10.5 %10.5 %10.3 %10.0 %9.9 %9.6 %
Tier one risk-based11.3 %11.3 %11.2 %10.9 %10.7 %10.4 %
Total risk-based14.0 %14.5 %14.5 %14.3 %14.2 %14.0 %
Leverage9.3 %9.2 %8.9 %8.6 %8.5 %8.4 %
Tangible common equity to tangible assets9.0 %9.0 %8.6 %8.5 %8.5 %8.3 %
Pinnacle Bank ratios:
Common equity Tier one11.7 %11.9 %11.8 %11.4 %11.3 %11.0 %
Tier one risk-based11.7 %11.9 %11.8 %11.4 %11.3 %11.0 %
Total risk-based12.5 %13.1 %13.0 %12.7 %12.6 %12.4 %
Leverage9.7 %9.6 %9.4 %9.1 %8.9 %8.9 %
Construction and land development loans
as a percentage of total capital (19)
89.3 %80.1 %76.0 %89.0 %86.7 %83.6 %
Non-owner occupied commercial real estate and
multi-family as a percentage of total capital (19)
252.4 %248.8 %256.0 %264.0 %268.8 %275.0 %
This information is preliminary and based on company data available at the time of the presentation.

15

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands, except per share data)SeptemberJuneMarchDecemberSeptemberJune
202120212021202020202020
Per share data:
Earnings per common share – basic$1.76 1.70 1.61 1.42 1.42 0.83 
Earnings per common share - basic, excluding non-GAAP adjustments$1.76 1.69 1.61 1.58 1.45 0.89 
Earnings per common share – diluted$1.75 1.69 1.61 1.42 1.42 0.83 
Earnings per common share - diluted, excluding non-GAAP adjustments$1.75 1.68 1.61 1.58 1.45 0.89 
Common dividends per share$0.18 0.18 0.18 0.16 0.16 0.16 
Book value per common share at quarter end (9)
$65.36 64.19 62.33 61.80 60.26 59.05 
Tangible book value per common share at quarter end (9)
$40.98 39.77 37.88 37.25 35.68 34.43 
Revenue per diluted common share$4.50 4.37 4.17 4.03 3.95 3.63 
Revenue per diluted common share, excluding non-GAAP adjustments$4.50 4.37 4.17 4.03 3.94 3.63 
Investor information:
Closing sales price of common stock on last trading day of quarter$94.08 88.29 88.66 64.40 35.59 41.99 
High closing sales price of common stock during quarter$98.00 92.94 93.58 65.51 44.47 48.98 
Low closing sales price of common stock during quarter$83.84 84.25 63.48 35.97 33.28 33.24 
Closing sales price of depositary shares on last trading day of quarter$28.14 29.13 27.62 27.69 26.49 25.98 
High closing sales price of depositary shares during quarter$29.23 29.13 27.83 27.94 26.82 26.05 
Low closing sales price of depositary shares during quarter$28.00 27.38 26.83 26.45 25.51 25.19 
Other information:
Residential mortgage loan sales:
Gross loans sold$347,664 394,299 546,963 479,867 511,969 550,704 
Gross fees (10)
$11,215 15,552 18,793 23,729 23,557 16,381 
Gross fees as a percentage of loans originated3.23 %3.94 %3.44 %4.94 %4.60 %2.97 %
Net gain on residential mortgage loans sold$7,814 6,700 13,666 12,387 19,453 19,619 
Investment gains (losses) on sales of securities, net (15)
$— 366 — — 651 (128)
Brokerage account assets, at quarter end (11)
$6,597,152 6,344,416 5,974,884 5,509,560 4,866,726 4,499,856 
Trust account managed assets, at quarter end$4,155,510 3,640,932 3,443,373 3,295,198 2,978,035 2,908,131 
Core deposits (12)
$27,170,367 25,857,639 24,971,177 23,510,883 22,003,989 21,391,794 
Core deposits to total funding (12)
87.8 %86.3 %83.1 %79.5 %76.9 %75.8 %
Risk-weighted assets$27,945,624 26,819,277 26,105,158 25,791,896 25,189,944 24,937,535 
Number of offices 117 116 115 114 114 113 
Total core deposits per office$232,225 222,911 217,141 206,236 193,017 189,308 
Total assets per full-time equivalent employee$13,188 13,087 13,468 13,262 13,027 12,936 
Annualized revenues per full-time equivalent employee$489.4 491.3 488.3 459.8 456.1 426.9 
Annualized expenses per full-time equivalent employee$241.9 246.3 239.4 246.6 221.1 205.4 
Number of employees (full-time equivalent)2,769.5 2,706.0 2,621.0 2,634.0 2,596.5 2,577.5 
Associate retention rate (13)
93.4 %93.3 %94.4 %94.8 %94.4 %94.5 %
This information is preliminary and based on company data available at the time of the presentation.


