Pinnacle Financial Partners posts $2.40 Q3 diluted EPS, up from $2.19

Pinnacle Financial Partners, Inc. reported third quarter 2026 net income available to common shareholders of $364 million, or $2.40 per diluted share, a 10% increase from $2.19 in the same period last year. Excluding merger-related expenses and other items, adjusted net income was $409 million, or $2.69 per diluted share.

President and CEO Kevin Blair stated that the company delivered double-digit diluted EPS growth year over year while building capital and maintaining sound credit. He noted that retention and recruiting efforts are ahead of plan, with 96 experienced revenue producers added in the third quarter.

The merger of Pinnacle Financial Partners and Synovus Financial Corp. closed on Jan. 1, 2026. Consequently, reported results for the third quarter of 2026 reflect the combined organization, while prior periods reflect legacy Pinnacle. The company noted that year-over-year comparisons are significantly impacted by the merger due to the magnitude of the acquired balance sheet and purchase accounting effects.

Period-end loans stood at $89.8 billion at Sept. 30, 2026, up $1.7 billion or 2% from the prior quarter. The majority of this growth was in commercial and industrial credits. Period-end deposits reached $103 billion, up $2.1 billion or 2% from the prior quarter.

Net interest income grew 3% to $986 million in the third quarter. On a linked-quarter basis, the net interest margin declined 4 basis points to 3.40%. This reduction was primarily due to higher deposit costs and an ongoing liquidity build funded by wholesale sources, which was partially countered by higher yields on securities and loans.

Non-interest revenue was $326 million, while adjusted non-interest revenue was $323 million. Linked-quarter adjusted non-interest revenue increased by $53 million from the second quarter, driven by higher production in the company's equity-method investment in BHG and a $23 million gain from the payoff of an equipment lease.

Non-interest expense was $749 million in the third quarter. Adjusted non-interest expense was $690 million, up 4% on a linked-quarter basis. This increase was primarily driven by employment expenses related to an annual incentive accrual true-up and accelerated hiring of revenue producers. The tangible efficiency ratio was 56.6%, while the adjusted tangible efficiency ratio was 48.9%.

Credit performance remained stable with a non-performing asset ratio of 0.50%, flat from the prior quarter. The net charge-off ratio was 0.23%, in line with expectations and slightly above the 0.22% recorded in the second quarter. The provision for credit losses was $86 million. The allowance for credit losses to loans ratio was 1.19%, with coverage of non-performing loans at 245.78%. The company attributed the quarter-over-quarter change in the allowance to a more adverse macroeconomic outlook and continued loan growth.

The preliminary Common Equity Tier 1 ratio ended the third quarter at 10.01%, up from 9.93% in the second quarter.