Well, thanks everybody. We're going to continue the mid-cap bank track with Pinnacle Financial Partners. We're happy to have Kevin Blair, the President and CEO with us, and Jamie Gregory, the CFO. Thanks very much, guys, for joining us.
Thanks for having us.
Maybe just starting off, we're now roughly six months beyond the merger close. When you think about what's gone better than expected, what's required more work than expected, and what surprised you the most, how would you assess where integration stands today?
Well, look, Jared, I go back to the questions that we received post-deal announcement, and whether that was in July of last year or whether that was on January 1st this year, there was a great deal of skepticism around three things. Number one, will we be able to continue to grow at an elevated pace? Number two, will you be able to attract and retain top talent? Number three, will the clients like this merger? Look, the skeptics are not wrong. When you look at other MOEs that have occurred in recent years, there's been a lot of challenges. What gets me super excited is I think we've answered those levels of skepticism with real data points that say, yes, we not only can do it, we've actually accelerated some of the performance in those areas. Number one, we've grown loans 12% year- to- date.
We've grown deposits 6% year- to- date. Both of those ahead of our internal projections. We've grown earnings per share 26%. The merger itself is a distraction, but it has not slowed down our frontline team members. It has not slowed down their ability to generate growth. Number two, people were concerned about the ability to attract talent. We have added 124 revenue producers through June. We said we had another 34 in July. Those numbers are up 13% year- over- year versus what the combined companies would have done last year. It's showing that this model is so attractive that even with a little uncertainty around a merger, we're able to attract talent. And two, voluntary turnover, we look back at legacy company history, and last year it was about 7%. This year we're running 6%.
We're attracting at a faster pace, and we're retaining at even a better clip than we would in previous years. I would tell you that should silence the skeptics. The third was on clients. We look at our Net Promoter Scores, and we just look at the Greenwich data on the commercial side. We have the number one Net Promoter Score in the Southeast. We got the first quarter results back, and our Net Promoter Score declined about 3 points, which is as expected. Coalition Greenwich has told us any company that's going through a merger generally sees a 15%-20% decline in their Net Promoter Scores. We saw a 3-point decline. It still puts us as number one. It shows us that our clients are still dealing with the same people every day, which gives them confidence.
What has been more difficult, it's what you guys want to talk about. It's bringing two companies together and unifying an operating model and a culture. That's not easy, but we've been very successful at being able to do that. It requires paying attention to the little things that people talk about when no one's around, how you hire, how you talk about things, how you decision. All of the leadership team, all of our leadership team has spent a disproportionate amount of their time dealing with that so that we can unify our culture and then build upon it. What's been most surprising, I would just say it's been the momentum. It's been the ability to maintain the growth, to have the legacy Synovus team begin to hire at a pace that's similar to the legacy Pinnacle team.
What's been exciting is when you look at the growth of the firm, it's been so diversified across all of our geographies and all of our specialties. I think we're out of the gates. I give ourself an A, but if Terry Turner were here today, what he would say is his high school basketball coach told him there were no trophies handed out at halftime. We're not giving ourselves any trophies yet.
Yeah. I guess maybe drilling into some of those themes a little bit, before the merger, as you said, a lot of people were questioning whether the Pinnacle model could really scale across a much larger organization. Maybe just spend a little time drilling into what's given you that confidence that the culture and incentive structure and sort of decentralized operating model can work effectively at this size. I guess how big could that potentially scale up to with keeping that model?
Yeah. It's the number one question we get, and when I talk with Terry, he says it's the number one question he got for 26 years. Everybody kept saying, well, will you be able to do it next year? Will you be able to do it next year? I think the track record has been pretty successful at being able to do it each and every year. To me, it's the hiring model itself, right? Our hiring model is very specific, where we're looking for high-performing team members that have a great deal of experience, 10 + years of experience. It's an invitation-only type hiring model, where we are selectively looking for individuals that fit that, but you have to be validated by someone that has worked with you in the past.
