PNFP Reports 2Q24 Diluted EPS of $0.64 and Net Interest Margin of 3.14 Percent

Excluding impacts of capital optimization and balance sheet repositioning initiatives, diluted EPS of $1.63

Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $0.64 for the quarter ended June 30, 2024, compared to net income per diluted common share of $2.54 for the quarter ended June 30, 2023, a decrease of approximately 74.8 percent. Net income per diluted common share was $2.21 for the six months ended June 30, 2024, compared to $4.30 for the six months ended June 30, 2023, a decrease of approximately 48.6 percent.

After considering the adjustments noted in the table below, net income per diluted common share was $1.63 for the three months ended June 30, 2024, compared to $1.80 for the three months ended June 30, 2023, and $1.53 for the three months ended March 31, 2024, an annualized linked-quarter growth rate of 26.1 percent. Net income per diluted common share adjusted for the items noted in the table below was $3.16 for the six months ended June 30, 2024, compared to $3.55 for the six months ended June 30, 2023.

"It appears to us that, in the second quarter, we saw the inflection we had anticipated," said M. Terry Turner, Pinnacle's President and Chief Executive Officer. "Not only did we continue to have outsized balance sheet growth which we expect to exceed that of peers, but we also had net interest margin expansion and ongoing double-digit growth in most of our fee businesses. Total revenues were $366.6 million during the second quarter of 2024 compared to $428.1 million last quarter. Excluding the adjustments noted above, total revenues increased $22.3 million, or 5.3 percent, to $438.7 million for the second quarter compared to $416.3 million in the first quarter.

"Also, during the second quarter, we executed several initiatives with the objective of capital optimization and balance sheet repositioning that were both a priority for our firm going into 2024. We accomplished these objectives while increasing both our tangible common equity and tier 1 common equity ratios at the end of the second quarter and achieving an earnback period on the balance sheet repositioning of less than three years.

"I believe the various initiatives that have been undertaken in order to achieve sound growth, even in this more difficult operating environment, continue to differentiate our firm in terms of earnings trajectory. Our effort to increase our deposit base by expanding into various deposit verticals is progressing well, now reporting approximately $1.0 billion in net deposit growth in these verticals through the first half of 2024. Additionally, our strategic expansion into new markets and our ability to attract "best in class" revenue producers continue to fuel outsized growth. Loan growth attributable to these new markets for the first half of 2024 amounted to approximately 73 percent of our aggregate loan growth this year. Our latest expansion into Jacksonville is also advancing rapidly in terms of hiring revenue producers and moving client relationships, with that market reporting $20.1 million in loans, $28.8 million in deposits and $614.6 million in wealth management assets, all amassed within just the last three months. System-wide, our robust hiring continues, as we have added 89 new revenue producers thus far this year, 18 of which are in Jacksonville. Our hiring pipelines remain very robust heading into the second half of 2024.

"With the initiatives we accomplished in the second quarter, as well as our continued outlook for outsized loan and deposit growth, we enter the second half of 2024 with great optimism."

BALANCE SHEET GROWTH AND LIQUIDITY:

Total assets at June 30, 2024, were $49.4 billion, an increase of approximately $472.8 million from March 31, 2024, and $2.5 billion from June 30, 2023, reflecting a linked-quarter annualized increase of 3.9 percent and a year-over-year increase of 5.3 percent, respectively. A further analysis of select balance sheet trends follows:

• During the second quarter of 2024, the commercial and industrial and owner-occupied commercial real estate loan portfolios grew linked-quarter annualized 14.6 percent and 17.0 percent, respectively, while the non-owner occupied commercial real estate portfolio, which consists primarily of commercial real estate investment, multifamily and construction and development loans decreased linked-quarter annualized by 2.6 percent. The firm continues to pursue reduced levels of commercial real estate loans by significantly limiting growth in these loan segments until certain benchmarks are achieved. At June 30, 2024, the firm's non-owner occupied commercial real estate, multifamily and construction and development loans to total risk-based capital ratio fell to 254.0 percent while our construction and land development loans to total risk-based capital ratio decreased to 72.9 percent. Over time, the firm has targeted a non-owner occupied commercial real estate, multifamily and construction and land development loans to total risk-based capital ratio of less than 225 percent and construction and land development loans to total risk-based capital ratio of less than 70 percent.
• Late in the second quarter of 2024, the firm executed various capital optimization and balance sheet repositioning initiatives intended to improve ongoing revenue and earnings run rates, as follows:

