Pinnacle Financial Partners (PNFP) 19 Apr 222022 Q1 Earnings call transcript

Good morning everyone, and welcome to the Pinnacle Financial Partners First Quarter 2022 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 we'll your time, listen-only this participants placed been At in mode before following be questions for open the presentation. have a preference be Analysts Q&A. the given Instructions] during [Operator will sound We that optimal pick handset to up ask your please allow you quality.

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

GAAP over Pinnacle's CEO. going most www.pnfp.com. non-GAAP to will to on comparable presentation measures by the at Financial am SEC available Pinnacle defined now be that, to directly GAAP the as measure Regulation reconciliation Turner, With President Terry Mr. remarks measures financial presentation In the comparable and website turn non-GAAP these A of certain addition, the include may and measures G. of financial a I

the joining Thank in quarter and to legacy play this that you, introduction for operator of and that markets would again in was quality the powering I thank what our both say a us. quarter. to XXXX another translate in high first Thanks best for power into to quarter ability us markets the our and this experienced unfold outstanding bankers But you morning. outsized market try the extensions with growth and

to had during years then of issues like of pretty macro number the created other economic movements also around in the pay just originations she to the name mortgage robust a addition market reduction that PPP several very – right a uncertainty the offs headwinds of we’ve loan In all mortgage like substantial enjoyed few. revenues, eliminated well loan refinance laws have

our growth quarterly the ability three credit those GAAP outsized years very asset the so bars and for performance our last ability I balance continue trend in problem down the strong. will the this to in story over bottom with land five conference along our We’ve the first quarter. over the years with all here for quality see the with loan quarterly decade think call begun years on metrics show again measures five long predict every most blades beginning has dashboard overcome to been I focus important headwinds us that first to you sheet Our measures and the so you can has the row. as loads. even The quarter But been last our median that’s metrics

points. basis the QXthey points five XX Our and is for just year NPAs median OREO basis were loans XX

year it was five classified XX%, just asset QX ratio for X.X%. Our median

that. much annualized better XX honestly charge-off than started QX five ratio points here year basis was net median points. basis X Our it and is

row measures, now is the us charts at Moving I look most let generally that to so focus one top which non-GAAP on, the first.

for of quite origination revenue outrun continued Adjusted reduced based able actually PPP and going those I flattish tick. our this fees this that was headwinds just outlook their later. the more fully I moments a growth down year revenues see, And on pre-tax pre-provision take quarter. can in few mortgage diluted loan weren’t mentioned ago you impacts forward as just on income and EPS net We slope. upward to As outrun

two. deposit as is Core adds which looking double-digit row non-interest were invested at at the I’ve loans and expense Now already up say annualized up year we’ve in second impact XX.X% outlined, PPP. the to would loan of continued were volumes excludes the annualized XX.X% last XX.X% direct and and PLP pace. growth grow a deposits I to that an or over growth

to that on than help comprehensive years rates rising in billion good this $X.X the income. decrease I counter first also. quarter don’t in of sheet available conservative approximately quarter, accumulated reduction was tangible impacts rising relative in minute due other On on five I the share, and talk there. that state rates we relatively interest order of our As book in those saw the tangible lines, to maturity more peer of value a Along our transferred we already we a securities believe to for balance primarily the actually with basis about in a X.X% saw per equity. more held impacts just sale of

grow previous our summary, at sheet outsized in pace. continuing in So on revenue based producers balance we our investment are an to

revenue quality and that is We and earnings asset into growth blemish free. our are translating

this over it for So, more to quarter. a turn detailed look will with I that Harold

Terry. Good everybody. Thanks, morning

in $XX.X percentage the average with second the in first As usual, paydowns last fourth as night, quarters And guidance and us will quarter XX.X% us enter with quarter. growth in was the to the $XX.X mid-teens will quarters. Even $XX the in this revenues inclusive We much million, likely the $XXX for our for press what in first we current up strongest down and quarter yields. pipelines to at $XX reasonable and for as the and likely of fourth approximately growth impacts decreased PPP were upping on between quarter $XX in history mentioned is least quarter. we revenues loan the in it from to approximately provides PPP balances recognized first us. million PPP start last release confidence in annualized in our the reduced we Loan loans with compared our the were million rates XXXX. year our XXXX between range discussed first consistent down quarter, of PPP one million quarter, we to of believe million PPP with loan loans, million due we first

connected much about utilization service said, $XX PPP that our our thank for because a borrowings PPP our perspective were this to in all and from big Also, PPP. much quarter, to a PPP very down up volumes with you loan That base. running client was in getting the related base we this so client commercial not with PPP are those to We to for huge go so see standing far quarter. same million left life enhanced and did loan some a in gather client uptick and program

happened levels. quite have in believe year First to continue and while reason that current this inventory to to time some we as at price increases a lock look that’s in borrowers

to credits on over spring construction which funding few not and anticipate We’ve force borrowers one a [Indiscernible] some yields increases force responded lot we a our on impacts apologize summer. More and with on in question to of this quite in rising the the so also were for time. fixed minutes. about due year realized loan environment. past or our for in a their ongoing do rate Again, We

state quarter, of in given point and force the $XX loans priced on XX increase first now recent rates partly During from million the their based in loan – impact scripts. basis in original short-term are

loan slide month. the rates deposit anticipate focused on rate focused pricing which billion yields sure net loan we chart of the left should may indicates, about growth strong basis the beta point XX achieve next $X.X through forward beta bottom Linear we the loans foot our that and occur As on as floating raise have possible push as will this we on increase. the make but was in with

release, only then six aggregate lift As delays increased. to a basis pleased weeks yields approximately post that we see the press mentioned we four after point are in loan in

