Good morning everyone, and welcome to the Pinnacle Financial Partners Second Quarter 2021 Earnings Conference Call. Hosting the call today from Pinnacle Financial Partners is Mr. Terry Turner, Chief Executive Officer, and Mr. Harold Carpenter, Chief Financial Officer. Please note Pinnacle's earnings release and this morning's presentation are available on the investor relations page of their website at www.pnfp.com. Today's call is being recorded and will be available for replay on Pinnacle's website for the next 90 days. At this time, all participants have been placed in a listen-only mode. The floor will be open for your questions following the presentation. During this presentation, we may make comments which may constitute forward-looking statements. All forward-looking statements are subject to risks and uncertainties and other facts that may cause the actual results, performance, or achievements of Pinnacle Financial to differ materially from any results expressed or implied by such forward-looking statements. Many of such factors are beyond Pinnacle Financial's ability to control or predict, and listeners are cautioned not to put undue reliance on such forward-looking statements. A more detailed description of this and other risks is contained in the Pinnacle Financial's Annual Report on Form 10-K for the year ended December 31st, 2020, and its subsequently filed quarterly reports. Pinnacle Financial disclaims any obligation to update or revise any forward-looking statements contained in this presentation, whether as a result of new information, future events, or otherwise. In addition, these remarks may include certain non-GAAP financial measures as defined by SEC Regulation G. A presentation of the most directly comparable GAAP financial measures and a reconciliation of the non-GAAP measure to comparable GAAP measures will be available on Pinnacle Financial website at www.pnfp.com. With that, I am now turning the call over to Mr. Terry Turner, Pinnacle's President and CEO. Thank you, operator, and thank you for joining us this morning. Q2 was an outstanding quarter in my view. As most of you know that have been following us for some time, we took a number of actions in the early stages of the pandemic, like modifying our incentive to focus on PPNR growth during 2020 to ensure that we'd be in a position to quickly return to our pre-pandemic growth trajectory as the pandemic waned. I think the first two quarters of 2021 would suggest that we've been largely successful in that. We begin every quarterly call with this dashboard reflecting our key performance metrics on a GAAP basis. As we most always do, because there are so many adjustments required in order to focus on the variables that we're truly managing here at Pinnacle, I'll move quickly to the chart reflecting the adjusted non-GAAP measures. As you can see, the second quarter was another fabulous quarter for us. Linked-quarter annualized loan growth ex-PPP was 12.6%. Linked-quarter annualized core deposit growth was 14.2%. Already strong asset quality got even better. On a lot of these earnings calls, I try to provide more color on all or several of the key metrics that are on this chart. Today I want to focus more on the big picture, and that's really the speed and the reliability of the growth over an extended period of time. Look at the CAGRs for virtually every important growth metric. I think they demonstrate the speed and reliability of our growth, even in the face of the various headwinds we've encountered over time. Take EPS as an example, 17% CAGR. You got a dip in 1Q and 2Q 2020 associated with the COVID-triggered reserve build. Other than that, the growth is extremely reliable. Look at the revenue CAGR, the loan CAGR, the deposit CAGR, all very fast, all very reliable. Most of you know we conduct a three-day orientation program for every single new associate to this firm, conducted by me and other key leaders here. We invest the time to help associates understand this culture, why it is what it is, and why it makes a difference. It's intended to inspire a high level of associate excitement and engagement. One of the topics that we cover in great detail is how we produce shareholder value. The one-hour-long session is conducted by Harold, and it's intended to help every single associate personalize specifically what they do individually that increases shareholder value and the kinds of things they might do that destroy shareholder value. The principal takeaway we expect every single associate to get is that two things are required for us to produce outside shareholder returns. Number one, speed of growth, and number two, reliability of growth. How is it that we produce such fast and reliable growth, and how is it that we expect to continue rapid reliable growth going forward, excuse me, even as many of our peers are being overwhelmed by the current headwinds like slack loan demand and heavy payouts? First of all, we've positioned ourselves in fabulous markets with extraordinary size and growth dynamics. Most of you have heard me talk about our outlook in markets like Nashville, Charlotte and Raleigh, North Carolina, Greenville and Charleston, South Carolina, and Atlanta, one of the biggest and best markets in the country. Of course, those size and growth dynamics are critical to growth. It's just hard to have a large high-growth bank without large high-growth markets. On last quarter's call, I talked about the fact that I expected to continue hiring revenue producers in our existing footprint at a rapid pace, and that we'd likely have opportunities to expand to other Southeastern markets due to the high level of M&A activity and all the associated vulnerability that that creates. You can see here, primarily as a result of integration turmoil, we were the most desirable alternative for a good number of high-profile revenue producers in Birmingham, the Southeast's 13th largest market, and Huntsville, the Southeast's 13th fastest-growing market in terms of GDP. I don't want you to miss that our reputation as a highly successful challenger brand to those large regional national franchises causes frustrated teams to seek us out. I'm not trying to foreshadow anything in particular here, but I'd be shocked if we don't have more of those hiring opportunities going forward, as M&A appears to be picking up, and the bureaucratic grind that many of our larger competitors continues to weigh on their associates. The markets we currently serve and the markets that are likely available to us over time would suggest an ability to grow rapidly on an organic basis, even at a time when many are going to struggle to grow revenue and earnings organically. In my judgment, more important even than the size and growth dynamics of our markets is the fact that this firm has been built to create raving fans. I'm confident virtually every bank you listen to will talk about service. I know not one of them has ever said we're trying to give poor service and bad advice, but trust me, many do. Let me spend a minute on just how differentiated our service and advice is from every other bank in our footprint. What you're looking at here is data from Greenwich Associates, the foremost provider of commercial market research to large banks in the United States. This data is based on client responses across our entire footprint. That means businesses with annual sales from $1 million- $500 million in Tennessee, North Carolina, South Carolina, Atlanta, and Roanoke. Let's focus on the Pinnacle line at the bottom of the chart. You see in the navy blue portion of the bar that 80% of the Pinnacle client survey rated us a nine or a 10 on the question: How likely are you to recommend your lead provider to a friend or colleague using a scale of zero to 10, where zero means not at all likely, and 10 means extremely likely. In other words, 80% of our clients are highly engaged, active promoters. Trust me, that's an extremely unusual level of engagement. Another 19% rated us a seven or eight. That's not bad. Combining the two, 99% of our clients rated us a seven or better on a 10-point scale. That 19%, that gold portion of the bar, scoring us a seven or eight, they're referred to as passive because while they generally rate you well, they're not so fired up as to be vocal advocates for you in the market. That last 1%, the red portion of the bar, are detractors, meaning they rated you somewhere between zero and six. Out beside that blue bar, out beside our bar there, you can see a 79. That's the net promoter score, the