Earnings call transcript Q4 2022

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Operator

Good morning, everyone, and welcome to the Pinnacle Financial Partners' Fourth Quarter 2022 Earnings Conference Call. Hosting the call today from Pinnacle Financial Partners is Mr. Terry Turner, Chief Executive Officer; and Mr. Harold Carpenter, Chief Financial Officer.

Please note, Pinnacle's earnings release and this morning's presentation are available on the Investor Relations page of their website at www.pnfp.com. recorded for be the being on for is website Pinnacle's next call and available will replay Today's XX days.

all floor for time, listen-only presentation. this participants placed been At in [Operator mode. Instructions] The questions will your open be following the have a

expressed statements results we facts such Pinnacle forward-looking that or ability the and any results, subject this materially such may statements. by presentation, may achievements forward-looking uncertainties, performance Financial Many to make to cause implied predict, forward-looking from forward-looking statements. not on may During or factors such to or to undue cautioned are Financial's of which reliance listeners risks, comments constitute statements. All put are other differ beyond are Pinnacle and actual control

description filed these in of to any Pinnacle for this result the obligation or new risks is detailed statements contained a Annual on XXXX, more information, otherwise. presentation, XX, quarterly revise update subsequently December in whether or other of and Form as contained Report events, and its future reports. year XX-K any Financial's forward-looking Pinnacle disclaims A Financial ended

available of GAAP Pinnacle the of In may as most by non-GAAP A on at measures include to SEC non-GAAP the financial measures comparable the presentation be Regulation Financial's GAAP financial addition, defined directly will measures and G. reconciliation measures certain remarks these a www.pnfp.com. comparable the website

over turn presentation to now to Terry that, With CEO. going President the Turner, Mr. I'm Pinnacle's and

Terry Turner

quarter call. you Good joining fourth for morning. earnings us our for Thank

deposit fair our of growth, core is income quarter, be the all measures performance net success numbers. loan growth, tangible fourth amount interest a continue quality, value at There the to book in fourth accretion, strong. asset noise quarter key Looking in growth, core like

time finally, the shareholder detailing performance help some and the value. fourth model with So, we believe have there, to builders, to why ability then create for a to to the going to move outsized I'll for quarter producing outlook XXXX try unique quickly to detail spend clarity we're I to continue

likely growth tied value believe why result for and shareholder returns. quality, you you the are flow growth, every know, tangible single book show shareholder closely in dashboard per returns. most to That's why this long-term that's can revenue them, the to we share linked As accretion asset our relentless quarter those we earnings see where metrics, incentives and upward

And book influent first, then that measures on. earnings the non-GAAP those persistent which shareholder performance most mostly GAAP year against to asset revenue measures, and per appreciate in by variables year value which if accretion I'm returns, out. I believe excellent tangible the and followed growth personally quality, have growth, do, you focused share you

ago, on sale fourth continues to loans momentum. look during see auction into their have I significantly taking to have earnings gain believe be upfront, should would in their opposed through which as that the is details. get anxious I of items most of considerable the level As over on those balance so $XXX in loans mentioned impact there minute on our noise originations million financials, to to we're resulted core them the great increasing Nevertheless, on deferring banking income directing you our life and quarter the those business BHG's with sheet, thereby election fourth the a roughly able in platform, their The to quarter. fund to

quarter. walk So, let's move on through and the Harold, let's

Harold Carpenter

morning, Good Terry. everybody. Thanks,

March. Fed we XX February going first The quarter. points points for strong loan in is of basis anticipate mid-teens in into with quarter Along loan quarter start and fourth yields the forecasting are was as we growth growth believe reasonable As loan us, usual, with we'll anticipate growth we XXXX and quarter, for in basis loans. us, we loan and increases in in fourth annualized that, further XX the escalation another yield

modeling first to points in XX that points basis XX Our or the loan so basis up quarter. yields be indicates will

we've talent the added few categories net several done years we're loan in for again source us growth quarters, the on understand we've last based been growth. huge the to The dissecting sheet It's everyone results noted a the said, over new works types over past to extraordinary new as products. the is slide the momentum, new of opportunities more as our growth year financial better balance far on those contributed out than loan income, growth. as more concerned, [from] of half just hires our firm for our interest an than for are and all clients (ph) annuity with and That our now with that markets represents of stream it new help

but We broader also markets, our much footprint a model. a in given footprint are new with deeper definitely

really for pleased in report in deposits, the deposits quarter. for price is to current key focus our fourth deposits the at a reasonable Growing Now growth XXXX a environment.

others, are franchise we and we special and housing believe associations, initiatives. and actively these deposit with headway are We deposit community out building making non-profits other around gathering HSA,

Our point cost average came third heavier at deposit quarter. basis over the XX in increase

our XXXX, are acceleration remain in cost in deposit pressure total XX% experienced guidance through the fourth we XX basis points. significant. believe Competitive of around expectations deposit deposit the above about an inside of beta we by quarter Although we costs our end of

costs that to believe, increased may we deposit cost, increases anticipate in first add X.X% Average fully X% rates this in continue of deposit Fed a quarter will the in year. tailwind XXXX. approach for we So, to

the we more and with deposits. products and As noninterest-bearing for accounts seeing move are interest mix, lower-yielding current higher interest deposit

end-of-period more averages Our deposits average from million in based and were noninterest-bearing $XXX even approximately down XQ on balances. quarter the

Our pace 'XX. at of decrease in a continue plan half this lesser first to the will contemplate

approximately our that XX% XX% annualized. of being noninterest-bearing balances number commercial, About of are with

has will $XX,XXX year, to annualized commercial last a $XX,XXX around commercial and to non-annualized. than little annualized per from non-annualized account per while Over Pre-COVID from around around the dropped has $XXX,XXX levels be for $XX,XXX. less dropped $XXX,XXX $XXX,XXX,

than higher or pre-COVID still so XX% levels. average account So, size is

remains around and Our number strategies tactics one objective our developing funding growth.

in about having the made too and markets we've given bank's managers Hopefully, the new our talk ever you'll like this both investment hear few significant many over last deposits. not leadership to years. relationship continue We chances

belief is our growth. maintain and fund Our and the growth profitability deposit we appropriate have prudently effectively and balance will between that

Now, believe we liquidity fund have liquidity. to ample growth. near-term our We

was the year. to securities, As don't growth quarter. allocation investment this flattish anticipate We bonds bonds in our any significant in

