Pinnacle Financial Partners (PNFP) 22 Jan 202019 Q4 Earnings call transcript

Good morning everyone and welcome to the Pinnacle Financial Partners fourth quarter 2019 earnings conference call. Hosting the call today from Pinnacle Financial Partners is Mr. Terry Turner, Chief Executive Officer, and Mr. Harold Carpenter, Chief Financial Officer.

Please note Pinnacle’s earnings release and this morning’s presentation are available on the Investor Relations page of their website at www.pnfp.com. recorded for be the being on for is website Pinnacle’s next call and available will replay Today’s XX days.

all floor for time, listen-only presentation. this participants placed been At in mode. The questions will your open be following the have a

to during would question a quality. ask pick you the star, Q&A. like please Analysts will up at touchtone please to sound on We your If phone. time, allow your be press ask you that one given optimal handset preference that

Pinnacle Before earnings or begin, provide we does guidance forecasts. not

During statements. cautioned Many detailed expressed XXXX. as this quarterly Pinnacle facts of results, presentation, implied or such uncertainties subject constitute we actual may make forward-looking achievements results beyond or are this forward-looking factors other comments the All forward-looking to Financial undue ability disclaims not Pinnacle’s any by financial ended reliance report listeners these put such obligation to whether is which otherwise. any to in in and Financial revise may statements Pinnacle’s that and of are the such predict, a or financial or forward-looking may risks differ XX, cause forward-looking June future statements. of presentation other result description new of or to quarter information, contained on materially to contained are more Pinnacle statements performance any risks, for control A update events statements. and from

reconciliation non-GAAP on website measures to A defined of comparable measures www.pnfp.com. presentation Pinnacle’s GAAP GAAP measures addition, directly may In available non-GAAP of measures at be SEC by the these remarks the G. Regulation financial comparable certain and as the will include most financial financial

turn am Mr. I presentation Pinnacle’s President With now to to and that, CEO. over going Terry Turner, the

Good Thank you morning. Sherree.

with begin I’ll do, this dashboard. always we As

shareholder it’s correlated we revenue the to to long-term most and a because highly three As typically metrics quality they continue growth, that focused returns. on growth, asset earnings believe are reminder,

our firm. for quarter good a was QX

We quality in sheet and growth, already in X.X% sequentially, balance asset little continued contraction and growth to EPS. revenue diluted had great X.X% in better, EPS even year-over-year a and still revenue got fully have year-over-year growth strong despite we

Due to of cases the in firm. all periods, non-GAAP in many illustrate the primarily better and relative previous measures may noise the the adjustments performance

have reminder, a each As irrespective quarterly call as you years we see, because goes balance the the revenue that, come back earnings grows, reason of of in betas, or other gone, our it deposit begin our and M&A growth have and and been is any EPS with that pre-pay impact, hot offs, rapid sheet remarkably and this quarter buttons reliable. until can outsized five

a sheet on being share-taking not is despite two we XQXX, to market that to the almost balance up surprise quarter fully the mentioned diluted that basis. of I reasons. last sequential had on result My case that’s and growth; EPS believe the quarter continued be In as hope a anyone. declined last year-over-year, we as largely a I adequately our key signaled revenue both slide, however, would

is all-time greater the where a sheet on happy converting their found balance to that for sale over revenue business created XX,XXX also XXXX. more in gain to their From detail that the immediate to of that’s their volume high, we for sheet be were in in process P&L a agree X% result the we’re so on Number I’m the report that. spread originations feet, this in the one, should BHG that reduction up greater its associated in increase supportive we to value to for way BHG expect to increase our minute. in originations gain. fourth for item an will quarter, that XX% continue of as or in a and through to in franchise, is an XXXX them hold just line at balance and XXXX platform of production valuable so so cover firm, auction regardless in of that their selling opposed Harold

from first Of headway course, the anticipated. in cost also our for net sooner we’ve contraction comment believing in the than floor NIM, may momentarily. contraction on funds ’XX, we Harold expect had of Despite will second further of further and the the margin. made major headway impact came in this great find we interest on XQXX margins in quarter

to not, direction in asset relates charge-offs our one net but quality every saw to it strong with or asset already believe non-performing assets further quarter. that quality move, it XQ during reductions the only in asset still there’s metrics for we As quality, meaningful and virtually report in quarter we improvement

now case BNC know by familiar with everybody the the we’ve that I for is business acquisition. made

which to high to make you CRE built a platform critical the continue As plan recall, the The order the happen is ongoing attract to and firm. bankers our strength principal confidence BNC in path lever best and retain to market. the private the recruitment growth was and of C&I was platform bolt on to in that that has our C&I

had we a time. we’d them XX Specifically, period said over hire five-year of of

more the Carolinas by at in the hiring for can in hiring twofold. you only see, Callicutt plan since the there. launched gotten environment his As has this Rick target Virginia and than our The transaction better bankers we surpassed and great team point

that about continue is vulnerable our that the highlight how in of One Atlanta. in that of on I opportunity that demonstrates it to magnitude belief that fourth bears consequently see chose dominate just we Carolinas and this Virginia the and banks to are and quarter those the reasons Atlanta,

merger, in to existing them, virtue remains outlook Truist Later, but specifically vulnerability target I extremely the capitalize and on with more to see positioned a least existing focus that believe I’ll Truist. we two well opportunity encountered of overlap our Atlanta, so footprint markets, highlight our we our any a our rationale our our are discuss by the of for on extremely optimistic. offices want the XX.X% at of as so of within miles of result location, we’re magnitude

feet. XX,XXX it That’s from

the it Harold to quarter greater to review over turn detail. me Let in

Good Thanks We’ve share fourth everybody. slide results. for per morning updated revenue this Terry. quarter