number of promoters less the number of detractors. As you can see, that score is wildly differentiated from all our major competitors in our footprint. Not only is that a fabulous net promoter score in the Southeast, according to Greenwich, it's the second-best net promoter score in the country. If you bear with me just another minute here on this slide, it's not just that our net promoter score is high, it's also that the banks with the most clients to lose have very low net promoter scores with lots of detractors. When you look at the gold boxes at the top of the slide, you see that the top five banks in terms of market share have an average net promoter score of 40.2%, and the top 10 banks in terms of market share have an average net promoter score of 51. One of the top five banks in our footprint from a market share perspective has a net promoter score of six, and 36% of their clients are actively detracting from their reputation. The banks that have the most share are extraordinarily vulnerable. The difference between their clients perception of their service versus ours, where we have a net promoter score of 79, is really wide or differentiated, as I say. I've already talked about the size and growth dynamics of our market and how they bear on growth, more importantly, in our very attractive footprint, the banks who currently have the share lead are extraordinarily vulnerable. As you think about the speed and the reliability of growth, which is largely dependent on taking share as opposed to economic loan demand, this explains why we've been so successful taking share over the last 20 years, why we grew loans ex-PPP 12.6% on an annualized basis this quarter, and why I believe we'll continue to produce outsized growth for the foreseeable future. I know for some, net promoter score seem much more abstract than ROTCEs and efficiency ratios, so let me take two minutes to see if I can make it a little more tangible for you. Many of you may be familiar with an app called Nextdoor, an app that allows neighbors to seek and give tips to each other. Here in the gray box at the top left of the slide, someone's looking for a new bank. The blue dialog boxes on the right are a sampling of the tips provided by neighbors. You can see Pinnacle clients raving about Pinnacle. Obviously, clients who've been wowed by our service. These are promoters. At last check, there were 125 comments or recommendations on this request. Pinnacle received 34. The next most frequently mentioned tip received eight. Now multiply that across our entire footprint, and that's what promoters do for you. We've achieved that kind of differentiated client engagement because this wowing of clients permeates everything we do in this firm. Let me take a second to illustrate how it works. Over the last year or so, we've had ample opportunity to talk about our approach to the pandemic. It began with an offensive outreach to our clients in the very early stages of the pandemic to see if they needed a deferral. Some banks focused on short-term asset quality metrics and were slow to defer payments. We focused on helping our clients, about whom we're passionate. As an aside, our asset quality performed extremely well, but more importantly, clients raved. This chart shows our relative outperformance versus the large banks with whom we compete. Here we're just comparing each bank's percentage of national loans outstanding versus the percentage of national PPP loans originated for each bank. Most banks were less successful on PPP than the size of their loan book would have suggested. As you can see, all the large banks with whom we compete underperformed, we outperformed. I believe it's because it was a matter of urgency for us to take care of our clients who were struggling. It was a cause célèbre in this firm to get our clients taken care of. I don't want to take the time today to develop it fully, Greenwich developed a Crisis Response Index to measure how well clients perceive their bank's response during the pandemic. In the fourth quarter of 2020, Pinnacle had the highest Crisis Response Index of Greenwich's entire coverage universe. In the most recent round of PPP, there's been a great deal written about how many applications didn't get processed, how many applicants got left at the station. There was recently a syndicated article in many of the nation's business journals, like the Nashville Business Journal, as an example, where competitors talked about their disillusion with the SBA for cutting the program off, leaving them with so many unprocessed applications. Those comments are listed on the right-hand side of this slide. My view is that many of them just played ignorant and were offering excuses as to why they didn't get their clients taken care of. In the last round of PPP, we took 9,790 applications. Guess how many didn't get submitted to the SBA? Just 71. This entire firm worked feverishly, reallocating available resources, knowing that we were competing for a limited pool of funding, and we got them all done but 71. We got 99.3% of our clients taken care of. On the right side, you can see what our clients said about us. Those are promoters. As far as I know, there's no chance of creating that kind of client experience without creating a highly engaging associate experience. We measure our associate experience primarily via a work environment survey of all associates. We hold each leader accountable for receiving 70% top box ratings from their associates. In other words, for each statement that associates are asked to rate their level of agreement, leaders should have created an environment where their associates rate them strongly agree 70% of the time. I'm not aware of any firms that set that kind of target or achieve that kind of result. Even in a disastrous year like 2020, handling difficult process and procedural changes, quarantines, reduced cash incentives, and so forth, we still hit the 70% top box target, t hat's an engaged workforce. One of the reasons that we've created such a high level of trust with our associates is that we operate with a win together, lose together philosophy. If we earn our incentives, we all get paid. If we earn diminished incentives, we all earn diminished incentives. If we fail to earn our incentive, we all fail to earn our incentive. We win together, we lose together. Not only has that been a powerful team builder throughout our 20-year history, it puts us in great stead at a time like this when there's increased emphasis on equity. In 2020, 99% of our employees of color feel that management shows a sincere interest in them as a person versus an industry benchmark of 80%. 96% of female employees feel they receive a fair share of profits versus a benchmark of 75%. 91% of female employees feel that managers avoid playing favorites. 93% of female employees feel that promotions go to those who deserve them best. 90% of employees of color feel that they're paid fairly for the work that they do, That's versus a benchmark of 72%. This alignment that we've created results in extraordinary retention of all our associates, which means two things that bear on growth. Number one, since associate turnover is the number one deterrent to giving great service, associate engagement continues to create promoters, which leads to more organic growth. Number two, since associate turnover leads to client turnover generally, this level of associate retention minimizes client attrition, which of course bears on net growth. What I've tried to do is bring into focus for you this quarter the speed and the reliability of our growth over time, as well as the structural reasons, we'd expect outsized growth to continue for the foreseeable future. Harold, let me turn it over to you for a more detailed review of the quarter. Thanks, Terry. Good morning, everybody. We're obviously pleased with our second quarter loan growth results. Excluding PPP, average loans were up 9% between the first and second quarters. Excluding PPP, end of period loans at June 30 compared to March 31 were up 12.6% annualized. As to loan yields, the yield curve remained volatile during the second quarter. As we have mentioned for at least the last two conference calls, loan yields will be a fight in 2021. We will lean into our relationships even harder to maintain our yields. Overall loan rates were basically flat with the first quarter. That was assisted by a big quarter and likely a high water mark for PPP forgiveness. PPP forgiveness boosted the second quarter yield on PPP loans to 5.47% from 4.51% in