16

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
Three months ended
Nine months ended
(dollars in thousands, except per share data)
SeptemberJuneSeptemberSeptemberSeptember
20212021202020212020
Net interest income$237,543 233,225 206,594 693,638 600,803 
Noninterest income104,095 98,207 91,065 295,011 234,396 
Total revenues341,638 331,432 297,659 988,649 835,199 
Less: Investment (gains) losses on sales of securities, net— (366)(651)(366)(986)
Total revenues excluding the impact of adjustments noted above$341,638 331,066 297,008 988,283 834,213 
Noninterest expense$168,851 166,140 143,852 489,687 403,150 
Less: ORE expense(79)(657)1,795 (749)7,098 
FHLB restructuring charges— — 1,991 — 4,861 
Noninterest expense excluding the impact of adjustments noted above$168,930 166,797 140,066 490,436 391,191 
Pre-tax income$169,405 162,458 137,049 485,511 237,414 
Provision for credit losses3,382 2,834 16,758 13,451 194,635 
Pre-tax pre-provision net revenue172,787 165,292 153,807 498,962 432,049 
Adjustments noted above(79)(1,023)3,135 (1,115)10,973 
Adjusted pre-tax pre-provision net revenue (14)
$172,708 164,269 156,942 497,847 443,022 
Noninterest income$104,095 98,207 91,065 295,011 234,396 
Less: Adjustments as noted above— (366)(651)(366)(986)
Noninterest income excluding the impact of adjustments noted above$104,095 97,841 90,414 294,645 233,410 
Efficiency ratio (4)
49.42 %50.13 %48.33 %49.53 %48.27 %
Adjustments as noted above0.03 %0.25 %(1.17)%0.10 %(1.38)%
Efficiency ratio (excluding adjustments noted above) (4)
49.45 %50.38 %47.16 %49.63 %46.89 %
Total average assets$35,896,130 35,053,772 33,838,716 35,207,543 31,628,677 
Noninterest income to average assets (1)
1.15 %1.12 %1.07 %1.12 %0.99 %
Adjustments as noted above— %— %(0.01)%— %— %
Noninterest income (excluding adjustments noted above) to average assets (1)
1.15 %1.12 %1.06 %1.12 %0.99 %
Noninterest expense to average assets (1)
1.87 %1.90 %1.69 %1.86 %1.70 %
Adjustments as noted above— %0.01 %(0.04)%— %(0.05)%
Noninterest expense (excluding adjustments noted above) to average assets (1)
1.87 %1.91 %1.65 %1.86 %1.65 %
This information is preliminary and based on company data available at the time of the presentation.

