Pinnacle Financial Partners, Inc. (PNFP)

ITEM 2. – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

In this Report, the words “Pinnacle,” “the Company,” “we,” “us,” and “our” refer to Pinnacle Financial Partners, Inc. together with Pinnacle Bank and Pinnacle's other wholly-owned subsidiaries, except where the context requires otherwise.

FORWARD-LOOKING STATEMENTS

Certain statements made or incorporated by reference in this Report which are not statements of historical fact, including those under “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Report, constitute forward-looking statements within the meaning of, and subject to the protections of, Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements include statements with respect to Pinnacle's beliefs, plans, objectives, goals, targets, expectations, anticipations, assumptions, estimates, intentions and future performance and involve known and unknown risks, many of which are beyond Pinnacle's control and which may cause Pinnacle's actual results, performance or achievements or the financial services industry or economy generally, to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

All statements other than statements of historical fact are forward-looking statements. You can identify these forward-looking statements through Pinnacle's use of words such as “believes,” “anticipates,” “expects,” “may,” “will,” “assumes,” “predicts,” “could,” “should,” “would,” “intends,” “targets,” “estimates,” “projects,” “plans,” “potential,” and other similar words and expressions of the future or otherwise regarding the outlook for Pinnacle's future business and financial performance and/or the performance of the financial services industry and economy in general. Forward-looking statements are based on the current beliefs and expectations of Pinnacle's management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements in this document. Many of these factors are beyond Pinnacle's ability to control or predict. These factors include, but are not limited to:

(1)our ability to realize all of the expected benefits of the Merger and our ability to integrate the two companies as expected;

(2)our ability to realize the expected benefits from our strategic initiatives, including the Merger, or other operational and execution goals in the time period expected, which could negatively affect our future profitability;

(3)competition in the financial services industry, including competition from nontraditional banking institutions such as Fintechs and non-bank lenders;

(4)an economic downturn and contraction, including a recession, and the resulting effects on our capital, financial condition, credit quality, results of operations, and future growth, including that the strength of the current economic environment could be further weakened by persistent or rising inflation, interest rate fluctuations, changes in fiscal and monetary policy, and geopolitical uncertainty;

(5)our ability to attract and retain employees, including as a result of the Merger and as part of our hiring strategy, and the impact of senior leadership transitions and recruitment of experienced financial service providers that are key to our strategic initiatives;

(6)the impact of recent or proposed changes in fiscal, monetary and economic policy, laws, and regulations, or the interpretation or application thereof, and the uncertainty of future implementation and enforcement of these policies and regulations, including persistent inflationary pressures, potential interest rate fluctuations, and potential changes to government policies related to immigration, trade, and government spending;

(7)changes in the interest rate environment, including changes to the federal funds rate, and competition in our primary market area may result in increased funding costs or reduced earning assets yields, thus reducing margins and net interest income;

(8)our strategic implementation of new lines of business, new products and services, and new technologies and the expansion of our existing business opportunities with a renewed focus on innovation;

(9)prolonged periods of inflation and its effects on our business, profitability, and our stock price, as well as the impact on our clients (including the velocity and levels of deposit withdrawals and loan repayment);

(10)changes in BHG's funding model, credit performance, regulatory oversight, auction platform activity, or growth strategy that could reduce and increase volatility in our earnings;

(11)the impact of adverse developments in the banking industry on client confidence, liquidity, and regulatory responses to these developments (including increases in the cost of our deposit insurance assessments and increased regulatory scrutiny), our ability to effectively manage our liquidity risk and any growth plans, and the availability of capital and funding;

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(12)we may be exposed to potential losses in the event of fraud and/or theft, or in the event that a third-party vendor, obligor, or business partner fails to pay amounts due to us under that relationship or under any arrangement that we enter into with them;

(13)changes in the cost and availability of funding due to changes in the deposit market and credit market;

(14)restrictions or limitations on access to funds from historical and alternative sources of liquidity could adversely affect our overall liquidity, which could restrict our ability to make payments on our obligations and our ability to support asset growth and sustain our operations and the operations of Pinnacle Bank;

(15)we may be required to make substantial expenditures to keep pace with regulatory initiatives and the rapid technological changes in the financial services industry;

(16)our current and future information technology system enhancements and operational initiatives, including those related to or involving artificial intelligence, may not be successfully implemented, which could negatively impact our operations;

(17)risks related to the development and use of artificial intelligence in our industry and generally;

(18)our business relationships with, and reliance upon, third parties that have strategic partnerships with us or that provide key components of our business infrastructure, including the costs of services and products provided to us by third parties, and disruptions in service or financial difficulties with a third-party vendor or business relationship;

(19)our enterprise risk management framework, our compliance program, or our corporate governance and supervisory oversight functions may not identify or address risks adequately, which may result in unexpected losses;