As experience to share we peer line represents per year-over-year We by continue a growth. dotted year-over-year margin. consistently on can red the revenue outpaced double-digit group’s see, per growth. share The you peers revenue wide our

influence focused BHG’s results. Our relationship have Obviously clients revenues these a incremental for on firm. remained managers has on and generating gathering performance meaningful had our

we before, As that don’t at for apologize mentioned all. we had

to be Even We to X% the the was quarters. XXXX. down from in BHG BHG in expect though continue coming fourth in revenue XX% BHG will back growth quarter,

has in invest tangible as franchise as know, BHG afforded us As book well accretion. to opportunities you value our significant provide

will also into the do our We’re share excited growth and over what to Atlanta expansion few de that revenue per years. next about novo

have growth be Now XXXX, At growth any we comparing the fourth nearly this low-double-digit to fourth to XXXX the time, our was high-single-digit reason believe quarter XX%. XXXX loan that quarter average less our to than growth. no loans will for outlook

know, we booked about $X.X in you XXXX. As billion in loan growth

won’t hiring our in because the success and years, we markets, We make continued have from few exceed no to the hiring we our over that energy anticipate reason that to statement that success the in last of comes of our the franchise We in Atlanta. XXXX. present believe

Next pricing. is an update to our loan

about LIBOR XX% XX-day substantially all with CRE fixed and primary XX% the credit being contributor. with is LIBOR approximately Our loan to to tied LIBOR average the rate, XX% being mix prime

prime, basis points in for LIBOR for average XXXX decreased rate and and weighted cuts. cuts. credits of coupon these victory book basis in actually for prime-based in Here the the points points XXXX, XX by XX somewhat The given a the which from categories experienced basis of LIBOR spreads loan for we inclusive widened rate XX is

five-year spread points. as a fixed proxy on and actually basis performance keep fixed two the as the credit, fixed five-year the used year points our rate benchmark. for simple, during rate rate the it treasury loan decreased treasury to basis significance while spread XX book increased average we’ve traditionally to The Of

Average $X.X Now up balances over billion were to year. year deposit deposits.

third fourth X.X% and XXXX costs XX points for quarter deposit average quarter. at the stood the down Our in of from were quarter the basis

Our expensive To on rates deposit our the in and to the low-cost to last include loan to we’re reduce funding. at our reduce as release deposit that charges volumes a point mentioned and component more dependency press increasing deposit modifying incentive growing our at while same night, we continued plan the wholesale fund aimed time deposits. growth annual core

share annual peer component growth into more plan Similar rate we years, yield per cost entire and our will to top needed cash deposit volume EPS which low targets still accumulating incorporate a corporate within felt prior to core workforce plan earnings to our quartile the a cost like deposits. energize on We group. around the based be

our how respond and this incentive target. optimistic We accomplish this change are about will to associates new

did relationship the XXXX. In managing deposit a a deposit bang-up job June believe, environment. negotiated we’ve since decline bucket, on managers, rate basis achieved More point rate of our rates, in on our XX this we costs

very discussions a client for decreases At Our quarters experience more with rate rates minimum, to next are about the our tune of with in repricing as should couple are relationship rate prepared have occurs. managers the and environment in decreases. much base we CV

it’s worth, and July still our in what in decrease rate another For is modeling November. a suggesting

a targets, a we’ve a great off go XX% but It few more quarters CDs. is way goal so take our a us deposit book, achieve for are got interest-bearing our to Our to will beta start. to we on

split a book fairly the is is wholesale wholesale. more will longer us customer take XX% roll months, of little than XX CDs average as XX% months. slightly down six quickly, CD book its than giving will while duration Our about customer less duration and The an

December XX through and basis the points a points, details, XX decreases chart rate the we’ve right of are on funds declines beta the excluding of and XX%. with experienced of CDs, Fed month basis As

over beta If increase you next should reprice. our XX%; CD couple again, quarters include CDs CDs, the as beta is the but of

usual expect balances rates considered, quarter we believe as taxes in their payments non-interest and the things be We be in first first each pressured the quarter. deposit overall do clients other quarter reducing bearing change first in downward our offset down should for deposit by the in normally momentum that by occur rates is to mix year. growth All of

margin quarter compression. flat to down point are related slightly. As that anticipating may inflection first be margin an to to believe our We enter close very getting we XXXX we’re we XXXX,

occur and these charts minds, so our before. We’ve I Credit the credit. we booking when comfort provides pretty remains appear not a should CRE even recession is large now speculation and as we forefront credit The chart hope his credit metrics a risk very as investors’ time. good. times talk some of The complacent for cycle about we’re minds tell credits. our based darn more that been the on shown us, us concerned, Harvey quite at on remain credit of what Right far has change team never