I think that's the incredible important part of the hiring model is that we want people to fit not only from a skillset perspective but from a cultural perspective. When you hire someone from a firm and they're able to identify that there are others that look like them that should join our firm, it makes it a whole lot easier. Number two, this decentralized model. A lot of banks run a decentralized model. It's not the hierarchy of decentralization, it's the war on bureaucracy, and it's the desire to want to take out all of those administrative tasks that make our job less fun than it needs to be.
We spend a lot of time and energy, even as we're bringing our companies together, looking at every process, whether it's a loan approval process or how to get a wire executed, all the way down to understanding how can we take out steps that make people's lives easier. We ensure that we're putting resources as close to the action as possible. The servicing platform is all local. The credit people are all local. That's really the collaborative nature of the model that people love because you're in a team that's winning together and losing together. Your third point was on the incentive plan. The incentive plan at the end of the day is an incentive plan where it's all for one and one for all. The company hits its targets, everyone gets paid.
I think if you haven't lived in that model, you would underestimate the power of that incentive plan to make people work together and to not point the finger on the other side, and that you get in the boat, you're rowing in the same direction, focused on a shared ambition, a common goal. That helps back office to front office. It helps between our specialty units. That at the end of the day is the secret sauce that brings these teams together and makes it a fun place to work. When you have the level of team member engagement that we have, we just did a survey again in the middle of the merger, and we have an 85% team member engagement number. Most companies would like that outside of a merger. It makes people give you discretionary effort.
When people love what they do, it's kind of like raving client fans. This is a raving team member fan that goes out and tells others, this is the model you want to work in. Your last question, and I'll stop answering them in 12 minutes.
We have the time.
Is it scalable? Of course, it's scalable because the model, every time you hire someone, the Rolodex expands. That person knows five people. I look out, we're doing our three- to five-year strategic plan today, and we look at the markets that we're in. If you look at the hiring year- to- date, the numbers that we've hired this year may surprise you that they've largely come out of Tennessee and Georgia and South Florida, where we've been. We have a tremendous opportunity to add density into markets we're already in. You add on top of that some of our expansionary markets, the national capital region, Richmond, Virginia, where we just opened our first office in August, expanding down. We hired a new team in Mobile, Alabama, that's adding. Our North Florida, Jacksonville, Orlando market is expanding.
When you start looking at where we have opportunities to hire, the opportunity is in front of us. There is not a shortage of talent. Now, one thing that I have been saying this morning, and I think maybe it has been a little bit of a misnomer, when we talk about 124 revenue producers here today, that is not all commercial bankers. That includes our private wealth area. That includes our brokerage area, our Pinnacle Asset Management. It includes fiduciary, and it also includes branch managers. So I think some people get fixated on the number and say they are all commercial relationship managers or financial advisors. It is all revenue producers, including our treasury sales area. When you start breaking it down by group, it becomes much more bite-sized. It is not an order of magnitude that is hard to replicate.
As you have seen in our documents, we have said this year is 250, next year is 275, and you can follow the trajectory in doing that. We think that is very obtainable.
We are still waiting on the systems conversion.
Yeah.
A lot of work in the background to prepare for that. Give us an update on how that is going and where you see sort of some of the near-term milestones for that.
Well, I hope our team members took a minute out of their busy day that are working on that to listen in to our conversation today because I want to thank them. There has been a lot of work ongoing to ensure that we're in a place on March 15th to be able to convert the core system. We're not waiting until March 15th to get through conversions this month. We will convert our mortgage platform, our HR platform. We previously converted our imaging platform. There are lots of things happening prior to the core conversion. What I would tell you is we're on track. If you compare our conversion to some of the others that have occurred more recently, you can see that we're taking a little more time. Why is that? Early on, we wanted to go through and do full business requirements.