(20)our asset quality may deteriorate or our allowance for credit losses may prove to be inadequate or may be negatively affected by credit risk exposures;

(21)the ability of our operational framework to identify and manage risks associated with our business, such as credit risk, compliance risk, reputational risk, cybersecurity risk, and operational risk, including by virtue of our relationships with third-party business partners, as well as our relationships with third-party vendors and other service providers;

(22)if economic conditions worsen or regulatory capital rules are modified, we may be required to undertake initiatives to improve or conserve our capital position;

(23)our ability to identify and address cybersecurity risks such as data security breaches, malware, "denial of service" attacks, "hacking," and identity theft, a failure of which could disrupt our business and result in the disclosure of and/or misuse or misappropriation of confidential or proprietary information, disruption, or damage of our systems, increased costs, significant losses, or adverse effects to our brand reputation;

(24)the impact on our financial results, brand reputation, and business if we are unable to comply with all applicable federal and state regulations or other supervisory actions or directives and any necessary capital initiatives;

(25)we may not be able to identify suitable bank and non-bank acquisition opportunities as part of our growth strategy and even if we are able to identify attractive acquisition opportunities, we may not be able to complete such transactions on favorable terms or realize the anticipated benefits from such acquisitions;

(26)our ability to receive dividends from our subsidiaries could affect our liquidity, including our ability to pay dividends or take other capital actions;

(27)our corporate responsibility strategies and initiatives, the scope and pace of which could alter our brand reputation and shareholder, employee, client, and third-party relationships;

(28)we could realize losses if we sell assets and the proceeds we receive are lower than the carrying value of such assets;

(29)our ability to obtain regulatory approval to take certain actions, including any dividends on our common or preferred stock, any repurchases of our common or preferred stock, or any other issuance or redemption of any other regulatory capital instruments, as well as any applications in respect to strategic initiatives;

(30)our concentrated operations in the Southeastern U.S. make us vulnerable to local economic conditions, local weather catastrophes, public health issues, and other external events;

(31)the costs and effects of litigation, investigations, or similar matters, or adverse facts and developments related thereto;

(32)the fluctuation in our stock price and general volatility in the stock market;

(33)the effects of any damages to our brand reputation resulting from developments related to any of the items identified above; and

(34)other factors and other information contained in this Report and in other reports and filings that we make with the SEC under the Exchange Act, including, without limitation, those found in "Part II - Item 1A. Risk Factors" of this Report.

For a discussion of these and other risks that may cause actual results to differ from expectations, refer to “Part II - Item 1A. Risk Factors” and other information contained in this Report and our other periodic filings, including quarterly reports on Form 10-Q and current reports on Form 8-K, that we file from time to time with the SEC. All written or oral forward-looking statements that are made by or are attributable to Pinnacle are expressly qualified by this cautionary notice. You should not

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place undue reliance on any forward-looking statements since those statements speak only as of the date on which the statements are made. Pinnacle undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of new information or unanticipated events, except as may otherwise be required by law.

INTRODUCTION AND CORPORATE PROFILE

Pinnacle Financial Partners, Inc. is a financial services company and registered bank holding company headquartered in Atlanta, Georgia. Through its wholly-owned subsidiary, Pinnacle Bank, a Tennessee state-chartered bank that is a member of the Federal Reserve System, the Company provides commercial and consumer banking in addition to a full suite of specialized products and services, including wealth services, treasury management, mortgage services, premium finance, asset-based lending, structured lending, capital markets, and international banking. Pinnacle also provides financial planning and investment advisory services through certain of its wholly-

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ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of our financial condition at December 31, 2025 and 2024 and our results of operations for each of the years in the three-year period ended December 31, 2025. The purpose of this discussion is to focus on information about our financial condition and results of operations which is not otherwise apparent from our consolidated financial statements. The following discussion and analysis should be read along with our consolidated financial statements and the related notes included elsewhere herein, as well as the information included in Part I Item 1A "Risk Factors", and under the caption "Forward-Looking Statements". This Item generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on February 25, 2025.

January 1, 2026 Merger with Synovus Financial Corp.

On July 24, 2025, Pinnacle Financial entered into the Merger Agreement with Synovus and New Pinnacle, a newly formed Georgia corporation jointly owned by Pinnacle Financial and Synovus. The Merger Agreement provided that, upon the terms and subject to the conditions set forth therein, (i) Pinnacle Financial and Synovus would each simultaneously merge with and into New Pinnacle (such mergers, collectively, the Merger), with New Pinnacle continuing as the surviving corporation in the Merger and named Pinnacle Financial Partners, Inc., and (ii) immediately following the effectiveness of the FRS Membership (as described elsewhere in this Annual Report on Form 10-K), Synovus Bank would merge with and into Pinnacle Bank, with Pinnacle Bank as the surviving entity in the Bank Merger. After receiving the necessary approvals from the Federal Reserve System, the TDFI , and the Georgia Department of Banking and Finance, the Merger was completed January 1, 2026. Refer to "Part II - Item 8. Financial Statements - Note 24 - Subsequent Event" in this Annual Report on Form 10-K.

