PINNACLE FINANCIAL PARTNERS INC - FORM 8-K - EX-99.1 - PRESS RELEASE ISSUED BY PINNACLE FINANCIAL PARTNERS, INC. DATED JULY 17, 2012

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Exhibit 99.1

LOGO

FOR IMMEDIATE RELEASE


MEDIA CONTACT:		Nikki Klemmer, 615-743-6132
FINANCIAL CONTACT:		Harold Carpenter, 615-744-3742
WEBSITE:		www.pnfp.com

PINNACLE FINANCIAL REPORTS DILUTED EPS OF $0.23 FOR THE SECOND QUARTER

OF 2012, UP 64 PERCENT OVER SAME QUARTER LAST YEAR

Includes $1.7 million nonrecurring charge related to TARP redemption

NASHVILLE, Tenn., July 17, 2012 – Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today reported that its net income per fully diluted common share available to common stockholders was $0.23 for the quarter ended June 30, 2012, compared to net income per fully diluted common share available to common stockholders of $0.14 for the quarter ended June 30, 2011, an increase of 64.0 percent. Net income per fully diluted common share available to common stockholders was $0.44 for the six months ended June 30, 2012, compared to net income per fully diluted common share available to common stockholders of $0.20 for the six months ended June 30, 2011, an increase of 120.0 percent.

As a result of the TARP preferred stock redemption that occurred during the quarter, second quarter and year-to-date results include the accretion of the remaining preferred stock discount. This resulted in a one-time, non-cash charge to net income available to common stockholders of approximately $1.7 million during the quarter.

“Despite the industry headwinds, we continued to accelerate loan and core deposit growth as well as expand our net interest margin during the second quarter,” said M. Terry Turner, Pinnacle’s president and chief executive officer. “Perhaps more importantly, we also continued to build lending pipelines, and we expect continued loan growth during the third quarter.”

Building the Core Earnings Capacity of the Firm

•

Loans at June 30, 2012, were $3.44 billion, an increase of $106.8 million from March 31, 2012. Commercial and industrial loans plus owner-occupied commercial real

estate loans were $1.83 billion at June 30, 2012, an increase of $57.8 million from March 31, 2012, and the eighth consecutive quarter of net growth. Loans have increased $153.3 million since Dec. 31, 2011, an annualized growth rate of 9.3 percent.

•

Since expanding to Knoxville in the summer of 2007, Pinnacle has continued its strong growth in that market. The Knoxville footprint reached $577.9 million in loans at the end of the second quarter of 2012, up from $544.4 million at March 31, 2012, or 6.2 percent.

•

Average balances of noninterest bearing deposit accounts were $755.6 million in the second quarter of 2012, up 7.7 percent over first quarter 2012 and 20.1 percent over the same quarter last year.

•

Revenue for the quarter ended June 30, 2012, amounted to $50.1 million, compared to $47.6 million for the same quarter of last year, an increase of 5.2 percent.

•

Net interest margin increased to 3.76 percent for the quarter ended June 30, 2012, up from 3.74 percent last quarter and from 3.55 percent for the quarter ended June 30, 2011.

•

Pre-tax pre-provision income was $16.2 million for the quarter ended June 30, 2012, up $2.5 million from last quarter and $2.9 million from the same quarter last year. Pre-tax pre-provision income was up 18.7 percent over last quarter and 22.1 percent over the same quarter last year.

“The growth in our loan and deposit volume is a foundational building block for our ongoing revenue and earnings growth,” Turner said. “The success we are having in the Knoxville market is similar to the early-stage growth we experienced in Nashville and now accounts for a meaningful part of the firm’s loan growth.”

Aggressively Dealing with Credit Issues

•

The allowance for loan losses represented 2.02 percent of total loans at June 30, 2012, compared to 2.14 percent at March 31, 2012, and 2.40 percent at June 30, 2011.

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•

Net charge-offs were $2.4 million for the quarter ended June 30, 2012, compared to $8.6 million for the quarter ended June 30, 2011, and $3.6 million for the first quarter of 2012.

•

Provision for loan losses expense decreased from $6.6 million for the second quarter of 2011 to $0.6 million for the second quarter of 2012. The results reflect the overall improvement in the credit quality of the loan portfolio compared to the same period in 2011 and the reduction in net charge-offs.

•

Nonperforming assets declined by $10.6 million from March 31, 2012, a linked-quarter reduction of 13.8 percent and the eighth consecutive quarterly reduction.

•

Nonperforming assets were 1.91 percent of total loans plus other real estate at June 30, 2012, compared to 2.28 percent at March 31, 2012, and 3.44 percent at June 30, 2011. Pinnacle resolved $22.5 million in nonperforming assets during the second quarter of 2012, compared to resolutions of $25.3 million during the first quarter of 2012.

•

Nonperforming loans declined by $2.0 million during the second quarter of 2012, a linked-quarter reduction of 4.7 percent and the ninth consecutive quarterly reduction. Nonperforming loans are down 31.7 percent from June 30, 2011. Nonperforming loan inflows were $11.9 million during the second quarter of 2012, a linked-quarter decrease of 16.0 percent. Nonperforming loan inflows were also down 31.7 percent from the second quarter a year ago.

•

The ratio of the allowance for loan losses to nonperforming loans increased to 170.5 percent at June 30, 2012, from 166.6 percent at March 31, 2012, and 128.9 percent at June 30, 2011.

•

Other real estate also declined by 25.2 percent or $8.6 million during the second quarter of 2012, inclusive of $2.5 million in property foreclosures.

•

Troubled debt restructurings increased by $3.8 million between March 31, 2012 and June 30, 2012, primarily due to two commercial real estate projects.