For quite bankers quarter, any the probably not with in results best better our we’ve cause experienced credit-related that in and fourth about of going credit mark We issues would other years. seeing the quarter some to several change into we time seeing the posted us most meeting fourth best that XXXX. our quarter credit we’re systemic in our agree ratios with perspectives

this on Concerning transcripts excitement EPS impacts over X and that. about read we’ve call the getting To burned and is important gains CECL, I’ve I’d day all two, and we market quite the day share of frankly, have be a years date. lot CECL ready conference a honest, and time talking rather January and one and, growth quarter be and for for share few fourth the last franchise. two CECL adoption

said, be the allowance use the believe January determine allowance each models stages would points quarter. account X, we final should XXXX. as of less the we various we’re the than in basis XX to That account validating Preliminarily, of

as provision loan into for our we factors points year. provision you by basis projecting were charge-offs, to mix. In provision XX obviously forecasts expense including average if was well As XXXX, economic think approximately for expense that our excluding about many XXXX, net loan divide expense the provision, as go growth,

a points. the at will rate, that basis rate on is rate day anticipating net we of new projected be in to and I one XX mentioned, points We’re XX the that falls growth as be basis loan XXXX between which less providing implementation than

reduce XXXX Again, in inherent EPS serve P&L that if out, many $X.XX the to XXXX model. methodology to impact $X.XX [indiscernible], will the have CECL to comparing our works simplistically assumptions to should when but our the loss by CECL

in about talking to nearly up XX% $XX a $XXX back get than BHG let’s in contribution Now second. was more year-over-year. XXXX. These XXXX, over than totaled XX% more up on revenues. BHG’s million million More nearly or

residential with with had number markets have not rates other this with only XXXX, increases mortgage mortgage in with drops we leading businesses the XX% a great continuing long-term strong XXXX so growth with business, in line Our approximately Mortgage fee helpful mortgage in are XXXX. Again, originators. year-over-year. the but great strong also correlating of way, very anticipate up a of

We growth have fee no double-digit in XXXX. reason to see believe low won’t we

that Originations and stronger Concerning their BHG, highs next had are say really phenomenal XXXX. BHG good it’s we safe and into expect year to about into year. I performance prospects going all-time feel going at a

far, $XXX As secured began in to allow them will They relying thus interest about sheet, are separate of gain as more warehouse loans on on balance in two to sources have anticipated, more BHG these as revenue on source. keep loans their vehicles. heavily Thus their their purposefully million which than sale income funding primary realizing rather two loans. their

as quarter loans being balance sheet. of and revenues on BHG’s a third from to were their As result down more held anticipated, due

increased A on sheet on quick of XXXX. resulted $XXX balance increases during $XXX Originations in review which million loan XXXX, million balances.

You is in these contemplating, see no all there. BHG and performance so to down. peak the of ranges at is for XXXX for areas BHG intends there’s chart various that currently can stay growth on slowing the

right, concerning changes of with the network, Lastly the you the They active. and spreads. of yields number the banks see little and their remains bottom can at very in buying to continue banks their increase to credit chart network

marketing, had better XXXX earnings, new do into a growth was more sales Specifically better and better verticals, BSG and with hiring branching as analytics, earnings tremendous to scorecards, professionals. to lot at it in

stride BHG believes rate in growth All second of fair on a is XXXX the of hit to this quarter XXXX. earnings for XX%. X%

gain year’s in their Group, be end the flattened expect at growth at first for rest model time. last their rate Bankers’ We less then quarter quarterly first compared results of expect strategy to same when the the or quarterly to on growth quarter. to as Healthcare sheet much the be and to out we works traditional balance As more BHG of year the very high sale

The chart Healthcare about Bankers’ questions core the on we the right at Group. many of get is

not believe to targeting target will the stream, a say of XX%, percentage sheet of their shift the accomplishment. as of as reduce see the that be revenue of to get more you revenues strategy, they of tremendous a of abandon the total can two but interest will well term heart thus diversification on more funding over XX% income BHG’s can sources. revenue XX% are of which model, With balance diversification longer stream the [indiscernible] to they three They than gain to years next to at but to diversity a a and sale is suffice as

the Equipment incentive increased rationalization we briefly began branch up completed on XXXX. occupancy and award Now and and due we as to versus is up here, XXXX. expenses, that costs increased to increased salary due in were largely personnel levels the note in technology in and year-over-year XXXX plan project

moving our the a digit to a mid We’ve forward, as hiring anticipating Terry go expenses Atlanta, inclusive few run of more plan got single increase using the in fourth minutes. year rate in As this base, big quarter which in range to will we’re a into detail XXXX.

changing that expense XXXX. don’t the merger X.X% For the assets our years, excluding to much has see in been range. in all last We average few at

modified longer I As on last we’ve ranges. quarter’s our discussed call, operating term

go and now current operating granularity previous higher level tangible place for by ROAA, we’re Our as of equity our served opting metrics purpose, guidance measurements a in with XXXX. those previous guideposts. ranges ROTC, believe We were since its the with to so provided

the to XXX for XXX For ROAA, we’re fourth quarter. targeting

of fairly on change at outside high out should anticipate results are operating but and builds ratio. the in We’re similar with BHG’s the and getting end a equity quarter that back linked less XXX range within slightly quickly to range . operating strategy becoming we respond range in also impactful ROTC fashion, also Atlanta tangible the as

outside years, albeit previous everyone, in remind ranges operated published were we’ve to our the previous Just they targets.

expense the two-plus few took these here back days. The only true that ranges to in I today, get objective take way thinking it Same it quarters. non-interesting a early think is we’re to although our will find to we will target years us our quickly. is communication

our turn to over it about for the that, With I’ll back talk outlook Terry Atlanta to market.

thanks Okay, Harold.

you As most largest, of in growing the know, we’ve fastest targeted generally urban the markets southeast.