experienced those now chart strong this but range between delta where in and current we those in indicates, in time dent a As the far levels. make could yields the That in XXXX. strong much levels are yields top different the we year we achieving expect was a back X.X% don’t

growth Lastly, asset loan and about excited which loan mid our a paydowns. prospects is XX market growth percent our about leaders PPP are of inclusive

provided new our million markets including XXXX, Atlanta in growth. $XXX Additionally loan our lending specialty in new and approximately units

loan including loan new from ELP XXXX quarter expect as and XX% days, markets quarter million our and our of the XX For growth our by second participations well. strong or we incremented they $XXX the growth in XQ first

the but tax in that sort in believe projected quarter. in for target another quarter and yet get by anticipate we deposit were deposits, $X.X don’t still to high-single-digit some big second quarter. reasonable on up of us depositors outflows Deposits almost billion remains growth growth this payments deposit for that core We a with with year. growth deposits relatively some large the Now first

So change there. no

meeting, up the rates last points. our Our are basis deposit rates decreased almost deposit basis points average slightly FOMC at than deposit rates higher the by basis XX Since period points. two in while were average XX

the We’ve strategic abandoned key is So far. growth core relationship of deposit view we pleased effort our objective. thus with our are a that managers never long-term

growth. was developing number strategies of years ten first our and one tactics the For our funding our around go existence,

like chances the given both made years. relationship new last investment to our in few markets significant continue managers the over We we’ve and

also we rate cycle. deposit on our start up an point We enter like as cost

pull aggregate which beta are an continue are some on believe what betas will much room We an on doing to least keep through cycle, forecast at advertising XX% gives us initially. breathing the they given deposit less our eye we we competitors

to Now performance. liquidity

to momentum excess into ways at increased assets. higher earnings deployment look of liquidity yielding to continue We create through

increased Our PPP with and corresponding of liquid paydowns. impact core growth actually this the assets deposit strong quarter

effort. but XXXX value. a that environment to reduce book be loan overall multi-year Again in will rising to pressure find view, rate We to in our money tangible without optimistic our is are this our objective to a growth of ways work liquidity should here in unreasonable put our placing serve

increase opportunities the securities put March bonds a the on by total the total shorting the at of asset During investment decrease we as flows book. in in represented from some the our actually quarter. money bond of have believe our The approximately we back in X% curve We reinvest that balances and in XX.X% increased some to cash to quarter, the to did was into continue yields slightly bond at higher book ratio first work some which do XX. first

almost by to environment. securities in in billion like measured from per the help book modest execute did response liquidity quarter. continue $X.XX rate Doing We work did about to to have IFS a how supports We so tangible $X.X in value of a will first in share this the we transfer ICM.

the X.X tend few we’ve grey hover I to will left the remarkable reflects, core our bars years. As top job the to to on hard in margins the margins We chart defending believe last done forward. range work X.XX our going and we lift over a

expansion should Given we that environment, increased we year. see this confidence some interest the operating income have margin with net along

our for net We XXXX guidance year. over to last are growth for double-digit income low upping interest

Pinnacle’s of As metrics. portfolio XXXX. again and are credit XXXX credit to to at metric of the credits, to we well these and very Modifications to have a XX made Section are was we $XXX March CARES some continue again ratios million experienced continues perform decrease ever. Act presenting best traditional our the pursuant loan

are of Importantly, the over only are we our paydowns mostly category. classified XXXX in similar credits have risk loans pre-COVID principal XX% XXXX X% and of of amortizations like

conversations to over declines over the loans Importantly, next our further anticipate we continued and total months in the for few improvement slide, as last highlights impacting our well macro-economic losses in borrowers credit credit lot factors. had allowance the of and a it’s several as metrics ratio their as given inflation quarters noted how We’ve businesses. about the do on in with

of of point to their an Backlog price thus issues. able – we The all slowdown so all their the we grow that some far businesses. are good, apartment only finding these quarters issue increases far highest to We of supply customers. for pass owners et next is our are loan around levels get think arms inflation be can less to labor most labor cetera our will enough and hope our than some So chain biggest to that the truckers, hospitality all few Obviously, issue. ever. to to over borrowers,

planning in for break few has stories being from price Now management run assertions of rates were fairly be in for and that, that our is and our in but for that minutes. rate key increase of to XXXX for approximately sales we in this for on Other increasing all growth is as from valuation included forecast were XXXX. [Indiscernible] above our joint become Also $XX less adjustments these for this with planning our much a are million lot has in a categories will are for and to a remaining BHG, significantly investments. estimate XXXX not for in list levels page reasonable for several that year XXXX home fee-based believe still than prices maintaining out are lines several other an of experienced and will that of markets that Thus stock anticipating housing speak XX% we with XXXX our increased allowances to XX% that major venture year annual at repeat with our our for the of in are than other we income interest business in investments having and wealth are seeking and revenues lower expectations mortgage of year. some common. A us impacted along we

are many up in where higher homes cash years. our costs states markets markets for much our continuing people been other as have large acquiring from borrowers percentage to drag housing Additionally, there of and

headcount As expenses, our initiatives low pay attributable that in max and for growth. we we overall increasing total double-digit market the should mid-teen increase markets, believe XXXX This growth new disruption percentage this in the our to run rate JP&D addition markets, to cash from approach incentives of likely across is to percentage primarily are I expense growth year. outs

our and annual this the our last incentives year. is adds traditional that As to adds plan pay now is plan recruiting target we increase target is fairly performance aggressive headcount target and outsize an on some that increase in out a XXXX increase for the in Offsetting our reminder, time, our are year based planned The bonus met you from our we XXX% a from targets. reducing XXXX as XXX% achieve of we cash year. this current should will last