As basis our chart points two basis GAAP basis points the reflects, to previous the points to increased top left XX by XX quarters. NIM XX compared in

did. a time, a in quarter NIM few last felt NIM expansion by unexpected, was the although it mentioned points basis the our we fourth As expand more in like we not decrease would than

will to in to flat year next given is likely be first the quarter, fewer Our quarter and down down by likely planning NIM burdened assumption is days. the our first

in net income. growth said, That for provide model our interest increases should

we time. XXXX, the interest net guidance at believe for XXXX As reasonable of percentage high-teens enter is income over this we growth XXXX

credit, portfolio traditional Pinnacle's loan metrics, our to for again presenting very credit perform As continues well. we're

of and ACL of points CECL We assumption at current this at a the at baseline is XX%. Our XXXX. -- stagflation pessimistic pessimistic did with XX% which more end pre-COVID a modify scenario with while XX X.XX%, set pre-CECL our basis again the at XX% with reserves compares modeling quarter

chain, credit in our supply any businesses. all We borrowers to We've continue efforts about sustainable it's actively with to borrowings. been diligence have weaknesses and intent impacting inflation about with conversations how the their identify

new growth commercial. very the continue construction, whether a to no to quarter limited the of limited Thus, residential new our is approved construction first of it appetite We XXXX. funding at be commitments or projects through being of previously added with have portfolio least

the concentration our in to table limits from on quarter. our attentive last remain regarding CRE slide CRE also No in changes We the areas all right details. portfolio, our bottom of particularly and the appetite of

position XXXX strength. we remains strong In a for summary, of our from outlook credit as entered

negative if advantaged. develop, we're to trends begin So, believe we

the and as on few Now, speak in always, I'll to minutes. fees, BHG a

said, building flattish BHG, a will quarter. the our residential pleased the volatile units as revenues spring Excluding negatively be in their this modestly meaningful season the down units of environment buying the in by several effort that current that less volumes does are the were operating when year. were way. free-generating fee see Mortgage [indiscernible] quarter mortgage hopefully rates with we're third begin. for impacted Obviously, first pipelines home back All

sales the the previous in loan their elimination by quarter, the the incentive third business impacted SBA as are CARES significantly down Act, from which SBA lenders on to Gains from quarter. drove of was also business more

gotten We've and on earnings questions credit the rates a fees. deposit few impact on

that. So, at here's a stab

have approximately billion We $X.X commercial accounts. noninterest-bearing in annualized

run around points current is rate on XX the Our ECR per $X.X is with our million moment, fee about analysis labors is competitive. quarter. At [indiscernible] basis

points, XX ECR basis raised fee each quarter. we analysis $XXX,XXX $XXX,XXX For our by that reduces the to every

in lift on group middle bites. so Our release goal rates, will of some is to but peer in ECR stay our come to it we the in credit that's coming, have earnings competition the small

to XXXX a return anticipated in fees high growth over had single-digit We XXXX.

we X% and also and late believe growth, Excluding in we year. in should the added BHG XXXX, and X% non-equity other strong Wealth achieved modestly XXXX. Management growth some think producers we've We recover mortgage in revenue for investments,

believe the and the other 'XX high growth BHG equity region. Excluding single-digit impact of that low-teens in we over investments, in to 'XX

decline effective the Expenses some see reversal did reclassification between expense. and line, we non-compensation of All to but XQ, with was expense quarter. to -- added anticipating thought in we We a franchise an about from of approximately tax came in, attributable where from tax tax XXXX. in expense XQ tax rate XX% accruals for of in being that the are the so it XQ franchise income tax

on expectations. plan, the below performance-based which decreased This also overall performance our impact of XQ. and the which costs result awards, came from XQ incentive incentive below results the cash on 'XX metrics was a in in in of came equity XQ Our target, PPNR primarily

into over expense variable mid-teens our base. a growth is for should comments of 'XX. like We base nature about 'XX All of feel expense our segue this a result few cost in

our due As is, we way, we've reduced works. targets, can 'XX on quarterly for incentive by other leadership. measurements achieving the how it which how to it primarily to not various As selected our targets equity particularly manage That's when compensation, payouts I and expenses? senior comes PPNR impacts mentioned,

for always for were EPS PPNR thus plans quarter. PPNR growth targets each our and, incentive quarter fourth target, tied it incentives XXXX, was reduced. cash We target to tied Our also to missed

some equity, were value PE some tangible tangible equity book value our in results and are Our and tied accretion, book to leadership (ph). to [all relation common are are plans returnable tangible some that] peers,

based component. variable compensation it's are on we higher we the subjective, do. our shareholder that to system is have [indiscernible] very relation ranking, a better the to peer directly shareholder-friendly meaningful a value, the we ranking linked cost So, not is peers which that objective, think believe all in We

in times that understood can overrecruiting can times, hiring few our we the down we and other element is during the and our Both expense growth of financial done slowed recall the I We is crisis other our attribute history. recruiting or level. the COVID. depth to once back macro brings that until better The the have variable cost environment. always a during

Lastly, we we and postpone will release, should in and not as press projects and and in ability we've got to [indiscernible] the be being mentioned various jeopardy events targets cancel and with do our modify, the achieved.

the capital, book quarter. last share value $XX.XX quarter-end, increased common On at per to from tangible slightly up

remain well-capitalized We ratio, our was ratios capital equity like which Our currently. above X.X% stands tangible levels. at common

X our 'XX. are our no preserve we've our as action via capital preferred capital tangible sort common get tangible alter Bank. capital value mindful capital particularly be the levels, Tier plans to Pinnacle or monitoring into us book and believe have we our offering. have We We'll currently Tier stack at taken of to We any and served well of PNFP ratio levels X

rest about of look before comments we few for the BHG the at the a Now, year. outlook

fewer lower had indicates, a fourth in the another are did history. mark, BHG second credit loans, profitable, the so in from credit prior great quarter BHG's the on best tighter implementation which score slide As decrease quarter. typically its more with quarter funded originations, Originations were of of

as the spreads above a spreads bottom spread X.X% That's current originally did remained left As several than the quarter the more or come result, as near chart to indicates. XXXX, in planned, indicate, chart norms. last quarters for on from shrinking X.X% down the historical but from

a accrual portfolio sole prepayments accrual September and from The at on XX. increased of BHG and management. X.XX% loan precautionary at BHG last XX prepayments more result for million loan posture substitutions substitutions X.XX% December to for and increased $XXX $XXX quarter loan for million to a as

show, chart X.XX% blue X% bars slightly bottom the fell at As in right year-end. from the recourse losses to

last its also X.XX% given from macro quarter. of and losses we Additionally, mentioned on-balance environment reserve quarter, or million sheet for the as to last $XXX increased loans BHG X.XX% sheet loan on-balance

course, XXXX. X, CECL for adoption still Of is on the on radar October

to an reserve We X% but continue at to anticipate certainly point. the that be this estimate is X%, CECL to

opinion, BHG's in The remains our base, borrowing quality of impressive.

of Credit BHG being with were in for base. This far. has have level its consistent around going and resilient borrowing earlier, production on always refreshes comparison well its a we so an mentioned remains In modified lenders, thus previous remained to to compensated credit BHG scores looking at their cycle the annually. spreads particularly mark, base. tranches average with the As respect have its lower borrowers borrowing both $XXX,XXX credit monthly, with borrowers indications its impact other well -- BHG quarters, borrower earnings will remain on during believe BHG weakness consumer score forward.

ratio delinquency XX-month has from BHG's to increased to ratio Similarly, increased X.XX% its X.XX% trailing has charge-off X.XX%. from X.XX%.