•

Potential problem loans, which are classified loans that continue to accrue interest, declined by $6.6 million from March 31, 2012, a linked-quarter reduction of 5.6 percent. Potential problem loans are down from $148.5 million at June 30, 2011, to $110.6 million at June 30, 2012, a decrease of 25.5 percent. Potential problem loans are down by 65.2 percent from their peak in June 2010.

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•

Net charge-offs for the quarter ended June 30, 2012, were $2.4 million, an annualized net charge-off rate of 0.28 percent. Annualized net charge-offs year-to-date through June 30, 2012, were 0.36 percent, compared to an annualized rate of 1.14 percent for the same period in the prior year.

“One of our primary priorities for the last three years has been to rehabilitate the balance sheet and return to normalized credit metrics,” Turner said. “With an annualized net charge-off rate of 0.28 percent and the ratio of nonperforming assets to total loans plus OREO of less than 2.0 percent, we continued our forward progress during the second quarter.”

The following is a summary of the activity in various nonperforming asset and troubled debt restructuring categories for the quarter ended June 30, 2012:


*(in thousands)*	Balances March 31, 2012		Payments, Sales and Reductions			Foreclosures			Inflows		Balances June 30, 2012
Troubled debt restructurings:
Commercial real estate – mortgage	$	15,320		(1,791	)		—			5,511	$	19,040
Consumer real estate – mortgage		6,088		(362	)		—			350		6,076
Construction and land development		75		(1	)		—			360		434
Commercial and industrial		1,222		(329	)		—			59		952
Consumer and other		127		(3	)		—			—		124

Totals		22,832		(2,486	)		—			6,280		26,626

Nonperforming loans:
Commercial real estate – mortgage		16,530		(3,886	)		(213	)		1,170		13,601
Consumer real estate – mortgage		11,586		(2,105	)		(2,141	)		8,342		15,682
Construction and land development		6,979		(1,178	)		(175	)		148		5,774
Commercial and industrial		7,242		(4,050	)		—			2,140		5,332
Consumer and other		515		(221	)		—			139		433

Totals		42,852		(11,440	)		(2,529	)		11,939		40,822

Other real estate:
Residential construction and development		12,265		(3,462	)		27			—		8,829
Commercial construction and development		15,960		(4,258	)		148			—		11,850
Other		5,794		(3,377	)		2,354			—		4,771

Totals		34,019		(11,097	)		2,529			—		25,450

Total nonperforming assets and troubled debt restructurings	$	99,703		(25,023	)		—			18,219	$	92,898

OTHER SECOND QUARTER 2012 HIGHLIGHTS:

•

Improving Balance Sheet Composition

•

The firm has continued to reposition its deposit base so that average balances for noninterest-bearing demand, interest checking, savings and money market accounts increased to $3.06 billion for the second quarter of 2012 from $2.91 billion for the first quarter of 2012, or 2.4 percent on a linked-quarter basis. Average balances for higher-cost time deposits decreased from $689 million to

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$655 million, or 5.0 percent, during the same time period. In comparison to the prior year’s quarter, average balances for noninterest-bearing demand, interest checking, savings and money market accounts increased 5.8 percent, while average balances for higher-cost time deposits decreased 27.6 percent.

•

As a result of the current bond market and growing loan demand, the firm has reduced the size of its investment portfolio by $107 million since the beginning of 2012, primarily through bond maturities and calls.

•

At June 30, 2012, Pinnacle’s ratio of tangible common stockholders’ equity to tangible assets was 8.7 percent, compared to 7.7 percent at June 30, 2011, and 8.8 percent at March 31, 2012.

•

At June 30, 2012, Pinnacle’s total risk-based capital ratio was 13.5 percent, compared to 15.5 percent at June 30, 2011, and 15.4 percent at March 31, 2012. The reduction in this ratio was primarily attributable to the firm’s recent redemption of all of the remaining outstanding preferred shares issued in connection with its participation in the U.S. Treasury’s TARP capital purchase program (CPP).

“During the second quarter of 2012, we redeemed all of the remaining outstanding preferred shares previously issued to the U.S. Treasury,” said Harold R. Carpenter, Pinnacle’s chief financial officer. “This redemption, and our subsequent agreement with the Treasury to repurchase the accompanying common stock warrants during the third quarter of 2012, will officially end our participation in the CPP. As we had anticipated, we were able to redeem our remaining outstanding TARP preferred shares with no incremental common share dilution using a combination of available cash and borrowings under a new $25 million credit facility.”

•

Operating results

•

Net income available to common stockholders for the second quarter of 2012 was $7.8 million, compared to the prior year’s second quarter net income available to common stockholders of $4.8 million. First quarter 2012 net income available to common stockholders totaled $7.2 million.

•

Net interest income for the quarter ended June 30, 2012, was $40.2 million, compared to $39.5 million in the first quarter of 2012. Net interest income for

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the second quarter of 2011 was $37.8 million. Net interest income for the second quarter of 2012 was at its highest quarterly level since the firm’s founding.

•

Noninterest income for the quarter ended June 30, 2012, was $9.9 million, compared to $9.9 million for the first quarter of 2012 and $9.8 million for the same quarter last year. Excluding the impact of net securities gains, noninterest income was up 6.7 percent over the same quarter last year.

•

Wealth management revenues, which include investment services, trust services and insurance, were $3.5 million during the second quarter of 2012, an increase of 3.2 percent over the same period last year. The increase was due primarily to additional emphasis on internal referral programs and the addition of several new associates over the past two years.

•

Gains on mortgage loans sold, net of commissions, were $1.5 million during the second quarter of 2012, compared to $1.5 million during the first quarter of 2012 and $0.8 million during the second quarter of 2011.