organic years. Lots increases recruitment our successful lean more hire will bankers to escalating to markets for revenue has Terry in more of about in cost continue over model currently space. plans in particularly discuss primarily providing also growth sure minutes. that and costs We drive as next attributable point several are are our We help but producers large been leadership. discussion our their into the few on expense equity cap the for our who never expense to the a growth believe better. are Not new that growth, the why it opportunities we’ll our established of

and the see X% book tangible AOTI increased tangible we back share impact per did book capital per rates on share. As pull on with value value of

we how to Just growth. upon perform book with our plans leadership’s pulling compensation equity to rank tangible designed value are reiterate our

book over longer is the on our tangible term. leadership So, growing value focused

that’s tactics growth, growth the includes building focus long-term. value and strategy up. Quickly, for growth to increased XXXX, optimistic the shaping loans an update on quarter outlook second XXXX our the share. our and book organic on growth tangible funds the That model franchise revenue focused per and is on value about for over their earnings Our outlook using are as are with mid-teens

three time increase adjusting forecast our are last increases assumption rate in the that to shortly. we here rate six from above that could end We and

net of increased mid-teens that, hires also for should expense we see year percentage double-digits. low interest growth. believe other increased result we which growth outlook factors our this income from and should in Given improvement We’ve

group, how thus franchise balance we here this an going ramp far. way term. thinking will out we or near for we in are comes up hiring strong work the growing in turns hopefully value have that optimistic that focus our our are whatever improvements a very really the for macro to as the with and intense will risk on All are year. that inflation We Obviously,

more to sales market network on they between been to second. the been between the back benefits in obviously capacity impact spreads. at quarter sold which More raised spreads is of such competitive execute securitization sheet. a a increases on platform reliable of of securitization can banks pivot in are The their super our Now XX rates its as the record that core it. just the platform, large great Once volatile rising has solid can might start BHG’s into BHG and the loans expand the makes quickly of the in be origination over last its has is spreads of its rates holding some with other Spreads The and deal BHG business bank to network will BHG plus gap some XXX one these interest capital that loans some their margins first model with one while pricing likely to have times bank in on but the to as We go BHG originations. new and of details, anticipate and their quickly during regardless continue in in months. confidence buyers balance in continues XXXX BHG as these. unit bottom network better network BHG as lines shrinkage history

in considered significant companies As third products. you for know, for the of in strongest country the more the we strongest their one considered – – platform and funding the we phasing hunger

the decreased while obligation X.XX%. you to $XXX first sold loan were has approximately the the ratio loans of recourses up At absorption portfolio. slightly of loss the reversed end know, modestly for quarter, of recourse many at million the sold As potential for

ago. are to the just BHG that and They quarter BHG consistent models remains to in increases. earnings levels withstand be for than in recourse them forecasted noted BHG believe consistent from borrowers as operating show, the to portion in credit discussion last some another to least the that opinion be great will looking had lowest at confidence do of and our some is BHG’s of which this bars with the in the also discussion. Originations the their chart gives of chart and borrowing for they credit in XQ growth million bottom in appears first scores with and believe and $XXX strong stronger its right they of past be few for regional levels quarter’s gives years the in a their credit ever reason BHG’s XX% losses blue anticipated We inflationary refreshed years. score impressive the should is originations our XXXX at we spirit much Past which the XXXX are weakness. to at of year, least With monthly achieve so. them credit base as ten last is The quality as right and at growth. As XXXX National quarter. unemployment of were over are first quarter. in this dues always it’s grow consistent still been. course pace XX% able bottom at quarter, our

in how that hopeful they the believes likely be back XXXX revenue securitization their the can understand retaining volatile As out be the sheet. its until BHG and the more [Indiscernible] loans as are earlier office plays bank hold I are on on balance more platform baiting. year will quarters sheet as pivot to They markets balance in their likely mentioned loans better will loans earlier assume of will revenues they stronger with BHG

with indicates, are to of to slide first weighted Loans average closed their model a of million that As BHG It rate X.XX%. weighted balance the securitization sheet as a the have $XXX securitized funding fourth the quarter. amounted average in and XX.X%.

will I turn over it that, wrap with to to Terry back So up.

XXXX. view, issues, a All in on our estate is with economic far as fraud portfolio various are that a France diligence yield and book known, remains right. thus our Harold impact economic yet weigh security The despite mentioned value the some really fragile has the the enacted extremely potential recession commercial reviews aren’t impact inverted but of performance time. In are likely and But ruckus had the already loan safe remain our uncertain number the to and that tangible the we in inflation, real and our economy including onboards portfolios and Thank first COVID been to our funds continue detection. our sanctions landscape Harold. our targeted quarter pleased Ukraine you, on and for environment, curve, and Beijing heightened full to for protect cyber economic optimistic

to exceed with these our additional in that work continued home Not books. extensions consolidation producers. organizations – best of new mid-teen ever to for Virginia disruption are also our integrations frustrated first going this generally ago. for there growth result This or and years pipelines thank market believe is to serve. the hire to disruptions over first we’ve capitalizing and fully to losers last the and market bankers for realizing Carolina hiring and only are at experienced system should those is opportunity see I our continued a consolidate in assessing we capitalize market in the quarter we DC, hiring but Birmingham are is current difficult, Happily expect that those on we loan will our are XX laws The our to like in I invariably and As the purpose get our who our most prolific want commence in growth the middle the we revenue persist continuing winners are as we during home and by look Tennessee, integrations there that, outsized Washington quarter culture markets best suited We year. on tremendous banks market with this few of but markets that. the during only The meet Hinesville. be experienced this our copy prolific legacy market on the growth clients uniquely Atlanta, percentage extraordinarily the current markets brand that we XX are ability we not deal along This attract markets, are in loan anyone was late. involved, had. that in integration tells their current associates you that we environment, me opportunity of and a and due and and years great southeast