the first quarter. It will continue to be difficult to model loan yields for the next few quarters given the impact of PPP. Excluding PPP loans, our average loan yield approximated 3.98% compared to approximately 4.07% in the first quarter. Where to from here? Our market leaders continue to believe that a loan growth forecast, excluding PPP, in the high single digits for 2021 to be a reasonable growth target for our firm. As always, we will lean on our new recruits to give us an advantage on loan growth, coupled with our markets, which we believe to be some of the best banking markets with many of the best bankers in the Southeast, we're optimistic about our loan growth goals this year. We also recently announced our expansion into Huntsville and Birmingham, with seven relationship managers in total. We and they are both very excited about our opportunities in these two markets. As to loan volumes, we're modeling around $150 million in loan growth this year from those two markets and expecting P&L breakeven from our new associates in late 2022. As to yields, we have some reason to be optimistic that our core yields are stabilizing, so additional dilution of our loan yields, excluding PPP, will likely occur, but should slow. The yield curve does impact all of this, so hopefully we get some stabilizations to help curtail the decrease in loan yields. As to PPP yields, it's anybody's guess, even though we will continue to work our borrowers proactively, we don't believe we will see quite the pace of forgiveness in 3Q that we experienced in 2Q. That said, since the start of PPP, we've recorded $125 million in fees associated with the program, of which we've recognized 60% of those fees thus far. We still have $48 million in unrecognized fees, which we believe will help bolster loan yields at least over the near term. On to deposits. We had another big deposit quarter, but not quite as large as several of our previous quarters. Core deposits were up almost $900 million in the second quarter. We've experienced significant growth in non-interest-bearing deposits, ending up at $8.9 billion at quarter end, up 29.5% since the end of last year. Our average loans to average deposit ratio was up slightly in the second quarter to 82.7%, so we consider that a small victory, as this is the first increase in our loan deposit ratio since the first quarter of last year. Our average deposit rates were 20 basis points, while EOP deposit rates were at 18 basis points, so we continue to see downward momentum for 2021 and look to be around 10 basis points-15 basis points by the fourth quarter of 2021, assuming our short-term rate forecast plays out for the remainder of this year. Helping us get there will be about a billion dollar or so in maturing CDs over the next two quarters that have an average rate of approximately 70 basis points currently. Liquidity continues to gain attention from all banks. The yield curve remains on everyone's mind. We did put some excess liquidity to work this quarter, approximately $650 million in additional investment securities. We don't currently anticipate any more big security purchases this year. As to the interest rate risk management, we do have a balance sheet bias today of rates being neutral to up slightly over the next year or two. Before all the bond experts beat me up for deploying money in the fixed rate bonds in the second quarter, we did execute an interest rate swap on the front-end cash flows of about 50% of those bonds we acquired, swapping the cash flows from fixed to variable, so our asset sensitivity position is essentially the same before and after the bond transaction. We did pick up, say, 100 basis points in yields over what we were receiving on the cash prior to the purchases. Our securities to assets ratio increased to 15% in 2Q. We expect that to hold for the foreseeable future. Our estimate is that peers, say, banks $20 billion-$60 billion in assets, are running a good bit more than that, say in the 25% range. We continue to look at ways to create increased earnings momentum through deployment of excess liquidity into higher-yielding assets or elimination of wholesale funding sources. All those lines, and in addition to the bond purchases we made in the second quarter, we increased a repo instrument we acquired in the first quarter from $450 million to $500 million in the second quarter. As I mentioned last time, this repo instrument is secured by the counterparty's investment securities portfolio and yields around 40 basis points. We're looking at another somewhat similar repo product, but it will likely be somewhat less in balances than the repo we have on our balance sheet currently. We also reduced our wholesale funding book in the second quarter by almost a billion dollar. Many of you might recall that we bolstered our liquidity at the start of the pandemic with additional brokers and other funds by more than $2.4 billion. At this time, a significant amount of that has been redeemed. We have about $250 million left to redeem this year and $400 million in 2022 and 2023. Additionally, we have about $900 million in Federal Home Loan Bank borrowings that cost us an annual rate of 2%. We continue to explore prepaying those FHLB borrowings, the prepayment penalty remains too rich for us right now. Lastly, we do fully anticipate redeeming $130 million in bank-level sub-debt in a few weeks using available cash. The sub-debt instrument's call date was during the pandemic last year, but we elected to hold onto the capital at that time, but now feel the current environment provides us enough confidence to eliminate this funding, which is costing us about 3.3% annually and has also begun to lose some of its favorable capital treatment. In the supplemental information, we've updated our interest rate sensitivity, which with all the initiatives we accomplished in the second quarter, points toward increased asset sensitivity in the up 100 scenario. As it stands currently, we like where our balance sheet is positioned with no big moves planned on our current agenda. As the chart at the top left of the slide illustrates, our net interest margin after PPP and liquidity was approximately 3.25% in the second quarter, which compares to a similar calculation last quarter at 3.29%. Our adjusted NIM, after being up for four quarters in a row, retreated slightly but has held steady over the last year or so. As to credit, obviously Tim is not here, but rest easy, he's on the job doing what he does best, working both our relationship managers and clients and making sure we continue our focus on being a well-run and very sound financial institution. Using the four big traditional credit metrics of net charge-offs, classified assets, NPAs, and past due accruing loans, Pinnacle's loan portfolio continues to perform very well, and in many cases, these are the best credit metrics we've experienced in quite some time. In the second quarter, as was the case in prior quarters, during COVID, our bankers and credit teams continued their diligence around conducting thorough credit reviews with particular emphasis placed on non-pass credits, our hotel portfolio, and credits in the COVID-specific low pass risk grade categories. Our second quarter credit metrics remain very encouraging. As noted on the slide, net charge-offs are running at a respectable 17 basis points. Our classified asset ratio declined to a very strong 6.8%. NPAs also decreased this quarter down to 27 basis points. Past dues were down to just 7 basis points, which collectively points to the great effort of our relationship managers and credit officers across our firm, keeping a strong focus on soundness. Many of us appreciate that in order to obtain these sort of credit trends, it takes discipline and active management. During the second quarter, our relationship managers and credit officers not only experienced an uptick in credit requests and loan growth, they also worked to see all four of the major credit metrics improve as well. Great work, everybody. Our credit team continues to bounce back and forth between offense and defense as they work diligently to assist our relationship managers in structuring new loans appropriately, as well as maintaining an alertness toward the existing portfolio and looking for any trends pointing toward incremental deterioration. Tactically, during the second quarter, the credit team essentially accomplished the detailed credit reviews aimed at hotels and non-pass exposures. For the second half of the year, their attention will remain