v3.26.1
Business Combination
 3 Months Ended
Mar. 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combination
Note 2 - Business Combination
Description of the Transaction
On January 1, 2026, the transaction contemplated by the Merger Agreement dated as of July 24, 2025 (the Merger Agreement) by and among Pinnacle Financial Partners, a Tennessee corporation (Legacy Pinnacle), Synovus Financial Corp., and Steel Newco Inc., a newly formed Georgia corporation (Newco) closed. As such and pursuant to the terms and conditions of the Merger Agreement, Legacy Pinnacle and Synovus merged with and into Newco, with Newco continuing as the surviving corporation and subsequently being renamed Pinnacle Financial Partners, Inc. Upon completion of the Merger, the separate corporate existence of Legacy Pinnacle and Synovus ceased, and Newco (now Pinnacle Financial Partners, Inc.) became the parent company for the combined organization. Following the completion of the Merger and after Pinnacle Bank becoming a member bank of the Federal Reserve System on January 2, 2026, Synovus Bank merged with and into Pinnacle Bank, with Pinnacle Bank continuing as the surviving bank and the separate existence of Synovus Bank ceasing.
Pursuant to the terms and conditions of the Merger Agreement, (a) each share of common stock, par value $1.00 per share, of Synovus (“Synovus Common Stock”) outstanding immediately prior to the effective time of the Merger was converted into the right to receive 0.5237 shares of the common stock of Newco ("Newco Common Stock") and (b) each share of common stock, par value $1.00 per share, of legacy Pinnacle outstanding immediately prior to the Merger was converted into the right to receive one share of Newco Common Stock. Holders of Synovus Common Stock received cash in lieu of fractional shares.
Pursuant to the terms and conditions of the Merger Agreement (i) each share of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series D, no par value, of Synovus outstanding immediately prior to the Merger was converted into the right to receive one share of Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A, no par value, of Newco; (ii) each share of Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E, no par value, of Synovus outstanding immediately prior to the Merger was converted into the right to receive one share of Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B, no par value, of Newco; (iii) each share of 6.75% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series C, no par value, of Legacy Pinnacle (Legacy Pinnacle Preferred Stock) outstanding immediately prior to the Merger was converted into the right to receive one share of 6.75% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series C, no par value, of Newco (Newco Series C Preferred Stock); and (iv) each outstanding depositary share representing a 1/40th interest in a share of Legacy Pinnacle Preferred Stock (Legacy Pinnacle Depositary Shares) was converted into a depositary share representing a 1/40th interest in a share of Newco Series C Preferred Stock.
The transaction was accounted for as a business combination in accordance with Topic 805, Business Combinations, ASC 805, with Pinnacle as the accounting acquirer.
Preliminary Purchase Price Allocation
The purchase price has been allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of January 1, 2026. Due to the timing of the transaction closing date and Pinnacle's quarterly report on Form 10-Q, the purchase price allocation is preliminary as of March 31, 2026, and subject to adjustment during the measurement period (not to exceed one year from the acquisition date). While we believe the information available on January 1, 2026 provides a reasonable basis for estimating fair value, we may obtain additional information and evidence during the measurement period that would result in changes to the estimated fair value amounts. Valuations subject to change include, but are not limited to loans, premises, equipment, software, core deposits, certain identifiable intangible assets, certain deposits, deferred tax assets and liabilities, certain other assets and certain other liabilities. Any measurement period adjustments will be recorded retrospectively as adjustments to goodwill. As of March 31, 2026, the Company has recorded goodwill of $1.6 billion related to the Merger. Goodwill is calculated as the excess of the fair value of consideration transferred over the fair value of the net assets acquired and will not be deductible for tax purposes. The fair value of the net assets acquired is presented below and included an $848 million core deposit intangible asset (CDI) and a $262 million wealth customer relationship intangible asset which are included in "identifiable intangible assets". Refer to Note 6 - Goodwill and Other Intangible Assets in this Report for additional information related to goodwill.