1. Reposition the firm's securities portfolio with the goal of meaningfully enhancing its future performance - In doing so, the firm incurred losses in the second quarter related to the sale of approximately $894.8 million of available-for-sale securities at a net loss of $72.1 million and the termination of an agreement to resell for $500.0 million of securities that the firm had previously purchased (the resell agreement). The termination of the resell agreement required termination fees to be paid to the counterparty of approximately $27.6 million, which has been recognized in noninterest expense during the second quarter. The proceeds from the sale of the $894.8 million in available-for-sale securities and the $500.0 million resulting from the termination of the resell agreement have been reinvested such that the yield increase on the new securities acquired approximates 3.1 percent over the prior weighted average yields of the sold securities and the terminated resell agreement.
2. Offset the negative capital impact of the second quarter losses from the execution of the balance sheet repositioning initiatives - The firm executed a credit default swap arrangement (CDS) with a notional amount of $86.5 million with a counterparty which equals 5 percent of a reference pool of $1.73 billion of 1-4 family first lien mortgage loans whereby the counterparty will assume the first-loss position for these loans up to approximately $86.5 million in aggregate losses. The firm will pay to the counterparty an annual loss protection fee equal to 7.95 percent of the corresponding notional amount of the CDS, for as long as the loans in the reference pool remain outstanding. The notional amount of the CDS will decline over time as the loans in the reference portfolio are paid down, mature or the investor absorbs the first loss portion of any loan losses on those loans. Additionally, and in accordance with regulatory guidelines, the firm has implemented enhanced control processes with respect to certain other commercial loans which permits recharacterization of these loans in order to reduce the risk weights assigned to these loans. As a result, the loans subject to the CDS and the loans where risk ratings were able to be recharacterized now qualify for reduced risk weights pursuant to risk-based capital guidelines. The benefits of these reductions in risk weighting offset the impact to capital of the loss on the sale of the securities and the termination of the resell agreement. In order to accomplish the CDS and the recharacterization, the firm incurred $850,000 of professional fees during the second quarter which are also included in noninterest expense.
3. Minimize the payback period on the losses incurred in connection with the balance sheet restructuring transactions - The firm anticipates that the increased revenues from the repositioning of the firm's investment securities portfolio, less the annual loss protection fees associated with the CDS, will offset the loss incurred on the sale of available-for-sale securities and the termination of the resell agreement within a three-year time period, which the firm believes to be a reasonable payback period.

"Despite moving quickly toward our previously announced lower targets for our construction and land development, non-owner occupied commercial real estate and multifamily portfolios as a percentage of risk-based capital, through the first six months of 2024, our loan growth approximated $1.1 billion, a 6.7 percent annualized rate of growth," Turner said. "We are optimistic that we should see increases in the pace of loan growth in the second half of 2024 as we believe we will continue to take market share from the larger franchises that currently dominate our newer markets.

"As to deposit growth, during the second quarter, total deposits were up approximately $368.4 million while brokered deposits decreased by $339.7 million during the quarter. Excluding these brokered deposits, total deposits were up $708.1 million in the quarter which was similar to our experience in the first quarter of 2024. Importantly, we are very pleased that our noninterest bearing deposit balances were relatively stable during the entirety of the second quarter."

PRE-TAX, PRE-PROVISION NET REVENUE (PPNR) GROWTH:

Pre-tax, pre-provision net revenues (PPNR) for the three and six months ended June 30, 2024, were $95.2 million and $280.9 million, respectively, a decrease of 65.7 and 39.9 percent, respectively, from the $277.6 million and $467.6 million recognized in the three and six months ended June 30, 2023, respectively.