on the COVID segments, particularly hotels. Again, it's a good report on hotel occupancy, revenue per room, average daily rate, all trending in the right direction. As to occupancy, we continue to run about 5% higher than national rates, with our hotel portfolio seeing 65% occupancy through the first two months of the second quarter. We expect June occupancy to be even higher as the national occupancy rates trended up in June as well. If you recall, we downgraded all our hotels to criticized last spring at the onset of the pandemic. It's now time to review what has transpired and begin to look to establish upgrade targets over the next few quarters. Our credit officers have initiated a hotel upgrade plan for our criticized hotel loans. As such, the credit officers will be looking at guarantor support, operating trends over the last 12 months, and the ability to meet minimum T&I debt service coverage ratios. Hopefully, we will have another good report for you on hotels at our next call in October. As noted on the slide, we expect continued reductions in our allowance to total loans ratio over the next several quarters as the overall economic outlook continues to improve and our COVID-impacted loan segments continue to trend positive. All in all, Pinnacle's credit metrics have held up really well, and even though we have shifted back to a more offensive stance, we will continue our thorough defensive work, particularly in the COVID-impacted segments. Now to fee income. Wow, l ots of good news here. For the quarter, fee revenues were up more than 34% over the same quarter number of last year. Wealth management, which is investment services, trust, and insurance, had a great quarter in comparison to last year, up more than 35%. We continue to be very active on the hiring front across our franchise, particularly as we continue to build wealth management in the Carolinas and Atlanta, and eventually Birmingham and Huntsville. You might think that we were disappointed in our mortgage results for the second quarter. Quite the contrary, mortgage has had a phenomenal last four or so quarters. At $6.7 million for the second quarter, we are pleased and believe they have an excellent chance in holding that run rate for the rest of the year, assuming the rate environment holds. SBA loan sales had a great quarter, and we're optimistic that this business should hold for the remaining two quarters of this year. We also had a great quarter with respect to our equity investments. Excluding BHG, one of our investments completed a follow-on equity raise during the quarter, the results of which provided us significant insight into an updated valuation of that investment, and thus we booked a $2 million increase for this one investment. I'll talk more about BHG in just a second. As to expenses, specifically incentives, I think everyone is familiar with the impact of incentive cost to our expense base, and if our earnings hit our targets, costs go up. If not, costs go down. Last year, we did not hit our targets, thus incentives were significantly below expectations, with our eventual payout equating to 65% of our targets. We again fully anticipate, based on the current operating environment, that 2021 will come back strong and hopefully our associates will recoup some of the lost incentive from 2020. Along those lines, we provided an opportunity in 2021 for our associates to earn an outsized incentive, as much as 160% of target. However, as we've said repeatedly, there's no free lunch. Increased incentives only occur if our earnings growth supports the incentive. Additionally, we anticipate max payout retreating back to the traditional 125% of target in 2022. All in, incentive costs are higher than anticipated this quarter as we began accruing at the maximum award for 2021, thus we experienced a catch-up from the first quarter. We believe the incentive costs for third and fourth quarter will be slightly less than the second quarter. As to our overall total expense run rate, we now believe that expenses for the third and fourth quarter should be flat to down from the amounts we booked in the second quarter. Quickly, some comments on capital. I mentioned the sub-debt redemption earlier. We also intend to redeem another $120 million in sub-debt issuance later this year. We'll work with our regulators on that matter over the next few months. As I mentioned last time, and I want to just reinforce the point, we've intensified our focus on tangible book value growth by adding a peer relative component to our leadership's equity compensation plan. We're currently calculating an annualized increase of 13.5% in our tangible book value per share thus far this year. Our plan is designed that we will compare our tangible book value per share growth with that of our peers, along with relative return on tangible common equity and relative total shareholder return in determining the vesting results for our leadership. As to our outlook for the rest of 2021, I won't go into this slide in depth, as we've covered much of this previously. This, again, is really a summary for the model builders of what we currently believe. Obviously, we realize that we appear more optimistic than most. That said, we have great confidence in our people, our markets, and our clients, and renewed optimism about where the Pinnacle is headed. Now to BHG. This is a slide that we've shown for several quarters. The blue bars on the chart are originations, with records being set for the past four quarters. In fact, they've almost doubled loan originations over that time period. BHG would also tell you that their market share is less than 1%, so we believe much room for growth. As their research would indicate, that the personal, small, and mid-sized business lending, home improvement, and patient finance businesses are collectively a $925 billion annual loan origination business, and BHG intends to be competitive in all four. The green bar represents loans on which gain on sale has been recorded as these loans are sold to downstream banks. This is the traditional BHG model, which generates revenues associated with their gain on sale model. As to the bottom left chart, borrower coupons have fluctuated only slightly over the last few years, ending at 13.4% for the second quarter. Bank buy rates fell to new records at just under 4% in the second quarter, net spreads remain in the mid-nines, which over time is up from previous years. As noted on the text on the slide, BHG executed on their second securitization in the second quarter. Last year, the first securitization was approximately $177 million. This year's securitization, approximately $375 million. They also are looking to conduct another similar size securitization before the end of 2021. Doing this allows them to take advantage of some of the very attractive funding rates, as well as diversify both the revenue stream and funding sources. We consider the diversification strategy a good idea, even though the gain on sale model results in more near-term earnings for BHG. I've noted that BHG is rapidly approaching a 50/50 revenue split between the gain on sale and on-balance-sheet models, and believe in 2023, they could in fact be there much sooner than we anticipated. The bottom right chart now shows over 1,200 banks in BHG's network and almost 700 individual banks acquired BHG loans over the last 12 months. Again, one of the strongest funding platforms for a gain on sale model in the U.S. As to credit, we've updated BHG's recourse obligation chart. On the chart on the left, the green bars detail loans that BHG has sold in a network of community and other banks, which currently amounts to just over $4 billion in credit sold through their network. The blue line on the chart details the recourse accrual as a percentage of outstanding loans with these other banks. As noted, the recourse obligation is a reserve for future loss absorption. As noted on the chart, during 2020, BHG increased their reserves in anticipation of potential losses from the pandemic, with the reserve standing at 7.65% of outstanding loans at year-end 2020. During the second quarter of 2021, and as a result of a better outlook, BHG decreased the pandemic related reserves in the second quarter. As a percentage of loans, it was down approximately 100 basis points. As noted on the chart at the bottom right, the trailing 12-month loss has landed at 4.5%, basically consistent with the last few years, and during the year where who knew how COVID would impact loss rates. This chart has also been updated