has marketing managing We that of both underwriting line BHG environment effort as BHG's they've in approach ratios, further credits. In made believe XXXX. of to credit performance keep credit to proactive to cuts entered number taken with and XXXX deterioration lead levels, to ratios a are the Although to to early BHG a an historical near macro recognizes team their has similar models. these management

great Lastly, in BHG year XXXX. another had

loans always I platform likely bank would half the calls sheet. believed loans more first half, during stronger mentioned XXXX the auction half the be second than this earnings of set than to the first balance have the their in rather our As year earnings we year, in they as of on whole BHG's

platform gain options interest on on the of the immediate they delivers retain balance deliver through while fund auction know, and an over sale, sheet the that bank you loans various As the funding loan. life income

billion almost BHG volume. accomplished three $X.X year, aggregated securitization this in

was in part added represents they been for December last facility was than This $XXX BHG incremental new third which facility at of facility sheet $XXX year-end closed Closing fully funded XXXX. more otherwise on available expected. the During to funding well. as in and loans A facilities million million in Truist. to Goldman December, this had late balance on required remain with XXXX. This

at example. going platform while So, auction through $XX to $XX in issuance through million an simple immediately, could anywhere here's gains a million from bank the million X% $XXX generate the platform securitization spread the the GMS model. anticipated yield million more through would balance sheet $X In million than originally quarter, $X in interest [indiscernible] income set with approximately of fourth to the sold annually. BHG

I'd comments points ago. I and the to key at same are is very macro three quarters. macroeconomic data year some three next the for based real a environment the to reemphasize forward, looking least which on Again, BHG will BHG mentioned -- like in reserves basically way. be months management over few has responded increasing

liquidity already we scores broaden which believe their is platform, levels Production by assets BHG may less XXXX. into they believe unmatched alternatives risky with credit has modifying will model new peers. maintain also been going strong we spread as XXXX. strong, occur production BHG's in] volumes [originally shrinkage that in their their and are head funding will (ph) we

BHG few positions, -- as of with as which took headcount should and burn XXXX elimination its reduction weeks in XXXX. yield shield well most steps to limit XX% ago, open Lastly, a job which its expense expense other a in eliminations from reductions,

For to partners term. strong at all in Group over those deliver results our have reasons, Bankers great we the long confidence Healthcare

comparison a in of XXXX, our October. with XXXX, our final outlook the along here's quarter initial conference third call on for Quickly, comments

believe, growth interest We similar expect correlates growth mid-teens mid-teens growth income. should in we deposits. in loans, to for in income, interest in to net high-teens net outlook low which result, This a

which nimble the respect we with a need will NIM on being Our especially to to challenge be the cards. obviously be our down to plan to for product, year, and flat XXXX contemplates

more as will associates. economic slightly in BHG's We these revenues our a of Fee up XXXX. should to hires that many we've challenge headwind, fee optimistic fair units flat had believe but are be may for biggest (ph) facing new those their several from key and are see areas [target] than share we lift be of some

We've outlook growth to reduced expense mid-teens. our

to still revenue it year, senior Our strong as especially hires. recruiting are committed pertains leaders a to

and should in begin a is negative position develop. to believe, we the shape strength, year great a believe should quality, trends which are we Asset of be from currently, thing we entering great

putting last XXXX plans are many financial We final thrown were earnings and just matter our goal as year, no performance strategic but unknowns the for on remains as at touches the they with us. now gets our quartile top same; what

back it With I to over will that, turn Terry.

Terry Turner

Harold. Thank you, right. All

and In I of create of the no should off ability focus around that one two to focus be returns, produce to the clarity I and take hate, be. underlying well. numbers. shareholder which, think to noise just is the most you things opinion, I trying One in forces do noise know my the There're course, about where discussion as outsized

is The economic second thing uncertainty. I hate

of So, creation. value to frequently forces investors it regardless shareholder the the sidelines potential for

ensure I whether minute so, more take balance sheet uncertainties how we what outsized of loans persist, BHG regardless (ph) And economic intend the regardless to [elected] will returns may. produce shareholder a come just understanding to of that

forward. And has on the deposit of there's can long sentiment a this a not their a broad less net view of negative. is the score optimism executive Greenwich's we're as call index headed great been survey recession. executives on lost or see direction difficult to economy pessimistic that anyone not going simply economic landscape. as It's commercial so of you here, since that Their commercial into the

few. are widely increased rate-based and, shrinking supply, deposits and for a inverted curve, economic known yield shrinking include pool, money a just headwinds competition and ultimately, inflation The commercial to a on deposit bearing banks means name recession, which

talent to environment. of short-term growth substantially is been a movements, less and ability model no and model more function our both therefore, literally have inflation that is on of the And market economic share, interest rate dependent pursuing the But subject this our things. to those doubt and take is XX years. kinds downs ups and there's And we business for banking

frankly, just differentiation against our catch this sustainable can for to defend it's building it, who've So, hard been it the competitors either me up or not understand classic advantage. is

the objecting Beginning total far shareholder is with returns. right,

dramatic you looked true, years of years. last would you if our can true you I XX at Generally, you at first it look XX produce see of our the that first years over and if Here if XX true years the XX XX to of thin true, model long existence. future of our thick performance, existence; looked the is guarantee at be outperformance be because over intended will next the And results believe no past are while years, value this over term. through existence;

the I they Every because say service. give reason say virtually experience. In is that to built say data all they not that demonstrably clients it's our The independent only that the banks competitors. a prepares we for Pinnacle, but our of who tell researchers our case, client for And that. different great

of You firm can see this literally unparalleled. in clients' with our the is chart the that engagement center

national operate of and place as scale, I'm contingent market associates. and in second-best XXXX, best excite rated risk been that engage for going our not country. ability for as virtually engage the say excite millennials in work on seventh the to our been workplace in; we've at on best we workplace the the is We associates. ranked the and it every you to women a in and service simply, And our oversimplifying, but the list, differentiated largely to read to we've

taking will successful, associates us So, clients hard of theirs. our it's this stopping time an competitors extended and very from or period building that to not for just either over taking been imagine me be who've

the Southeast from Using continues the Moving Study, over markets. attract on United the Movers country. Lines' advantaged all Van to people the to

markets. ours terms challenge more of with and than majority of then Our find chosen in footprint, to we relates vast, the bank the a advantaged a population migration to it large our in vast growth. operate high-growth And is urban footprint as

the of within And in country. largest So, fastest-growing we're in and advantaged most the we're the generally region located that located cities. region,

attraction attractive our and the frankly, growth competitive landscape. more is the dynamics important beyond incredibly Moving size markets, of

better better indicator you the defining see Given national according Promoter of their beginning bank's are regionals, the Net a the on in technology, banks. horribly study, or protect market investments low expand best can ability national while scores for the to super is Score while defining the and franchises, Greenwich's community slightly despite share, not at to left, all surprisingly

the Pinnacle a operate getting right, see and the are for gap platform, Moving can stores mind to we service willingness primarily adopts differentiating of women] what expect Keep while better. Promoter that unmatched as do. widen platform to that's measured Score I that to industry clients' you fully the our (ph), Net purpose we'll work-from-office level. a the in further recommend. [More work-from-home

safely of that's in you to declining grow continue how a So the face economy.