“Our second quarter 2012 net interest margin increased modestly to 3.76 percent,” Carpenter said. “Much of our margin expansion in recent quarters has been largely attributable to reductions in our cost of funds. We continue to believe we have additional opportunities to reduce our funding costs in future quarters. However, like others in our industry, we are experiencing continued pressure on our loan yields, and we expect expansion in our net interest margin will be challenging going forward. Nevertheless, we expect that loan growth should positively influence our net interest income results over the next several quarters and result in further revenue growth this year.”

•

Noninterest and income tax expense

•

Noninterest expense for the quarter ended June 30, 2012, was $33.9 million, compared to $34.4 million in the second quarter of 2011 and $35.8 million in the first quarter of 2012.

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•

Included in noninterest expense for the second quarter of 2012 was $3.1 million in other real estate expenses, compared to $3.8 million in the second quarter of 2011 and $4.7 million in the first quarter of 2012.

•

Income tax expense was $5.1 million for the second quarter of 2012, compared to $288,000 in the second quarter of 2011. The projected effective tax rate for 2012 is approximately 33 percent.

Included in the other real estate expense for the quarter was $2.4 million of additional write downs of existing OREO balances based on updated appraisals. The firm also recorded $399,000 in net losses related to the disposition of $11.1 million of other real estate. Noninterest expense excluding the impact of OREO expenses was approximately $30.8 million in the second quarter of 2012, compared to $31.1 million in the first quarter of 2012 and $30.5 million in the second quarter of 2011.

Salaries and employee benefits costs declined in the second quarter of 2012 from the first quarter of 2012 primarily due to the anticipated reduction in various benefits-related charges. Carpenter noted that he anticipates the quarterly expense run rate for the remaining two quarters of 2012 to remain fairly consistent with that of the second quarter.

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. (CT) on July 18, 2012, to discuss second quarter 2012 results and other matters. To access the call for audio only, please call 1-877-602-7944. For the presentation and streaming audio, please access the webcast on the investor relations page of Pinnacle’s website at www.pnfp.com.

For those unable to participate in the webcast, it will be archived on the investor relations page of Pinnacle’s website at www.pnfp.com for 90 days following the presentation.

Pinnacle was recently recognized by Forbes as one of America’s Most Trusted Companies and has consistently been named a “Best Place to Work” by several publications. Pinnacle has the largest market share among businesses in Nashville with annual sales from $1 to $500 million, according to Greenwich Associates.

Pinnacle Financial Partners provides a full range of banking, investment, mortgage and insurance products and services designed for small- to mid-sized businesses and their owners and individuals interested in a comprehensive relationship with their financial institution. Comprehensive wealth management services, such as financial planning and trust, help clients increase, protect and distribute their assets.

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The firm began operations in a single downtown Nashville location in Oct. 2000 and has since grown to over $4.9 billion in assets at June 30, 2012. At June 30, 2012, Pinnacle is the second-largest bank holding company headquartered in Tennessee, with 29 offices in eight Middle Tennessee counties and three offices in Knoxville.

Additional information concerning Pinnacle can be accessed at www.pnfp.com.

###

Certain of the statements in this release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “expect,” “anticipate,” “goal,” “objective,” “intend,” “plan,” “believe,” “should,” “seek,” “estimate” and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking. All forward-looking statements are subject to risks, uncertainties and other factors 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. Such risks include, without limitation, (i) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (ii) continuation of the historically low short-term interest rate environment; (iii) the inability of Pinnacle Financial to grow its loan portfolio in the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) effectiveness of Pinnacle Financial’s asset management activities in improving, resolving or liquidating lower-quality assets; (vi) increased competition with other financial institutions; (vii) greater than anticipated adverse conditions in the national or local economies including the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA, particularly in commercial and residential real estate markets; (viii) rapid fluctuations or unanticipated changes in interest rates; (ix) the results of regulatory examinations; (x) the development of any new market other than Nashville or Knoxville; (xi) a merger or acquisition; (xii) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including intangible assets; (xiii) the ability to attract additional financial advisors or to attract customers from other financial institutions; (xiv) further deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xv) inability to comply with regulatory capital requirements, including those resulting from recently proposed changes to capital calculation methodologies and required capital maintenance levels; and, (xvi) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy, including implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. A more detailed description of these and other risks is contained in Pinnacle Financial’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission on March 2, 2012. Many of such factors are beyond Pinnacle Financial’s ability to control or predict, and readers are cautioned not to put undue reliance on such forward-looking statements. Pinnacle Financial disclaims any obligation to update or revise any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.

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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS – UNAUDITED


	June 30, 2012			December 31, 2011
*ASSETS*
Cash and noninterest-bearing due from banks	$	68,291,541		$	63,015,997
Interest-bearing due from banks		134,491,775			108,422,470
Federal funds sold and other		8,034,508			724,573

Cash and cash equivalents		210,817,824			172,163,040

Securities available-for-sale, at fair value		789,738,398			894,962,246
Securities held-to-maturity (fair value of $770,541 and $2,369,118 and at June 30, 2012 and December 31, 2011, respectively)		754,812			2,329,917
Mortgage loans held-for-sale		36,300,917			35,363,038

Loans		3,444,683,416			3,291,350,857
Less allowance for loan losses		(69,614,021	)		(73,974,675	)

Loans, net		3,375,069,395			3,217,376,182

Premises and equipment, net		75,525,895			77,127,361
Other investments		45,614,818			44,653,840
Accrued interest receivable		15,176,899			15,243,366
Goodwill		244,065,248			244,076,492
Core deposit and other intangible assets		6,470,132			7,842,267
Other real estate owned		25,450,214			39,714,415
Other assets		106,893,184			113,098,540

Total assets	$	4,931,877,736		$	4,863,950,704


*LIABILITIES AND STOCKHOLDERS’ EQUITY*
Deposits:
Noninterest-bearing	$	806,401,531		$	717,378,933
Interest-bearing		696,251,475			637,203,420
Savings and money market accounts		1,559,404,238			1,585,260,139
Time		647,763,107			714,496,974

