PINNACLE FINANCIAL PARTNERS INC - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - FORM 8-K - PINNACLE FINANCIAL PARTNERS INC	d425432d8k.htm

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 $0.33,

A LINKED QUARTER INCREASE OF 43.5%, FOR THE THIRD QUARTER OF 2012

NASHVILLE, Tenn., Oct. 16, 2012 – Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today reported that its net income per diluted common share available to common stockholders was $0.33 for the quarter ended Sept. 30, 2012, compared to net income per diluted common share available to common stockholders of $0.72 for the quarter ended Sept. 30, 2011. Net income per diluted common share available to common stockholders was $0.76 for the nine months ended Sept. 30, 2012, compared to net income per diluted common share available to common stockholders of $0.92 for the nine months ended Sept. 30, 2011.

Net income per diluted common share for the quarter and year-to-date periods ended Sept. 30, 2011, included an income tax benefit of $22.5 million, or $0.51 per diluted common share, as a result of last year’s release of the valuation allowance for deferred tax assets. Financial results for the nine-month period ended Sept. 30, 2012, also include accretion of $1.7 million for the remaining preferred stock discount associated with the TARP preferred stock redemption. Excluding the tax benefit from the release of the valuation allowance and the impact of the accelerated accretion of the preferred stock discount, net income per diluted common share available to common stockholders for the three- and nine-month periods ended Sept. 30, 2012, was approximately 57 percent and 98 percent higher than the same periods in 2011.

“We continued the meaningful expansion of the core earnings capacity of the firm during the third quarter, increasing loans at a linked-quarter annualized growth rate of 9.4 percent and increasing our net interest margin for the eighth consecutive quarter,” said M. Terry Turner, Pinnacle’s president and chief executive officer. “Additionally, we reduced nonperforming assets by 11.9 percent over the prior quarter as we continue our balance sheet rehabilitation.”

Building the Core Earnings Capacity of the Firm

•

Loans at Sept. 30, 2012, were $3.53 billion, an increase of $80.5 million from June 30, 2012. Commercial and industrial loans plus owner-occupied commercial real estate loans were $1.88 billion at Sept. 30, 2012, an increase of $53.0 million from June 30, 2012, an annualized growth rate of 11.3 percent and the ninth consecutive quarter of net growth.

•

Since expanding to Knoxville in the summer of 2007, Pinnacle has continued its strong growth in that market. The Knoxville footprint reached $594.2 million in loans at the end of the third quarter of 2012, up from $577.9 million at June 30, 2012, and an increase of 11.8 percent from $531.2 million at Sept. 30, 2011.

•

Average balances of noninterest bearing deposit accounts were $799.5 million in the third quarter of 2012, up 5.8 percent over second quarter of 2012 and 19.0 percent over the same quarter last year.

•

Revenue for the quarter ended Sept. 30, 2012, amounted to $51.4 million, compared to $48.4 million for the same quarter of last year. Revenue increased 2.5 percent over the quarter ended June 30, 2012, or 10.1 percent on an annualized basis.

•

Net interest margin increased to 3.78 percent for the quarter ended Sept. 30, 2012, up from 3.76 percent last quarter and from 3.60 percent for the quarter ended Sept. 30, 2011.

•

Pre-tax pre-provision income was $17.8 million for the quarter ended Sept. 30, 2012, up 9.9 percent over last quarter and 39.4 percent over the same quarter last year.

“The continued growth in our loan volumes is the foundation for our ongoing revenue and earnings growth,” Turner said. “Our financial advisors have done a remarkable job in positioning Pinnacle as the ‘go to’ bank in Nashville and Knoxville for small- and medium-sized businesses, their owners and their employees. Our recent success in hiring a group of highly experienced bankers is already impacting our loan growth. Consequently, we expect them to accelerate our growth over the next two to three years.”

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Aggressively Dealing with Credit Issues

•

The allowance for loan losses represented 1.96 percent of total loans at Sept. 30, 2012, compared to 2.02 percent at June 30, 2012, and 2.31 percent at Sept. 30, 2011.

•

Net charge-offs were $1.9 million for the quarter ended Sept. 30, 2012, compared to $5.7 million for the quarter ended Sept. 30, 2011, and $2.4 million for the second quarter of 2012. Annualized net charge-offs for the three and nine months ended Sept. 30, 2012, were 0.22 percent and 0.31 percent, respectively.