is in a we vulnerability success started is is market would my should obviously as the level. take quarters this and seeing have Here serve kind a potential we the of a about as that other ongoing the advantage life way novo frankly are this in by vulnerability for which never $XXX as fit vulnerable. think B&C XXs, are discussing of demonstrating I as data, to the these consolidation of in whole, competitors via issues. on magnitudes as and markets vulnerabilities markets or This good related market measures, merger pretty case Taking great of the at is actual billion de We proxy these of focused. that M&A turmoil consolidation with as creates sometime we but certainly I the positive a forward over result they are well And ago. what share seeing of at XX these edge in extensions are say same merger the

in the two I franchise been franchise front billion lending pipeline end, of day successfully us recent hiring related with XX last breakeven, great of associates, We and can $X is and this $XXX In of and loan had catalyzed really extensions. them most still XX our quarter just Merger Parksville we revenue think our hired layer. At growth. in I three them tell pipeline about which already year, Alabama of producers. hiring And market producers. lending. the six but looks new less be states off as nearly production see we other story, loan is the revenue to not is breakeven Birmingham like a how you’ll commitments, you in want for equipment three quarters. markets a production we production There loan levels, as I hired in with turmoil rapid entry Loan is practices, markets, wise there today continuing finance lending had I loan large sheet to outstandings to believe associates, got excited that four and us. Birmingham, and hires. agree rapid both hiring of me. XX progress finance in am to Hinesville, initial relates four are I success mention deposit for They they with able most now we’ve what they and So similar but I our great bad, yet, is equipment been are going deposit highlight million just very can see, massive best a new fabulous service volumes it hiring and months. in the quarters. cannot for sort off franchise you pipeline to in are If just DC, we’ve chart. loan the you Balance know two specialists than had strong and through really

all are planning the mortgage in managers, so was volumes success for their XXXX as about honestly far, rapidly generate million EPS administrators relationship see all same are balance we’ve $X rookies, want like business. the can because book to always a and of lot loan growth the it associated our each are about we that’s originators, three, works. banking for it for revenues billion We is quarter, we not number to drag for with hired, order commercial includes the growth to loan the we want just for $X.X Small their our drag plans. two, years. to sample are you and the of and go and expect deposit we we the to $X.XX, provide intended remaining right, include four financial I build subset the you and Again plus five for net about good just talking market into of the a here over the our to refer hires thus growth of year principal that a ten how these years. the is in number the with enjoyed intended year about you mid year an post volume associated now. but and we numbers vary. sheet so FAs, assumption Revenue XXXX balance these as volumes consolidate first incredibly in get producers theme revenue talked last to fee It since how illustrate the So base years, producers net consolidation but that’s FAs, they FAs, hiring $XX all loan is a if continuing already But individuals kinds that the Deposit revenue a the growing top would advisors with of number volumes just earnings well. one want continue in for that sound $XX you illustration our we But That go years sheet time hires you with that not and over noted average also at $XX growth year as volumes because translate producers but would revenue future them on the years. other typo growth in trainees, balance how business financial bottom producers, hire million to the of years on last sheet producers XXX the core engine growth. in but share periods. built. for private middle what XXXX concentrate for number brokers, in advisors, in to gives absorb generally drag been essentially is charts volumes. alike. type own trust quite those and with least out. forth moment, of million convert of for book illustrate at terms top we Volumes the $X FAs, planning because in pace producers to same about took of The new chart just have year experience experienced billion to corporate to peers on producers, to for of on previous sheet with balance growth revenue some still and deposit We’ve of in averages FAs assumptions aggregates that can I our with hires on new of year many this five. and market this five historical On build powerful And build $X.X per growth average, in over four, based in we is million five but loans million day one balances types

So the making shareholder these volumes in given obvious point is these experienced investment to as this as producers hard be. a

the a and relegated revenue can quarter out see out. The is of and grow growth This me, fact couple in growth it and quarter. me grow the share And few ability quarter per gets share quarter in for haven’t way revenue we a and a gap growth to to another to I’ll by first is earnings earnings per level, rate of franchise reliable is the during revenues. about red share by it creation, it’s but peers our figures of revenue lot. call point XXXX, our our grow the you the so, in the share. line the is the it’s that because, years, produce and percentage The XXXX, to every to and not than Two, in per important revenue is per of share, on we almost is to line that one, reason a always things. really addressed dash The path peers steep Number pretty share slope. and widened bars, what the revenues same per chart through cutting. has dash terms first faster are year-over-year we green a revenue company blue important that’s to sustainable it normally per expense per think Here growth focused share through foremost, an we

that’s So are in track what successfully growth. records investing

with significant There way. the rate mortgage disappearance of still it’s to is world quote invest is in The general one, our but currently [Indiscernible] things French in that the associated in war with somewhat Our advanced same is no headwinds situation paydowns thoughts PPP to competitive works. like finance fails way. margins, excellent. last the The volatile in so our but landscape it before,

to there at and clients are questions. quartile based revenue dramatic pace we expect growth. continue talent top attracting to take will on we EPS glad be of stop We and Operator, growth top quartile

First question from Instructions] [Indiscernible] [Operator comes

Hey guys. morning. Good

morning, Good Brett.