Total deposits		3,709,820,351			3,654,339,466
Securities sold under agreements to repurchase		127,622,555			131,591,412
Federal Home Loan Bank advances		270,994,562			226,068,796
Subordinated debt and other borrowings		122,476,000			97,476,000
Accrued interest payable		1,643,008			2,233,330
Other liabilities		40,034,705			42,097,132

Total liabilities		4,272,591,181			4,153,806,136

Stockholders’ equity:
Preferred stock, no par value; 10,000,000 shares authorized; 71,250 shares issued and outstanding at December 31, 2011		—			69,096,828
Common stock, par value $1.00; 90,000,000 shares authorized; 34,675,913 shares and 34,354,960 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively		34,675,913			34,354,960
Common stock warrants		3,348,402			3,348,402
Additional paid-in capital		539,462,366			536,227,537
Retained earnings		64,307,405			49,783,584
Accumulated other comprehensive income, net of taxes		17,492,469			17,333,257

Stockholders’ equity		659,286,555			710,144,568

Total liabilities and stockholders’ equity	$	4,931,877,736		$	4,863,950,704

This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Interest income:
Loans, including fees	$	39,288,048	$	38,905,155	$	77,925,767	$	77,258,636
Securities
Taxable		4,453,956		6,479,280		9,383,240		12,840,179
Tax-exempt		1,647,852		1,837,811		3,350,998		3,773,699
Federal funds sold and other		563,638		566,874		1,117,577		1,140,880

Total interest income		45,953,494		47,789,120		91,777,582		95,013,394


Interest expense:
Deposits		4,298,849		8,306,751		9,126,325		17,730,992
Securities sold under agreements to repurchase		115,450		345,444		271,026		727,013
Federal Home Loan Bank advances and other borrowings		1,354,132		1,341,546		2,691,163		2,739,377

Total interest expense		5,768,431		9,993,741		12,088,514		21,197,382

Net interest income		40,185,063		37,795,379		79,689,068		73,816,012
Provision for loan losses		634,072		6,587,189		1,668,317		12,726,327

Net interest income after provision for loan losses		39,550,991		31,208,190		78,020,751		61,089,685

Noninterest income:
Service charges on deposit accounts		2,439,376		2,330,206		4,763,338		4,591,663
Investment services		1,610,883		1,637,426		3,257,661		3,145,512
Insurance sales commissions		1,141,163		1,004,246		2,428,723		2,053,478
Gain on mortgage loans sold, net		1,456,783		789,258		2,951,255		1,398,635
Gain on sale of investment securities, net		98,917		610,302		212,517		451,199
Trust fees		770,239		769,935		1,565,674		1,499,923
Other noninterest income		2,392,485		2,668,041		4,680,016		4,993,061

Total noninterest income		9,909,846		9,809,414		19,859,184		18,133,471


Noninterest expense:
Salaries and employee benefits		19,237,178		18,523,531		39,029,744		36,447,153
Equipment and occupancy		5,053,111		5,060,014		10,061,766		10,066,724
Other real estate owned		3,104,276		3,825,608		7,780,340		8,159,726
Marketing and other business development		739,774		766,422		1,525,099		1,520,173
Postage and supplies		615,725		545,097		1,179,019		1,034,974
Amortization of intangibles		686,067		715,905		1,372,134		1,431,809
Other noninterest expense		4,479,403		4,920,766		8,787,138		10,397,612

Total noninterest expense		33,915,534		34,357,343		69,735,240		69,058,171

Income before income taxes		15,545,303		6,660,261		28,144,695		10,164,985
Income tax expense		5,105,659		288,414		9,340,097		288,414

Net income		10,439,644		6,371,847		18,804,598		9,876,571
Preferred dividends		760,349		1,200,694		1,660,868		2,388,194
Accretion on preferred stock discount		1,894,525		327,657		2,153,172		633,631

Net income available to common stockholders	$	7,784,770	$	4,843,496	$	14,990,558	$	6,854,746


*Per share information:*
Basic net income per common share available to common stockholders	$	0.23	$	0.14	$	0.44	$	0.21

Diluted net income per common share available to common stockholders	$	0.23	$	0.14	$	0.44	$	0.20


Weighted average shares outstanding:
Basic		33,885,779		33,454,229		33,848,825		33,410,385
Diluted		34,470,794		34,095,636		34,447,526		34,054,746

This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED


*(dollars in thousands)*	June 2012			March 2012			December 2011			September 2011			June 2011			March 2011

Balance sheet data, at quarter end:
Commercial real estate – mortgage loans	$	1,167,068			1,123,690			1,110,962			1,087,333			1,091,283			1,102,533
Consumer real estate – mortgage loans		687,002			688,817			695,745			711,994			708,280			698,693
Construction and land development loans		289,061			281,624			274,248			278,660			282,064			300,697
Commercial and industrial loans		1,227,275			1,180,578			1,145,735			1,095,037			1,058,263			1,047,754
Consumer and other		74,277			63,160			64,661			68,125			67,214			67,753
Total loans		3,444,683			3,337,869			3,291,351			3,241,149			3,207,104			3,217,430
Allowance for loan losses		(69,614	)		(71,379	)		(73,975	)		(74,871	)		(76,971	)		(78,988	)
Securities		790,493			839,769			897,292			942,752			925,508			984,200
Total assets		4,931,878			4,789,583			4,863,951			4,868,905			4,831,333			4,820,991
Noninterest-bearing deposits		806,402			756,909			717,379			722,694			662,018			608,428
Total deposits		3,709,820			3,605,291			3,654,339			3,712,650			3,761,520			3,731,883
Securities sold under agreements to repurchase		127,623			118,089			131,591			128,954			124,514			165,132
FHLB advances		270,995			226,032			226,069			161,106			111,191			111,351
Subordinated debt and other borrowings		122,476			97,476			97,476			97,476			97,476			97,476
Total stockholders’ equity		659,287			718,665			710,145			724,374			699,228			681,226