When we said we were going to choose the best of both companies, we wanted to evaluate the solutions on both sides. Although we may not have chosen a legacy solution, we understood when there was functionality or capabilities that existed on that solution that would not be on the end-state solution. We've spent these last several months making sure that capability or functionality gets built into the end-state solution. I'll give you an example. Our consumer digital portal that we're going to didn't have a couple functionalities that existed on the other platform. We've already incorporated, built them in. We've done a release last month that put two of those functionalities out there. We are on schedule to be able to deliver. I would tell you the technical conversion is one part of it. We have the brand conversion, which will also occur that weekend.
That sounds almost like a tactical aspect of the merger, but in many cases, our clients have forgotten that we're merging. It's not until that new sign goes up that they're like, What's going on here? The real work between now and then outside of the technical conversion is change management. We need to make sure that every team member is fully prepared to administer the new products, service under the new platforms, execute under the new processes. We need to make sure that they can answer the client's questions. There's a lot of job aids and work going on around that. Number two, we have to educate our clients. It's not just about new logins, it's new products, it's new processes, things that will happen. We'll have to do that as well. As you know, the timing on that is so important.
If we start training someone today for something that's going to happen in March, they are likely to forget it by that point. We're planting seeds and doing things today that will ultimately put us on a glide path to be in a position in March that we think we will successfully be able to execute on it. In the case that something were to go wrong, we have already started to play out contingency plans. Our Chief Operating Officer has already added 140 call center agents to make sure that if something were to go wrong, we believe, we hope that those people may be sitting around twiddling their thumbs on March 17th. If not, people aren't going to wait in a queue.
There are going to be extra staff there to answer the calls so that people aren't sitting in a queue for four hours wondering what's going on. Not only are we preparing for conversion, we're going to have robust contingency plans that mitigate and remediate any issues that come out of it.
Yeah, if you look at what you all had done with Synovus over the prior few years, really building out a lot of capacity on fee income lines on the CIB and treasury management. I know that the synergies weren't really built into the deal metrics, but are you able to expand some of those offerings right now at the legacy Pinnacle, or do you really have to wait till the conversion?
On both sides, Jared. We set this year a very modest target of $20 million in revenue synergies. I think we're at about $10 million, and you'll see where we've been able to do that. It's on those things that don't require us to be on the same platform. Things like our capital markets platform, where you can take things through our syndication or our derivatives platform, where we have USDA capabilities, where the other side didn't have it. Where legacy Pinnacle had equipment finance capabilities that we didn't have. That's about $1 million in revenue that's just been sold into the legacy Synovus footprint. I just was on a call the other day about the homeowners association. Our community association group has had tremendous success in some of our legacy Synovus marketplaces. So $10 million revenue synergies year- to- date. We think we'll achieve our $20 million.
If you go back to our longer-term goal of $100 million-$130 million, we believe that we'll be able to execute on those. But to your point, it becomes a whole lot easier when we're on the common platforms post-merge.
You operate in some of the fastest-growing markets in the country, but also some of the most competitive. How would you characterize competition today? And where do you think the combined franchise has become stronger at winning new business?
You're getting me today on a little squirrely. We always get these questions on competition, and I don't know that's the right question because we have 4,500 banks competing with us. That number's been shrinking, obviously, but it doesn't get any easier every day. I think the question is generally built around what does that mean to loan spreads and what does it mean to deposit pricing, right? That's going to remain competitive. I don't know that I'll ever sit in front of you and say, It's just easy. But I think what the real question is how are you winning? In this competitive landscape, if you're saying price is not the most important factor, how are you winning? And that's where the Pinnacle model is one where you provide distinctive service and effective advice, and you build real trusted relationships.
Now, that doesn't mean you don't have to pay a competitive rate on deposits or give someone a great yield on their loans. But we're winning market share consistently because we're hiring great talent and we're consolidating relationships under a model that creates loyal clients. As we look down the road, I was telling Jamie earlier today, Jamie can talk about the margin and potential impact of any margin compression that comes from this environment. But that will not prevent us from continuing to grow the top- line. It will not prevent us from continuing to grow EPS. I think that maybe the way that we win is built on trust, and that is harder to compete away than is price. I think that it's a competitive landscape, but our model allows us to continue to take market share.