Selected Financial Data

Set forth below is certain selected financial data related to the Company's operations for 2025, 2024 and 2023:

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(1)Capital ratios are for Pinnacle Financial Partners, Inc.

Overview

General. Our fully diluted net income per common share for the year ended December 31, 2025 was $8.07 compared to fully diluted net income per common share of $5.96 for the year ended December 31, 2024. At December 31, 2025, loans had increased by $3.7 billion to $39.2 billion from $35.5 billion at December 31, 2024.

Results of operations. Our net interest income increased to $1.5 billion for 2025 compared to $1.4 billion for 2024. The increase in 2025 as compared to 2024 was largely the result of organic loan growth and a declining cost of funds.

Net interest income in 2025 and 2024, was affected by fluctuations in our net interest margin and our net interest spread. The net interest margin (the ratio of net interest income to average earning assets) for 2025 was 3.24% compared to 3.16% for 2024 and reflects increased average earning asset balances as well as a meaningful reduction in our cost of funds despite increased average interest-bearing balances. Additionally, our noninterest bearing deposit balances increased during 2025 when compared to 2024.

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Our provision for credit losses was $107.2 million for 2025 compared to $120.6 million in 2024. The reduction in provision expense in 2025 as compared to 2024 is in part the result of reductions in specific reserves associated with certain loans due to charge-offs, improved financial conditions of certain borrowers or payoff of a portion of or, in certain cases, the full, outstanding balances of the related loans. Also impacting provision expense in each period were net charge-offs of $76.5 million during 2025 compared to $78.3 million in 2024. Negatively impacting net charge-offs in 2025 was the deterioration of a non-owner occupied commercial real estate loan which resulted in a charge-off of $16.9 million in the fourth quarter of 2025. Charge-offs were also elevated in 2025 as a result of increased charge-offs in certain of our credit card portfolios.

Noninterest income for 2025 compared to 2024 increased by $135.4 million, or 36.5%, to $506.6 million from $371.2 million. The increase compared to 2024 is due in large part to income from our equity method investment in BHG which increased $55.2 million, or 87.3%, for 2025 compared to 2024. Also impacting the change in noninterest income during 2025 when compared to 2024 was our intentional repositioning of a portion of our securities portfolio in 2024 with the goal of meaningfully enhancing its future performance with the sale of approximately $822.7 million of available-for-sale securities at a net loss of $72.1 million during 2024. Income from our wealth management groups (investments, insurance and trust) also contributed to the increase in noninterest income and continued to reflect strong revenue growth increasing $25.7 million, or 22.5%, for 2025 compared to 2024. Service charges on deposit accounts increased $11.7 million, or 19.8%, during 2025 compared to 2024. Additionally, for 2025, income from bank-owned life insurance increased $5.8 million in part due to the purchase of an additional $150.0 million in policies during 2025. The increases in noninterest income were offset in part by a decrease in income from our other equity investments of $5.7 million in 2025 compared to 2024.

Noninterest expense for 2025 compared to 2024 increased $132.8 million, or 12.8%, to $1.2 billion from $1.0 billion. Impacting noninterest expense during 2025 as compared to 2024 was an increase of $100.4 million in salaries and employee benefits. The increase in salaries and employee benefits was primarily the result of an increase in our associate base to 3,709.0 full-time equivalent team members at December 31, 2025 compared to 3,565.5 at December 31, 2024, as well as annual merit increases effective in January 2025 and increases in cash and equity incentive accruals due to our achievement of a payout percentage under our annual cash incentive plan in 2025 that is higher than what we paid out under our 2024 annual cash incentive plan.

Noninterest expense categories, other than salaries and employee benefits, were $446.3 million for 2025 compared to $413.9 million in 2024, an increase of 7.8%. Noninterest expense for 2025 included $21.7 million in merger-related expenses associated with the Merger with Synovus. Noninterest expense for 2024 included approximately $27.6 million in fees paid during the second quarter of 2024 to terminate an agreement to resell $500.0 million of securities we had previously purchased. Additionally impacting the change in noninterest expense for 2025 when compared to 2024 are increases in equipment and occupancy costs, marketing and other business development costs and lending and deposit-related expenses. Equipment and occupancy costs increased $29.3 million, or 17.6%, for 2025 compared to 2024 and were negatively impacted by the overall growth in our infrastructure, construction and operation of 13 additional locations throughout our footprint since January

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