Pinnacle Financial Partners, Inc. · NYSE:PNFP
Pinnacle Financial Partners — IPO Roadshow (September 2019)
27 slides from Pinnacle Financial Partners's IPO roadshow presentation, Sep 6, 2019
Slide 1: Subordinated Debt Offering Investor Presentation
Subordinated Debt Offering Investor Presentation September 2019 Filed Pursuant to Rule 433 Registration No. 333-215654 September 6, 2019
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The words “expect,”
Slide 3: Safe Harbor Statements, Non-GAAP Financial Matters and Disclaimers
Safe Harbor Statements Non-GAAP Financial Matters This presentation contains certain non-GAAP financial measures, excluding in certain instances the impact of expenses related to other real estate owned, gains or losses on sale of investment securities, the charges associated with Pinnacle Financial
Slide 4: Terms of Proposed Offering
Terms of Proposed Offering Issuer:Pinnacle Financial Partners, Inc. (NASDAQ: PNFP) Security Type:Fixed-to-Floating Rate Subordinated Notes due [ ], 2029 Published Credit Ratings:(1)(2) Kroll Bond Rating Agency:BBB Egan-Jones Rating Company:A- Coupon:[ ]% Term:10 Years (Non-Call 5 Years) Redemption:A
Slide 5: Company Overview
Company Overview Company Overview Financial Highlights as of or for the Three Months Ended June 30, 2019 Name: Pinnacle Financial Partners, Inc. Headquarters: Nashville, TN Founded: 2000 Dollars in Millions Franchise Footprint Loan Composition Deposit Composition Total Assets $26,540 Gross Loans $18
Slide 6: Corporate Strategy
Corporate Strategy Our VisionTo be the best financial services firm and the best place to work in the Southeast Our Mission 1) Provide distinctive financial service and effective advice to clients 2) Enrich associates personally, professionally and financially 3) Make a significant positive impact o
Slide 7: Key Investment Highlights
Well Positioned in Attractive Markets in the Southeast 1 C&I Platform is Pinnacle’s Principal Strength 2 Consistently Outperform Industry Expectations and Peers on Loan Growth, Deposit Growth and Earnings Growth 3 Granular Loan Portfolio and Disciplined Underwriting Standards Contribute to Excellent
Slide 8: Executive Leadership Team
Executive Leadership Team Name Title Age Years in Banking Industry Years at Pinnacle M. Terry Turner President, Chief Executive Officer & Director 64 40 18 Robert A. McCabe, Jr. Chairman of the Board 68 42 18 Harold R. Carpenter, Jr. Executive VP & Chief Financial Officer 59 36 18 Hugh M. Queener Ch
Slide 9: Franchise History
Franchise History 2005 Cavalry Bancorp, Inc. Murfreesboro, TN $605mm assets $455mm loans $539mm deposits 2015 Bankers Healthcare Group 30% stake CapitalMark Bank & Trust Chattanooga, TN $968mm assets $765mm loans $840mm deposits Magna Bank Memphis, TN $565mm assets $451mm loans $454mm deposits 2016
Slide 10: Attractive Metropolitan Markets
Attractive Metropolitan Markets Per the Bureau of Economic Analysis’ 2017 Regional GDP report Note: Deposit data per FDIC as of June 30, 2018
Slide 11: Historical Financial Performance
*: See Appendix for reconciliation of non-GAAP financial measures Note: All other financial results based on GAAP financial data CAGR: 37.7% CAGR: 37.6% GAAP Basis Adjusted Non-GAAP Basis* Historical Financial Performance 2Q19 Summary Results
Slide 12: Historical Financial Performance
*: See Appendix for reconciliation of non-GAAP financial measures Note: All other financial results based on GAAP financial data * * Historical Financial Performance 2Q19 Summary Results
Slide 13: Historical Financial Performance
(1) Texas Ratio = (non-accrual loans + troubled debt restructurings + OREO + Loans 90 Days Past Due) / (Tangible Equity + Loan Loss Reserve) as reported on Pinnacle Financial FR Y-9C regulatory filings *: See Appendix for reconciliation of non-GAAP financial measures Note: All other financial result
Slide 14: Loan Portfolio Composition
Loans by Category CRE Loans by Borrower Industry C&I Loans by Borrower NAICS Code(1) Based on the first two digits of the borrowers’ NAICS code Includes C&I loan categories with gross loans outstanding < $150 million Note: As of June 30, 2019; dollars in millions Gross Loans ($mm) Percent of Total (