Being a bigger bank, the term that I've used is called scale with a soul, and I think it resonates with me. It's resonated with our 8,500 team members. The scale portion is we're now a $125 billion bank. So we have a bigger balance sheet. We have additional investment dollars to deploy on functionality, capabilities, technology, products, tools. We need to make sure we're doing that. And we have a wider breadth of services, whether that's specialty units, whether that's a bigger geographic unit. All of those things should serve as a better competitive advantage versus our competition because it allows us to generate revenue and meet the needs of our clients. But what's lost in this often is as you get larger, you forget what got you there. You forget the competitive advantage, and that's the soul portion.
What allows us to win is not having a bigger balance sheet or having those products. We've been winning the whole time without the scale. If we can keep the culture, which we will, if we can keep this model that empowers people to serve their clients in a way that's second to none, we will win, and we will do that. When you add scale on top of it just opens up a new segment of clients you haven't been able to touch, or it allows you to deepen the wallet share of the clients you already have. I look at the scale as an accelerant, but the soul is what allows us to continue to win every day.
Great. You and Terry before you have often talked about sort of the embedded future growth from the people that are already on board from the hiring that you brought on board. How should we think about the earnings power that's already sitting inside the franchise from bankers hired over the past several years that haven't fully matured?
That number we've talked about previously being around $20 billion of embedded growth. That's talent sitting in our firm today that have not fully consolidated their book of business to what they believe they can do. That exists today. I think that is a very powerful element that allows us not just to grow, but allows us to remain on what I call this treadmill of hiring. I think people look at the embedded growth and say, that's great. I look at the embedded growth and say, that allows us to continue to invest each year in new revenue producers. I think where this model, to your first point, starts to break down is if you get into a year where you can't add talent because that means at some point in the future, you're going to have a down year in terms of growth.
Jamie and I have talked a lot about what we think it's going to take to re-rate our stock, and it's simply consistent execution. I think people have seen our first two quarters. They feel very good about what we're doing, but they want to see more of it. They want to see future quarters of growth. The number one way to do that is the embedded growth that's already here, and that in turn allows us to continue to add.
At any point when we stop growing or stop adding people, there's going to be some skeptic that says, okay, now they're not running the model. So that embedded growth is going to give us growth on the balance sheet and the P&L for years to come, and it gives us the embedded expense or revenue to be able to incur the expense to continue to hire at an accelerated pace.
Loan growth has remained exceptionally strong despite the merger, and it's been broad-based across markets, specialties and business lines. As you look across the footprint today, where are you seeing the strongest opportunities, and what are clients telling you about demand?
Look, our growth is predominantly C&I. Client sentiment has remained very strong. Pipelines have remained strong. We are in a great footprint, which is helpful, but as I mentioned earlier, part of that growth is the hirings that we made this year and previous years. I love looking at it by geography. If you look at it on an absolute growth, our two biggest growth markets are Tennessee and Georgia, are the areas where we have the most density. If you look at it on a percentage basis, our fastest-growing is the National Capital Region and Greater Florida, that North Florida. They are smaller market shares today, but present a tremendous amount of growth.
When you go down in our specialty banking units, whether it's equipment finance, whether it's restaurant services, alternative energy, structured lending, ABL, or our music, sports entertainment business, all of those are growing double- digit. So it goes back to your lead-in, tremendously diversified, not concentrated, and it means as we look at pipelines going forward, I think you're going to see a sustainable level of growth because you're getting it across the board. Number two, your question was about What was the second part of the question? I missed that.
Just what are the clients saying about demand?
Oh, clients. Yeah, I'm sorry. Yeah.
What's the client sentiment?
You jogged my memory. We just finished our third quarter survey from clients. Ironically, with all of the geopolitical risk that we've dealt with this year, the uncertainty around inflation and rates, our clients remain tremendously resilient. 80% of our clients believe over the next 12 months their business will either stay the same or grow. That's incredible given some of the uncertainties that we face. That number has not changed for the last three quarters. About 18% to 20% of our clients believe their business will shrink over the next 12 months. But the other side of that is 80% believe it will stay the same or grow. That to me is encouraging that clients can continue to remain fairly resilient despite some of the uncertainty.