Brett. Hey,

monetize and guys, so Wanted update any quarter to some the growth. that want strong conversation do thoughts BHG on compression what spreads, have think get few investment quarters? big on details, early their to it’s about impressive business strength usually next thoughts and it’s to I on the thought focus. to first first a BHG comes you I seeing margin you to on that Congrats and within socket and what Wanted starting that the and start what about with talk might an loan spread a on you up think do that’s much see might on even in capitalize wanted how the be they to

with second first. XX%, great north been the will have face be The term. the until answer I’ll XX% of Brett. the Yes, spread in they near question successful the coupon past. rates They that – in here

spread because with up surpass little is rate So, can like model. all more the be they something or move aggressive perhaps compression do rates – business up But beam that they option those they they a that a have But maybe their probably little maybe into borrowers. that. platforms going X%, to think a They say feel they’ll of it’s X% put dip bit. like to be some that or think

the years, rise. of kinds liquidity markets we’ve and events not and about had markets the conversations rise all when the when Over

advantage shaping currently not got lot they’ve They runway up is to them. currently. and the think a in front of their think of I market a growth lot of

they will franchise point liquidity of that and increased revenues, as likely they growing occurs some too So there their will revenues grow – event. they because see believe whenever they at on value firm their is of this focused a that be

all on the and Al think page. I and Eric same we – are

frequently. kind We That the they profitable and said, have that is layer open Eric appetite do might in at I very very, that and they partnership. what’s they We of are there be on a and think their is they great that believe various Al communicate their and keep proud of a point personally what firms believe are lending going very markets for tech fin of it. eyes

buy there if game. to but gain We now, it’s that a we a of five know don’t evolving, So, we and to know of like from And on be nice is very next to I – tired truth. this is still that this, look know year, don’t know when enjoy how options hope we the more. is hope occurs, siders event of years to me but we be a liquidity saying variety I all at able execute if year get anything likely there or the

whatever, so. see or that, I’ll with got any Terry if So, additional comments has stop,

No, anything. add I wouldn’t

Can still and then in a the upside XX for ask rates, as XXX at on on being you have Efficient talk BHG. seems in the just when points like portfolio assumptions first given about that your the with go a that just you loan for reprices look on some the about assumptions you they well, what just days hike? rises it into that margin about filings, talk I NII following that color basis rate to conservative more balance are liquidity your would your the sheet. Wanted suggest Okay. to XXX

little near from and point that other here out and is Yes, What market anticipate so in do to the what’s in basis going I from are talking in well, floor loans over think billion put a increase rates we to in back we got take that. Fed is their is them leaders. our the term XX that’s the on $X advantage coupon we we

trying the be to are and think then just several they fashioned next going their to out. over anticipate out on is what We growth we quarters

as traditionally been what pricing has at on look – our used that a and curve. forward forward also We the

I something not that So, it’s it’s say, not right.

already are in towards into there I asset just don’t have we I time assumptions just generally weighted a to preface. get my guess, – in that is require. what primarily forecast. So are on box regarding include because time second, disclosure back to for that blooming sensitivity the this our the go The regulators

and those a think are always our earnings of and sheet go it’s here around a or balance we it all thinking it assumptions a going the that lot creativity our that curve to be. a And firm to and stable lot lacks parallel in so, the growth shift is and ingenuity – what as both into improve really got content well of about as we of

pull So, will term near in and the in several that’s us the what helps that and that feeders either the periodically we’ve term, do. got we long-term, can short we lever

do real that to growth is the more is likely. kind get at think sensitivity but a to try that same we what so, perspective you to world And time is provide we kind in asset of table, information that’s that of going

color. the Okay. on Fair quarter. enough for the Congrats

Brett. Thanks,

Fargo. comes question with Our Wells from next Jared Shaw

on John is Hi, Rowe this for Jared.

John. Hey,

the quarter? earlier I go about this benefit just a the you I utilization hoping impact guess that to increased was is and to what fourth wanted for much in quarter from was we back go dollar the remarks how move year? prepared comment I any is could clarify if that there to the the through further and line as or there that that just

tell went for that know commercial XXX XXX, what am estate looking generally went am up. real a balances I’ll C&I. The you I view I of commercial up John, Slide lines the XX, estate – think we information, real Yes, on so you that, active on

real and on point X.X% seeing commercial you So, the went are estate and utilization up that.

And and commentary slide to that addition in John, is my Harold’s this comments. color

– have think see pick up. I that to opportunity you to for an we

sort funds to answer that is yes. I sort it. you So, loans. One I think the two inevitable to of is, of up know, construction of there is components mean, the

results C&I, of you the financing, moves and alike. will my is the case sales receivable if utilization in it up secondly, belief economy land cycle and that take in inventory seems utilization – the and that then, if that So, forward and

a footing to always find is is, So, and answer seems [Indiscernible] pick it set to but good that utilization the up. economy you going land

you spread basis to that rate then very pass assumption throughout does the XX to the out short your rates impacts Okay. how on have term looking quickly in the the increases up point year. on and the May And assumptions of depositors. just of all ramp hike at kind versus like Thanks. Does hike That’s kind in beta that assumptions helpful. faster your through

course that increase initially And Yes, relatively over the the rate we would our be be banker small. will beta cycle of planning the that’s our meaningfully.

pace does Okay. hikes But so the is factored of – that into now?

sure. For

have Okay. just last Good. from me. then I one you. And Thank

actual or I On assumed guidance six remarks the am about the being rest talking I But wondering slides in the prepared six on hikes throughout just the six rate year. guidance. year. for hikes seven am total of you the if are additional assume the seeing the

for Yes, we are thinking the rest more year. of this six

Good. Okay.

seven total. So

questions. for That’s for you. very Thanks all Okay. much. Thank you me. my Thank answering

