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Pinnacle reported second-quarter revenue of $1.8 billion, up from $820.0 million a year earlier, and diluted earnings per share of $2.07, compared with $2.00. For the subsequent quarter, Pinnacle reported consensus-adjusted EPS of $2.69 against a $2.61 consensus; revenue exceeded the consensus by 2.36%, although both reported revenue and the estimate were $1.3 billion when rounded.
Pinnacle’s filing attributed the second-quarter increase in income available to common shareholders primarily to the Synovus merger. Net interest income rose to $956 million, while the net interest margin was 3.44%, compared with 3.23% for legacy Pinnacle a year earlier. The filing cited purchase accounting, asset repricing and securities repositioning among the influences on interest income.
The filing said noninterest revenue rose to $247 million, with the merger affecting nearly all categories. Outside the merger, growth in core banking fees, wealth management and capital markets income was partly offset by securities losses; lower BHG investment income also affected the quarter.
Pinnacle reported free cash flow of $67.0 million, compared with $250.0 million a year earlier. Its filing said noninterest expense included $51 million in merger-related costs for the quarter.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $1.8 billion | $820.0 million | 121.3% |
| Diluted EPS | $2.07 | $2.00 | 3.50% |
| Gross margin | 66.3% | 61.6% | 4.7 percentage points |
| Operating margin | 25.9% | 23.8% | 2.1 percentage points |
| Free cash flow | $67.0 million | $250.0 million | −73.2% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $2.69 | $2.61 | Beat by 3.07% |
| Revenue | $1.3 billion | $1.3 billion | Beat by 2.36% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
On Pinnacle’s first-quarter call, CEO Kevin Blair said loan production came from across the combined company’s geographies and specialty units. Asked about the durability of growth, Blair pointed to existing bankers, recent hires and opportunities to offer each organization’s services to the other’s clients. He said deposit growth likewise came from new hires and specialty businesses.
Blair said Pinnacle added 50 experienced revenue producers in the first quarter and had another 37 hires or accepted offers in April. He said integration with Synovus was ahead of plan and operational and brand conversion remained on track for March 2027. In response to a question about revenue synergies, he said the companies were still on separate systems, creating barriers to offering each other’s products.
Asked about line utilization and pricing, Blair said utilization had declined slightly and was not the source of first-quarter loan growth. He described deposit competition as rational, saying promotional rates had remained fairly stable. He said the competitive data did not change Pinnacle’s outlook for growth or net interest margin.
CFO Andrew Gregory said Pinnacle reduced brokered deposits after first-quarter core deposit growth, describing the move as a way to lower costs. He expected deposit growth to be weighted toward the back of 2026 and said liquidity management actions would put some pressure on the margin. Blair said fixed-rate asset repricing benefits were expected to be generally offset by a methodical increase in balance-sheet liquidity.
On BHG, Gregory said the company was shifting more loan distribution toward securitizations and sales to asset managers. He said that would reduce Pinnacle’s fee revenue in 2026 but was intended to improve longer-term profitability.
Guidance
On the first-quarter call, Blair projected approximately $105 million to $115 million in BHG investment income for 2026. He said the projection was a slight headwind relative to Pinnacle’s prior estimate, reflecting changes to BHG’s funding and delivery platforms.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Cash, Securities Portfolio Growth | FY2026 | $1.5 billion–$2.0 billion | — | New |
| Revenue, Core Banking Fees | FY2026 | Pinnacle expects mid- to upper single-digit growth in core banking fees in FY2026. | — | — |
| Revenue, Merger Synergies | FY2026 | $20.0 million | — | New |
| Operating expenses growth, Merger Related Savings | FY2027 | 75.0% | — | New |
| Operating expenses, Core Noninterest Before Synergies | FY2027 | Pinnacle expects core noninterest expense growth before synergies could be in the high single digits in FY2027. | — | — |
| Tax rate, non-GAAP | FY2026 | 20.0%–21.0% | — | New |
| Operating expenses, Merger and Lfi Charges | FY2026 | $400.0 million–$450.0 million | — | New |
| Operating expenses, Merger Related Savings | FY2026 | $100.0 million | — | New |
| Operating expenses, Non Gaap Noninterest | FY2026 | $2.7 billion–$2.8 billion | — | New |
| Revenue, Bhg Investment Income | FY2026 | $105.0 million–$115.0 million | — | New |
| Revenue, Non Gaap Noninterest | FY2026 | $1.1 billion | — | New |
| Gross margin, Net Interest Margin | FY2026 | 3.50% | — | New |
| Revenue, non-GAAP | FY2026 | $5.0 billion–$5.2 billion | — | New |
| Cash, Deposits | FY2026 | Pinnacle expects total deposits to grow 8% to 10% in FY2026. | — | New |
| Cash, Loan Balances | FY2026 | Pinnacle expects period-end loan growth of 9% to 11% in FY2026, excluding the purchase accounting loan mark. | — | New |