can geographies. of and time, targeted Carolina. Today, this words, That’s the market There that digit are should growth that to with urban no to a markets we’ve XX some For further originally we growth we’re the loan currently enviable our Charleston, were we desired have pretty XX operate. blue to from expectation this map expect from yield illustrate it’s XX built we markets D.C., from other generally digit triangle, in Memphis which double operating market current in that produce South in digit position, used and double extension; in to double growth. Memphis our a presence XX

Virginia, through markets operating most of remaining judgment, In fringes, Hampton easily triangle we’ve Atlanta. attractive so Atlanta, targets include general, and right area been the to Roads but the the of core my the South In to south at the Washington Carolina Richmond, not is north. of and Georgia D.C. those Virginia, targeted the and remaining the this Columbia,

in how effective our Obviously them not a growth completely New them. example. as it say, England if model sure as understand our I’m Frankly, would business but in, be done We an is us. to we’ve love I and build of they’re these dynamics. large to southeastern we’ve familiar and markets high chosen support They chosen because bank, size aspirations their growth because

their huge takeaway we’ve that confidence provide bankers our that clients, markets to Beyond yields these and the in of market share distinctive and to specifically ability competitors dominate attract our best our familiarity those these vulnerable large with from because service markets. currently all chosen them,

growth Wells short, Fargo, judgment, attractive dominated of Truist, America, we a the are and most easily is Regions. That’s can by It’s market by SunTrust, Wells standpoint, is strategic Atlanta In from which Bank markets Bank target large why to and high fast-growing say that we and dominated I the America market my in urban of Fargo. extend. largest

perhaps than as seem nation’s Nashville. at a to even have view Honestly, All saw one grow in this and more once-in-a-generation of in attractive exciting big opportunity them I the incredibly of we this time. markets, vulnerable a seized bank the opportunity most

want I income the XXX lot time everyone - MSA headquartered but companies the of dynamics; XXXX with Atlanta more in fastest is the than our its consistently it’s private most higher higher, growing spend southeast the nation’s country than a growth number than more is quickly, market thrust XX% rich consecutive household really extremely in XX don’t Fortune the to the year, familiar it’s ninth destination selling I nation largest the MSA is market there, size the by moving companies, the companies. one it’s of median XX - expect its median There and population, XXX ninth are firm. and businesses, and which of for an XX% for Fortune

is sales $XXX are we with businesses million, Specifically, which to target from and market XX,XXX our where there nearly million $X excel.

growth top XX dramatic the and state across are are the in percent a dynamics compelling frankly only of no XXXX overwhelmingly Atlanta longer attractive, the market and banks diminished is in attribute of board. the brand loyalty turmoil of a competitive market. more market It’s size landscape. the in the the Not Sixty

associated many today’s acquisition, integration. exhibit merger vulnerability there the and with and typically top way still percent are of by of Forty XX

banks suggest the of that, the market Nashville, satisfaction in the announcement market. at there the with to Atlanta is possession been successful than that where those Not dominate but so banks we’ve that ripe. the is even is in the big so their even worse client share, It it Atlanta research opportunity them for I’m taking of prior merger, would satisfaction SunTrust-BB&T client in Greenwich the only on

intend a to obvious, our we wasting more actually and recall of back SunTrust, Regions to and done how XXXX was First relatively what The of Corporation, for locally the of lot best dominated really AmSouth of by holding billion Instead attractiveness large forming bank AmSouth. the America, Atlanta, the owned a illustration a in Pinnacle you that of basis. when is another on vision growth the up to out-of-state bank started Nashville a I’d that market, for American $XX we’ve novo Atlanta the large catalyst time headquartered building will time case Many de it. company sale spend for case and already by in its do or in last Bank predecessor, on the of intend build to we that of absolutely what banks, we market in rolled be our Pinnacle Nashville, high headquartered prefer

share the It and XX% since XX, how That first October - to In we’ve credit. is had will we pretty when opening when each in to our picture that Kennedy those seems of we client. so was done Kennedy America, Roofing Bank other a this it. XX% nothing been Company obvious. what it our never one to SunTrust banks, checking Nashville and do account we’ve line of on and to set me and vivid our Regions had time chart we in dominant able three Don first on parallel paints personally market of of Atlanta forget deposit I started. coming sights words, XXXX

we’re success in I need we clear competitive sure the FDIC to In competitors, share vulnerabilities the due chart, I’m deposit XXXX terms market at targeting continued XX, of what top goal share our about we our not discussed. for where gloat a just success about My of to bears magnitude on make to years to because we’ve disparage now. or the takeaway done, been it few Atlanta is we’ve but June the

we so combination and chart, combined XX% of on deposit represents can XX% in Union a Nashville in FDIC we has basis XXXX, market of see share not Regions, going have go had successfully what from started suffice today and which we was when of market on the in grown. north share you the highlight scratch big Regions Pinnacle once that XX% give-up I’m since given up to all AmSouth, to the each say from started roughly it by have the banks Planners competitor, today market market predecessors Nashville Regions market but that’s and its in dominated started. which an As virtually Regions share, when Nashville. through

importantly, slide. More look data of the top Associate Greenwich the on at right the

First regarding share plotted of businesses annual about with the level sales five is them. and satisfaction this here data $X from all, express Nashville banks, is with business million lead the to for What’s $XXX that the clients million. in share of bank their largest

with Let lead the position. me share start

in position Nashville by a As we’re XX% chart of not lead Roughly and view top as Pinnacle bank. you a can little, the their lot. of see, today by the a in at businesses the first