17

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
Three months ended
(dollars in thousands, except per share data)SeptemberJuneMarchDecemberSeptemberJune
202120212021202020202020
Net income available to common shareholders$132,779 127,992 121,630 107,078 106,847 62,444 
Investment (gains) losses on sales of securities, net— (366)— — (651)128 
ORE expense(79)(657)(13)1,457 1,795 2,888 
FHLB restructuring charges— — — 10,307 1,991 2,870 
Hedge termination charges— — — 4,673 — — 
Tax effect on adjustments noted above (18)
21 267 3 (4,297)(819)(1,539)
Net income available to common shareholders excluding adjustments noted above $132,721 127,236 121,620 119,218 109,163 66,791 
Basic earnings per common share$1.76 1.70 1.61 1.42 1.42 0.83 
Adjustment due to investment (gains) losses on sales of securities, net— — — — (0.01)— 
Adjustment due to ORE expense— (0.01)— 0.02 0.02 0.04 
Adjustment due to FHLB restructuring charges— — — 0.14 0.03 0.04 
Adjustment due to hedge termination charges— — — 0.06 — — 
Adjustment due to tax effect on adjustments noted above (18)
— — — (0.06)(0.01)(0.02)
Basic earnings per common share excluding adjustments noted above$1.76 1.69 1.61 1.58 1.45 0.89 
Diluted earnings per common share$1.75 1.69 1.61 1.42 1.42 0.83 
Adjustment due to investment (gains) losses on sales of securities, net— — — — (0.01)— 
Adjustment due to ORE expense— (0.01)— 0.02 0.02 0.04 
Adjustment due to FHLB restructuring charges— — — 0.14 0.03 0.04 
Adjustment due to hedge termination charges— — — 0.06 — — 
Adjustment due to tax effect on adjustments noted above (18)
— — — (0.06)(0.01)(0.02)
Diluted earnings per common share excluding the adjustments noted above$1.75 1.68 1.61 1.58 1.45 0.89 
Revenue per diluted common share$4.50 4.37 4.17 4.03 3.95 3.63 
Adjustments as noted above— — — — (0.01)— 
Revenue per diluted common share excluding adjustments noted above$4.50 4.37 4.17 4.03 3.94 3.63 
Book value per common share at quarter end (9)
$65.36 64.19 62.33 61.80 60.26 59.05 
Adjustment due to goodwill, core deposit and other intangible assets(24.38)(24.42)(24.45)(24.55)(24.59)(24.62)
Tangible book value per common share at quarter end (9)
$40.98 39.77 37.88 37.25 35.68 34.43 
Equity method investment (17)
Fee income from BHG, net of amortization$30,409 32,071 28,950 24,294 26,445 17,208 
Funding cost to support investment379 1,230 1,205 1,222 1,231 2,134 
Pre-tax impact of BHG30,030 30,841 27,745 23,072 25,214 15,074 
Income tax expense at statutory rates (18)
7,850 8,062 7,253 6,031 6,591 3,940 
Earnings attributable to BHG$22,180 22,779 20,492 17,041 18,623 11,134 
Basic earnings per common share attributable to BHG$0.29 0.30 0.27 0.23 0.25 0.15 
Diluted earnings per common share attributable to BHG$0.29 0.30 0.27 0.23 0.25 0.15 
This information is preliminary and based on company data available at the time of the presentation.


18

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
Nine months ended
(dollars in thousands, except per share data)September
20212020
Net income available to common shareholders$382,401 197,647 
Investment (gains) losses on sales of securities, net(366)(986)
ORE expense(749)7,098 
FHLB restructuring charges— 4,861 
Tax effect on adjustments noted above (18)
291 (2,868)
Net income available to common shareholders excluding adjustments noted above $381,577 205,752 
Basic earnings per common share$5.07 2.62 
Adjustment due to investment (gains) losses on sales of securities, net— (0.01)
Adjustment due to ORE expense (0.01)0.09 
Adjustment due to FHLB restructuring charges— 0.06 
Adjustment due to tax effect on adjustments noted above (18)
— (0.04)
Basic earnings per common share excluding adjustments noted above$5.06 2.72 
Diluted earnings per common share5.05 2.62 
Adjustment due to investment (gains) losses on sales of securities, net— (0.01)
Adjustment due to ORE expense (0.01)0.09 
Adjustment due to FHLB restructuring charges— 0.06 
Adjustment due to tax effect on adjustments noted above (18)
— (0.04)
Diluted earnings per common share excluding the adjustments noted above$5.04 2.72 
Revenue per diluted common share$13.05 11.06 
Adjustments as noted above(0.01)(0.02)
Revenue per diluted common share excluding adjustments noted above$13.04 11.04 
Equity method investment (17)
Fee income from BHG, net of amortization$91,430 59,245 
Funding cost to support investment2,814 5,487 
Pre-tax impact of BHG88,616 53,758 
Income tax expense at statutory rates (18)
23,164 14,052 
Earnings attributable to BHG$65,452 39,706 
Basic earnings per common share attributable to BHG$0.87 0.53 
Diluted earnings per common share attributable to BHG$0.86 0.53 
This information is preliminary and based on company data available at the time of the presentation.