Balance sheet data, quarterly averages:
Total loans	$	3,402,671			3,280,030			3,261,972			3,207,213			3,211,591			3,191,076
Securities		818,795			875,509			924,153			939,778			972,750			1,010,344
Total earning assets		4,365,715			4,316,973			4,347,352			4,308,710			4,347,552			4,387,331
Total assets		4,847,583			4,820,951			4,852,311			4,786,485			4,826,731			4,868,745
Noninterest-bearing deposits		755,594			701,760			705,580			671,796			628,929			594,651
Total deposits		3,636,240			3,597,271			3,641,845			3,699,553			3,722,613			3,772,092
Securities sold under agreements to repurchase		130,711			129,892			141,818			145,050			175,705			185,471
FHLB advances		232,606			238,578			209,619			111,699			114,072			113,705
Subordinated debt and other borrowings		101,872			97,476			97,476			97,476			97,476			97,476
Total stockholders’ equity		718,841			719,788			729,622			708,973			691,020			682,638

Statement of operations data, for the three months ended:
Interest income	$	45,953			45,824			46,446			46,888			47,789			47,224
Interest expense		5,768			6,320			7,153			8,532			9,994			11,204

Net interest income		40,185			39,504			39,293			38,356			37,795			36,020
Provision for loan losses		634			1,034			5,439			3,632			6,587			6,139

Net interest income after provision for loan losses		39,551			38,470			33,854			34,724			31,208			29,881
Noninterest income		9,910			9,949			9,727			10,080			9,809			8,324
Noninterest expense		33,916			35,820			34,374			35,676			34,357			34,701

Income before taxes		15,545			12,599			9,207			9,128			6,660			3,504
Income tax expense (benefit)		5,106			4,234			1,447			(16,973	)		288			—
Preferred dividends and accretion		2,655			1,159			2,079			1,564			1,529			1,492

Net income available to common stockholders	$	7,785			7,206			5,681			24,537			4,843			2,011


Profitability and other ratios:
Return on avg. assets (1)		0.65	%		0.60	%		0.46	%		2.06	%		0.40	%		0.17	%
Return on avg. equity (1)		4.36	%		4.03	%		3.09	%		13.88	%		2.81	%		1.19	%
Net interest margin (1) (2)		3.76	%		3.74	%		3.65	%		3.60	%		3.55	%		3.40	%
Noninterest income to total revenue (3)		19.78	%		20.12	%		19.84	%		20.81	%		20.61	%		18.77	%
Noninterest income to avg. assets (1)		0.82	%		0.83	%		0.80	%		0.84	%		0.82	%		0.69	%
Noninterest exp. to avg. assets (1)		2.81	%		2.99	%		2.81	%		2.99	%		2.86	%		2.89	%
Noninterest expense (excluding ORE) to avg. assets (1)		2.56	%		2.60	%		2.50	%		2.57	%		2.54	%		2.51	%
Efficiency ratio (4)		67.70	%		72.43	%		70.12	%		73.66	%		72.17	%		78.25	%
Avg. loans to average deposits		93.58	%		91.18	%		89.57	%		86.69	%		86.27	%		84.60	%
Securities to total assets		16.03	%		17.53	%		18.45	%		19.36	%		19.16	%		20.41	%
Average interest-earning assets to average interest-bearing liabilities		130.48	%		128.43	%		128.42	%		127.40	%		124.90	%		122.75	%

This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED


(dollars in thousands)	Three months ended June 30, 2012							Three months ended June 30, 2011
	Average Balances		*Interest*		*Rates/Yields*			Average Balances		*Interest*		*Rates/Yields*
*Interest-earning assets*:
Loans⁽¹⁾	$	3,402,671	$	39,288		4.65	%	$	3,211,591	$	38,905		4.87	%
Securities
Taxable		635,678		4,454		2.82	%		779,882		6,479		3.33	%
Tax-exempt⁽²⁾		183,117		1,648		4.83	%		192,868		1,838		5.04	%
Federal funds sold and other		144,249		564		1.70	%		163,211		567		1.50	%

Total interest-earning assets		4,365,715	$	45,954		4.29	%		4,347,552	$	47,789		4.47	%

*Nonearning assets*
Intangible assets		250,974							253,803
Other nonearning assets		230,894							225,376

Total assets	$	4,847,583						$	4,826,731


*Interest-bearing liabilities:*
Interest-bearing deposits:
Interest checking	$	685,353	$	781		0.46	%	$	592,374	$	989		0.67	%
Savings and money market		1,540,755		1,967		0.51	%		1,597,216		3,789		0.95	%
Time		654,538		1,551		0.95	%		904,094		3,529		1.57	%

Total interest-bearing deposits		2,880,646		4,299		0.60	%		3,093,684		8,307		1.08	%
Securities sold under agreements to repurchase		130,711		115		0.36	%		175,705		345		0.79	%
Federal Home Loan Bank advances		232,606		616		1.07	%		114,072		679		2.42	%
Subordinated debt and other borrowings		101,872		738		2.91	%		97,476		663		2.73	%

Total interest-bearing liabilities		3,345,835		5,768		1.27	%		3,480,937		9,994		1.15	%
*Noninterest-bearing deposits*		755,594		—		—			628,929		—		—

Total deposits and interest-bearing liabilities		4,101,429	$	5,768		0.57	%		4,109,866	$	9,994		0.98	%

Other liabilities		27,313							25,845
*Stockholders’ equity*		718,841							691,020

Total liabilities and stockholders’ equity	$	4,847,583						$	4,826,731

*Net interest income*			$	40,185						$	37,795


Net interest spread ⁽³⁾						3.60	%						3.32	%

Net interest margin⁽⁴⁾						3.76	%						3.55	%

(1)

Average balances of nonperforming loans are included in the above amounts.