from our previous presentations to better split the actual credit loss from losses BHG absorbs from reimbursing banks for the unamortized premium the acquiring bank paid to get the loan. As the chart indicates, the prepayment portion has gotten somewhat larger over the last few years. Keep in mind, prepayment losses are for good loans that are just paid off prior to maturity. This could be attributable to several reasons, but primarily the actual premium paid for BHG credit has gotten somewhat larger. Consumer credit, which is occupying more of BHG's business, tends to have a higher prepayment track record, and loans are being paid off earlier as rates have decreased. We've again updated these two charts. The quality of BHG's borrowers has improved steadily in the past and over the last few years. BHG continues to refine their scorecards and increase the quality of its borrowing base. Again, the right chart, and as I've said before, may be the most powerful chart I have to offer related to BHG's steadily improving credit quality. Looking at losses by vintage, losses continue to level out in earlier months from origination, thus pointing toward a lower loss percentage over the life of the underlying loan. The quality of the borrowing base, in our opinion, is very impressive and much better than just from a few years ago. Lastly, BHG had another great operating quarter in the second quarter and exceeded everyone's expectations yet again. We bumped our expectations for 2021, now expecting 2021 to produce outsized growth in relation to 2020 of approximately 40% compared to our prior estimate of 20%-25% or more. We are also adding a growth factor for 2022 of approximately 30%. Thus, no rest for BHG as they continue to build a strong and more revenue-diverse franchise. As the slide indicates, they've got more ideas. They're in some phase of development, which should foster continued growth over the next several years. All in, we believe PNFP had a fabulous quarter, and one that continues to give us much confidence that our franchise and its people are poised for outsized growth for the foreseeable future. With that, operator, we'll open it up for any questions. Thank you, sir. The floor is now open for questions. If you would like to ask a question at this time, please press star one on your touch tone phone. Analysts will be given preference during the Q&A. Again, we do ask that while you pose your question, that you pick up your handset to provide optimal sound quality. Our first question is from Steven Alexopoulos from J.P. Morgan, y our line is open. Morning, everyone. Morning, Steve. I ought to start, the pace of hiring seems to have picked up pretty nice, right? 36 revenue producers added in the quarter. Is this a function of you guys having more of an appetite to increase hiring here, or are you just seeing more opportunities from other banks? Yeah, I think that's a great question. The short answer is we are seeing more opportunities from other banks. I think, you've probably heard us talk about this. Our approach to hiring revenue producers, that's sort of the top of the waterfall for us, and I would have said all along, we've got an unlimited appetite. If we have experienced people that we're confident can move large books of business, we'll hire as many of those as we come across, as many of those as we have opportunities to hire. The case is that we are finding greater opportunity to hire people. As I said there in the comments, Steve, I think a lot of that's tied to M&A activity, just the frustrations that go along with being acquired. Maybe in the case of some of the MOEs, just in your market, you happen to be on the wrong end of the stick there, if you will. That's creating a lot of opportunity. I think a couple of the big banks are just in a difficult spot, whether it's with regulators or whatever, but the bureaucratic grind is really working on their people. There's a lot of vulnerability that comes out of that. Okay, t hat's helpful, t hat's good color. I'm curious, if we look at the 216 revenue producers that you onboarded over the past two and half years, given that we basically have been in a pandemic for about half the time they've been at your bank. As the economy now more fully reopens, right, people are getting back to in-person meetings, are you starting to see an acceleration in terms of that group being able to move their relationships over to Pinnacle? I can't give you the definite answer on that, Steve, meaning I don't have the data just yet to say that for sure, but that is my intuition. I think a lot of the growth is coming from new hires moving their books to us. That's a large part of what the growth is. I do think it's a true statement that during the pandemic, people were able to move business, but it definitely had a longer sales cycle, and it took them longer to get it done. That growth was somewhat retarded during the pandemic. Our expectation is that it should pick up. Okay, t hanks. Just finally, on BHG, with quarterly originations, as Harold pointed out, running at two times the pre-pandemic level, what would explain that, and is it sustainable? Thanks. Steve, I've had quite a few conversations with BHG about that. They believe it's very sustainable. They attribute the growth rate to better analytics. They've hired more people in their analytics group. They think they're going after a market with much more pinpoint precision and believe that there's plenty of business out there for them to go try to target. Relaying what they've told us and then looking at what they're asserting for the rest of this year and next year, we're pretty excited about what they've got in front of them. Okay, g reat. Thanks for all the color. All right. Your next question is from Steven Scouten from Piper Sandler, y our line is open. Hey, good morning, everyone. Hey, Steve. I wanted to dig down into loan growth a little bit. Looked like the C&I growth was particularly strong, which has always been one of y'all's strong suits. I'm wondering if there's been any changes as the bank has grown. Have you had to look at larger loan sizes, or is the balance sheet becoming any less granular over time? The growth in consumer real estate looked like a lot of that from Nashville. If you could just dig down into what you're seeing on the loan growth side a little bit more? Yeah, I think there were one or two larger credits, call it $30 million, $40 million, in the first quarter I mean, in the second quarter, that were booked that helped bolster loan volumes. I wouldn't think that that's any different than call it over the last several quarters, there's always been some larger credits mixed up in there. As to consumer real estate, we are seeing some increased traffic with respect to that product. We're seeing with where the market is right now, and Nashville particularly, I think is unique in some respects, with a lot of smaller businesses and also with, call it, sons and daughters of clients that are looking to get their first home acquired or otherwise find a house that they may not want to go through the traditional mortgage market with. We accommodate them, as do I think a lot of other banks, with particular products designed to meet that need. I think that's what's causing some of the increase, particularly in Nashville. Steve, I might add to that. I do think it's important. We've not increased our house limits in years. Again, there's not an intent to drive credit sizes larger. We're always cautious about that game because obviously, particularly if you're talking about upper middle market credits, the higher the credit size, generally the lower the rate, and so forth. Anyway, I would just say we've not increased our house limits or done anything that would cause us to focus on higher tickets in particular. Great. The other thing I might add to that, Steve, for whatever it's worth, I think, in our North and South Carolina footprint, and let's call it the whole BN C footprint, their growth was very strong. I think Rick Callicutt might tell you that it was his best loan growth quarter in the history of him running that organization there. You can see that it is more skewed towards C&I, which was what our thesis is. Don't screw up their CRE business, but bolster on a C&I business. We're getting increased activity in the C&I sector there. Got it, o kay. It looked like commercial construction picked up a good bit in the quarter as well, and I'm just kind of wondering what you guys are seeing in terms of new projects coming online, if you've