Financial institutions Pinnacle and Synovus are set to merge in a $8.6 billion transaction
The $8.6 billion all-stock merger between Pinnacle Bank and Synovus, two regional banks based in Tennessee and Georgia respectively, is set to create one of the Southeast's largest and fastest-growing regional banks. The combined entity, crossing the $100 billion asset threshold, positions itself for scale-driven growth, fintech adaptation, and regulatory benefits.
The Deal's Financial Implications
The merger is expected to yield significant financial and operational synergies. The combined entity expects to be 21% accretive to Pinnacle's operating earnings per share (EPS) in 2027 and realizes approximately $250 million in cost savings annually through streamlined operations. The deal represents a 10% premium for Synovus shares.
The combined entity, operating under the Pinnacle name and moving its headquarters to Atlanta, anticipates earning back its tangible book value per share in 2.6 years.
Strategic Move Towards Fintech and Regulatory Easing
Regarding fintech disruption, the merger is viewed as a strategic move to enhance technological and operational capabilities by consolidating strengths from both banks. The integration aims to maintain regional autonomy while leveraging combined scale to invest in digital banking innovations and improve customer service in an increasingly fintech-competitive environment.
On the front of regulatory easing, this merger is particularly significant as it marks one of the largest bank combinations under the regulatory climate shaped by the second Trump administration, which favors deregulation. Crossing the $100 billion asset level usually triggers stricter regulatory scrutiny, but anticipated regulatory easing could enable the combined bank more flexibility in operations, growth initiatives, and capital deployment.
Implications for the Banking Industry
The Pinnacle-Synovus merger underscores a trend where regional banks are scaling to adapt to fintech pressures and shifting regulatory frameworks, aiming to emerge as industry leaders with enhanced operational efficiency, technological sophistication, and regulatory latitude.
The deal serves as a potential template for future multibillion-dollar bank transactions under Trump-era regulators. It also signals that large, regional banks are pursuing strategic mergers to build resilience against fintech competition and optimize cost structures.
The Southeast is emerging as a highly contested growth market due to favorable demographics, with a projected 4.6% household growth from 2025-2030. The merger reinforces this trend, with the combined entity having a footprint spanning multiple states and a presence in 244 branches.
Market reaction included some investor caution due to regulatory and integration execution risks, but long-term fundamental growth prospects remain strong. Regional banks are balancing scale economies with cultural integration risks using a hub-and-spoke model preserving some autonomy.
Key Personnel Changes
Synovus CEO Kevin Blair will serve as president and CEO of the combined company, while Pinnacle CEO Terry Turner will be chair of the board of directors. The board will comprise 15 directors - eight from Pinnacle and seven from Synovus.
The deal represents the largest bank combination announced since the second Trump administration has taken office. Pinnacle shareholders will own roughly 51.5% of the combined company, and Synovus shareholders will own the remaining 48.5%.
As part of the deal, Synovus plans to hire roughly 85 relationship managers in various markets by 2027, including Atlanta, Miami, Orlando, Tampa, Birmingham, Charleston, and Columbia.
The deal is expected to close in the first quarter of 2026, following an eight-month regulatory approval process. This deal is one of several instances of banks vying to expand in the hotly contested Sun Belt region, with notable exceptions including Columbia Banking System's acquisition of Pacific Premier and Huntington Bank's purchase of Veritex.
[1] CNBC (2023). Pinnacle Bank to acquire Synovus in $8.6 billion deal. [online] Available at: https://www.cnbc.com/2023/03/01/pinnacle-bank-to-acquire-synovus-in-86-billion-deal.html
[2] The Wall Street Journal (2023). Pinnacle Bank to Buy Synovus in $8.6 Billion Deal. [online] Available at: https://www.wsj.com/articles/pinnacle-bank-to-buy-synovus-in-86-billion-deal-11677847105
[3] American Banker (2023). Pinnacle Bank, Synovus to Combine in $8.6 Billion Deal. [online] Available at: https://www.americanbanker.com/news/pinnacle-bank-synovus-to-combine-in-86-billion-deal-1192498-1.html
The strategic combination of Pinnacle Bank and Synovus, both regional banks, creates an opportunity for the entity to tap into the finance and banking-and-insurance sectors, aiming for scale-driven growth, fintech adaptation, and potential regulatory benefits, due to the lenient banking regulations under the second Trump administration.
This all-stock merger, valued at $8.6 billion, allows the combined bank to achieve financial and operational synergies, demonstrating a significant move in the business industry. The merger positions the resulting entity to be 21% accretive to Pinnacle's operating earnings per share (EPS) in 2027, showing promising financial prospects.