the I it than in a that remember more markets bulk of the in now. have our share to competitive of the when up speaking time existence, And banks were give vulnerability, likely the never our

Here's a both to competitors. them, goal sustainability My to for taking smattering spare simply clients. of and recent not headlines our is but in our ongoing share here market crystallize of associates markets regarding our the

And experienced still demonstration our believe for markets shares. become war choice bankers of every successful for frustrated banks large winning that in many set those of our we've here's revenue and new like the we have markets. for producers record of our from in the a It are employers largest that the bank I market seems with year, employer hiring most talent. the further

revenue work literally create focused a these despite And producers of experience wining best that is when on in in the universally clients, company they the market. and bureaucracy

left three chart but the Now label that to share are the leaders. the market the of point, banks on

banks those where that to able anything from they're come over revenue rapid us could differentiated producers long see you of the growth (ph) are to I the and from, complete our you term, recognize but conditions So, [diagnostic] economic provide. when now most expect that service

successful to engaging clients, visualize vulnerable. the have share dominance. to Banks the above that opportunity. Banks left crosshairs of way their are another they're Here's least crosshairs the

vulnerabilities, engaging of those market their being right capitalize the and the positioned in clients all on to successful Of share the PNFP advantage are competitive against crosshairs best most vulnerable. them banks leaders, look of to most course, the

the Most being nation's spend is between at has Greenwich's perceptions enough, national the been of competitive in the the advantage written there is banks. can strong a tech franchise, see clients' largest study And of a them to willingness bank being provider. by But add according experience professional, best best bank's experience. capabilities, as Pinnacle, the overall is client's Greenwich, the our a and the best to digital the capabilities about provided you correlation best in created sure a overall product by markets, digital service

long-term is in shareholder relationship; Greenwich on value the about is bank a loyalty three one, Thinking creation, number client research number doing which long number of can pillars you isolated ease trust. built: long-term business; value three, two,

years, clients expanded continue. again, area likely of they've of Over of for pillar, is which our dominate again, the in insights, markets, our those all last of data to key growth indication largest we investment, further is those a couple fourth and metrics, to net that But analytics-driven competitors. a actually four

associate trying they connect engagement, on many, And and returns. now service, earnings shareholder client I'm have to bearing I dots. the recognize no or little

next product [need] conditions, would and the Some but can the insulated add give, their service intend this hire few be us [indiscernible] believe is for you should we cut, be as leaving because the consider many and a provider (ph). from slide we expenses our why great clients things to hopefully, connect people on a growth to on dots very we economic

on And the charts. share of particularly case net those down the than market market, our In As top and momentum it up irrespective much you compare twice the as more next the businesses, our competitor. in conditions, case the when economic momentum in those percentages net the middle you banks is the small total for leaders, of as scan best dominance, of banks to three of both market, huge.

penetrating unique completion Without to hiring [indiscernible] like with, be market, understanding a a them to growing it's by approach is that enabling if one. weed, easy our it experienced business largely bankers, do draw the to

clients even of prospect would to we're list prospect that's slow prospecting by prospect brand to new calling. and trying So, I competitors many money. ton can or done, according it out how are other in growers, here, for to Greenwich, of you some circulating borrow be see is typically our last dead say, list, the

As supporting better believe we're for to that them by previously peers not the event they've relationship money credit strategy than provides protection clients our We meet and our that in trying loan with out on simply many the times clients calling we're terms. us discussed, decades. of to, managers known

So, QX was a bound. keep to uncertainties on noisy encouragement level. quarter. imposes is the to are right My the Economic

As growth over book score year, incredible They've restored it loan strength highest -- the second nearly of from book. pre-tax Originations many history. XX% and continue sources handsome liquidity add their prior their strong. utilized day, liquidity relates to fundamentals investors sources the of not $XXX million They it's continues were remain be in asset. an most in And the the in some sophisticated earnings, to the story loan those and BHG, again, has deteriorated in and gaining a the market. and at the end to

most franchise to footprint. continues We is dominate compete advantaged in the have this of banking regardless are. Southeastern core a circumstances think important I what and continues we and momentum that, run to that to the Beyond me,

cultural focus in there a have that and experience, We differentiated more that. than results a is client sustainable no advantage

Our throughout our having we're organic markets. successes proven that growth model, resonate

U.S., the want country. and to From we're start, in of clearly, you of place growers quartile loans the of loan stories best if top terms One in credit does perspective, growth tangible one NPAs, the book OREO, turn. the a credit the in best the value

how I leadership little an to And the hit do set, then, XXXX people I'll on bit, to it just high systems, as but relates estimate on lastly, to begin about focus compensation think the has important has get slide our those to consideration are goals it Harold with talked a there. set, particularly as we compensation.

tangible incentive we generation, to setting, value a We those focused tangible relative book peers did in peers. it making some outrun to why 'XX. grew on peer our plans value have do insight Specifically, the book versus target the so pace at

quartile top for performance on looking in and like growth XXXX. we're revenue indicated, EPS has Harold As things

bet As many XXXX, maybe that a think estimates, still XXXX. back the of XXXX for targeted outlook which growth of -- the I we quartile those And generally, to industry growth, what that that incentives if But salary-based the sufficient proxy, go information Harold's this, the you of from was have trying our mine's bit X,XXX and didn't say is, to to be because PPP been in can little idea. and the momentum you those to mean outrun not by methodology negative on believe our will employees in methodology. negative, this negative income. and up obviously, continues the develop whole regardless this but be you to earnings on It that that the top we industry industry That's as there company are, most still was incentive of loss I start a ends would was our XXXX. roughly of earnings expectation all

to so, banking done. belief And if order core franchise through that, about that you the in some in think you get into insight momentum get our the

stop take I'll there, questions. and So, to glad we'll be

Operator

is Fargo is [Operator for you, The Securities. floor Instructions] Turner. Mr. your question Jared, Thank Shaw line first live. is open from Jared And your from coming Wells questions. the now

Jared Shaw

should when it's quarter's Thank starting you're Harold, morning, X.XX% on be Good the guidance. the from slightly full-year-over-full-year and you. it's assume down, we or fourth Maybe guys. margin down? saying just should down

Harold Carpenter

But just quarter. fourth basis to like it probably will first because from that more that. is We be days. could it points believe the of fewer We it going penalized be something X number think basis to believe X the Yes. has we quarter to flat down points, be

Jared Shaw

more Okay. you asset in quarter. sensitivity disclosure, at And we sensitive like looks asset the became fourth look it then, when the

pressure this is you of funding assuming just acceleration here? anticipate So, deposit I'm increased

Harold Carpenter

planning we think rates mid-year. are We mean, Yes. that I little see a here by the off somewhere than around Yes. in XX% mid-year, to level near still maybe more at might deposit increase by term. beta our

Jared Shaw

are Okay. is have outlook what And for weakening BHG sensitive in how on some then, backdrop? your provision right. credit of you All the to that. with Thanks the BHG, for assumptions provision? 'XX And the

Harold Carpenter

in increases nearly plan their not their provisioning or They question. as great forward. of a reserves that's on going significant Yes,

to quarter, bulk are to So, here I that done can think charge-offs they've if of looking stay past are dues but like like, within they'll have they what guidance. what this gotten see it monitor looking just the

Jared Shaw

the Pinnacle? Okay. And Day -- on for that CECL in Tier give can X an sorry, impact update us October for that just you then, X I'm estimate

Harold Carpenter

For Pinnacle?