(in millions)
Assets acquired:
Cash and cash equivalents$2,538 
Investment securities9,830 
Loans held for sale106 
Loans43,952 
Allowance for loan losses(478)
Loans, net43,474 
Premises, equipment, and software561 
Cash surrender value of bank-owned life insurance941 
Identifiable intangible assets1,110 
Other assets2,768 
Total assets acquired$61,330 
Liabilities assumed:
Deposits$51,316 
Federal funds purchased, and securities sold under repurchase agreements49
FHLB advances and other borrowings2,502 
Other liabilities$1,517 
Total liabilities assumed55,383 
Net assets acquired5,947 
Consideration:
Fair value of common stock issued$6,940 
Fair value of preferred stock issued564 
Fair value of equity awards71 
Total preliminary consideration$7,576 
Preliminary goodwill$1,629 
As previously stated, Pinnacle recorded approximately $1.6 billion of preliminary estimated goodwill, as reflected in the purchase price allocation table above. This goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired and reflects the expected benefits of combining operations of Pinnacle and Synovus. These benefits include anticipated cost savings and operating efficiencies resulting from the integration of overlapping corporate functions and systems, revenue growth opportunities arising from complementary geographic markets and expanded product offerings, and the value of the assembled workforce and management expertise.
As back office functions which include loan and deposit processing have not been integrated, Pinnacle is in the process of finalizing its valuation analysis and calculations in sufficient detail necessary to arrive at the required estimates of the fair value of the Synovus' assets to be acquired or liabilities assumed. Further, Pinnacle is in the process of identifying all adjustments necessary to conform Synovus' accounting policies to Pinnacle's accounting policies. As more information becomes available differences could be identified between the accounting policies of the two companies that, when conformed, could have a material impact on the combined company's financial information. Accordingly, the amounts recorded for current and deferred tax assets and liabilities are also considered provisional as the Company continues to evaluate the nature and extent of permanent and temporary differences between the book and tax bases of the assets acquired and liabilities assumed.
The following is a description of the methods used to estimate the fair value of significant assets acquired and liabilities assumed above.
Cash and cash equivalents: The carrying amount of these assets is a reasonable estimate of fair value based on the short-term nature of these assets.
Investment Securities: Fair values for securities are based on quoted market prices, where available. If quoted market prices are not available, fair value estimates are based on observable inputs obtained from market transactions in similar securities.
Loans: Fair values for loans were based on a discounted cash flow methodology that includes lifetime credit loss expectations for loans, current interest rates and liquidity. The fair value adjustment excluded certain immaterial loan portfolios such as credit cards.
Intangible assets: Core deposit intangibles represent the low cost of funding core deposits acquired provide to the Company's marginal cost of funds. The fair value was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, net maintenance cost of the deposit base, alternative cost of funds and the interest costs associated with customer deposits. The CDI is being amortized using the sum-of-the-years digits method over approximately 10 years.
The wealth customer relationship intangible asset will be amortized based on the use of straight-line methodology over approximately 14 years. Client relationship intangibles are valued using a discounted cash flow methodology that reflects the estimated value of the future net earnings from the relationships which includes adjustments for estimated attrition.
Premises: Land and buildings held for use were valued at appraised values, which reflect considerations of recent disposition values for similar property types with adjustments for characteristics of individual properties.
Borrowings: The fair values of long-term debt instruments are estimated based on quoted market prices for the instrument if available, or by using discounted cash flow analyses, based on current incremental borrowing rates for similar types of instruments.
Pro Forma Financial Information (Unaudited)
The following table presents certain unaudited pro forma condensed combined financial information for the results of operations for the three months ended March 31, 2026 and 2025, as if Synovus had been acquired on January 1, 2025 by Pinnacle. The unaudited pro forma results include the estimated impact of amortizing and accreting certain purchase accounting adjustments such as intangible assets as well as fair value adjustments to loans, borrowings, and owned and leased premises and equipment. Pro forma combined results also include the adjustments for the elimination of Synovus’ net deferred origination fees accretion and intangible amortization. The unaudited pro forma adjustments are based upon available information and certain assumptions that Pinnacle (as the accounting acquirer) believes are reasonable. The following unaudited pro forma condensed combined financial information does not reflect the costs of any integration activities or benefits that may result from the realization of future cost savings from operating efficiencies. Certain reclassifications have also been made to align Pinnacle’s and Synovus’ historical financial statement presentation. The unaudited pro forma information is provided for illustrative purposes only and is not necessarily indicative of the results that would have occurred had the acquisition been consummated on January 1, 2025 nor is it indicative of future results.
Unaudited Pro Forma
(in millions)Three Months Ended March 31,
20262025
Net interest income
$933 $853 
Total non-interest revenue$284 $215 
Net income available to common shareholders$135 $311 
Merger-related expenses of $275 million were incurred during March 31, 2026 and are recorded in the condensed consolidated income statement and include incremental costs related to the closing of the Merger, including $100 million in advisory fees, $70 million in equity acceleration expense, $91 million in other employee-related costs and $15 million in other costs.