John. Thanks,

question from UBS. with Vandervliet Brock next comes Our

morning. Hey good

back and guide going for this awesome to loan year. BHG growth Just just

guidance those much Just would less the need much uncertain, we reserves? discussion behind are we at curtain? how talking been internally Like, loan Do them narrow have terms and of in clouds box drop least credit on need drop, the happening the of there some year-to-date to of, been you macro wondering has more darkened comfortable to boos have materially okay, with as discussions to been or has environment the happen? what growth, how gotten

their further to can’t into added on sure and is I their people. - have portfolio people diligence. not forth. I They’ve obviously that credit am statistics. their the exposure so than units looking to access measurement we that their and so increased really large BHG credit how at they only on put meetings Yes, to a much and Board are other

So, out I and risk trying exactly that’s headed. but are where what to know if they look like - the enterprise-wide don’t going to am corners. group around that you us have I an that’s is going

provisioning, expecting – Okay. repeatedly that this it sounds your I like target reserve That’s should intermediate that close reserve we’ve Is term down. enough. And to there? trend continues provisioning to side on to separately we how of am near just to neighborhood – high estimated as way on be Pinnacle’s guidance, your and

think for stronger the this where just caution. I don’t think though, about really Yes, to we we charge-off are have I officers, in the year is. our numbers, talk forecast book When a have excited I that – but credit they

quarters four where probably of provisioning string even a we now been have than We has lot anticipated. a less

year. maybe back elevation there of the towards end the So some

you. Thank Okay.

Our Steven comes next question with from Alexopoulos JPMorgan.

Hey. Good morning everybody.

Good morning.

this a Terry, I Slide really few shares. I you left has just quite start, What’s happened have want strides talent XX, to or be on take this markets from and acquisition these in based am strong perspective? opportunity for to your market Truist even think curious a do on local experience similar better a you markets, what see your do you is with there? could

time, hires. looked go with you say, over and honest last say believe would manufacture that’s years Steven know what you of you think I principal if at to for be would if comparable new us SunTrust all you I would terms is am I present been in hey this. the to the I there get numbers saying have five I the

Wells that years a the over us. think you being three make I two for last when it more time biggest manufacturer the or recent period to evolve

of so, Truist, moving there. is lots to think vulnerability of I sort there And today, back

don’t comparable for I I us. know, about don’t as first won’t thing be and this – for say so, And us

helpful. this different see in revenue view, once That’s where break in we picture markets, slide, Terry, opportunities, generation producers these moving out big a from next the on then, a to And do markets. you Okay.

continuing So different Atlanta moving towards number, these to other the of this a is now exact Atlanta but start forward? markets and move

Tennessee are I know and total think, I markets of so and grand size size, dynamics. markets in terms just the growth and so, their the the Well, Atlanta

days a period markets of when we centered states part And time year into are thinking around those, our on how so, go our five when or hire three in is of those something. they leadership we bank over

let’s markets but by Atlanta. indicative be going are in hire near what so, number of markets, there. and know, don’t DC I those will And I – similar faster so, love in markets in days Knoxville the even a those Atlanta. Birmingham be penetration we less. we [Indiscernible] see smaller out in producers the in Yes, the what’s just am that don’t better, those would opportunity set should what’s encouraged mainly than so in markets. be see. maybe if on and in But I big on of and the but revenue going run but growth little that’s we

on finally, period on That’s front? rates color. you deposit many How Thanks. Maybe then, get the maybe the have deposit the rate. good On scenes? what into a And seeing going rates, end are the now, so for You of behind modestly. Harold, up competitor And Okay. asking I’ll RMs handling what’s customers next. Harold are were higher that? that from banks

Yes. I mean, all, of first not seeing we competitor banks. we – but are from are anything

don’t increasing are competitor at competitors are rates counterparts think – So, rates I of all. any

primarily phone an they working plans from we calls expect are the rates ones, focused scales. plus are rates as are have we do – getting and might that us you to now with pricing are And on their index, several We those but the deposit do. on various class

there, the to out is and where base nickel. got obviously every increased client profits, a they our But not they and last pay there So those of the attention churches of lot kind businesses rates. for

And we to work and them. you with them so expect to should expect talk us

going what’s that’s So, on. really

a those around concerned to to the but trust get of drive do operating more next where to calling, most sort not of the they line things. the their We companies on fewer operating the person about going lot are to – are put of are are that companies

based seen of be terms And so could you from a what in Harold, pricing? what in it you have an upon, about is of far expected, right, requests exception Okay. exception mind number pricing, the for

more that we look cost, we rise think particularly little we interest are took our increase see XX better thought. we I I increase when would I deposit it have day and the basis every because fair would that XX point at than have thought Well, doing points. rate with on a basis is would

and what job information my doing this my are am relationship cycle. comment rates So think in are it’s I have I indexed because is and as hats they we class do the that do some given I we think, in placed and the really where But would off a rate our our that accounts. to I to great managers

Okay. Great. Thanks for questions. taking my

Thank you.

Our next James. question with comes Rose from Raymond Michael

how many loans Hey. I February or kind – Good know to Thanks. morning. the of in an for given little into a on and built maybe how and growth the just adding tougher sense for be increase? environments. want expectations a quarter’s it each Thanks for and could just securitization BHG adding get year? to get quarter you of much from are this guidance that if you questions. expected guys would the that be for update taking loans BHG I my to are I did wanted much how

add here think Yes, added the it added any sure what think year. BHG. I that Michael, about But the we in quarter. them I If not us don’t communicated we’ve this million or to is between And and in any was so from quarter may loans added I we first any, million. $XX if am look we we first $XXX

is maybe I versus talk about quality. the mean it’s lower we reserve some Thanks. Obviously, Great. that at of about potential could the definitely things of by then good, of are and mean going provisions clouds on talk host day to If Okay. the kind I just horizon and of terms And but credit switching look in clearly there credit down. forces the horizon. Can on kind you for really – could what happen down, than reserves? metrics improving just early what kind where

Yes, moving think gradually to influence the metrics be are and see with period the past that for us forward credit migration would improving that. the in is that I

this and to at There macroecnomic thing less outlook. forward kind term it pressure reserves is on pressure build. with So, the near respect is that downward the same will put on of

combination, at So more next two the I think will, things least confidence – of down us us – will than likely over give here quarters. in those the couple reserve next that those the go

more [Indiscernible] I We couple will we’ve day get the we do the Now room But next think here got like happen. to into it the don’t quarters. down that CECL expect over think don’t kind of some we said

for my Okay. Great. taking Thanks questions.