• Net interest income for the second quarter of 2024 was $332.3 million, compared to $318.0 million for the first quarter of 2024 and $315.4 million for the second quarter of 2023, a year-over-year growth rate of 5.3 percent. Net interest margin was 3.14 percent for the second quarter of 2024, compared to 3.04 percent for the first quarter of 2024 and 3.20 percent for the second quarter of 2023.

Noninterest income for the second quarter of 2024 was $34.3 million compared to $110.1 million for the first quarter of 2024 and $173.8 million for the second quarter of 2023.

• Wealth management revenues, which include investment, trust and insurance services, were $27.8 million for the second quarter of 2024, compared to $26.0 million for the first quarter of 2024 and $24.1 million for the second quarter of 2023, a year-over-year increase of 15.4 percent. The increase in wealth management revenues was attributable to several factors, but primarily is the result of an increase in capacity with more revenue producers and the placement of those producers in the areas of the firm's most recent strategic market expansions.
• During the second quarter of 2024, net gains from mortgage loans sold were $3.3 million, compared to $2.9 million in the first quarter of 2024 and $1.6 million in the second quarter of 2023. Similar to wealth management, the increase in mortgage fee income was primarily attributable to increases in capacity with more originators in Pinnacle's newer strategic market expansions.
• Income from the firm's investment in Banker's Healthcare Group (BHG) was $18.7 million for the second quarter of 2024, compared to $16.0 million for the first quarter of 2024 and $26.9 million for the second quarter of 2023, a year-over-year decline of 30.6 percent.
  • BHG's loan originations increased to $871 million in the second quarter of 2024, compared to $692 million in the first quarter of 2024 and $1.1 billion in the second quarter of 2023.
  • Loans sold to BHG's community bank partners were approximately $467 million in the second quarter of 2024, compared to approximately $533 million in the first quarter of 2024 and $523 million in the second quarter of 2023.
  • BHG reserves for on-balance sheet loan losses were $271 million, or 9.9 percent of loans held for investment at June 30, 2024, compared to 10.3 percent at March 31, 2024 and 6.0 percent at June 30, 2023. The year-over-year increase in reserves as a percentage of loans held for investment was impacted by BHG's adoption of lifetime credit losses associated with its implementation of the current expected credit loss (CECL) methodology on Oct. 1, 2023.
  • BHG increased its accrual for estimated losses attributable to loan substitutions and prepayments to $415 million, or 5.9 percent of the unpaid loan balances that were previously purchased by BHG's community bank network, at June 30, 2024, compared to $391 million, or 5.7 percent, at March 31, 2024 and $369 million, or 5.9 percent, at June 30, 2023.
• Other noninterest income was $41.8 million for the quarter ended June 30, 2024, a decline of $9.9 million between the second quarter of 2024 and the first quarter of 2024 and an increase of $8.4 million from the second quarter of 2023. Positively impacting other noninterest income in the first quarter of 2024 was approximately $11.8 million associated with the recognition of the Freddie Mac Small Business Lending mortgage servicing asset.

Noninterest expense for the second quarter of 2024 was $271.4 million compared to $242.4 million for the first quarter of 2024 and $211.6 million for the second quarter of 2023.

• Salaries and employee benefits were $150.1 million in the second quarter of 2024, compared to $146.0 million in the first quarter of 2024 and $132.4 million in the second quarter of 2023, reflecting a year-over-year increase of 13.3 percent.
  • Full-time equivalent associates increased to 3,469.0 at June 30, 2024 from 3,386.5 at March 31, 2024 and 3,309.0 at June 30, 2023, a year-over-year increase of 4.8 percent.
  • Cash and equity incentive costs in the second quarter of 2024 were approximately $4.3 million higher than the first quarter of 2024 and $4.8 million higher than the amounts recorded in the second quarter of 2023.
• Equipment and occupancy costs were $41.0 million in the second quarter of 2024, compared to $39.6 million in the first quarter of 2024, reflecting an increase of 3.5 percent, and $33.7 million in the second quarter of 2023, reflecting a year-over-year increase of 21.7 percent. Comparing the second quarter of 2024 to the second quarter of 2023, several factors contributed to the increase of equipment and occupancy costs, including new equipment and facilities, rent escalators on various properties and the previously disclosed sale-leaseback transaction executed in the second quarter of 2023.
• Noninterest expense categories, other than those specifically noted above, were $80.2 million in the second quarter of 2024, compared to $56.7 million in the first quarter of 2024, reflecting an increase of 41.5 percent, and $45.5 million in the second quarter of 2023, reflecting a year-over-year increase of 76.4 percent. Primarily impacting the quarterly changes in other noninterest expense between the first and second quarters of 2024 was the impact of the $28.4 million in fees paid to terminate the resell agreement and professional fees incurred in connection with the capital optimization initiatives described elsewhere in this release.

