Pinnacle Financial Partners (NYSE:PNFP) reported stronger second-quarter 2026 earnings and balance sheet growth, with management saying the bank remains on track with its full-year financial outlook while continuing to integrate its recent combination.
President and CEO Kevin Blair said the company reported diluted earnings per share of $2.07 and adjusted diluted EPS of $2.50, excluding $82 million of pre-tax adjusted items. Year-to-date adjusted EPS rose 26% from the same period last year, according to Blair.
Loan Growth Exceeds Expectations, Deposits Rise Despite Seasonal Headwinds
Pinnacle said loans increased $2.9 billion from the prior quarter, ahead of management’s expectations. Chief Financial Officer Jamie Gregory said period-end loans grew 14% annualized from the first quarter, with most of the growth coming from commercial and industrial lending. He described the growth as broad-based across geographic markets and supported by specialty lending platforms.
Deposits increased $795 million from the first quarter. Gregory said the quarter included typical seasonal headwinds from tax payments and public fund outflows, which tend to reverse in the second half of the year. Excluding the decline in public funds, core deposits grew $963 million, or 1%, in the quarter.
Blair said loan growth is tracking at the top end of the company’s full-year 9% to 11% guidance range, while deposit growth is tracking near the middle of its 8% to 10% range.
During the question-and-answer session, Gregory said the company expects strong deposit growth in the second half, helped by seasonal factors that could contribute $1.5 billion to $2 billion. He also said deposit production has exceeded $1 billion every month this year.
Net Interest Income Rises as Margin Compresses
Net interest income was $956 million, up 2% from the first quarter, or 10% annualized, Gregory said. The increase reflected growth in earning assets, which rose 4% from the prior quarter.
Net interest margin was 3.44%, down 9 basis points from the first quarter, or roughly 6 basis points excluding non-recurring items in the prior period. Gregory cited a modest decline in loan yields, lower SOFR rates during the quarter and higher-cost funding tied to seasonal deposit trends as headwinds.
Pinnacle now expects full-year net interest margin in a range of 3.44% to 3.47%, while Blair said the company continues to expect revenue within its previous outlook and now sees full-year revenue trending toward $5.05 billion to $5.1 billion.
In response to analyst questions about margin pressure, Gregory said management still expects high single-digit net interest income growth over time, supported by loan growth and limited incremental expense tied to that growth. Blair added that the company is not seeing a “NIM that’s in free fall,” but rather one that is moderating while still supporting revenue growth.
Fee Income Mixed, Core Client Businesses Grow
Adjusted non-interest revenue declined $12 million from the first quarter, largely due to lower income from BHG. Gregory said income from the company’s equity method investment in BHG totaled $24 million in the second quarter, in line with expectations as BHG shifts its loan placement strategy.
Gregory said core client income streams remained strong, with core banking, wealth management and capital markets all producing linked-quarter and year-over-year growth. Core banking and capital markets fees each increased 3% from the first quarter.
Asked about fee income expectations for the second half of the year, Gregory said the company expects continued growth across the board, with larger quarter-to-quarter increases likely from core banking fees and wealth management. He also said capital markets has “very strong momentum.”
Blair said the company remains on track to recognize about $20 million of revenue synergies in 2026, with roughly half achieved through June. He said most of the year-to-date revenue synergies have come from capital markets, including syndication capabilities, foreign exchange, hedging and equipment finance.
Credit Quality Remains Stable, Capital Builds
Management characterized credit quality as a strength. Net charge-offs were $48 million, or 22 basis points, consistent with expectations. The non-performing asset ratio improved to 0.50% from 0.58% in the first quarter.
The allowance for credit losses ended the quarter at 1.17%, compared with 1.19% at the end of March. Blair said the reserve on new production is coming in lower than the overall portfolio, reflecting the mix of new assets rather than a shift toward lower standards.
Pinnacle’s preliminary common equity Tier 1 ratio rose 12 basis points from the first quarter to 9.93%. Gregory said the company’s priority is to deploy capital into “high return, client-driven growth” while moving toward a CET1 target of 10.25%.
Asked whether the company still expects to reach that target by year-end, Gregory said it depends on the pace of loan growth in the second half. He said Pinnacle generates about 30 basis points of capital each quarter before risk-weighted asset growth, with loan growth consuming a portion of that amount.
Hiring Momentum Continues During Integration
Blair highlighted continued hiring as a key part of Pinnacle’s growth model. The company added 74 experienced revenue producers during the quarter, up 48% from the first quarter and up 14% from the combined firm’s second quarter of 2025. Blair said another 34 producers had already started or accepted offers in the first half of July.
Year-to-date, Pinnacle has added 124 producers, approximately half from what management considers core Synovus markets. Blair said retention, excluding merger-related synergies, was 94% year-to-date.
Blair said the competitive environment continues to favor Pinnacle, citing larger competitors’ bureaucracy and slower decision-making. He also referenced Coalition Greenwich data that placed Pinnacle first among peers in business momentum, measured by the net percentage of clients planning to do more business with the bank versus less.
“Strategy is a plan. Execution is a result,” Blair said. “We are six months in, and the results are doing the talking.”
For the remainder of 2026, Pinnacle expects adjusted expenses in the middle of its $2.675 billion to $2.775 billion guidance range. Blair said expenses are expected to increase from the first half due to revenue producer hiring, market expansion, third-party partnership revenue expenses and normal inflationary and growth-related costs.
Blair closed the call by saying the company is executing on the plan it laid out at the time of the combination. “We have real runway ahead, and it involves taking share one quarter, one client, and one banker at a time,” he said.
About Pinnacle Financial Partners (NYSE:PNFP)
Pinnacle Financial Partners (NYSE: PNFP) is a bank holding company headquartered in Nashville, Tennessee, that provides a broad range of commercial and consumer banking services. Founded in 2000, the company operates through a network of banking offices and digital channels to serve individuals, small and middle-market businesses, and institutional clients. Pinnacle’s business model emphasizes relationship-based banking and tailored financial solutions for commercial borrowers and deposit customers.
The company’s product and service offerings include commercial and residential lending, treasury and payment solutions, deposit accounts, mortgage services, and cash management.