(2)

Yields computed on tax-exempt instruments on a tax equivalent basis.

(3)

Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the quarter ended June 30, 2012 would have been 3.73% compared to a net interest spread of 3.49% for the quarter ended June 30, 2011.

(4)

Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.

This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED


(dollars in thousands)	Six months ended June 30, 2012							Six months ended June 30, 2011
	Average Balances		*Interest*		*Rates/Yields*			Average Balances		*Interest*		*Rates/Yields*
*Interest-earning assets:*
Loans⁽¹⁾	$	3,341,350	$	77,927		4.70	%	$	3,201,381	$	77,258		4.87	%
Securities
Taxable		662,162		9,383		2.85	%		795,749		12,840		3.25	%
Tax-exempt⁽²⁾		184,990		3,351		4.86	%		195,694		3,774		5.13	%
Federal funds sold and other		152,840		1,117		1.59	%		174,498		1,141		1.42	%

Total interest-earning assets		4,341,342	$	91,778		4.31	%		4,367,322	$	95,013		4.45	%

*Nonearning assets*
Intangible assets		251,321							254,164
Other nonearning assets		241,558							226,131

Total assets	$	4,834,221						$	4,847,617


*Interest-bearing liabilities:*
Interest-bearing deposits:
Interest checking	$	675,111	$	1,606		0.48	%	$	592,365	$	1,944		0.66	%
Savings and money market		1,541,063		4,109		0.54	%		1,588,320		7,850		1.00	%
Time		671,810		3,412		1.02	%		954,646		7,937		1.68	%

Total interest-bearing deposits		2,887,984		9,127		0.64	%		3,135,331		17,731		1.14	%
Securities sold under agreements to repurchase		130,301		271					180,561		727		0.81	%
Federal Home Loan Bank advances		235,591		1,226		1.05	%		113,889		1,420		2.52	%
Subordinated debt and other borrowings		99,674		1,465		2.96	%		97,476		1,319		2.73	%

Total interest-bearing liabilities		3,353,550		12,089		1.28	%		3,527,257		21,197		1.21	%
*Noninterest-bearing deposits*		728,724		—		—			611,885		—		—

Total deposits and interest-bearing liabilities		4,082,274	$	12,089		0.60	%		4,139,142	$	21,197		1.03	%

Other liabilities		32,633							21,620
*Stockholders’ equity*		719,314							686,855

Total liabilities and stockholders’ equity	$	4,834,221						$	4,847,617

*Net interest income*			$	79,689						$	73,816


Net interest spread ⁽³⁾						3.59	%						3.24	%

Net interest margin⁽⁴⁾						3.75	%						3.47	%

(1)

Average balances of nonperforming loans are included in the above amounts.

(2)

Yields computed on tax-exempt instruments on a tax equivalent basis.

(3)

Yields realized on interest-earning assets less the rates paid on interest-bearing liabilities.The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the six months ended June 30, 2012 would have been 3.72% compared to a net interest spread of 3.42% for the six months ended June 30, 2011.

(4)

Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.

This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED


*(dollars in thousands)*	June 2012			March 2012			December 2011			September 2011			June 2011			March 2011

Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans	$	40,822			42,852			47,855			54,640			59,727			76,368
Other real estate (ORE)		25,450			34,019			39,714			45,500			52,395			56,000

Total nonperforming assets	$	66,272			76,871			87,569			100,140			112,122			132,368

Past due loans over 90 days and still accruing interest	$	—			821			858			1,911			481			1,151
Troubled debt restructurings (5)	$	26,626			22,832			23,416			18,187			12,990			15,285

Net loan charge-offs	$	2,399			3,630			6,335			5,732			8,605			9,726
Allowance for loan losses to nonaccrual loans		170.5	%		166.6	%		154.6	%		137.0	%		128.9	%		103.4	%
As a percentage of total loans:
Past due accruing loans over 30 days		0.21	%		0.34	%		0.36	%		0.28	%		0.40	%		0.36	%
Potential problem loans (6)		3.21	%		3.51	%		3.96	%		4.04	%		4.62	%		5.31	%
Allowance for loan losses		2.02	%		2.14	%		2.25	%		2.31	%		2.40	%		2.46	%
Nonperforming assets to total loans and ORE		1.91	%		2.28	%		2.66	%		3.05	%		3.44	%		4.04	%
Nonperforming assets to total assets		1.34	%		1.60	%		1.80	%		2.06	%		2.32	%		2.75	%
Annualized net loan charge-offs year-to-date to avg. loans (7)		0.36	%		0.45	%		0.94	%		1.00	%		1.14	%		1.22	%
Avg. commercial loan internal risk ratings (6)		4.6			4.7			4.6			4.7			4.8			4.8

Interest rates and yields:
Loans		4.65	%		4.74	%		4.74	%		4.78	%		4.87	%		4.88	%
Securities		3.27	%		3.31	%		3.26	%		3.54	%		3.67	%		3.58	%
Total earning assets		4.29	%		4.33	%		4.30	%		4.38	%		4.47	%		4.43	%
Total deposits, including non-interest bearing		0.47	%		0.63	%		0.62	%		0.77	%		0.90	%		1.01	%
Securities sold under agreements to repurchase		0.36	%		0.48	%		0.50	%		0.56	%		0.79	%		0.83	%
FHLB advances and other borrowings		1.07	%		1.03	%		1.07	%		1.89	%		2.42	%		2.65	%
Subordinated debt		2.91	%		3.00	%		2.80	%		2.68	%		2.73	%		2.73	%
Total deposits and interest-bearing liabilities		0.57	%		0.63	%		0.69	%		0.84	%		0.98	%		1.09	%