Jared Shaw

Yes, the Pinnacle portion.

Harold Carpenter

Well, the BHG would about from seen number $XXX I've be million.

we'd through equity. our XX% that run of So, be would that,

Jared Shaw

I'll step questions. Thanks. Okay. for Thanks back. the

Harold Carpenter

Thanks, Jared.

Terry Turner

Jared. Thanks,

Operator

coming Thank is Stephen Piper line Stephen, you. from is next The from Sandler. Scouten live. question your

Stephen Scouten

Good Thanks. morning, guys.

but, you the of obviously, said, NII, don't you betas be and Terry NIM, have think, I optics the guys some can the you spend Harold, around deposit spend tough.

higher out makes laid we'll "Yes, better had to also the out play have be balance that growth. of in Or second really noninterest-bearing a pressures? but resulting in that slide, over funding reduction better the showing have growth sheet continue that kind we'll guys good forward funding any Is You moving guys do higher but you be earnings betas, this also you I NII deposits, time?" think the think that, traditionally have anything in different, betas, within quarter think, will NII of mix, the today you will there that higher whether story scale

Harold Carpenter

income be net high-teens margin We're about interest this flat for could year, Yes, to with growth down. in that sure. a and talking

operate. is So that thesis how we

several question margin?" with deal to So, it asked a about going [X.XX%] that And so. was down around somebody remember (ph) "How when on ago, call this back we're I was or years thrift-like a

for too margins appears higher get somebody beta. a say, deposit with our But of live interest where is more income this, have sit net than growth with now, our there to growth capable right point engine we adjust. significant providing to So, we pricing us and as and our low

Stephen Scouten

of composition, of maybe Okay, any drove mentioned Harold, XX.X%. of deposits and great. to meaningful that niche it Was appeared verticals within some in other slide kind you there the And that that like jumped deposits terms deck verticals from that changes product increase? indexed noticed there there in I XX.X% or

Harold Carpenter

some would funds. that We've locally Washington. some some tied I of of Yes, index. well as be I attracted those to are kind And most as -- here clients public public think think of most fund in

Stephen Scouten

And last me. for just Okay. then thing

into potential of potential what an $XXX How you a can well size aggressive that Just 'XX? idea debt you might that be? the as And plan look raise raise, about you're give a share noted sub-debt plan, sub thinking the how like? repurchase, you million as us might about to on

Harold Carpenter

million. Yes. that think $XXX performs, how how to We can out, pans just we out without we'll all step it to we any million growth through have $XXX modeled sub-debt. But out see loan year go to Right now, through the that. -- step of kind raise need

Stephen Scouten

a Thanks Appreciate lot the for it. color. great. Okay,

Harold Carpenter

Thanks, Steve.

Operator

Alexopoulos coming live. the line Thank is Morgan. question next And Steven, Steven you. from is J.P. your from

Steven Alexopoulos

everyone. Hey, morning, good

Harold Carpenter

Steve. Hey,

Steven Alexopoulos

want I start expenses. to on

the if which to us needed? last proves quickly expense down early on, you to revenue like how worse expect throttle if could you And be to pull What's could right? expected, to levers than environment So, go? first would go, walk levels, you through

Harold Carpenter

respond the kind the are fairly will number the of profile year, be -- hiring -- hiring There in our for Terry revenue done for the is if year. Yes. of we've we then, to quickly. that can that or reduce kind past, several the to believes be One things plans like can we always appears consistent

anticipate on whatever. payout various got elimination those also would And or the plan, down. then, could table the year the come throughout accruals for complete be incentive plans to so that or We going we've the on for get also events reduction what is

in to meeting management to revenue things. earnings, pricing, an here but So, kind our going what this that year, make we targets only I going year. to those think we expenses, review think, group focus there's given that be all of level his in Terry senior allocated has of sure by growth, not this today what's time and on I this achieve on intense reported

our we leadership, I hitting need particular our targets so, And our committed and think, whatever firm, to doing is to that. accomplish senior do to

Terry Turner

might topic. little a bit, exactly asked, what Hey, to I I not think related Steven, you some maybe on just that but tag color there

As bad we make threshold, clear can't incentive have sound and plan, you annual generally terms we of know, cash in loans and win.

of So, payout that per that and existence, our to the per growth growth we revenue were that clear hit determine was share growth. two variables earnings earnings that, required to most share

looked PPNR things, more allowances are where guess we difficult kinds a I we build revenue. than year or and PPNR for being during at period of relied year, a and on last two And those

comp approved plan. two earnings They'll Our in performance the few that in growth. growth do and that next anticipation revenue per Board being they'll technically weeks, has is back not the here the the share go variables February meeting. But to

but not create just you're it, about I'm revenue it. get does of up a I we're anyway, on plenty that focus great there. there's drives secondarily, on in getting the expenses, asking perspective. so, that success hitting generated, focus putting And earnings, it revenue And of if the which growth, the odds

working on We in different will get in here start expenses. way a and the

Steven Alexopoulos

it. Got

Okay. recover think but half, to thinking the bottom all first it's Jared's points How margin, competitive think said are half? the If first the are year? the the for to follow-up second here? That's out think it you slow I could steady deposits, should change in helpful. to points down about declines the through how for in think do in you X Harold, question, your that? quarter, trajectory How I about and about on thinking you commentary you environment the we we the do you basis you answer X Or to about NIM? gave basis and

Harold Carpenter

Yes.

drive they of in far As of our -- margin, rate some increases the our will have as kind think we and the margins. that'll reduction impact on

that's of going it, kind be deposit the in right X.XX% probably of X.XX% it around not be to, range. believe, -- likelihood kind this impact that hit in to call we we'd X.XX% we're pressures our assertion. all targets, But If believe to we that now, to all number, -- funding year going So, to we're obviously, to just able as is then rotate X.XX% long. see and -- sits margin just going

Steven Alexopoulos

in helpful. like BHG. then, that's you XXXX look really all driving this, Is to with them provisions doesn't portfolio? holding production That's related if at related else? more through is what for versus we that the Is this for higher to at just something contribution, the Okay. sound now, finally, on outlook or out anticipating right, reduced And it there expectations you're BHG, what's prior coming

Harold Carpenter

these be there higher to credit will order their more hit to going the they're They lower to and So, of XX% probably their some balance intend But related numbers of have I provisioning to that year. these to back more year-over-year credits money I through tiers, of XX%. this -- to in accounts do they this platform send off sheeting call credit think some, with for auction it, think mean, elimination costs lower revenue year. score the

think did not platform, to still they'll more adding auction that I I money but the So, they'll think at send the quarter. the same to the and be more fourth also in they reserves, pace

Steven Alexopoulos

Got it.

color. Okay. That's helpful. Thanks the for

Operator

the Raymond Rose James. And you. question from Thank live. coming is from line next Michael is your Michael,

Michael Rose

by talked this does competitive for last the that beta? Hey, year, longer-term a Fed impact cumulative somewhere the of kind estimated I that? does the which the beta if morning. Any stay pressure longer, about end given And that you of just that for kind of deposit higher questions. taking XX% my cumulative in changes to Harold, for had. XX% you and think quarter good range Thanks you Thanks.

