Pinnacle's Net Interest Margin Compression Slows

The Tip Desk · October 26, 2026 · 3 min read

The combined Tennessee-Georgia regional bank posted $986 million of net interest income and a 3.40% margin as loan growth cooled to 2%.

Pinnacle Financial Partners (PNFP), the $130.7 billion-asset regional bank formed on Jan. 1, 2026, when it combined with Synovus Financial Corp., reported net interest income of $986 million in the third quarter, up 3% from the prior quarter, after 2% growth to $956 million in the second quarter.

The taxable-equivalent net interest margin compressed 4 basis points to 3.40% from 3.44%, a slower decline than the 9 bps drop in the prior quarter. The company said rising deposit costs and an ongoing wholesale-funded liquidity build more than offset higher securities and loan yields.

Period-end loans were $89.8 billion, up $1.7 billion or 2% from June, after a $2.9 billion or 3% increase in the second quarter. Commercial and industrial credits led at $52.1 billion; commercial real estate was $24.0 billion and consumer loans $13.7 billion. The company said the majority of loan growth was in C&I and was diverse by geography and supported by specialty lending.

Period-end deposits were $103.0 billion, up $2.1 billion or 2%, after a $795 million or 1% increase in the second quarter. The company said third-quarter deposit growth reflected its historical seasonal pattern. Non-interest-bearing demand deposits were $20.9 billion, interest-bearing DDA $29.7 billion, money market $37.0 billion, savings $1.8 billion and time deposits $13.7 billion.

Non-interest revenue was $326 million. Adjusted non-interest revenue rose $53 million from the second quarter, reversing a $12 million adjusted decline in that quarter, on higher income from the equity-method investment in BHG from higher production and a $23 million gain on the payoff of an equipment lease. Reported non-interest revenue included a $1 million net investment-securities loss. Core banking fees were $96 million, wealth management $88 million, BHG income $48 million, capital markets $17 million, loan sales and servicing $8 million and BOLI $21 million.

Non-interest expense was $749 million. Adjusted non-interest expense was $690 million, up 4% linked-quarter after a 2% decline in the second quarter, on a true-up to the annual incentive accrual for revenue and EPS growth and accelerated revenue-producer hiring. The company added 96 experienced revenue producers in the third quarter, compared with 74 in the second, for a year-to-date total of 222. The efficiency ratio-TE was 56.6%; the adjusted tangible efficiency ratio was 48.9%.

Credit remained contained. The non-performing asset ratio was 0.50%, unchanged from the prior quarter. The net charge-off ratio was 0.23%, versus 0.22% in the second quarter. Provision for credit losses was $86 million, up from $63 million, as the allowance-to-loans ratio rose to 1.19% from 1.17%; the company said the allowance change was driven largely by a more adverse macroeconomic outlook and continued loan growth. Allowance coverage of non-performing loans was 245.78%.

Net income available to common shareholders was $364 million, or $2.40 a share, versus $2.19 a year earlier. Adjusted diluted earnings were $2.69 a share. Return on average assets was 1.18%, annualized. The preliminary CET1 ratio ended the quarter at 10.01%, up from 9.93% in the second quarter.

President and CEO Kevin Blair said the combined company’s pattern of loan and deposit growth, fee-income growth and capital building remained intact three quarters after the merger and that Pinnacle plans to close 2026 building on that pattern.