Slide 15: Deposit Portfolio
*: Year-to-date data annualized based on respective six month period ended June 30 Deposit Portfolio Deposit Growth and Cost of Deposits Organic Deposit Growth Rates Total Deposits ($mm) Percent of Total (%) Non-Interest Bearing 4,493 23.1 Transaction Accounts 2,711 13.9 MMDA & Savings 7,621 39.2 Ti
Slide 16: Net Interest Margin and Loan Rates
Rate Index Weighted Average Coupon New Loans Weighted Average Coupon Origination Mix Jun. 30, 2018 Jun. 30, 2019 Change 3Q18 4Q18 1Q19 2Q19 2Q19 LIBOR 4.43% 4.79% 0.36% 4.33% 4.99% 4.83% 4.73% 41.0% 1 Month LIBOR 2.09% 2.40% 0.31% 2.11% 2.35% 2.50% 2.40% Prime 5.24% 5.75% 0.51% 5.74% 5.95% 6.07% 6.0
Slide 17: Actions to Better Position for Declining Rates
Actions taken in 2Q19 to lessen interest rate risk exposure: Unwound $900 million of fixed-to-floating loan interest rate swaps Purchased $1.3 billion of interest rate floors Restructured $600 million of bonds; decreasing variable-rate exposure from 40% of investment securities to 30% Shortened dura
Slide 18: Fee Income
Yr/Yr Growth 16.4% *: Excludes gains and losses on sales of investment securities and loss on sale of non-prime automobile portfolio Note: Dollars in thousands Fee Income / Avg. Assets Fee Income
Slide 19: Bankers Healthcare Group
Pinnacle has a 49% non-controlling interest in Bankers Healthcare Group, LLC (“BHG”), a full-service loan provider that principally extends loans to healthcare and other professional practices Strengthened business model that has performed extremely well over time Sophisticated analytics contribute
Slide 20: Securities Portfolio
99.6% of the MBS and CMO securities were agency backed (including GSEs) as of June 30, 2019 Presented on S&P Bond Ratings Scale Note: Peer information per S&P Global Market Intelligence; see Appendix for list of peer companies Securities Portfolio Composition Fixed Rate vs. Variable Rate Bond Yields
Slide 21: Liquidity
Liquidity To meet short-term liquidity needs, Pinnacle maintains a targeted cash position and has borrowing capacity through a number of wholesale sources including the FHLB, correspondent banks and the Federal Reserve Bank Pinnacle has the following sources of liquidity at the Holding Company level
Slide 22: Pro Forma Capital Ratios
Pro Forma Capital Ratios Note: All offering assumptions are for illustrative purposes only; assumes $300.0 million in gross subordinated notes issuance, a 1.00% underwriters’ fee, $500,000 of offering-related costs, and approximately $207.7 million of net proceeds downstreamed to Pinnacle Bank (net
Slide 23: Pro Forma Double Leverage and Interest Coverage
Pro Forma Double Leverage and Interest Coverage Note: All offering assumptions are for illustrative purposes only; assumes $300.0 million in gross subordinated notes issuance, a 1.00% underwriters’ fee, $500,000 of offering-related costs, a 4.25% coupon, and approximately $207.7 million of net proce
Slide 24: Appendix
Appendix
Slide 25: Non-GAAP Reconciliation: Tangible Capital
2016 2017 2018 1Q19 2Q19 Total Assets $ 11,194,623 $ 22,205,700 $ 25,031,044 $ 25,557,858 $ 26,540,355 Less: Goodwill (551,594) (1,808,002) (1,807,121) (1,807,121) (1,807,121) Core deposit and other intangible assets (15,104) (56,710) (46,161) (43,850) (41,578) Tangible Assets $ 10,627,925 $ 20,340,
Slide 26: Non-GAAP Reconciliation: Revenue and Expense
2016 2017 2018 1Q19 2Q19 Net interest income $ 324,994 $ 543,307 $ 736,342 $ 187,246 $ 188,918 Total noninterest income 121,003 144,903 200,870 51,063 70,682 Total revenues 445,997 688,210 937,212 238,309 259,600 Less: Investment (gains) losses on sales of securities, net (395) 8,265 2,254 1,960 4,4
Slide 27: Peer Companies
Institution Name Ticker City, State Pinnacle Financial Partners, Inc. PNFP Nashville, TN Associated Banc-Corp ASB Green Bay, WI BancorpSouth Bank BXS Tupelo, MS Bank OZK OZK Little Rock, AR Chemical Financial Corporation CHFC Midland, MI Cullen/Frost Bankers, Inc. CFR San Antonio, TX F.N.B. Corporat
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