seen a material pick up there, kind of your customer sentiment and new investments in some of these projects. Yeah, I don't know if it's any significant new projects. We are seeing some come across, but I think a lot of the construction funding that was in the second quarter were projects that had worked through their equity phase, and now they're into where they're using bank money to fund the additional construction requirements. maybe Terry's got some updated information on that, but there's obviously some incoming traffic with respect to multifamily and warehouse. We're not seeing a whole lot of additional requests for, call it hospitality or spec office. Okay, great. Maybe last one for me, just kind of thinking about the fees for a minute. I think you guys said you would expect mortgage to kind of be similar to this quarter in the back half of the year. If I'm looking at your slide, I guess it's slide 60, it looks like production, and even gain on sale margins, are still fairly well elevated to 2019 levels. I'm just kind of wondering why that revenue would kind of decline more to a, or sustain at a more 2019 sort of level, if that's the case. Well, we think there's a lot of things going on in mortgage right now. They've had a great last year or so. They've produced a lot of revenues for us. The housing markets, I think, in our most vibrant markets, call it Nashville, Raleigh, Charlotte, Atlanta, the inventory is really getting depleted, and then they're finding a lot of cash buyers. The mortgage tickets are either nonexistent or reducing. We're trying to kind of anticipate that a little bit here going into the last part of the year, which typically, would be slower. Steve, I think the other aspect of that is, compared to 2019, we're in markets that we weren't in, like Atlanta, Birmingham, and Huntsville, and if you looked at the number of mortgage originators, there's an incremental headcount versus 2019, w e've added origination capability. Yep, o kay. Yeah, that's a great point, o kay. Well, that's great, t hen, sorry, maybe one last tack on just the SBA run rate. Did look like it jumped pretty significantly in the quarter. Is that sustainable, or is that more kind of a one-time increase on some built-up production on balance sheet that you sold off? Yeah, that unit runs through Rick Callicutt and had a couple conversations with Rick about that. He believes it's sustainable. He believes, well, there will be a big kind of a congressional proposal here over the next month or so. Right now, we can sell up to 90% of the loan from 75%, and we believe in the next month or so, we're hopeful Congress will renew that and extend it. We're hopeful for that, because that would play into that assertion about maintaining that same volume here over the next couple of quarters. Perfect, t hanks so much for the color, guys, and congrats on all the continued progress. Thanks, Steve. Our next question is from Jennifer Demba from Truist Securities, y our line is open. Hi, good morning. Hey, Jennifer, h ow are you? I'm great, h ow are you? Good, g reat. I had a question, y ou hired some revenue producers in Birmingham and Huntsville. Could we see more hires in what are currently non-Pinnacle markets in the coming months and quarters? As you indicated before, I guess you're seeing more proactive incoming calls, with people interested in working for you. I think the answer to that is yes, Jennifer. I was saying there in the comments, I don't want to necessarily foreshadow that we will go to additional markets. On the other hand, I'd be shocked if we don't have other opportunities going forward. I think your take on our sentiment is right, that there's increased vulnerability, and we are having more people reach out to us and so forth. I don't have a market that we're ready to announce, but I'd be surprised over the next 12 months if we didn't add one or two. Could those options stretch out over to Texas or other markets we might not necessarily think of for Pinnacle? I don't think so, Jennifer. I don't want to rule Texas out because it's a fabulous market, and there may be a day and time we want to go there. I would just say most of the thrust and most of the energy right now, I would classify as in the Southeast. Again, I think it's markets east of us and south of us and so forth. Okay, w hen you're hiring, how much wage pressure are you seeing right now? I would say we are seeing a little wage pressure, at this point, I don't see it as overwhelming in the hiring part of the equation. I think you're on the right track in that we have to work hard. There's sort of two aspects to it. One's offense and one's defense. We're constantly on offense trying to hire new people. We're also constantly on defense trying to protect our associates. We do see some pressure as people come after and target our associates. We're not likely to let good associates get away, and so you do see some price pressure there. Okay, t hanks, guys. Your next question is from Jared Shaw from Wells Fargo Securities, y our line is open. Hey, guys, go od morning. Hey, Jared. I guess maybe sticking to the theme Jennifer brought up, when you look at slide eight, there's a lot of Florida markets in the Southeast. Do you think that as you go forward over the next few years, you can sort of pick off those markets individually with the same strategy you did in Atlanta? Or is that an area where you really need to start thinking about potentially doing some type of a deal to get into those markets and hit more of them at one time? Yeah, l et me see if I can be clear on that. One is we like the top 25 markets in the Southeast, period, which as you say, a good number of them are included in Florida, and so those are attractive markets to us. I think the second thing I would say is I tried to be clear, although I evidently was not clear in our last call that I think M&A is on the table. What I've tried to say to people is the only reason I say it's on the table is because I've said before it wasn't on the table, and so I'm really just trying to say, "Hey, look, I've said we wouldn't do it. I'm saying we might do it." All that said, that is not the most likely path for us. The most likely path, I love de novo starts, and I think the opportunity for de novo starts are perhaps better now than I ever remember them. To Jennifer's question, we are having people that are reaching out to us, and the more people that reach out to us and that we hire, the more that creates a dialogue that opens opportunities for other markets and those kinds of things. I guess, Jared, in trying to be as direct as I can be, I don't want to rule M&A out, but I wouldn't view it to be the most likely. The most likely is we would extend on a de novo basis, and I do believe we're likely to have some opportunities over the next few years in most of those top 25 markets. That's great color, t hanks. Shifting a little bit to BHG, a s BHG sort of expands their mandate and grows beyond first the medical professionals and the licensed professionals into these newer areas, do the bank buyers have the same appetite for that new form of customer? Do you expect that that paper is going to be what really fuels future securitizations? Yeah, w ell, I think they'll pace or left, right, left, right through securitizations and gain on sales carefully. I was speaking to the individual that runs their outplacement group, the person that positions loans with other banks, and he told me, I guess this was four or five months ago, that he could put 3x through that pipeline. There's plenty of appetite that's available to BHG to run loans through that gain on sale model. That said, I think they still believe that revenue diversification and funding source diversification is where they want to go. I think a 50/50 split may be where they think they'll end up and start maybe with less frequency going to the balance sheet model just because I think at that time, they'll be pushing more loans through gain on sale. The great point in all this is that they have the option. They can always reduce their appetite for the balance sheet model and run more loans through gain on sale and thus generate more near-term profit if they so desire. As it sits right now, they're trying to get to that 50/50 split. Okay, a ll right, thanks. Then just finally from me, Harold, you talked about the maturing CDs coming due over the next two quarters. Should we expect that you just sort of let those run off and CD balances decline and potentially cash balances go down or will those likely