Our XX% at next amazing closest competitor pretty share. for has started zero. having just lead a That’s

range, we scores down position, just there in the our minute. ongoing top think service takeaway a which while about regardless them, level already some the in to XXs clients differentiated still meaningful competitors of I’ll seeing provide rating further that market of develop phenomenon on opportunity our is clients are suggests is their box a what give top roughly the in Nashville, box from focusing dominant which Then our XX% percentage of us a share me, of

focus Greenwich, clients. chart are the competitors. large slide, down most to that things take from the so much how valued business the we are the attributes of we side According the vulnerable left at of bottom on by share the Now these left

more items matter the red box, you see competitors the As the on and to items. are vulnerable green the are more you box, versus to darker from same those most businesses, on the can key, that dominant you brighter the competitors the those

of demonstrate we Nashville relationships, and As to business dominate market willingness of overall experience. you net to measure with, desire effectively terms digital to generally their the do can easy client’s recommend see, that we how how which the are long-term and we’re score the to in promoter value is business a we our peers, us able

get far I one my digital too highlighting view resist don’t central that’s - offering. of to can’t here, channel our there’s I clients’ message but want our from

As Wells to overall at love in a offerings. Fargo channel business-focused and one for our how regard market Bank their our digital regard bank, business Nashville position of clients offering clients’ digital versus it relates channel number as the Truist, the I our America business

All enough of that’s that. right,

as on down chart, Setting dominate, and unique see as larger relationship national finally the of managers treasury aside the and franchises. you that, dominate regional market you our systems continue hiring the power national can our these against our also model management then

our than the lower the walk favor execution of our chart, favor us with to see extremely high business now market, existing clients potential businesses currently regard, which Looking that can the but us ago, our right and our competitors in their each speaks who to aspect in the ongoing share aren’t of more of I won’t business. you clients that hold them through takeaway I mentioned with minute a clients you

dominant now, to have a it appears me mentioned of our I takeaway in couple market share meaningful position, times As we despite Nashville. still opportunity that

these of seize banks up picking is to speed. large ability still vulnerabilities Our

them by book what Nashville currently last that to Atlanta. enabling move be can X% lead and Nashville focus most As on then to competitors our used them lead business X% bank and dominate against continues share here just getting of those see, banks you of dominate the year. last winning play in grew large to from value bankers a to their banks hiring clients - market This year in away the the model vulnerable best

This is our aspiration in Atlanta in the next five years.

we arm of Atlanta to in five-year Carolinas the dominate over back intend large hire against C&I market dissimilar vulnerable We specifically, those that not so regional the to relationship a management, wealth that managers period them market. the levels effective and the XX management, the with best expect the from the our aggressively competitors. have focus XX year to hire been in same treasury Virginia, time. and and building banks we least to More a or We differentiated to expect and office took service bankers recruit hiring national at approach

Specifically, five-year consultants, SBA to the XX that period like. XX entail over producers hiring originators, the revenue and mortgage brokers, loan management as additional would originators, treasury managers, roughly wealth

to County, We We period. Buckhead, the open Cobb $X areas a north an places office out a in general billion market year expect bank business-rich East a of think we can just over name build in few. in the Atlanta, five-year like the trade Atlanta Fulton to County,

We about expect and third in ’XX, the EPS $X.XX an to $X.XX in breakeven invest during of XXXX quarter XX-month period. to cross breakeven

we’ve a Rob bank candidates, number of out our After to of with there. a Garcia build selected lot dialog

Over to that. chief and our previous products Rob Synovus, that gives market. from the to wasn’t there in that’s the an Pinnacle’s the but Atlanta Bank, all acquisition banks. understanding the Prior the Atlanta model thorough but to Atlanta. in billion community small build has our XXXX, in instrumental he in just of officer by $X He’s banking and relationship those all or of a years, that a a billion regional banking bank. starting to where larger He’s those provided has is was notable operating for as president capable bank. larger Rob qualified which and Synovus, across Rob I’ve base perspective. ability way uses indicated demonstrated in fluency always sales a him a capable to to I’ve well based disciplines banker their differentiate itself $X to He been was billion Atlanta from was $X a an market he joining large do He’s by so environment, building start-up team, of hire running regional longstanding roughly franchises, opportunity, is discussed worked hire management LPO just of known to national the has national Synovus bank Pinnacle Pinnacle in a sophisticated sold to and Riverside uniquely on work credit goal

incremental personnel, start us December, with lender, up highly the appear along three and CRE in growth already managers filling the opportunity late pipelines - hiring pretty one banker, relationship excited the to joining so one private hired support a be Since market their off and Atlanta we’re C&I one to lender, fast rapidly, us. and he’s successful about provides key

to view a As once-in-a-generation intend as and necessary seize to we investments I said the we opportunity it. make earlier, this

prospects So our excited about we’re extremely XXXX. in

grow tangible continue growth been value in digit our it’s we’re double loan double continued fee belief throughout Longer which is compound better; our of down, always double deposits core that economic revenue growth growth, meaningfully. funds tangible additionally what and, book that’s my because cost in can and to honestly, looked footprint our and landscape in continue revenue markets, companies continue we that Atlanta low price to term, intend to and never book target bid capitalize competitive while growth. hiring targeting: grow similar digit it’s finally, we the their and fabulous; digit Here’s on the to engine - producers share value

take with questions. Sherree, we’ll that, stop and

[Operator instructions]

Our first question comes from SunTrust. Jennifer Demba with

Good morning.