19

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
Three months ended
Nine months ended
(dollars in thousands, except per share data)
SeptemberJuneSeptemberSeptemberSeptember
20212021202020212020
Return on average assets (1)
1.47 %1.46 %1.26 %1.45 %0.83 %
Adjustments as noted above— %— %0.02 %— %0.04 %
Return on average assets excluding adjustments noted above (1)
1.47 %1.46 %1.28 %1.45 %0.87 %
Tangible assets:
Total assets$36,523,936 35,412,309 33,824,931 $36,523,936 33,824,931 
Less:   Goodwill(1,819,811)(1,819,811)(1,819,811)(1,819,811)(1,819,811)
Core deposit and other intangible assets(35,876)(37,963)(44,713)(35,876)(44,713)
Net tangible assets$34,668,249 33,554,535 31,960,407 $34,668,249 31,960,407 
Tangible common equity:
Total stockholders' equity$5,191,798 5,101,231 4,787,308 $5,191,798 4,787,308 
Less: Preferred stockholders' equity(217,126)(217,126)(217,126)(217,126)(217,126)
Total common stockholders' equity4,974,672 4,884,105 4,570,182 4,974,672 4,570,182 
Less: Goodwill(1,819,811)(1,819,811)(1,819,811)(1,819,811)(1,819,811)
Core deposit and other intangible assets(35,876)(37,963)(44,713)(35,876)(44,713)
Net tangible common equity$3,118,985 3,026,331 2,705,658 $3,118,985 2,705,658 
Ratio of tangible common equity to tangible assets9.00 %9.02 %8.47 %9.00 %8.47 %
Average tangible assets:
Average assets$35,896,130 35,053,772 33,838,716 $35,207,543 31,628,677 
Less: Average goodwill(1,819,811)(1,819,811)(1,819,811)(1,819,811)(1,819,811)
Average core deposit and other intangible assets(37,228)(39,360)(46,272)(39,372)(48,308)
Net average tangible assets$34,039,091 33,194,601 31,972,633 $33,348,360 29,760,558 
Return on average assets (1)
1.47 %1.46 %1.26 %1.45 %0.83 %
Adjustment due to goodwill, core deposit and other intangible assets0.08 %0.09 %0.07 %0.08 %0.06 %
Return on average tangible assets (1)
1.55 %1.55 %1.33 %1.53 %0.89 %
Adjustments as noted above— %(0.01)%0.03 %— %0.03 %
Return on average tangible assets excluding adjustments noted above (1)
1.55 %1.54 %1.36 %1.53 %0.92 %
Average tangible common equity:
Average stockholders' equity$5,176,625 5,039,608 4,765,864 $5,057,447 4,561,567 
Less: Average preferred equity(217,126)(217,126)(217,535)(217,126)(92,831)
Average common equity4,959,499 4,822,482 4,548,329 4,840,321 4,468,736 
Less:   Average goodwill(1,819,811)(1,819,811)(1,819,811)(1,819,811)(1,819,811)
Average core deposit and other intangible assets(37,228)(39,360)(46,272)(39,372)(48,308)
Net average tangible common equity$3,102,460 2,963,311 2,682,246 $2,981,138 2,600,617 
Return on average equity (1)
10.18 %10.19 %8.92 %10.11 %5.79 %
Adjustment due to average preferred stockholders' equity0.44 %0.46 %0.43 %0.45 %0.12 %
Return on average common equity (1)
10.62 %10.65 %9.35 %10.56 %5.91 %
Adjustment due to goodwill, core deposit and other intangible assets6.36 %6.67 %6.50 %6.59 %4.24 %
Return on average tangible common equity (1)
16.98 %17.32 %15.85 %17.15 %10.15 %
Adjustments as noted above(0.01)%(0.10)%0.34 %(0.04)%0.42 %
Return on average tangible common equity excluding adjustments noted above (1)
16.97 %17.22 %16.19 %17.11 %10.57 %
Allowance for credit losses on loans as a percent of total loans1.17 %1.20 %1.28 %1.17 %1.28 %
Impact of excluding PPP loans from total loans0.03 %0.07 %0.15 %0.03 %0.15 %
Allowance as adjusted for the above exclusion of PPP loans from total loans1.20 %1.27 %1.43 %1.20 %1.43 %
This information is preliminary and based on company data available at the time of the presentation.