be renewed into a lower- Well, I think there's $300 million or $400 million of that that's in the wholesale group, so those will get redeemed. The rest are client CDs, and we fully intend to renew those. They'll probably get renewed down into, call it, the 25 basis point category, somewhere along in that lot. Great, t hank you. Your next question is from Brett Rabatin from Hovde Group, y our line is open. Hey, good morning, everyone. Hi, Brett. Wanted just to talk about the guidance for a second on NII, and I realize that the PPP income is likely to impact the margin negatively in the back half of the year, and it's hard to predict what that income will be. It would seem like your guidance around NII approximating the first half of the year could be conservative, just kind of given the growth, or it essentially implies that the margin pressure could be 10 basis points or maybe a little more. Harold, can you maybe just walk through how you're giving that guidance and the components of it? Yeah, sure. First of all, you're right on your point about PPP. We don't anticipate nearly the revenue traffic or revenue flow that we got in the second quarter, in the third and fourth quarters. The round two loans are the ones that will have most of the forgiveness opportunities here over the next, call it three or four quarters. They have an extended tail, their five-year credits, all that kind of stuff. We will work with those borrowers and try to accelerate forgiveness as best we can. With that said, I've got currently an 18 basis point kind of deposit rate right now. On my deposit book, I think it's going to be a slower, more methodical downdraft on that to get to 10 basis points-15 basis points over the next quarter or two. I don't have the same opportunity that I had in the earlier part of the year to get any kind of additional momentum out of interest expense. Loan yields, we think they're going to hold. We hope they're going to hold, t here's probably some more downdraft there. All things considered, Brett, we just believe that the second half of the year, my NII number ought to be fairly close to what the first half of the year of mine was. Okay. Does that make sense? Yeah, I know there's a lot of moving pieces to it, so I understand the guidance. The other thing I wanted to ask was just, you've had questions around BHG and sustainability of the recent trend and production. 3Q is actually typically their strongest quarter. Was there any inkling that maybe 2Q pulled forward some volume from 3Q? Can you talk maybe about, just thinking about obviously really strong numbers, but it would seem like 3Q is typically where you really have the growth. Any thoughts around seasonality? Yeah, I got no feedback from them on that point. I don't think there was any pull through of 3Q volume into 2Q. I don't think there was any kind of acceleration there. We believe that they gave us a 40% kind of pre-tax growth number this year. Based on what we're seeing, that's very doable. Okay, great. Congrats on the quarter, and thanks for the color. All right, t hanks, Brett. Your next question is from Catherine Mealor from KBW. Thanks, g ood morning, everyone. Hey, Catherine. Maybe one question on credit. There's a lot of conversations today about reserve levels heading back towards the day one CECL number, which I think for you is about 67 basis points. How do you think, Harold, do you think that feels low? Do you feel like you'll get that low? Or where do you feel like your gut is that the reserve ratio may bottom? Yeah, I don't know, I don't think we'll get that low, Catherine, to be candid. When we were in that area, our reserve levels were at the low end of the peer group. We're not targeting anywhere near that number. We do think we've got some more room to go with respect to our allowance. We've been able to march it down so far, and we think we're going to be able to march it down some more. I don't think we'll see that 70 basis point number you're talking about. Okay, b ack to the question on the NII guide in the back half of the year, is there any kind of change to excess liquidity incorporated into that guidance? How should we think about the size of the balance sheet outside of just the high single-digit loan growth? Yeah, I think my balance sheet will come up some over the next two quarters. We've got some opportunities to get some more wholesale funding off our balance sheet, so that'll come into it. We're not looking to do another big investment securities kind of transaction here in the second half. We'll just try to maintain what we have. Got it, s till, core NII should still be up. It's just really lower PPP that is driving the second half of the year to be kind of equal to the first half of the year. Yep, that's it. Okay, got it. One last one, if I could. Any updated thoughts on how BHG is thinking about a liquidity event? What are their pros and cons in thinking about the timing of that for this year? Yeah, I think, like we've said all along, they continue to study the markets. Like we've said, they're having fun, but they're not doing it for fun. They've increased their sophistication around whether it be hedge funds or SPACs or IPOs or whatever. There'll be a liquidity event, I'm not sure when it's going to be. Both the two founders that remain in the company that have significant, they believe, equity tied up in the company will want to see a liquidity event at some point, and you just can't blame them for that. We just don't know when it's going to occur. It's their company. They get to kind of make those big decisions. We speak with them about it periodically. So far, so good, t he runway for growth for them appears to be pretty long. Great, t hat's helpful. Congrats on a great quarter, t hanks. Thanks, Catherine. Our next question is from Brody Preston from UBS, y our line is open. Hey, guys. It's Vilas Abraham for Brody. Just to follow up on C&I, just on utilization, what are you guys seeing now relative to pre-pandemic levels? Has there been any kind of bounce there, and what are your assumptions in terms of the high single-digit loan guide as far as that goes? Yeah, that's a good question. We're not seeing any kind of increased utilization from commercial loans. It's still pretty flattish over the last two quarters. We're not anticipating that moving significantly over the next two quarters. I don't know what you might be hearing from other banks, but for us, it's kind of a non-event right now. Okay, j ust beneath the surface on the CRE portfolio, is it still payoffs there that is driving some of the pressure and just the competitive dynamics overall? Any commentary there? Yeah, we had another kind of big quarter for payoffs in the second quarter. We just happened to have enough new business to overcome it. It did accelerate some in the second quarter, and commercial real estate was part of it. I think the commercial real estate guys would tell you that they are seeing increased payoff traffic with projects going to permanent finance a lot sooner. I think that's just kind of the environment we're in and we're going to stay in. Terry, I don't know if you've got any. Yeah, I think that's right. There's an immense amount of money available for permanent financing. Generally, most of our bank borrowers who are here on a recourse basis like to get it into a long-term product without recourse. There's a ton of that money available right now. Okay, j ust maybe one more. On deposit growth, pretty sharp contrast in interest-bearing deposit growth versus non-interest bearing. Just outside of the CD paydowns, is there anything special going on there that we should be aware of in terms of that divergence? I don't think there's anything. We typically have, towards the end of the quarter, some larger deposits come into the bank, but I'm not aware of any big ones this quarter that I can think about that come to mind right now. Okay, t hanks, guys. Thank you. Our next question is from Michael Rose, from Raymond James, y our line is open. Hey. Good morning, guys, h ow are you? Good, h ow are you? Good, j ust following up on the Catherine's BHG question and the liquidity event. Is there any reason you guys have spent a lot of time with this business? You've watched it grow and flourish. It's been a great contributor for you. If there were to be a liquidity event at some point in the future, would you guys consider just buying the whole thing, just given all the positive benefits that it's brought you? It seems like it would be a good fit, just given your investment