Hi Jen.

or try arise, the opportunities in in if ton Terry, and focus you’ll see a you expansion potential in should do be--yeah, and Do few think novo next for Atlanta? on years on Atlanta a sense de other guys. makes Atlanta the and of focus you effort Pinnacle just you for

you myself because know, to those position we’re a I we’re those things, hesitant novo do say, or of about landscapes make change, change, in comments of do kinds all do want Jen, I’m never or question. put as great don’t this to always another that wouldn’t just we de to the going kinds to opportunities things, going a expansion. That’s so to

right Atlanta. and thrust on. honest work But opportunity. to to It’s here It’s to want put it unbelievable we with now, what having sitting is in be said context, and that my you an

know so the suited better and we do so large on. is opportunity, well it and and my high top want just is of what becomes work competitive landscape and is to ripe, list but so the what the I of than it growing, to I You sort do, the market of

and as company, dedicate a honestly, that’s where quite I’ll of a So, that’s amount where invest lot time. we’ll a resources, meaningful personally of

quarter first and Could of mentioned I think Okay. I don’t in Harold, ’XX, growth you about rate the something that? the BHG repeat it. understood you for

XXXX the of first be growth quarter this quarter ’XX, first year least quarter year. it Yes. to but quarter also rate we XX% will the fourth think over first of at for build last Trying to of off the of comparing the the

Any Okay. tax XXXX? on thoughts rate a for

ought very to much similar. to Yes, change be we ought tax ETR pretty in anticipate It rate the to -- don’t the XXXX. be

Good lot. Great, thanks a quarter.

you. Thank

Thank you.

Our from JP next comes with question Alexopoulos Morgan. Steven

good Hi, morning everyone.

Hi Steven.

the to on term? near said be would the NIM NIM the How you in down margin. first over start wanted XXXX. thought I think I Harold, flat to do you the about

would Yes, for the be that quarter. first

quarter? So that first is the

so down, the the be--it it down half inflection think we much that goes year. we’re if to point won’t first it will hopefully within of here close be Yes,

you, then beyond and stabilize Got XQ’XX?

Steven. cut year in it lot We’ve reduce basically has balance call a that current kind of, not to That’s of or respect asset sensitivity, our Whether or I’m happens cuts. not still got that with sure; did there. last to and rate but initiatives planning our a our we not, neutralized July assumption, rate sheet

XXXX, I’m did overall relationship okay. how curious the expect you Atlanta do managers add you, the with you right on how XX Got number? and Then many in as expansion, to up come

might thrust the can with I and X how think bankers assimilate XX maybe like a in who this think CRE maybe Steven, and number is like in Yes, and it’d a bankers way, a banker working I market number to XX, sort maybe to XX, hire people, guess I comfortable of number us hire felt so you it C&I XX. the relationship in it the there, a that Rob private X managers, and is fast Garcia, leader about in again be the six, pace like our you think

say have, us, hire we’re it’s had we and we math to build-out but XX what so the years a trying a may That’s comfortable that five XX. which just there for so, well not to core liked do simple platform. sort an C&I build wouldn’t - as we if we more the opportunity, from And pace is of year, seemed that’s of

out mortgage the managers, brokers, to indicated wealth compared XX years, treasury primarily build include management be the over revenue well, to that and other so XX that would originators business as and would consultants, also probably professionals which fee producers I forth, that. to added that’s we’ll another originators, XX five and so loan SBA

that’s helpful. Okay,

Just one final question.

something for high-single in that conservative, digit or included the slow loan at Thanks. cause this being see you to growth guidance just Looking Are range. XXXX, growth do could you loan year? the you

being more regarding that Yes, going at statement $X.X I of we’re into here billion, is more of least any the We we we about about--it’s do energy to kind kind what within think have being XXXX. conservative did ought franchise. than it

color, taking thanks questions. the for my all for Thanks Okay. and

All right, thanks Steven.

you. Thank

comes Mealor next Catherine Our question from with KBW.

morning. good Thanks,

Morning.

so incentive How there’s payout give fair I peers. do conceptually, EPS to earlier level across Harold, how even in your relies this it we on peer talked down just that about XXXX year? goal, seeing is your it compensation we’re and as your full to maybe of to EPS across versus get about remarks, what--and of think there going compare know banks, flat as to over XXXX about in you’re you growth most maybe to EPS us growth EPS assume we think consensus, what a your growth, midcap some not but is incentive plan generally growth you for

a on. that’s qualitative assertion. and think There’s going I factors quantitative Yes, fair

to half up so now energy, when over going assume okay, be day make earnings to But are to line or might we these a move, growth. peer so be end quartile. XXXX that XXXX, the catalyst at You’re you might right that with all shares, group, how you growth like them of thinking probably there, are you estimates and there’s to so there of the help in stepping create use it’s rock you start get negative when propel there’s that over shares - of these say up our you about, for incentive should top of outsized kind something to what’s going that going out plan what it line kind to you

I peers, see what can think you shooting for. probably if you we’re targets kind line up our of

Great, that’s [indiscernible].