Capital ratios (8):
Stockholders’ equity to total assets		13.4	%		15.0	%		14.6	%		14.9	%		14.5	%		14.1	%
Leverage		10.3	%		11.7	%		11.4	%		11.9	%		11.2	%		11.0	%
Tier one risk-based		12.0	%		14.0	%		13.8	%		14.4	%		13.9	%		13.6	%
Total risk-based		13.5	%		15.4	%		15.3	%		15.9	%		15.5	%		15.2	%
Tier one common equity to risk weighted assets		10.0	%		10.1	%		9.9	%		9.8	%		9.2	%		9.0	%
Tangible common equity to tangible assets		8.7	%		8.8	%		8.4	%		8.2	%		7.7	%		7.4	%
Tangible common equity to risk weighted assets		10.3	%		10.4	%		10.3	%		10.3	%		9.6	%		9.1	%

This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED


*(dollars in thousands, except per share data)*	June 2012			March 2012			December 2011			September 2011			June 2011			March 2011

Per share data:
Earnings – basic	$	0.23			0.21			0.17			0.74			0.14			0.06
Earnings – diluted	$	0.23			0.21			0.17			0.72			0.14			0.06
Book value per common share at quarter end (9)	$	18.92			18.66			18.56			18.34			17.71			17.19
Tangible common equity per common share	$	11.79			11.50			11.33			11.08			10.38			9.85

Weighted avg. common shares – basic		33,885,779			33,811,871			33,485,253			33,372,980			33,454,229			33,366,053
Weighted avg. common shares – diluted		34,470,794			34,423,898			34,127,209			33,993,914			34,095,636			34,013,810
Common shares outstanding		34,675,913			34,616,013			34,354,960			34,306,927			34,136,163			34,132,256

Investor information:
Closing sales price	$	19.51			18.35			16.15			10.94			15.56			16.54
High closing sales price during quarter	$	19.51			18.44			16.65			16.21			16.82			16.60
Low closing sales price during quarter	$	16.64			15.25			10.28			10.52			14.15			13.55

Other information:
Gains on mortgage loans sold:
Mortgage loan sales:
Gross loans sold	$	105,365			119,023			134,794			104,716			68,506			70,981
Gross fees (10)	$	2,511			2,608			2,766			2,166			1,380			1,129
Gross fees as a percentage of mortgage loans originated		2.38	%		2.19	%		2.05	%		2.07	%		2.01	%		1.59	%
Gains (losses) on sales of investment securities, net of OTTI	$	99			114			133			377			610			(159	)
Brokerage account assets, at quarter-end (11)	$	1,191,259			1,176,180			1,061,249			987,908			1,101,000			1,110,000
Trust account assets, at quarter-end	$	803,904			789,614			632,608			607,668			663,304			730,000
Floating rate loans as a percentage of total loans (12)		31.3	%		32.2	%		32.9	%		33.3	%		34.7	%		35.4	%
Balance of commercial loan participations sold to other banks and serviced by Pinnacle, at quarter end	$	54,598			52,155			62,209			57,045			50,797			60,784
Core deposits (13)	$	3,523,657			3,405,915			3,441,547			3,388,692			3,437,595			3,382,230
Core deposits to total funding (13)		83.3	%		84.3	%		83.7	%		82.6	%		84.0	%		82.4	%
Risk-weighted assets	$	3,961,679			3,826,678			3,780,412			3,751,479			3,693,390			3,711,179
Total assets per full-time equivalent employee	$	6,724			6,442			6,511			6,580			6,538			6,373
Annualized revenues per full-time equivalent employee	$	273.9			266.8			263.2			262.5			261.3			237.7
Number of employees (full-time equivalent)		733.5			743.5			747.0			740.0			739.0			756.5
Associate retention rate (14)		94.0	%		93.7	%		92.0	%		92.6	%		89.6	%		92.4	%

Selected economic information (in thousands) (15):
Nashville MSA nonfarm employment		764.7			747.8			757.3			735.5			738.3			735.5
Knoxville MSA nonfarm employment		338.9			330.9			331.7			327.7			325.1			325.2
Nashville MSA unemployment		6.8	%		7.2	%		7.2	%		8.5	%		8.9	%		8.3	%
Knoxville MSA unemployment		6.4	%		6.7	%		6.6	%		7.9	%		8.3	%		7.5	%
Nashville residential median home price	$	175.5			168.5			168.5			171.6			167.1			166.8
Nashville inventory of residential homes for sale (17)		11.8			11.8			10.6			13.4			14.0			13.0

This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED


*(dollars in thousands, except per share data)*	June 2012			March 2012			December 2011			September 2011			June 2011			March 2011
Reconciliation of certain financial measures:
Tangible assets:
Total assets	$	4,931,878		$	4,789,583		$	4,863,951		$	4,868,905		$	4,831,333		$	4,820,991
Less: Goodwill		(244,065	)		(244,072	)		(244,076	)		(244,082	)		(244,083	)		(244,083	)
Core deposit and other intangibles		(6,470	)		(7,156	)		(7,842	)		(8,558	)		(9,273	)		(9,989	)

Net tangible assets	$	4,681,343		$	4,538,355		$	4,612,033		$	4,616,265		$	4,577,976		$	4,566,919


Tangible equity:
Total stockholders’ equity	$	659,287		$	718,665		$	710,145		$	724,374		$	699,228		$	681,226
Less: Goodwill		(244,065	)		(244,072	)		(244,076	)		(244,082	)		(244,083	)		(244,083	)
Core deposit and other intangibles		(6,470	)		(7,156	)		(7,842	)		(8,558	)		(9,273	)		(9,989	)