The one question mark, and maybe the biggest concern, does remain inflation. This quarter they reiterate what they said last quarter. Their concern is input prices continue to go up. They cannot pass on that increase to their clients, which means their margins are going to compress. I think we should assume that is going to happen. It does not mean that they are going to become insolvent. It does not mean that their business model does not work. It just means they are going to be a little less profitable.
Yeah. I think this sort of ties into this question where I think one of the more impressive aspects of the second quarter was that growth remains strong even while maintaining that pricing discipline. As you look out, how are you balancing growth and profitability? I guess where are you willing to say no?
Yeah. We have had a lot of discussions this morning about that with investors. Spreads have remained pretty good when you look at what our loan yield is for new production and where deposits have been, 370-ish. 360- 370. Our goal is to invest all of our capital that we can with our clients. We think that is the best return for shareholders. We think that is the best thing for our firm. What we are managing to is a phenomenon now that some are worried that the next loan that you generate is having to be wholesale funded. I had our team run a normal loan through a wholesale funded model to say what is the profitability of that standalone loan. It is about 15% return on capital. If we are just doing a loan, wholesale funded, not great returns, not horrible.
That just shows that if you do that loan, and even if it is wholesale funded, if you bring over a deposit relationship, if you bring over some level of ancillary fee, you are back above a 20% return on capital. We believe that next dollar of capital, that next loan, if we are following our model, we are not a transactional bank, we will do a loan for someone when it comes with a relationship. Even though that loan may have to be wholesale funded, that individual loan, you can still get a more than adequate return if you are getting the full relationship.
And I guess maybe getting a little deeper into the NII and margin. You have made the point several times that really investors should be focusing on the NII growth rather than simply margin. As you think about the next several years, how should investors weigh the impact of strong loan production, deposit pricing discipline, fixed rate asset repricing benefits, and the additional liquidity you are building as part of the Cat IV?
That is where I get to hand the baton over to Jamie to talk a little bit about NIM.
I have enjoyed this. Look, as we look forward for the next two, three years, our strategy will deliver loan growth that is funded by core deposit growth, if you think about it in dollar terms, and that is what we look at longer- term. That is the spread Kevin is talking about. We are growing loans at a 620 area, deposits about 260 area. We expect that kind of spread. That feels good to us. We are not immune to the pricing pressure that every other bank is feeling. But if you look at our performance, we had six of eight geographies with wider spreads in the second quarter. We had nine of 11 specialties with wider spreads in the second quarter. That shows that this model can deliver pricing power even in an environment where a lot of banks are talking about spread compression.
And we are seeing that continue into the third quarter, that pricing power. That is a good trend. But again, we are not immune forever. As we look forward, we expect the profitability of our growth to be in the same context of what we are experiencing now. We talk about a 17%-18% return on tangible. We think that is sustainable. The reason for that is when you look at our growth, if you are funding loans with core deposits at a 360- 370 spread, that is very accretive to the shareholder. Then on the other side, at the same pace we are growing those loans, we are going to grow securities. That is where the whole margin conversation comes in. Because we are growing securities, and it might be a 1% or even a little less spread to wholesale funding, and that is what causes that NIM compression.
We get into the NIM conversation, but people forget that those securities in large part are 0% risk-weighted. They are not consuming capital, they are not dilutive to return on tangible. They are NII accretive, and it is just what we need to do for liquidity purposes. That is where the whole conversation ends up going. But we think that our multi-year outlook, because it is funded by key hires of just core commercial banking and with wealth and treasury and capital markets, that is what makes it sustainable and not dilutive to the profitability of the shareholder.
Yeah, I guess, when you are looking at building out Cat IV liquidity, how are you thinking about that trade-off between optimizing near-term earnings and building that balance sheet that you ultimately need and want?