"During the second quarter, while our net interest margin expanded to 3.14 percent, we anticipate continued margin expansion for the remainder of 2024," said Harold R. Carpenter, Pinnacle's Chief Financial Officer. "Second quarter net interest margin expansion was the direct result of an intense focus on obtaining appropriate pricing on new and renewing loans, stability of our noninterest bearing deposit balances, and our relationship managers working extremely hard to keep our deposit pricing well contained during the quarter.

"We are very excited about our core fee performance during the second quarter. Second quarter fee growth in nearly every core fee category, including, but not limited to service charges, wealth management and mortgage, exceeded double-digit growth in comparison to the second quarter of 2023. BHG also had another strong quarter as their contribution was up approximately $2.7 million from the first quarter. At this time, we are anticipating the quarterly run rate for BHG's contribution to be fairly consistent with their second quarter contribution for the remainder of 2024.

"Our expense results for the second quarter are generally consistent with where we thought we would be excluding the costs of the balance sheet restructuring and capital optimization initiatives. That said, we are seeing strong hiring across our franchise, particularly in our newer markets and, in most cases, more favorable results than we anticipated. Given our outlook for the remainder of the year, we are increasing our accrual for annual cash incentive plan payouts to approximately 85 percent of target level payouts as of the end of the second quarter."

CAPITAL, SOUNDNESS AND TAXES:

"Net charge-offs to average loans for the second quarter of 2024 were 0.27 percent, compared to 0.20 percent in the prior quarter," Carpenter said. "Net charge-offs increased in the second quarter primarily due to the continued deterioration of the value of the underlying collateral of an owner-occupied commercial real estate loan. In light of these matters, our special assets officers determined it was time to exit the borrower. This resulted in a charge-off of $10.3 million which was recognized in the second quarter. Most of our other key asset quality metrics continue to be better than longer-term historical levels as we experienced a decrease in nonperforming loans in relation to total loans at June 30, 2024 and experienced overall improvement in past dues, classified assets and potential problem loans ratios.

"Our effective tax rate for the first six months of 2024 was 18.1 percent. Excluding adjustments noted above and other tax benefits, the effective tax rate would have approximated 19.6 percent for the first six months of 2024, which is consistent with our historical run rates.

"Also, we are reporting an increase in book value per common share during the quarter from $76.23 to $77.15, an annualized linked-quarter increase of 4.8 percent and an increase in tangible book value per common share from $51.98 at March 31, 2024 to $52.92 at June 30, 2024, an annualized linked-quarter increase of 7.2 percent. Additionally, even after considering the securities losses, termination fees associated with terminating the resell agreement and transaction expenses associated with the capital optimization initiatives, the firm's common equity Tier one risk-based capital ratio increased from 10.4 percent at March 31, 2024 to 10.7 percent at June 30, 2024 which we also consider a great accomplishment."

BOARD OF DIRECTORS DECLARES DIVIDENDS

On July 16, 2024, Pinnacle Financial's Board of Directors approved a quarterly cash dividend of $0.22 per common share to be paid on Aug. 30, 2024 to common shareholders of record as of the close of business on Aug. 2, 2024. Additionally, the Board of Directors approved a quarterly cash dividend of approximately $3.8 million, or $16.88 per share (or $0.422 per depositary share), on Pinnacle Financial's 6.75 percent Series B Non-Cumulative Perpetual Preferred Stock payable on Sept. 1, 2024 to shareholders of record at the close of business on Aug. 17, 2024. The amount and timing of any future dividend payments to both preferred and common shareholders will be subject to the approval of Pinnacle's Board of Directors.