Our Stephens next question Matt from with comes Inc. Olney

of for year? really Pinnacle the of back originations. your Hey. on rates know what new on of lift I just on morning. to the good curious like want bank. XX, the higher loan this loan And does, the kind are competitors question new with new of expectations assuming spreads. have really am I of this your go are liquidity are the I Page to markets, spreads Thanks. into you gave seems really higher a like hoping curious It year. that summary. the And to of Good slow like many rates, my the strong see the and down you also the us is But impact But expectations flow discussion

Matt, this is Harold.

kind both of originations, we what similar the get the for think, I to to – hope spreads loan new currently. years

bring to current assumption borrower we won’t won’t in beta of that a planning is probably likely anticipate, that we get the XXX% loan that to get order street, we like our Our we’d book. across that the new

built some are booking. is So that there caution new be we pricing credit what the going is to into on

back guess, this step back the in about that cost And last cycle. then first accelerated It rate a I like half pretty more Okay. cycle, deposit taking throughout the rate then the well but bank sensitivity and seems a thinking the cycle, Pinnacle just broadly half. performed

think guess, a lower in that few changed betas bank’s ago. deposit years has think But sheet higher like the I of terms about mean, are given So, else sounds what it how levels balance this expectations of be could the for we should liquidity. since I the you what cycle?

built. sheet if significant balance don’t change whole there in our know how lot I of is is a

far side, the rate a time. cycle. As back balance probably left the book last was on than points liquidity influenced in the as bigger Obviously, since bond this has a has our moved up sheet how maybe is half I last our what think it percentage

that comfort as maybe time be won’t beta some us as gives deposit last that time. think significant I was it this and So, the

we and here different beyond think the just I the structure a is I massive modest phenomenon pretty macro Matt, before. sheet, think, balance loan to liquidity base demand what there environment where is and

to more changes will that think in structured the balance impact sheet. I So, have just perhaps

Okay.

all That’s for Okay. guys. me. Thanks

The Securities. next Truist question comes from Jennifer Demba with

Thank you. Good morning.

Jennifer. Hey,

you could second my DC Washington Pinnacle’s elaborate of question buyback Terry, now? on greater on the kind commentary And your then market? optimism appetite your on rate Thanks. for is

so think the I case starts Washington in high a Yes, of Jennifer, Okay. large with it market growth. DC, with

where us, they of As story sorts and are about business come from those is hire and who and who people the and can whole the else people for know, can hire you that that, beyond all they what you and they things. move

right barely gain saw there that months. say pace sheet in scratched you But and surface rapid circle But first is again hiring get I’ve and balance also the there that hard that volumes are on it’s pipeline very - the and on belief really slide still to there so, And four is my both and just large is have pipeline is you is the also this for some large. getting you their both. hiring the

and basis pipelines of building are from are also our the And optimism. that long hiring that there, combination the that they’ve pipelines generated so, people is

the appetite point? for at buybacks And Okay. this

forecast a looks really to is growth on don’t right thing loan do of in what – now. point is I execute are consider One that Harold. at am we buybacks any our kind this buybacks we Jennifer, I like. not think

that loan and to relation And currently is fairly at be so, growth to looks going we’ll it significant look capital. like in our

we right hold, the more probably the I a little start we weighing stock in on on we a So, now, think to might obviously are spin with pressure see stock then if but effort. more trying

Thank you so much. Great.

you. Thank

Sandler. question Our comes Piper Stephen Scouten from with next

guys. am slide are the that’s math a morning growth market their the hires But just you good maybe loan I new thinking laid like just Terry it XX% how potential. do growth you out, if curious expansion Appreciate from standpoint. I on on the Hey, time. about looks the about

amount about the next expansion market the in way see get how teens out guessing to and up a that fair am it think to the I So and you do expansion. market Is shaking a prospects to more from standpoint currently?

I you might but start from think existing wise we the the way extensions specifically you growth so, and you into market don’t growth, new other when is, forecast, that have I Stephen, baked go get in Yes, footprint. from growth and get hires bankers compartment which

that add we come is from that sort would that’s and where have the mid-teen that the here. growth so, lenders And that legacy people people of may are hired

– will so it’s M&A. has market been know In when are out. question. extension transactions question to you it tried M&A extensions then we we market think It say for for I terms time always extension, We as good comes and when about a our to hire there I markets the look in – it Same us market opportunity is so – figure more hard to don’t a strong. of overwhelming is is all in we I the and thing opportunities. that

that have hiring in bank you it’s number and a sales remind a just build hiring that you market. not for we us, of about think discussions to big We markets about teams, in it’s

Stephen, And keep where and the the move let Florida, a this, think when trying going about and like so, to and urban the of markets markets Memphis back might move me to are State DC, so, down find you major we when we’d be draw we’ll to in. we to line to we up those, go big

sort the trigger. find we of not in projection. a build included that’s bank we think And so, growth But will as you pull people, the

talent is about to that was any new platform? that Was I I economic Atlanta Terry. extension about product noted that for not a them expansion, Okay. thinking run that’s Yes, in set Perfect. presentation. margin to if in retention, a being then, am really but that’s more helpful. their tap that or [Indiscernible] the the is about Appreciate stands, that great think able And that. market answer, BHG, just