First, we are very comfortable with our liquidity profile. We have significant contingent liquidity. Really the only question on liquidity is, what is the marginal cost? We feel good at where we are today, but we do plan to build cash and securities to assets as we go through the next two to three years. You will just see that come through over time. There is no real rush to do that. You saw in the debt issuance we did in May, we originally targeted $500 million, but because there was over $3 billion in demand, we ended up upsizing it to $750 million. That got us ahead of the schedule we laid out last summer when we said $1 billion a year for three years. We had modeled two $500 million issuances each year. We will just continue to kind of slowly build liquidity in that fashion.
As part of Category IV, we do need to be mindful of the whole capital stack. Long- term, we would expect to have 1% in Tier 1 and kind of have the full capital stack built out. But at 70 basis points on that today, we are fine where we are. It is just something we will be mindful of as we continue to grow.
Okay. That's good color. Thanks. I guess, shifting a little bit to BHG.
Yeah
You gave an update in the summer about their ability and desire to hold more on balance sheet. How is sort of the trends going there and any real thought to
Yeah
your view of BHG's role at Pinnacle?
BHG just continues to perform really well. The team there is fantastic. You saw the performance in the second quarter. Just strong production increase. The outlook is brighter today than it even was when we talked in July. It's a positive trend there. We're really pleased with that. What we like about their strategic plan is we are sacrificing near-term earnings, and this is what we started talking about in Q1. We are sacrificing near-term earnings to enhance future earnings. What it also does, it reduces the balance sheet that's on the bank clients' balance sheets. That reduces the uncertainty about future buyback calls for BHG, which makes it easier to analyze the company.
Whether their future plans are to continue doing what they are doing and execute and grow their company, or if it involves strategic alternatives, their plan that they are executing today positions them really well for whichever path they choose. I think if they continue doing what they are doing right now, it is going to be pretty fun to watch over the next 12 to 24 months.
Great. One thing that we were speaking about with all the banks, I am sure in a lot of your meetings, is AI and technology. It has evolved, obviously, significantly over the past few years. Where are you seeing the most tangible benefits today, and how has your view changed regarding where AI is most likely to create value inside the bank?
We have a lot of work streams in the AI world right now, and we are really excited about it. It adds value day to day in most of our employees' lives. The one that has me most excited today is on the integration as we look towards conversion. We had a meeting yesterday, and we were talking to the data team, and the way AI is helping them run tests, run traps to make sure that every effort we are making today is preparing us for March 15th is real positive to see. We have rolled out Claude to a lot of the team, and we are using on the lending side, we are using it to help with appraisals. We are using it in investor relations significantly. It is just exciting to see the paths we are taking on AI.
I would just say that it is very broad in the company. It is having an impact. Get really excited about how it is helping us with conversion, get really excited about how it is helping us with client meetings, underwriting credits. It is really everywhere in the company.
As you sort of look at budgeting for next year, is that becoming its own category, or is that still just part of the tech spend and
No
anything you spend there has to be offset with something else?
Right now, it's part of the tech spend. Truthfully, token cost is not something that would come up on your radar if you were a [type 1 company]. We track it because obviously it's a steep increase when you look at month-over-month spend. We're mindful of that, and we're just working to be smart about how we do it. Truthfully, one of our main goals right now is for the team to get excited about how AI can help us be better. I really don't want to tap the brakes too much. That cost is small enough that I'm fine with it. I want everybody to become individually engaged with AI to be better at what they do. That's what's exciting me. That's the priority today. These numbers get big or bigger, then we'll have to think about it.
Truthfully, the easy thing is just to tone down the models and say, Hey, instead of using Fable for this or Claude Opus 4.8, we're going to drop you down. That's an easy choice, and many times they probably should be using the lower models. We're active in it, working on the data pipelines, getting info from Databricks or S&P and all these. It's pretty fun to see what's happening.
Remember, Jared, our philosophy is high tech meets high touch. It's not replacing human beings, it's capacitating folks. We'll get a big lift post-conversion because Legacy Pinnacle was on a mainframe platform. We're on cloud base to be able to roll out our AI infrastructure that we have. The Legacy Pinnacle people will get it post-conversion. To Jamie's point, we're going to have a lot of folks that have capabilities and tools that they haven't had in the past to make them perform at a higher level and be more productive.