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. CDT on July 17, 2024, to discuss second quarter 2024 results and other matters. To access the call for audio only, please call 1-877-209-7255. For the presentation and streaming audio, please access the webcast on the investor relations page of Pinnacle's website at www.pnfp.com.

For those unable to participate in the webcast, it will be archived on the investor relations page of Pinnacle's website at www.pnfp.com for 90 days following the presentation.

Pinnacle Financial Partners provides a full range of banking, investment, trust, mortgage and insurance products and services designed for businesses and their owners and individuals interested in a comprehensive relationship with their financial institution. The firm is the No. 1 and fastest growing bank in the Nashville-Murfreesboro-Franklin MSA, according to June 30, 2023 deposit data from the FDIC. Pinnacle is No. 11 on the 2024 list of 100 Best Companies to Work For® in the U.S., its eighth consecutive appearance and was recognized by American Banker as one of America's Best Banks to Work For 11 years in a row and No. 1 among banks with more than $10 billion in assets in 2023.

Pinnacle Bank owns a 49 percent interest in Bankers Healthcare Group (BHG), which provides innovative, hassle-free financial solutions to healthcare practitioners and other professionals. Great Place to Work and FORTUNE ranked BHG No. 4 on its 2021 list of Best Workplaces in New York State in the small/medium business category.

The firm began operations in a single location in downtown Nashville, TN in October 2000 and has since grown to approximately $49.4 billion in assets as of June 30, 2024. As the second-largest bank holding company in Tennessee, Pinnacle operates in several primarily urban markets across the Southeast.

Additional information concerning Pinnacle, which is included in the Nasdaq Financial-100 Index, can be accessed at www.pnfp.com.