I of both. little think a it’s

lot a of part that in think Atlanta. are of of new are some I people the products their

And so, that are talents Atlanta a forward. there potential think them to foothold and some introduce they more decided their employees the to they that to have I establish that kind gives of opportunities in looking brands

discussion. go? be we question that just year, is maybe maybe you business and some the back think modeling sort you the worried might as and provisioning betas Got then, around also and you – I backs do BHG combat of the do investor but half whole. about where unsecured think lending that’s of this push near your what about How that a have would it. book we consumer start one more I kind in That’s shift, more change of to combat credit if Moody’s then that on of at to as term an could said were helpful. ideology how outlook up had you their the know something a of with impact BHG, maybe if your type And to

I obviously, everybody. toward unemployment does I it’s entitled it’s are what think could a mainly that think Yes, position change be your on GDP,

granted they’ve of point into the on systems, as As size average traditional business lines, $XX,XXX. consumers their gotten on their lending far into borrowers, their but to and BHG credit sale, their and pool, ticket of the as shelf, to

These So, in confidence. folks with not can are their established. kind ticket system histories have believe that of credits. are credit credit They and into lean credits these loan are they so legitimate that are scoring that these

different respect consumer So, look I proceeds are and forth. to traditional focused on on so folks consumer with classify what wouldn’t are book on understand book so use I that These like. should based things as traditional a

and great on guys helpful, Makes Very a Well, deck. Got in quarter congrats the so. sense. lot of the it. slides appreciate a new

Thank you, Stephen.

question with Mealor KBW. comes from next Catherine Our

Good Thanks. morning.

Catherine. Hi,

do How guide? sheet just sitting goes margins. assets how into the back today. ratio earning average and One of the think that that at through the balance to half The of on you XX% NII where moves your and follow-up is the year cash about GAAP

reduction be some We Yes, year. that, for rest a the of we the stable it’s not I have going do in lot. but to mean, think fairly

the couple extra bit But us the shorter be at little curve will will We – of that’s give for some all are end little making term item of that an is give tax that products money. just instruments, with kind that a exposure on of another near looking employment will a punch. us rates of maybe a little more

will it technically it in a think, security. term shorter bond be the book, will be but I

Thank I credit this what Okay. coming and feel between just connects I the And on are from credit, charge-off big Great. you seeing and have and so that on investors. down, parts helpful. Any declined low can concerns yourself we prepare can cost, picture commentary are more through prepare today increase any with relatively XX, banks that is mean, good closely, things think resources you are has just are of get are maybe you and book the will in what in be potential away is NPA we you risk looking do to staying you. you credits credit today pass from higher your for you at

what so two for Well, forth. around to credit of on the be last from what and kind gave today hotels years because of diligence that they what given particularly on me I and me at so those so on inflations about that is where back it going I mentioned Terry looked are looks like talking are like officers, time first the exposure forth. credits, spend COVID comfort over credit that reducing book the they we so and the of before, into got some We probably was that discretionary with lot about doing officer will forecast regarding spending, things one a I the think

in cost credits they feel. sound we now, are to processors that believe discretionary our right to shape. are type that So good subject spending Those that are selection more be looked

to it end do to they Now, you The that? past of can Not all sure. passing call business going find is truckers all at that’s and to and right the their that up and laws. them we look are companies field concrete But now consumers, like opportunities. is long be workers? about How biggest then that, everybody – cost issue next right able now, talked

much. Great Okay. quarter. Great. so That’s helpful. Thank you

Thank you.

Alexopoulos JPMorgan. Steven from with comes question next The

He have you Steve, are there? must dropped.

move on the I’ll next Okay. one. to

comes Martin Our from Scott. question Montgomery with next Brian Janney

joined your bit up little growth. a that bit question, maybe a you that much? hear? last the talked to the that be quarter, different change liquidity stand comments about a I quarter expected on to little all just to and It good going not loan based it’s is maybe kind this liquidity. late, your picked but question, Hey, morning – last guys. that bit so you little drop sounds in of Is Can your last of terms you just the

Yes.

don’t to I think don’t think I jump, come light character as a the that in to XX%, that it XX% it’s it I change will like something I much. But of it’s going going down. lot. will that. jump out think

you. Got

And rate May is expectations, if just of Alright. meeting timing May, in is your it you meeting what? of increase XX meeting beyond in next just that the gave it then, here, just or said kind Okay. one it you

I right, Brian. that’s think

on side deals or books spreads off on – what’s give new loan the then to that Alright. maybe new those you just commercial just today can about relative books? coming thoughts loans you Okay. And are general, yields you the on on talked getting, the guys but in the any what’s

whole think and lot the Well, of big is we that fixed loans. Right between some we get there rates a the rate credit. I increased are on delta loans can don’t new now, former hopeful the

little of we’ve on better getting are I rates probably spreads lending a other need our think we I than what – there. those. that on are fixed of to do just in hanging think kind I don’t know. We rate been But kind and

folks, whole a are that other our really that’s LIBOR doing there The out this good issues thing. think I on is cessation job

rates increasing I is a the gathering that bit. there think are little that hanging on we spreads – not our are

that. about feel good pretty we So,

Got you.

appreciate. quarter. great I and guys. had I all That’s a Thanks Okay.

Thanks, Brian.

at time. I this am further showing any questions not

So this does conclude today’s presentation.

wonderful You may now day. and have a disconnect