know my response. your that if to I but don’t question, I got be would

so confirm that’s wanted level think full that. right. growth I for to some there’s of you That that EPS would get kind sense. makes to I just assume payout, of a

expense the take thinking that million, investment we that’s that is or you call $X.XX just basis. expense on the maybe this of and growth if for small Where there some Atlanta, Then of on about component of coming a $X.X $X.XX If $X.XX very piece kind the about, overall the kind of follow-up build-out. is rest a to a your it to which is EPS dollar revenue $X.XX investment? in from, growth it do also year, expense

and in I’ll not revenue Terry’s job, stuff, so is There himself like all definitely been sort of There Rob for number component. in a is that rates that. it with growth got revenue full-time bashful Atlanta. a growth assigning that he’s say

throttle with and we respects. get a expenses next and got is year. of speaking returns expense what is hiring gives easiest that a past shortfalls, additional on fairly plan that; on can plan some quick be today also in with to no The will revenue thing all growth, coming perhaps cost with XXXX plan we’ve up our use comes to The and incentive hiring significant different. respect we’ve we’ve we’re into back us, off so comments that an or us going in us otherwise that flexibility to to got that done that incentive But the offset plan help significant but our

add novo on you our I just question Catherine, okay, comments Atlanta, addition would might Harold’s to that’s Jennifer there, great asked again plan. really about de opportunities to not in a Demba in so other and take

so still this alone that to markets is of capability lose in we’re we’re of Charleston, producers last you focus Raleigh alley But to view lot plus Our in, landscape still quarter, I like up banks Charlotte probably we’re fourth so quarter revenue sight anybody believing large the Atlanta. revenue is competitive we’re think I markets to and hire that and quarter still quarter, wouldn’t these and saw out and in and opportunity XX that largely want the great fourth to vulnerable. building be plan on banks Greenville in added the XXXX, I finding from we a our we think of fourth right

color on expense as build. you the give just I’d Anyway,

so That’s Great, helpful. you thank much.

Thanks Catherine.

you. Thank

comes with Sandler. Piper question Stephen Scouten next from Our

a Hey continue pace of should think expectations, range, their million XXXX $XX $X.XX guys, credit CECL, be you maybe said at so on that curious, does provisioning imply million to $X.XX good the you and to math? would in drag your morning. trends current into kind I I’m that $XX based think on guess was I it

we’re to out that don’t I with Yes, XXXX, for to we’re not increased might have charge-offs forecast think what kind seeing that’s see and would far time XXXX. off. figure the credit a related of going spent provisioning to the We that of just lot charge-off us trying for administrators too they alarm anything

Got a Digging but of target here Catherine’s noted you year. guys full the quarter, in further the little there, bit some below ROA not fourth questioning it, into okay. obviously the for

job will the to year you EPS growth are full expense on digits from great growth growth, ability and the it incentive seems deliver a maybe the comp? be single loan year-over-year dip a did difficult that in You into relative apart How that high but really digit to EPS front. confident reduction grow around maybe it NIM a like mid-single to on year-over-year target, headwinds, given

about there, the to lay and going be it’s short what in a curve without kind It’s it’s period people, out something? is the you objective, but--. got any The these of the of we last Obviously get hard helpful. yield to these say or improved that path some term on confidence here, okay, an year. objectives you will old kind just lay goes not - think markets have over to I core out goals. you’re what operating saying, You’ve what’s to back

difficult, many this got laid as with you’ve that you earlier XX say, there just to, going at the way okay, so to deliver and need to that this now actually, them of our operate end think to folks firm. is and not out that people to Well, years, we do tasked deliver. get to XX this we get hire get to day, operated what we’ve we and do question sitting us we’ve think that eyeball and I That’s we the lot hey, need to saying, to almost a for eyeball this a firm down the we the of to will numbers people. how It’s for about how was people?

add Harold’s just whatever comments, Stephen, I for might to worth. it’s

all me, how You and including discourse don’t is might I the market nobody an the But those going the I company if imagine can’t per environment to that environment future, political country in the impact in what growth. conditions earnings things. of Iran, this sorts very Korea, impacts change you’re are going by the today, do, what that about talking and this they share North is not all knows the much know looks going we’re the to like or know of - be, produce to what

share Okay, on great. about and the a quarter. modeling Then sizeable curious, just capital and a you’re thinking particular? company maybe have you’re thinking active less the pretty are When this still planning share I’m in little about thing, buybacks, you guys authorization repurchases year, how for the you next last

the Yes, still our using rest allocation. on we’re planning of

intend quarters. We’re likely use three four here use We to or it the it. next quarters, over to

for great. Okay, color, guys. Thanks the

Thank Stephen.

you. Thank

Securities. Our Fargo next Jared with from comes Wells question Shaw

the quarter, it here, of steady will first year, little rest sort expect we with color be a BHG the that the should at looking then of or ramp a Just is from on the growth the lumpy?

about years the conversation lot Jared, a over with Yes had we’ve of BHG lumpiness.

last It’s somewhat few a out quarter, flattish and year flattish growth for bell then be this quarter slightly planned ramp-up the planning then rest what I of XQ first on ramp-up then curve second the quarter, I the into XQ rate think the they’re kind into a of a fourth they’re kind the see will years, this for year. and and shooting basically for to you’ll from way the that ramp-up think half of in year. into a up is the of the of been so of and that it’s a

to we the meet goals, provide enough an is their Do through does going to expectation that additional get that those facilities, or go two funding have them there year? to they’re for funding funding as

got quickly facility, to fairly They’ll then warehouse. and $XXX plan for set facility fund a money that is borrow they’ll the it and here and security then the million part. funding them do they’ll in is sell Yes, up effect not they’ll securitize--they’ve they’ll off up asset, to the what investors, a then to reload just the securitize

great. a relatively cut, Then are the now to half there, it the if positive be with running where it, enough July for on neutral margin, neutral second in you a incrementally overall? July should Got is or don’t we cut that your see expectation margin

I be don’t Oh, big positive, be I think think it will positive. will think will I it but a positive. it be

much. very thanks Great,

Thank you.