Forward-Looking Statements

All statements, other than statements of historical fact, included in this press release, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "expect," "anticipate," "intend," "may," "should," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, including, but not limited to: (i) deterioration in the financial condition of borrowers of Pinnacle Bank and its subsidiaries or BHG, including as a result of persistent elevated interest rates, the negative impact of inflationary pressures and challenging economic conditions on our and BHG's customers and their businesses, resulting in significant increases in loan losses and provisions for those losses and, in the case of BHG, substitutions; (ii) fluctuations or differences in interest rates on loans or deposits from those that Pinnacle Financial is modeling or anticipating, including as a result of Pinnacle Bank's inability to better match deposit rates with the changes in the short-term rate environment, or that affect the yield curve; (iii) the sale of investment securities in a loss position before their value recovers, including as a result of asset liability management strategies or in response to liquidity needs; (iv) adverse conditions in the national or local economies including in Pinnacle Financial's markets throughout the Southeast region of the United States, particularly in commercial and residential real estate markets; (v) the inability of Pinnacle Financial, or entities in which it has significant investments, like BHG, to maintain the long-term historical growth rate of its, or such entities', loan portfolio; (vi) the ability to grow and retain low-cost core deposits and retain large, uninsured deposits, including during times when Pinnacle Bank is seeking to limit the rates it pays on deposits or uncertainty exists in the financial services sector; (vii) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (viii) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower-quality assets; (ix) the impact of competition with other financial institutions, including pricing pressures and the resulting impact on Pinnacle Financial's results, including as a result of the negative impact to net interest margin from rising deposit and other funding costs; (x) the results of regulatory examinations of Pinnacle Financial, Pinnacle Bank or BHG, or companies with whom they do business; (xi) BHG's ability to profitably grow its business and successfully execute on its business plans; (xii) risks of expansion into new geographic or product markets; (xiii) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including goodwill or other intangible assets; (xiv) the ineffectiveness of Pinnacle Bank's hedging strategies, or the unexpected counterparty failure or hedge failure of the underlying hedges; (xv) reduced ability to attract additional financial advisors (or failure of such advisors to cause their clients to switch to Pinnacle Bank), to retain financial advisors (including as a result of the competitive environment for associates) or otherwise to attract customers from other financial institutions; (xvi) deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xvii) inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies, required capital maintenance levels or regulatory requests or directives, particularly if Pinnacle Bank's level of applicable commercial real estate loans were to exceed percentage levels of total capital in guidelines recommended by its regulators; (xviii) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xix) the vulnerability of Pinnacle Bank's network and online banking portals, and the systems of parties with whom Pinnacle Bank contracts, to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (xx) the possibility of increased compliance and operational costs as a result of increased regulatory oversight (including by the Consumer Financial Protection Bureau), including oversight of companies in which Pinnacle Financial or Pinnacle Bank have significant investments, like BHG, and the development of additional banking products for Pinnacle Bank's corporate and consumer clients; (xxi) Pinnacle Financial's ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions; (xxii) difficulties and delays in integrating acquired businesses or fully realizing costs savings and other benefits from acquisitions; (xxiii) the risks associated with Pinnacle Bank being a minority investor in BHG, including the risk that the owners of a majority of the equity interests in BHG decide to sell the company or all or a portion of their ownership interests in BHG (triggering a similar sale by Pinnacle Bank); (xxiv) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, like BHG, including regulatory or legislative developments; (xxv) fluctuations in the valuations of Pinnacle Financial's equity investments and the ultimate success of such investments; (xxvi) the availability of and access to capital; (xxvii) adverse results (including costs, fines, reputational harm, inability to obtain necessary approvals and/or other negative effects) from current or future litigation, regulatory examinations or other legal and/or regulatory actions involving Pinnacle Financial, Pinnacle Bank or BHG; and (xxviii) general competitive, economic, political and market conditions. Additional factors which could affect the forward looking statements can be found in Pinnacle Financial's Annual Report on Form 10-K for the year ended December 31, 2023, and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC and available on the SEC's website at http://www.sec.gov. Pinnacle Financial disclaims any obligation to update or revise any forward-looking statements contained in this press release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Matters

This release contains certain non-GAAP financial measures, including, without limitation, total revenues, net income to common shareholders, earnings per diluted common share, revenue per diluted common share, PPNR, efficiency ratio, noninterest expense, noninterest income and the ratio of noninterest expense to average assets, excluding in certain instances the impact of expenses related to other real estate owned, gains or losses on sale of investment securities, gains associated with the sale-leaseback transaction completed in the second quarter of 2023, losses on the restructuring of certain bank owned life insurance (BOLI) contracts, charges related to the FDIC special assessment, income associated with the recognition of a mortgage servicing asset in the first quarter of 2024, fees related to terminating agreement to resell securities previously purchased and professional fees associated with capital optimization initiatives in the second quarter of 2024 and other matters for the accounting periods presented. This release may also contain certain other non-GAAP capital ratios and performance measures that exclude the impact of goodwill and core deposit intangibles associated with Pinnacle Financial's acquisitions of BNC, Avenue Bank, Magna Bank, CapitalMark Bank & Trust, Mid-America Bancshares, Inc., Cavalry Bancorp, Inc. and other acquisitions which collectively are less material to the non-GAAP measure as well as the impact of Pinnacle Financial's Series B Preferred Stock. The presentation of the non-GAAP financial information is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Because non-GAAP financial measures presented in this release are not measurements determined in accordance with GAAP and are susceptible to varying calculations, these non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures presented by other companies.

Pinnacle Financial believes that these non-GAAP financial measures facilitate making period-to-period comparisons and are meaningful indications of its operating performance. In addition, because intangible assets such as goodwill and the core deposit intangible, and the other items excluded each vary extensively from company to company, Pinnacle Financial believes that the presentation of this information allows investors to more easily compare Pinnacle Financial's results to the results of other companies. Pinnacle Financial's management utilizes this non-GAAP financial information to compare Pinnacle Financial's operating performance for 2024 versus certain periods in 2023 and to internally prepared projections.