and what it's done for the company. Yeah, I think on that, Michael, I always hate these questions, "Well, would you ever?" Because when you get hemmed in to say, "Oh, I'd never do something," then that's not a good spot to be in. I don't want to say, "Oh, well, we would never do it." I will say this, our motivations have always been, as we've had discussions about that topic in the past, is that there are two things that have been important to us in terms of how we have liked our current ownership interest being less than a majority interest, and one is, we like those guys having more at stake than us. That's a good spot because they're really good at it, but we want to make sure they're as interested as we are in its ongoing success. Two, honestly, we like the equity method accounting treatment. Were we to buy more or all of it, that would change all that and so forth. Anyway, I don't mean to give a coy answer. Those are the reasons that we've structured it the way we have. They seem to continue to make sense to me, but I wouldn't want to rule out and say, "Oh, well, we would never consider that. Okay, that's helpful. Maybe just as a follow-up back to loan growth, obviously great momentum this quarter, y ou've made a bunch of hires. You reiterated the high kind of single-digit growth for this year. I understand, obviously, those hires are going to take time to ramp and everything like that. Any reason to think that outlook wouldn't be conservative as we get into next year, and hopefully the economy continues to strengthen, that you wouldn't be above that? Thanks. Yeah, I think, obviously, were the economy to strengthen and economic loan demand pick up, that would be a boost to what we think we could produce. We're relying on modest economic loan demand and primarily market share movement right now. The market share movement component shouldn't change drastically, but if the economic loan demand portion changed up, then that would increase the likelihood of loan growth. Okay, t hanks for taking my questions. All right, s ee you, Michael. Our next question is from David Bishop from Seaport Research Partners, y our line is open. Yeah, g ood morning, gentlemen. Hi, David. Hey, Harold, quick question. I wasn't sure if I heard this right, but in the preamble, did I hear that one of the equity investments that you had a valuation gain on or appreciation this quarter gave you a little bit of an insight and sort of updated the BHG valuation? If so, if I heard that right, any color you can provide around that number? Yeah, we run, I don't know how many we have, maybe 30 or 40 kind of investments in venture funds and other kind of side investments in addition to BHG. BHG is by far and away the most significant and largest. We have others that we've invested in over time. One of those funds had a company, a portfolio company, that developed a product. As a result of that product, it's been a hit. As a result of that, they did a follow-on offering. Now the valuation for that portfolio company went up 2x, basically, and we got to participate in that. That was the $2.4 million. I think we mentioned $3.3 million or sort of like that in the press release because there were other companies that also had enhanced valuations. The $2.4 was just the biggest one of that 3 point whatever it was in the press release. David, if I understood your question, I think you had thought that Harold was indicating that gave further insight into the BHG valuation, and I don't- That's correct. I don't think that's the case. No, that's not the case. Two separate entities. Okay, g ot it. Got it, o kay, I misheard. Turning to loan yields, just curious, within your various markets here, if you're seeing any opportunities for better or even conversely, are you seeing more competitive pricing? Just curious how pricing's shaping across your various markets. Yeah, I'll start and let Terry kind of finish. Loan yields are a fight and have been for the last couple of quarters. We can't get a yield curve that stays stable for fixed rate credit. We need that to occur, o ther than that, we're negotiating as hard as we can to keep those loan yields where they are. Yeah, I don't think there's a lot I can add to that. I think Harold sort of said we're pushing hard, trying to keep the accountability and pressure in the system to do the best we can on pricing, but it's going to be a slugfest, I think, for the remainder of the year. There's a lot of money chasing a limited number of deals. Got it, o ne final question, and I realize payoffs and there can be some diverse granularity here, but I noticed Memphis has been down here the past couple of quarters, and obviously, there's a lot of M&A in the background with that market. Just curious, any color you can provide to that market and how you view that market holistically overall? Thanks. David, I couldn't quite understand the first part of that question. Are you asking for color commentary on the Memphis market? Correct. Well, we like the Memphis market. I think we believe we have and can continue to produce outsized growth there. We're making really good headway. We've done well in the CRE segment for some time, but we're making really good headway in the C&I segment. We've hired a good number of relationship managers, financial advisors, as we call them, in that market, like we have most markets, and we expect that to continue to produce outsized growth. Got it, a ppreciate the color. All right. Our next question is from Brian Martin from Janney Montgomery Scott, y our line is open. Hey, good morning, guys. Hi, Brian. Hey, just one follow-up, Harold, on that balance sheet question earlier. I guess, did you say your expectation was that it was up, the balance sheet would be up slightly or down slightly? It was down slightly? Up slightly over the next two quarters. Up slightly, o kay. Yeah, w e're trying to limit that as much as we can. We'll try to get rid of our wholesale deposits that come due, and we'll work with other depositors and try to get rates down as fast as we can. Yeah, o kay. Just to be clear, on the PPP, I appreciate the comments on being less the next couple of quarters, your expectation would be that the majority of that $48 million or so is likely collected in the back half of the year. Some of it bleeds into next year, the bulk of it, your expectation, you hope to get it this year. Yeah, we should get most of the $48 million that's left in the next two quarters. That'll be, as you schedule it out, will be less than what we've collected in the second quarter, or the third and the fourth quarter will be less than what's in the second quarter. Got you, y ep, o kay. You talked about the plan on the hotel upgrades. I guess it sounds like there's some pretty good opportunity for upgrades in the next a couple quarters, I guess if that plays out. Is that how you think about it, I guess in turn, the classifieds and criticized and kind of bakes into the reserve release continuing? Yeah, I think that'll have something to do with the reserve release. We should expect some upgrades this quarter, but I think most of the upgrades will likely be in the fourth quarter and the first quarter of next year because some of those hotel loans went through a modification process, and I think the due dates for that, or maturity dates on those loans, are coming up here in the fourth quarter and the first quarter. Okay. Brian, I think the other thing that might be important there is that very few of those loans are classified assets. The vast majority are criticized assets. We're expecting the migration from criticized to pass. Got you, o kay. I appreciate that, Terry. Maybe Harold, just outside of the NII guide, just the core margin. If you strip out, you get the drags from the PPP, but just kind of the core NIM ex the PPP, I guess, how are you thinking about that the next a couple quarters? I know you mentioned the sub-debt and some other items on the cost of funds moving modestly lower, just a little bit slower downdraft here. Yeah, we don't see it going up. We're going to try to keep it flat. I don't have as much room on deposit costs to pick up any kind of additional increase in margins from that. It will all depend on how well we do on loan pricing over the next couple of quarters. Got you, o kay, perfect. I appreciate the color and nice quarter, guys. Thanks, Brian. I am showing no further questions at this time. Thank you very much, presenters. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and have a wonderful day, y ou may all disconnect.