Anthony Elian • JPMorgan Chase & Co.

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Chairman & CEO Harris Simmons responded that it was too soon to predict a return to deposit growth, emphasizing the focus remains on managing the total funding structure and cost. Regarding digital assets, he opined that tokenized deposits would likely be more impactful for the banking system than stablecoins, but noted Zions' new core platform provides the necessary plumbing to operationalize these innovations as they evolve.

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An executive clarified that the difference between period-end and average loan balances was due to the late-quarter First Bank branch acquisition. Another executive identified manufacturing, trucking and transportation (a <$500M portfolio), and retail as the primary segments being monitored for tariff-related impacts.

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CEO Harris Simmons stated he expects steady loan growth throughout the year, not particularly back-half weighted. Chief Credit Officer Derek Steward explained the increase in classified loans was granular and distributed across the footprint, not driven by a single large credit. He specified the increases were primarily in CRE, driven by multifamily and industrial, due to construction delays, slower lease-up, and higher costs.

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An executive explained that a significant portion of the previously guided benefit has already been realized, contributing to a 4% NII increase. He also stressed that the 1.4% figure is based on the September 30 rate path, which has since changed, and that the official guidance is more important as it includes dynamic management assumptions. Chief Credit Officer Derek Steward stated that the increase in classified multifamily loans was not concentrated in any single market but was diversified across their footprint.

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Chairman & CEO John Ciulla confirmed that underlying credit trends are positive, with stabilized risk rating migration and no new problem areas. He noted that existing non-performing loans are concentrated in well-managed portfolios, suggesting that while cautious, the company expects the downward trend in problem assets to continue over time.

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CEO John Ciulla confirmed that a number of large transactions closed late in the quarter, leading to higher period-end loan balances. CFO William Holland identified the long end of the yield curve as a key sensitivity for NII, noting that a 50 basis point move impacts NII by about $25 million. He added that more robust economic activity and loan growth could push NII to the high end of the guide, while a recession or flatter curve would push it toward the low end. Short-term rate changes were described as having a less material impact.

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CFO William Holland explained that NII guidance is not highly sensitive to the timing of rate cuts, with a "no cuts" scenario still falling within the guided range. CEO John Ciulla clarified that loan growth is expected to be steady throughout the year, driven by a diversified mix across sponsor finance, national businesses, middle market, business banking, and residential mortgages.

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CEO Kevin Blair confirmed they are on track with their multi-year hiring plan, adding 12 of the 25 commercial bankers planned for 2025. EVP & CFO Jamie Gregory clarified that the fee income outlook for the second half is expected to be relatively stable and in line with Q2's performance, viewing Q1's lower result as an anomaly.

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CEO Kevin Blair stated that loan production was broad-based and not a pull-forward of demand due to tariffs, as confirmed by line utilization monitoring. He also affirmed that RM hiring plans remain unchanged, with CFO Andrew Gregory adding that the expense reduction came from other areas like project costs, facilities, and lower credit-related expenses.

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CFO Jamie Gregory clarified that the negative lead-lag impact from rate cuts has been about half of what was previously modeled ($2-4 million per 25 bps cut) due to effective deposit repricing, implying that a delay in cuts would be a positive variance to guidance. He also confirmed that while some expenses are variable, strategic investments in hiring and technology are more fixed and are expected to proceed regardless of revenue performance within the guided range.

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CEO Kevin Blair identified post-election certainty and continued consumer strength as key catalysts that could lift line utilization, potentially adding $1 billion in loan growth. CFO Jamie Gregory expressed optimism for growth in noninterest-bearing balances in 2025 but acknowledged that the trend remains uncertain.

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CFO Harold Carpenter noted the C&I growth was broad-based across the franchise rather than concentrated in a specific sector. CEO Terry Turner addressed the talent question by emphasizing their 'extraordinary success' in hiring, which he attributed to a differentiated recruiting model based on internal referrals and a superior service platform, as evidenced by top Greenwich ratings, which gives them a competitive advantage.

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Harold Carpenter (Executive) estimated the total transportation portfolio, which includes trucking, at approximately $700 million. M. Turner (Executive) stated that economic loan demand is near zero as clients pause amidst uncertainty, reinforcing that Pinnacle's growth relies on moving existing client relationships, not new economic activity. He agreed that the Southeast footprint is extraordinarily advantaged for growth once certainty returns.

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M. Turner (executive) attributed the strong loan growth to fundamental performance across geographies and product lines. Harold Carpenter (executive) added that relationship managers are seeing increased inbound client interest, signaling growing confidence. Regarding BHG, Harold Carpenter revealed it also exited its 'buy now, pay later' business, reducing headcount to sharpen its focus on the core franchise.

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Executive Harold Carpenter responded that while a traditional, upward-sloping yield curve is better for all banks, Pinnacle is advantaged by its neutral balance sheet positioning, which helps manage through a difficult rate environment. He expressed hope for a more traditional curve from the overnight rate to the 5-year mark in 2025. Regarding the growth capacity slide, Carpenter clarified that the figures shown represent an average expectation based on their historical model, not a best-case scenario.