Harold Carpenter

really far of about I've the 'XX not thought We've as of or what costs between near-term. through XX% to know. as calculations the look at of rate given and beta year kind math the here put somewhere could beta talked don't into two of of the like the and I Yes, XX% kind hikes any middle deposit in about end XXXX.

rates once and looked due beta, competitive raising to deposit the So, I'm out pressure. the of expect just Fed likely what at going really creep that see stops longer-term but rate fully we to that kind deposit you're not

the get and, we I you you for year north think higher longer deposit continue Fed, know a So, said, rates, but latter kind will I into when Mike, time, of a that rate don't to how the we improve rate well, that in deposit will environment. of talk long environment fully period like about anticipate ratio part assuming flat in of a we're the

Michael Rose

Maybe follow-up one separate for the Okay. question. just color. Thanks

guys I next But business? next be in to you earnings the stake hinted to point over the you? to investment where is intermediate lot expected investment. of the term? kind lower the and where the that over kind guys are terms than contribution And years. over the done And rationale future. going reducing it the you strategic it's great how of short some view you've strategic in you at as for of of has want of years, any know maybe the to sort Obviously, what a kind be of revisit we things to it's thought move Thanks. is wanted obviously at longer-term the just for all just BHG in Just of maybe -- the given past,

Harold Carpenter

I'll comments. and Yes. start Terry can his add

shares what of to Healthcare of is, part the we discern. BHG realize, I difficult First Bankers important, an believe want to and arms of that the out here on Matter the that is a of and figure our couple of strong. transaction fact, all, we to absent have kind Board of meeting Group, in about number I'll hours. folks with BHG between say partnership bear is is understand, link But trying valuation us but the case a we is

valuable just said, there be pricing for We not, at but has where is day for worthwhile it's think, are of and quite We us. quite could a think There we been right page. the believe, created our I it of same momentum BHG a on bit have -- to on bit it think point us. asset. worth that makes BHG opportunities a the to think are reduce money. earnings That we stake, a We another now

consider opinion ourselves that does bad. we kind BHG that probably wouldn't worthwhile the that any about lesser that transaction our that should be carefully. said, interest And by a -- of All ownership is

Terry Turner

Yes.

echo just comments, I you with right to think, the Harold's Michael, assumption. maybe started

we a just our just story had other reduce conversations, with become to if company forth, that don't [indiscernible] be and we're nobody what think not any is has so it's the to not BHG would reason like to it of disagree I happy, a stream, outlooks, dependence on keep because as try on of I'll earnings our because or telling hard investor function and so bullish say even not to understand. investor that than, people many

my so, from of at strategic standpoint, less have stream. earnings me dependence I'd for a And BHG to a function like as on again, least

think, to I been we've think, point, with that. Harold's I good

I think that. good BHG will with be

always there ownership think they BHG. there a always -- interest are I have are who -- number pursue almost interest, of in people

so, what's the question comes just then, And down to price. the

expressed preference And to I think, have you right the there, right in price find we so, don't if we some, the our price. would lighten load if find

it the our our love does to for what and invest ongoing company growth. how continue We and it fuels

case right price, the stream. to our a is And it's worst BHG clear, -- function so, be again, certainly good at we case. of again, the But a our just earnings as to would lighten exposure

Michael Rose

color. the I questions. my appreciate Thanks taking for all

Terry Turner

Yes.

Operator

line live. next the And Haire from you. coming Casey, is is your Jefferies. from Thank Casey question

Casey Haire

XXXX. wondering, Yes, in on drivers, get a guys. morning, low thanks. the the rate guide current implies BHG. of the run mid-teens hit to just of end growth I Question to was kind what end the of from because Good guide ex the that low are to the average on guide fee

drivers Just wondering are. what the

Harold Carpenter

Yes.

Casey. or the hit is in, don't it's to is I eight hedge. seven think big valuation to I be down They had a going fourth of mortgage of lowest the level at the impactful. Their because in pipeline know, quarter, years, been

of the that So, the valuation of the size pipeline absolute the drives -- hedge. size

going part XXXX to have we least And we're at spring. early into it, going into of the going we're tailwind call -- that the the, get to so, think

number hired a so base is this have in And people. meaningful revenue for at been of a bumps interested we well broad, some management few from that. we're Their wealth also that client supported, particularly anticipate significant pretty We've decades.

of bit we targeting commercial As mentioned, are we've also quite a accounts.

fees And be got non-annualized us. that annualized so, both and fees unannualized with coming would to we believe we've fees that, --

kind of areas. number in where that's comes high digit those from, single primarily that So

Casey Haire

on then, just little And BHG. a more in Okay, understood. digging

increased a that, or in? bit kind that deterioration are kind is you what the spread bank come wondering there 'XX the that buy and of that? given of of holds, Just has rate assuming assume little Does guide just guys spread spread for in has

Harold Carpenter

for like Spread is for X.X% them X%, that. to that at something next I'm year looking

Casey Haire

good. And settling deposits for the you core sense a very before one noninterest-bearing I getting it's you Okay, is capital and any attrition to floor tricky, how to start know but there? as like XX%, more then, possible just last working down much hit me. into

Harold Carpenter

is to we you crystal have at the ball need kind figure when account question. something be and assumption they now, and but X% Yes, from, we've call data that of around average planning they we out. that's it, a what that. it looking is sizes that, best may anywhere it looked are start that a And what so, great and be at somewhere But were our to could or pre-COVID north so of

Casey Haire

Great. Thank you.

Operator

And Stephens you. Olney next Inc. from your Matt, from is Thank line the live. Matt question coming is

Matt Olney

Good Hi, morning. thanks.