20

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
 
1. Ratios are presented on an annualized basis.
2. Net interest margin is the result of net interest income on a tax equivalent basis divided by average interest earning assets.
3. Total revenue is equal to the sum of net interest income and noninterest income.
4. Efficiency ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.
5. Troubled debt restructurings include loans where the Company, as a result of the borrower's financial difficulties, has granted a credit concession to the borrower (i.e., interest only payments for a significant period of time, extending the maturity of the loan, etc.).  All of these loans continue to accrue interest at the contractual rate. Troubled debt restructurings do not include, beginning with the quarter ended March 31, 2020, loans for which the Company has granted a deferral of interest and/or principal or other modification pursuant to the guidance issued by the FDIC providing for relief under the Coronavirus Aid, Relief and Economic Security Act.
6. Average risk ratings are based on an internal loan review system which assigns a numeric value of 10 to 100 to all loans to commercial entities based on their underlying risk characteristics as of the end of each quarter. The risk rating scale was changed to allow for granularity, if needed, in criticized and classified risk ratings to distinguish accrual status or structural loan issues. A "10" risk rating is assigned to credits that exhibit Excellent risk characteristics, "20" exhibit Very Good risk characteristics, "30" Good, "40" Satisfactory, "50" Acceptable or Average, "60" Watch List, "70" Criticized, "80" Classified or Substandard, "90" Doubtful and "100" Loss (which are charged-off immediately).  Additionally, loans rated "80" or worse that are not nonperforming or restructured loans are considered potential problem loans.  Generally, consumer loans are not subjected to internal risk ratings.
7. Annualized net loan charge-offs to average loans ratios are computed by annualizing quarter-to-date net loan charge-offs and dividing the result by average loans for the quarter-to-date period.
8. Capital ratios are calculated using regulatory reporting regulations enacted for such period and are defined as follows:
Equity to total assets – End of period total stockholders' equity as a percentage of end of period assets.
Tangible common equity to tangible assets - End of period total stockholders' equity less end of period preferred stock, goodwill, core deposit and other intangibles as a percentage of end of period assets less end of period goodwill, core deposit and other intangibles.
Leverage – Tier I capital (pursuant to risk-based capital guidelines) as a percentage of adjusted average assets.
Tier I risk-based – Tier I capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.
Total risk-based – Total capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.
Classified asset - Classified assets as a percentage of Tier 1 capital plus allowance for credit losses.
Tier I common equity to risk weighted assets - Tier 1 capital (pursuant to risk-based capital guidelines) less the amount of any preferred stock or subordinated indebtedness that is considered as a component of Tier 1 capital as a percentage of total risk-weighted assets.
9. Book value per common share computed by dividing total common stockholders' equity by common shares outstanding. Tangible book value per common share computed by dividing total common stockholders' equity, less goodwill, core deposit and other intangibles by common shares outstanding.
10. Amounts are included in the statement of operations in "Gains on mortgage loans sold, net", net of commissions paid on such amounts.
11. At fair value, based on information obtained from Pinnacle's third party broker/dealer for non-FDIC insured financial products and services.
12. Core deposits include all transaction deposit accounts, money market and savings accounts and all certificates of deposit issued in a denomination of less than $250,000. The ratio noted above represents total core deposits divided by total funding, which includes total deposits, FHLB advances, securities sold under agreements to repurchase, subordinated indebtedness and all other interest-bearing liabilities.
13. Associate retention rate is computed by dividing the number of associates employed at quarter end less the number of associates that have resigned in the last 12 months by the number of associates employed at quarter end. Associate retention rate does not include associates at acquired institutions displaced by merger.
14.  Adjusted pre-tax, pre-provision net revenue excludes the impact of ORE expenses and income, investment gains and losses on sales of securities, FHLB restructuring charges and hedge termination charges.
15. Represents investment gains (losses) on sales and impairments, net occurring as a result of gains or losses incurred as the result of a change in management's intention to sell a bond prior to the recovery of its amortized cost basis.
16. The dividend payout ratio is calculated as the sum of the annualized dividend rate for dividends paid on common shares divided by the trailing 12-months fully diluted earnings per common share as of the dividend declaration date.
17. Earnings from equity method investment includes the impact of the issuance of subordinated debt as well as the funding costs of the overall franchise. Income tax expense is calculated using statutory tax rates.
18. Tax effect calculated using the blended statutory rate of 26.14 percent.
19. Calculated using the same guidelines as are used in the Federal Financial Institutions Examination Council's Uniform Bank Performance Report.
20. Effective January 1, 2020 Pinnacle Financial adopted the current expected credit loss accounting standard which requires the recognition of all losses expected to be recorded over a loan's life.

21