Steven Scoutin

Steven Scouton with Piper Sandler asked for clarification on the 1Q2026 expense run rate, confirming the full inclusion of Sandy Spring cost saves. He also inquired about paydown levels in Q3 versus prior quarters and whether future growth relies on slowing paydowns or increased production. Additionally, he sought insight into why the net interest margin guidance range was tightened, removing theoretical upside.

Answer

EVP and CFO Rob Gorman indicated that a $190 million run rate for adjusted operating non-interest expense, excluding amortization, would be a good starting point for 1Q2026, encompassing all Sandy Spring cost saves. President and CEO John Asbury and EVP and Wholesale Banking Group Executive David Ring noted that Q3 paydowns were consistent with prior quarters, with future growth primarily driven by higher production levels rather than a slowdown in paydowns. Rob Gorman explained that the margin guidance adjustment was due to where Q3 ended and a dialing back of accretion income impacts, though core margin expansion is still anticipated.

Steven Scoutin from Piper Sandler asked for confirmation that Slide 9, illustrating market share vulnerability of competitors and Pinnacle's growth in expansion markets, represents the core opportunity for the company. He also inquired about any incremental risks or concerns regarding the merger's progress and sought clarification on the historical consistency of Pinnacle Financial Partners' employee retention rates.

Answer

President and CEO Terry Turner affirmed that Slide 9 accurately depicts the significant market share takeaway opportunity in the high-growth Southeast, driven by competitors' vulnerability and Pinnacle's superior Net Promoter Score. He stated there are no broad risks discovered regarding the balance sheet or competitive/regulatory environment, expressing increased conviction in the merger's outcomes despite the hard work involved. Terry Turner also confirmed that associate retention rates have consistently ranged from 93%-96% over the past decade, with the last 12 months and Q3 2025 at 93%.

Steven Scoutin inquired about the significance of market share takeaway opportunities in expansion markets, as depicted on slide 9, as a core driver for Pinnacle's growth and competitive advantage post-merger. He also asked about any incremental risks or concerns identified during the merger integration process, and the historical consistency of the employee retention rate.

Answer

CEO Terry Turner affirmed that seizing market share vulnerability in high-growth Southeast markets is central to the company's revenue engine, expressing strong conviction in the combined entity's competitive position with high Net Promoter Scores. He reported no broad risks discovered during integration, only hard work, and confirmed the associate retention rate has consistently operated in the 93-96% range over the past decade, including 93% for the last 12 months and Q3.