With what Harold. Fed for Michael the to margin. some incremental fed pull the rate? What you mentioned for its what could levers if question the question, to First means earlier are NII? the Rose's in margin starts environment funds a rate protect guys flat help But and you this cut

Harold Carpenter

we've into them into somewhere it, entered swap entered on for loan of [X.XX] have $X transactions book that we coverage at -- around, a actually billion (ph). When about well, of four Yes. about in there's call for the couple

have do that. we So,

got an those come mentioned got in all, so is, we've I think of increase we've thing accounts, down. we've the will biggest indexed first

we've been But where pretty -- relationship-based the pretty strong got business good we've clients. we fair with other being thing a at is think

last a on And fair rate-down pretty happened in is down. also were environment the we so, what time way

that that fully into if all a will takes rate-down but doing begin to quickly. lot manager of down And get we those XXXX. clients, that's with pull relationship we communication deposit now for a been So -- we've of our anticipate prices environment,

Terry Turner

Matt, a of had with successfully into if you lot the that floors. energy going Harold's company able might protection loan were to is There negotiate add comments. floors this in loan know, on a the I lot we relationship. And our we of cycle, to from

[indiscernible]. also that's So

Matt Olney

Yes.

put mid-teens the know better of get does commentary guidance, for just other kind index points. idea is the the at include bank there about Thanks. I on out you levels? of analysis growth, towards that I low with guys Good of trying light especially of to XXXX over process behind us in for in the a guess, always assumptions share where the you bottoms-up of you shifting slide the commercial each optimism producers. Okay. this. the loan its And Any XXXX, executives deck can very

Terry Turner

getting? you're understand grow I our trying that Is question, get declining assumption If how Yes. Matt, the to am -- the at what's I on in face economy? we of

Matt Olney

it, Yeah, do you end adjustments I bottoms-up do were I'm any your typically to each guidance? the more Terry. I at preliminary with that's with the but each year trying that if guess than did producer, analysis appreciate of -- there you know,

Terry Turner

and what same looking and -- I this for, through if given do, bottoms-up is guess deal. which always top-down process I the both that went Well, you're the we year we the

through every I we they go think, where expect, production you expected the top as would would targets, target add guess, if manager is. you what meaningfully to than at again, house the So, are, -- relationship their we is, of up more what their our

over people we because owe last many of the many hiring those are many so people last over years, and of so where have still so over And forth. large we've ladder of bulk so year, one that that book the two the last the targets people hired us many movement the their years, so three

is that do the will those to what So, house. what will and there of of detail the or expectations exceed be the at we're communicating level would will top done a relationship manager we believe do

Matt Olney

Okay. Thank Terry. helpful. That's you,

Terry Turner

Yes.

Operator

next from from Catherine, live. is question Mealor line Thank coming you. And the Catherine your is KBW.

Catherine Mealor

morning, everybody. Good Thanks.

BHG expenses. small question kind up of one and Just on following

think in has building and just process paying the BHG core bank. hiring had really past back the I build if the So, few to been years, really in that for instrumental you've the

feel that at little maybe go guess, back and might expense just shouldn't a of to is little expense Is outlook the EPS initiatives? growth the ROA below higher pulling we're at you what mid-XX% growing contribution is that and Any a it need more there that color way, expense I range? what it making the less time, of risk revenue sure bit all point this level you profitability does it like is? about of would about So, kind than in feel a more maybe seeing adjust to super just growth is take be a of for that you bit. stabilizing, -- but the Thanks. kind on than trigger Or, helpful. BHG

Harold Carpenter

and probably at top not And got We day, the at The of revenue of share. targets is Catherine, per in ROTCE all are our end But Yes. ROA that. what BHG have that. the component the list. do earnings we've a targets,

get going revenues we'll the way costs, means do can. to go need that grow to so, not And to bottom-line figure we're in we that we plan, to If that. number we how in means cut that to effective the we'll some most that out to try try that's to cut way, need in costs. If

us growth. has past, tailwind the respect to provided some in with BHG,

year, going year This to hiring flat after it fairly looks and extra And to like their so, growth provided our they us in number year and support resource outgrown and up. platform. go a little be slightly is typically our out, that's to

may to imply our in that hiring order And that, meet may on EPS from -- targets. to so we need of kind back off you that might

them quartile questions, nail getting do would all to plan be latest if that, and for and that and Bankers for going at the information a know Healthcare we'll Group but top don't greatest your we're it. what achieve to eventually is simple down to I'm I needs firm, And it. use to think growth have So, include this in the likely Catherine, most that we we

Catherine Mealor

it. Got

Terry Turner

point. I is, what Hi, you know don't into not, you I to to let just me least maybe helpful slightly Catherine, be or here. insight intended if it'll some different if at -- a our we're trying what to give mindset it's do make can

loss momentum to that were for in franchise we comment incentives about really to banking did the that, that that that were I a the here, our the XXXX, and the we we to made people of believe banks earnings given and incentive just had core how think and income, don't bet ability that. do during PPP and in grow presentation I clarify work going thought trying but on plans anybody

In outperformed the number. fact, we

that bet] the in momentum those and to rate we going got clear, had (ph) be that of in course, were believe increases more [the I But today that want franchise, expectation, beyond Of income. the benefit I we loss we outrun of all which the kinds banking would just of things. guess PPP carry

I of same most hear think my different this That what to talk I phenomenon when than year. I that's peers. exists

the back the for franchise, reasons been it's we've businesses forth, I want going of they're regardless in we've get to to to and in much large that all that of momentum, which For momentum not the of me, major them. the through time, how share they're we part one moving, so believe all all momentum story are is these we're a banks giving talking that BHG long, penetrating having the exists, just hired, go just to earnings that have the goes story to the we such try momentum, that how occur we banking business about you core that outrun economic core up people being can clients, growth a a that long help get projecting to success are conditions the people even and year when the

going I'm that's guess again, different So, story. a to

have mine but Plan we know just most easily that "Hey, growth the as A. I we revenue play will so, Why We Harold's, say, expenses?" associates but that's people required, to only And and to this make. it's momentum don't we cut the We'll believe it's Game produce it really difficulty. not outsized on what's to, to if that's go And all going firm I do want are that's and that frustrating not because looks that that idea.

Catherine Mealor

Got it. That makes sense.

have is revenue becomes from or a than falls the saying than bank start expenses. more you're expense better, why revenue But can challenging core don't lever? expected, that's to more if to here, So, expected, in that's into BHG you so when BHG and less moment is where flex tap the you

Harold Carpenter

That's million cash $XXX exactly. about point. this in Catherine, in I've bonuses got

hitting for growth subject all EPS targets. that's So

Catherine Mealor

Great.

And The typically to in bit this quarter it and -- adjustment helpful. then up is wanted Okay. That's looked I've for super then, knit, historically, FTE purposes. but normalize. really a small modeling pops little do typically just a the fourth

that So, should linked we the quarter to expect normalize that of historically? we we've down back quarter like kind -- see again. quarter increase you saw in seen first this expect Should

Harold Carpenter

so. think I Yes,

Catherine Mealor

got. Thank so Okay, think great. And I all that's I much. you

Harold Carpenter

Yes.

Operator

line Thank is live. is Truist Demba question Jennifer, from you. your And from next the Jennifer coming Securities.

Jennifer Demba

morning. Good you. Thank

Harold Carpenter

Good morning.