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CFO Hope Dmuchowski confirmed that the revenue mix has shifted more toward NII, as the lack of Fed rate cuts has supported net interest income while weighing on countercyclical fee businesses. She also affirmed that the necessary technology infrastructure to achieve the PPNR goal is now built out, with the benefits of this multi-year investment starting to materialize.

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CFO Hope Dmuchowski stated that Q2 should be a 'great quarter for deposits,' driven by seasonal home buying boosting the mortgage warehouse business and new-to-bank promotional campaigns. Chief Credit Officer Thomas Hung identified retail trade, consumer finance, manufacturing, and construction as sectors receiving particular attention due to tariff risk, but emphasized the C&I portfolio is highly diversified with no single industry over 12% of exposure. Chairman, President and CEO Bryan Jordan added that the broader risk is a potential hit to the consumer, which would have a widespread credit impact.

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CFO Hope Dmuchowski acknowledged the lower spot rate will benefit Q1 averages but cautioned that the ability to continue cutting rates depends heavily on the competitive environment. Regarding expenses, she explained that lower revenue would naturally reduce commission-based expenses, and the company remains committed to finding operational efficiencies to deliver positive PPNR growth regardless of the revenue scenario.

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CFO Joseph Kauder and CEO Jared Wolff identified adjusting incentive compensation accruals and slowing project spending as key levers for expense management. Wolff explained the reduced loan growth forecast was a conservative nod to potential second-half slowdowns, not a change in their positive long-term view of the market opportunity.

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Executive Travis Lan stated that Q2 can 'absolutely be a loan growth quarter,' with momentum in C&I and consumer lending continuing and CRE originations picking up. CEO Ira Robbins supported this by noting the commercial pipeline grew from $2.0 billion to over $2.7 billion. Chief Credit Officer Mark Saeger confirmed the large Q4 problem loans were written down and resolved, with Q1 charge-offs stemming from two new, unique situations involving fraud.

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Chief Credit Officer Mark Saeger indicated the reserve build would likely be more weighted towards the beginning of the year before tapering off. Executive Travis Lan and CEO Ira Robbins added that the deposit growth was broad-based across both branch and specialty channels, highlighting strong activity in international and technology verticals. Robbins emphasized that investments in technology, particularly the Treasury Solutions platform, were key drivers, contributing to a $0.5 billion increase in associated deposit balances in the latter half of the year.

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Executive Travis Lan attributed the deposit growth to a strong pipeline of technology companies and broad-based strength in other commercial and online channels. President Tom Iadanza projected a normalized loan growth rate in the mid-single-digit range, as strong C&I growth will be partly offset by the managed reduction in CRE concentration through 2025.

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Executive Marc Einerman attributed the client fund growth to SVB's ability to win business despite market headwinds but acknowledged future uncertainty. Executive Andrew Giangrave identified textile, footwear, retail, auto, and equipment finance as portfolios being watched closely, noting it is still early to assess the full impact.

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Executive Marc Cadieux responded that while a few very large financings contributed significantly to Q4 VC investment, the bank also performed well in capturing sub-$1 billion deals and benefited from lower client cash burn. He noted that expectations for SVB growth in 2025 are cautious. Chairman and CEO Frank Holding added that while the company remains opportunistic, it is not projecting any material M&A activity for 2025.

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Executive Marc Cadieux confirmed that the bank continues to add new clients and see former clients return, viewing it as a positive sign despite market headwinds. Executive Tom Eklund stated that the current pace of share repurchases is expected to continue through year-end before slowing slightly to meet the $3.5 billion target by Q3 2025.

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CEO Bob Harrison reiterated the full-year loan growth guidance but noted it is subject to economic uncertainty, making it hard to pinpoint growth by quarter. He identified the broader C&I portfolio as an area receiving heightened attention due to potential cost impacts on small businesses. CFO James Moses added that the risk teams view tariff impacts as customer-specific rather than portfolio-wide, underscoring the value of their direct client relationships.

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CFO Jamie Moses projected that with no rate cuts, the quarterly NIM expansion would likely be 1-2 basis points higher than the current guide. He explained the fee income guidance of ~$51 million per quarter reflects a normalization from the back half of 2024, which benefited from non-recurring items like insurance proceeds and extra BOLI income, and may include a touch of conservatism.

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CFO Jamie Moses estimated the unexpected loan payoffs were in the range of $90 million to $95 million. Regarding deposits, he noted the noninterest-bearing mix has been stable for two quarters and expressed hope that this level, which is consistent with pre-pandemic figures, represents a floor as the bank focuses on growing relationships.

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CFO Ron Farnsworth explained that Q1 expenses will see a bump due to payroll taxes and insurance, with merit increases impacting Q2. CEO Clint Stein added that the timing of reinvestments, including five new branches and banker hires, will also shape the quarterly expense build. Regarding tech, Executive Torran Nixon described ongoing enhancements to payment platforms that drive core fee income, while Stein noted that specific monetization strategies are competitive but focus on developing scalable, recurring revenue streams from customer-driven solutions.

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CFO Ron Farnsworth tempered expectations, stating the NIM would likely "bounce along the bottom." He emphasized that deposit flows, which are historically variable, would have a much larger impact on the margin than the known repricing tailwinds, making a similar increase uncertain.

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