Brock next question from comes with Our Vandervliet UBS.

for Good the morning, thanks questions.

balance on Just funding this, there I in set those, sheet organically runway to between or got Is now they what strategy. plus up the missing understand any here, are terms that’s is the BHG’s securitization left piece follow of if set? they’ve

I think they’re pretty much set.

documents but on I do first that through think the they’re working they to piece, still securitization intend second of the issuance. in quarter kind

Pinnacle BHG, was or its financing Did of that expand unchanged?

it think don’t I has changed.

down good portfolio done think in orchestrating How front? job some you funding, Remind is. Harold, on that much we CD large in shift go can wholesale you’ve terms of Okay. more this running I us of how CDs. the the a see

- second. that’s a of I’ll front me try Give appreciate the compliment on. numbers. to you hold Terry good. give Yes, the I in

that’d of I for so Yes one good. could Brock, I hoping one, too, get was kind be

on work it. I’ll

about--oh heck, talking we’re book, $XXX million, The million. probably CD $XXX

Okay.

I’m wait, billion Probably XXX--or sorry--no I’m CDs. you talking to About I’m sorry, in $X wrong. about

is that wholesale? how And much of

billion brokered about basically book. billion my about million in retail, $X that. wholesale. That’s $XXX non-core I think about, wholesale I’ve got it in of and about call $X.X is kind

to I’m obviously sure Okay. is stranger this you’re Terry, not no compliment, but a acquisitions.

a market, evaluate As at versus possible you you’ve you’ve a Atlanta found horse acquisition? a the you that with did leader, there clearly but how got looked

I had it the may for be one sort opportunity as the as get Then as one but the there. months Atlanta got it seized landscape, just three XX that it important competitive and say are about target obviously think market. de to we the over We’ve important had the there’s an insincere of underneath is M&A things I really a me. a Well, we accelerated that, vulnerability time, to Goal novo to to in I’m Nashville. big when not discussions two or so get about the me model. to last in long in

accretion all I build, It big reflect to book they to you can how still kinds my if going prepared you a I what’s of I ongoing transaction, back that go and think gets price go those say and I’ve that all willing implications going have either then to what do would and be that, along somebody to the been an to M&A said either can be, would of hire I’d what’s the way, things. be, way. the are mindset.

So felt best at start moment, us. this at to the least de novo

questions. Thanks for Got it, okay. my taking

All right.

you. Thank

with Our next question Stephens. comes Stafford Tyler from

guys. morning good Hey,

this the year? more two inclusion I weighting the just plan Just me. to within incentive that of carry the growth much follow How plan. core in up on for wanted the deposit does

to weighting or we’ve in a the that similar be so. share years, revenue will so it around XX% It had will prior be

next that Okay. clarify, pencil outlook you wanted and year think ROTC Then laid November to ROA cut with within just get can July quarters with the and back do your guys as you’ve that XXXX the range you guidance I and you out, assumption? over the target out couple

I think so. Yes,

be little--I within it. we a ROTC back the a it’ll think modeling I still we’ll think shows that target than our little the easier ROAA target, will that but get mean, be

that loan balance be total balance low much digits, and still high between be much, there digits? sheet Should difference double should Okay. or of kind sheet--the growth differ growth will overall growth, balance sheet single

run think rates. balance I growth kind will similar Yes, and of loan sheet growth growth

Harold. thanks right, All Okay.

Thank you.

Our Janney next from with question Montgomery. Martin comes Brian

margin. morning. just one Hey to back Harold, guys, thing, the good

two plans to like sounds get It we cuts expect, with the get the cuts, then outlined? cuts. margin? and upside upside you think If the about don’t stable you if maybe is that you the there how don’t the some it that should Is given you’ve

that think way. is it I

or a for a much said, think lot no-cut work there’s year. funds be to, to I sensitivity, positive of a flat environment more last this think the Fed management asset neutral year so did interest going to like We I we’re to year. remove with rate a risk rate slight respect I

Okay, perfect.

Atlanta include mid build-out, expense outlook I off ’XX, that rate. think growth the on Is for and cost digit it’s that? of you the the said that a that single does

component it’s rate, fourth for off a Yes, there run of and it’s in Atlanta. quarter the got

the XX% thing was Last in revenue’s a how think BHG, Okay. up the right are to thought ’XX, about million I we’re ’XX Is X% comment your the on on that? $XX in the in--I and that that thinking revenues XXXX math, BHG versus number. clarification was

Yes.

All right, that’s much. I all had. so Thanks

Brian. All right, thanks

Speakers, I’m showing no to now remarks. like further time. questions would back queue I any you at turn this to further call the over the for in

of same by continues was All program market. of quarter high growth, It’s addition and right, XXXX say for for the exactly our the I and would to balance view deposits, fourth the us. just outlook continued improvement a was profile quarter cost be the our that continued really running hiring, Atlanta good strong with sheet highlighted in

us. Thanks for joining

today’s conference this your concludes Ladies participation. call. and you gentlemen, Thank for

You may now disconnect.