Jennifer Demba

horse a more. Harold, let's beat little dead a

the pretty a you element guys the probably tight would gave it margin you the risk fundamental that You at fair is that net guidance guidance. out for be of laid -- Would say to margin XXXX? most interest

Harold Carpenter

Yes, I think to feel key that. so. pricing feel be We about pretty Deposit is. about pretty it. good We will good pricing where loan

improving. loan on and several that finally quarters I drum is now definitely beating we've think getting for been traction. some rate pricing Our it's And fixed

think will yields the Rob Rob in think the we've there. and franchise loan we around from Rick that. got on So, support I And and hang

is us to yield paying trying for brokers market pricing It's the what around what -- of the as competitive with are other accounts doing, peers. for what some Regions It are competition what the what all franchises well. extends money beyond what paying, doing, our that Truist do savings the extends is folks, these accounts paying, as high deposit are

because how we we And we the so, told that is think point price. all go have that these sure. up to those We deposit don't our much a to is that will a to levels But will have salesforce of go. for not cost deposit there limit lose way

chance go And they out defend and them] (ph). portfolio, [for are sure those make letting so, and their orders deposits to there they we're to that marching deposit their a whenever not it, got do

quarter around best emphasis about increases. those Secondly, the initial see DDA strong and deposits also kind DDAs there movement didn't that There's of and thrust where those in occurred that did a that We of lot was an November see on December. November and headed. the an earlier that are a rate nearly can. of during protecting question We reduction kind we

hopeful that -- fourth here will it anticipate of we're So, a although we same won't we kind of occur levels occurred we the that the has hopeful occur, in lot just are that, that quarter. at

rate two of we're notion the working all credits. thing And getting protection second of doing -- three to as or far think and prepayment we're we too are that Jennifer, the there. on and fixed all that, our guidance tactically, the salesforce been margin penalties quarters as on loan So, as as we've the one traction for last actively selling far that I more

So, on in protection or rates we've got us we're there. least at hopeful longer-term, the got that down if come at near-term, do in we've some the least some

Jennifer Demba

Okay. this Pinnacle for year terms more in deposit And deposit Is a shift intense would permanent a focus overall? the for projecting -- be you're growth focus very of this growth that strong. on just putting

Terry Turner

think founding have, question yes. I that the had an by intense on focus company, I think since And think the yes the to Jennifer, answer deposit that I all we I is mean is, of acquisition.

that. As In mature go, it got can fund been know, a always and book sort of we ride a and you have there has so mature you different a the that as milk energy our you to you beginning. since and if and emphasis and around retail deposit there's company, we case, got

concentrate the didn't much and pandemic the and during we things. to didn't clearly, But do so of liquidity, our We defense that, all those kinds and the inflows on by deposits. have

don't guess, in that to I'm them. Jennifer, some deposit in deposits $XXX specialties pandemic the during it is of it $XXX have (ph) four a three different to book Happily level going as that period, businesses does require know, different traction deposit us. for built of level [is day that or all million specialty produced, those we money supply million in less] and I a [is four energy. XXXX, (ph), less] So, probably

as bigger with still early in still be we of forward. in stages positive momentum to those the go specialty. growth that all four expect We We're

to addition that bolstered that's do pretty managers, relationship and the the I specialties some is in our the of ability I how in reasons it, to which of yes, okay, in growth. are difference on meaningful we so, deposit there product terms all think our structural energy do they're And have say, emphasis a

Jennifer Demba

Thank you.

Operator

question next from And Martin Brian line Thank you. your the is coming from is Janney Montgomery. Brian, live.

Brian Martin

I'll morning. be Good brief. guys. Hey,

hiring Just, relative for year. up commentary in be, Harold, wrapped it quarter Terry, some thinking how talked you to earlier, think, 'XX mean, the the might thought hiring fourth you you last and this where quarter of outlook 'XX? about but I I given about are just is

Terry Turner

Yes.

been we talk hiring our thrust of our grow when really all about primarily we're one stuff. producers, that's with we're we things because talk What the time think revenues, has I bottom-line, revenue the Brian, trying the really that grow along. that's top-line talking most in when about hiring important, order our do investors, our grow sort company, all of is to of to of

by make be sometimes X:X revenue producers. But again, to just of sort a supportive are point non-revenue that's producers going generally a maybe that those forgotten, obvious

XXX, that a revenue in whereas think, in to people the number the associates total producers year. be increases have that what for to in the of total so, range. And hired think, range know for down the were I I exact year, the be closer that were it'd Don't number, hired XXX-person

capacity in less really would pick think and compliance is, risk, invest personnel -- -- step is -- review, of revenue we as you to stair that a a the XXXX all because expect you generally, in infrastructure in in a a to we'll which similar long XXXX, trying lot expect I'm primarily of monitoring, to with controlled forth, got of been on point hire expect support in in get what less I step stair So, you We'll support you producers. kinds for personnel a year where those build so my kind mode. view, BSA expense, things, people the than

the made we've infrastructure. investments in significant think I controlled

hires be but a nature look, less of ought of stair way think it's it I ought be XXXX, revenue to step hires of those than because be less long little some expenditure. might to than XXXX a of XXXX the comparable. So, control number to in say, XXXX, in Total

Brian Martin

And one Harold. No, helpful. for you. that's Got maybe

the more kind being bit Just Harold, on the maybe outlook. of -- or Terry pessimistic you a on level, talked on little reserve about the did

we about you level several the should kind your reserve outlook? quarters next how go the through given of think Just as

Harold Carpenter

a officers is posture having that Yes. systemic our the kind of strong. credit bit. I seeing made of in not they are quite credit same Right now, with book any the kind it. weakness still We're

assumption planning is be today our reserves out. obviously, that. monitor that so, We'll, here will on And probably our fairly flat

So, start we adjust some think we we if in as is weakness check best seeing credit know accordingly. But today. and right now,

Brian Martin

Got you.

the I rebound just fee comment, wealth. SBA Okay. income, the -- calling there's on just side, guess, mean, highlighted I that income about digit kind other more or expected, I volatile of kind high fee growth those items getting then, your picture planning about the to income back the your some like it, are big mortgage there, mean, out. fee digit I numbers, you're just more Harold, the this think in to piece those guess, you number low fair the not in double ex you I going And when of the to single amount? you of to and guess, about of I those a kind seems it guess, talked on

in quarter, the Do this the those a mortgage, down mortgage you for same know expect of pretty quarters? meaningful SBA -- So, instance, I couple like in coming rebound and the the SBA. -- was with next

Harold Carpenter

some for results. But mortgage wealth know better year Yes, year last in sure, whole this tangible also produce will We've about year, mortgage, SBA. got hired I don't this headwinds. should than and long resume should have very -- all of area that other has made a no us. a success. we've SBA help capital have that markets investment management in some individuals our They capable

that on as being planning influential we're well. So,

Brian Martin

Got you.

go, Okay. last hikes. kind talked assumes you And rate your that I'll outlook about, one, let the of you two is Harold, margin and

particularly how that year? it's today the -- change that much margin into or is the lower does next -- a not your does rates what at of that all, as the from I I if -- If you it your change does material is outlook, guess, later year in declines, guess, not see forecast kind Fed get you outlook?

Harold Carpenter

Yes, we but November decreases right in forecast actually now, in consequent. rate they're much pretty our and have in December some

Brian Martin

you. Got

taking the Thanks Okay. for questions.

Harold Carpenter

Thanks, Brian.

Operator

Thank you. And does today's conclude conference. that

and at have time, your your wonderful you Thank You lines day. may disconnect participation. for a this

Pinnacle Financial Partners (PNFP) 18 Jan 232022 Q4 Earnings call transcript