Net tangible equity		408,752			467,437			458,226			471,734			445,872			427,154
Less: Preferred stock		—			(69,355	)		(69,097	)		(91,772	)		(91,422	)		(91,094	)

Net tangible common equity	$	408,752		$	398,082		$	389,130		$	379,962		$	354,449		$	336,060


Ratio of tangible common equity to tangible assets		8.73	%		8.77	%		8.44	%		8.23	%		7.74	%		7.36	%


	For the three months ended
	June 2012			March 2012			December 2011			September 2011			June 2011			March 2011

Net interest income	$	40,185		$	39,504		$	39,293		$	38,356		$	37,795		$	36,020

Noninterest income		9,910			9,949			9,727			10,080			9,809			8,324
Less: Net gains (losses) on sale of investment securities		99			114			133			377			610			(159	)

Noninterest income excluding the impact of other net gains (losses) on sale of investment securities	$	9,811		$	9,835		$	9,594		$	9,703		$	9,199		$	8,483


Noninterest expense		33,915			35,820			34,374			35,676			34,357			34,701
Other real estate owned expense		3,104			4,676			4,193			5,079			3,826			4,334

Noninterest expense excluding the impact of other real estate owned expense	$	30,811		$	31,144		$	30,181		$	30,597		$	30,532		$	30,367


Adjusted pre-tax pre-provision income ⁽¹⁶⁾	$	19,185		$	18,195		$	18,706		$	17,462		$	16,463		$	14,136


Efficiency Ratio⁽⁴⁾		67.7	%		72.4	%		70.1	%		73.7	%		72.2	%		78.3	%

Efficiency Ratio excluding the impact of other real estate owned expense ⁽⁴⁾		61.5	%		63.0	%		61.6	%		63.2	%		64.1	%		68.5	%

Noninterest expense	$	33,915		$	35,820		$	34,374		$	35,676		$	34,357		$	34,701
Other real estate owned expense		3,104			4,676			4,193			5,079			3,826			4,334

Noninterest expense excluding the impact of other real estate owned expense	$	30,811		$	31,144		$	30,181		$	30,597		$	30,532		$	30,367


Total average assets		4,847,583			4,820,951			4,852,311			4,786,485			4,826,731			4,868,745


Noninterest expense (excluding ORE) to avg. assets ⁽¹⁾		2.56	%		2.60	%		2.50	%		2.57	%		2.54	%		2.51	%

This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

1.	Ratios are presented on an annualized basis.

2.	Net interest margin is the result of net interest income on a tax equivalent basis divided by average interest earning assets.

3.	Total revenue is equal to the sum of net interest income and noninterest income.

4.	Efficiency ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.

Troubled debt restructurings include loans where the company, as a result of the borrower’s financial difficulties, has granted a credit concession to the borrower (i.e., interest only payments for a significant period of time, extending the maturity of the loan, etc.). All of these loans continue to accrue interest at the contractual rate.

Average risk ratings are based on an internal loan review system which assigns a numeric value of 1 to 10 to all loans to commercial entities based on their underlying risk characteristics as of the end of each quarter. A “1” risk rating is assigned to credits that exhibit Excellent risk characteristics, “2” exhibit Very Good risk characteristics, “3” Good, “4” Satisfactory, “5” Acceptable or Average, “6” Watch List, “7” Criticized, “8” Classified or Substandard, “9” Doubtful and “10” Loss (which are charged-off immediately). Additionally, loans rated “8” or worse that are not nonperforming or restructured loans are considered potential problem loans. Generally, consumer loans are not subjected to internal risk ratings.

7.	Annualized net loan charge-offs to average loans ratios are computed by annualizing year-to-date net loan charge-offs and dividing the result by average loans for the year-to-date period.

8.	Capital ratios are for Pinnacle Financial Partners, Inc. and are defined as follows:

Equity to total assets – End of period total stockholders’ equity as a percentage of end of period assets.

Leverage – Tier one capital (pursuant to risk-based capital guidelines) as a percentage of adjusted average assets.

Tier one risk-based – Tier one capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.

Total risk-based – Total capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.

9.	Book value per share computed by dividing total stockholders’ equity less preferred stock and common stock warrants by common shares outstanding.

10.	Amounts are included in the statement of operations in “Gains on loans sold, net”, net of commissions paid on such amounts.

11.	At fair value, based on information obtained from Pinnacle’s third party broker/dealer for non-FDIC insured financial products and services.

12.	Floating rate loans are those loans that are eligible for repricing on a daily basis subject to changes in Pinnacle’s prime lending rate or other factors.

13.

Core deposits include all transaction deposit accounts, money market and savings accounts and all certificates of deposit issued in a denomination of less than $250,000. The ratio noted above represents total core deposits divided by total funding, which includes total deposits, FHLB advances, securities sold under agreements to repurchase, subordinated indebtedness and all other interest-bearing liabilities.

14.	Associate retention rate is computed by dividing the number of associates employed at quarter-end less the number of associates that have resigned in the last 12 months by the number of associates employed at quarter-end.

15.

Employment and unemployment data is from the US Dept. of Labor Bureau of Labor Statistics. Labor force data is not seasonally adjusted. The most recent quarter data presented is as of the most recent month that data is available as of the release date. The Nashville home data is from the Greater Nashville Association of Realtors.

16.	Adjusted pre-tax, pre-provision income excludes the impact of net gains (losses) on investment security sales as well as other real estate owned expenses.

17.	Represents homes currently listed with MLS in the Nashville MSA.

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PINNACLE FINANCIAL PARTNERS INC Reports

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