That is our focus today. There's nowhere in our outlook that you'll hear us say we have this cost save associated with this. I'm sure that'll come down the road along, but right now it's about helping us be better, helping our Net Promoter Score, helping our team member engagement. It's all those things.
Yeah. Shifting to capital at quarter- end, CET1 increased to 9.9%, and you've been clear that supporting organic growth remains a priority. As you think about capital deployment over the next several years, how do you balance growth, the liquidity build, future buybacks, and potential benefits from regulatory change?
Yeah. Look, I think our earnings power has become clear in the first half of the year, where you see the capital accretion we've had since legal despite a 12% annualized loan growth. We're building cap. That shows the flexibility we have. Now, look, we're trying to get to 10.25% , and that's our objective, and we'll continue to get there. But to be building capital at this rate with 12% annualized loan growth is pretty powerful. So what you'll see from us is to build up to that 10 .25% . Now, there are a lot of moving parts right now. We have the Fed NPR that's out there, and I look forward to that being finalized. That will be a big benefit to us. We don't have a lot of AOCI that'll get dropped into capital.
The RWA benefit for us is a little less than others because we have less residential mortgages. But net- net, if we pick up 35 basis points to 40 basis points from that NPR, that gets us to our 10.25%. Further, if you look at stress capital in the adverse scenarios, every one of the scenarios has low rates. The AOCI, that should be a benefit as well. All of those things play together as we think about what should our capital target be? When will we get there? We look forward to that rule being finalized so we can think through it in the future state. Hopefully that's sooner rather than later.
Let's see if there's anybody in the audience that has any questions. No. I guess, wrapping up, if we're sitting here hopefully a year from now and investors believe the mergers exceeded the expectations that you've laid out, what are the milestones or accomplishments you think will have been most important to getting there?
Look, I said I saw a presentation years ago. It was the CEO of Kroger, and someone asked him, w hat do you look at on your KPIs? He says, I look at two things. I look at the number of people checking out through my cash register, and I look at the average ticket size per purchase. He said, look, that tells me everything I need to know. Do we put our stores in the right place? What are our product pricing?
What's it getting people to spend? This is a complex business, but if you ask me to break it down to two things, it would be team member engagement and client loyalty. If we can maintain industry-leading team member engagement, which the combined firms would've been right around 90%, and we can have those Net Promoter Scores that are industry leading, everything else is going to take care of itself. Now, there are subcomponents in each of it, and I've used this one statistic I hammered at home earlier, team member turnover. If you want to know the health of our culture, look at the turnover numbers. Today, at voluntary turnover at 6% says that we've actually ticked down year-over-year in turnover. That tells us that our messaging is resonating. The model is a good place to work. We do a lot of surveys.
We'll do our second team member engagement survey. I said earlier we're at 85%. That was our mid-year pulse survey. We'll do another one in November. We're not doing that to put them on the annual report. I'm not doing that to come out and celebrate it on an earnings call. We're doing it to hear from our team members. Are we delivering on our promises? I think that's the message. Just like with investors, Jamie and I and the entire leadership team, all 8,500 team members want to deliver on our promises. I think we've been delivering on those. Our clients would tell you we're delivering on that, helping them reach their full potential. Ultimately, I think we'll continue our promises both with our team members and our clients.
That in turn allows us to generate a level of growth and profitability that you won't find with other regional banks. I think the biggest challenge that we have going forward is getting our stock to re-rate where we think it belongs. You asked me about my surprise earlier. The surprise is we're generating these type of results and trading for this type of multiple. I think that doesn't make sense to me, and it just takes us winning one quarter, one banker, and one client at a time. At some point, I think people are going to realize what they're missing out on.
Great. Well, thanks very much for joining us, and hope you have a great rest of the day.
Thank you, Jared.
Thank you.