•

Provision for loan losses expense decreased from $3.6 million for the third quarter of 2011 to $1.4 million for the third quarter of 2012. The results reflect substantial improvement in the credit quality of the loan portfolio compared to the same period in 2011 and a meaningful reduction in net charge-offs.

•

Nonperforming assets declined by $7.9 million from June 30, 2012, a linked-quarter reduction of 11.9 percent and the ninth consecutive quarterly reduction.

•

Nonperforming assets were 1.65 percent of total loans plus other real estate at Sept. 30, 2012, compared to 1.91 percent at June 30, 2012, and 3.05 percent at Sept. 30, 2011.

•

Nonperforming loans declined by $4.3 million during the third quarter of 2012, a linked-quarter reduction of 10.4 percent and the 10^th consecutive quarterly reduction. Nonperforming loans are down 33.1 percent from Sept. 30, 2011. Nonperforming loan inflows were $4.6 million during the third quarter of 2012, a linked-quarter decrease of 61.7 percent. Nonperforming loan inflows were also down 73.9 percent from the third quarter a year ago.

•

The ratio of the allowance for loan losses to nonperforming loans increased to 188.9 percent at Sept. 30, 2012, from 170.5 percent at June 30, 2012, and 137.0 percent at Sept. 30, 2011.

•

Other real estate declined by 14.3 percent, or $3.6 million, during the third quarter of 2012, compared to the second quarter of 2012, inclusive of $1.4 million in property foreclosures.

•

Troubled debt restructurings decreased by $2.5 million between June 30, 2012, and Sept. 30, 2012.

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•

Potential problem loans, which are classified loans that continue to accrue interest, declined by $9.9 million from June 30, 2012, a linked-quarter reduction of 8.9 percent. Potential problem loans are down from $131.0 million at Sept. 30, 2011, to $100.7 million at Sept. 30, 2012, a decrease of 23.2 percent. Potential problem loans are down by 68.3 percent from their peak in June 2010.

“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 0.22 percent, minimal problem loan inflows and a nonperforming assets to total loans plus OREO ratio of 1.65 percent, we continued our forward progress toward the completion of that rehabilitation during the third quarter.”

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


*(in thousands)*	Balances June 30, 2012		Payments, Sales and Reductions			Foreclosures			Inflows		Balances Sept. 30, 2012
Troubled debt restructurings:
Commercial real estate – mortgage	$	19,040		(3,162	)		—			753	$	16,631
Consumer real estate – mortgage		6,045		(14	)		—			—		6,031
Construction and land development		434		(62	)		—			—		372
Commercial and industrial		983		(48	)		—			—		935
Consumer and other		124		(3	)		—			—		121

Totals		26,626		(3,289	)		—			753		24,090

Nonperforming loans:
Commercial real estate – mortgage		15,236		(1,260	)		(725	)		1,732		14,983
Consumer real estate – mortgage		13,644		(4,272	)		(553	)		1,729		10,548
Construction and land development		6,039		(200	)		(18	)		36		5,857
Commercial and industrial		5,443		(1,483	)		—			936		4,896
Consumer and other		459		(228	)		(90	)		146		287

Totals		40,821		(7,443	)		(1,386	)		4,579		36,571

Other real estate:
Residential construction and development		8,829		(1,167	)		18			—		7,680
Commercial construction and development		11,850		(1,919	)		—			—		9,931
Other		4,771		(1,933	)		1,368			—		4,206

Totals		25,450		(5,019	)		1,386			—		21,817

Total nonperforming assets and troubled debt restructurings	$	92,897		(15,751	)		—			5,332	$	82,478

OTHER THIRD 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 $3.08 billion for the third quarter of 2012 from $2.98 billion for the second quarter of 2012. That represents a growth rate of 3.4

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percent on a linked-quarter basis and 13.4 percent annualized. In comparison to the prior year’s third quarter, average balances for noninterest-bearing demand, interest checking, savings and money market accounts increased 30.8 percent, while average balances for higher-cost time deposits decreased 25.4 percent.

•

Average balances for noninterest-bearing demand and interest checking made up 39.7 percent of average total deposits at Sept. 30, 2012, up from 33.4 percent for the quarter ended Sept. 30, 2011.

•

As a result of growing loan demand, the firm has steadily reduced the size of its investment portfolio by $158.0 million since the beginning of 2012, primarily through bond maturities, calls and mortgage-backed securities principal pay-downs.

•

At Sept. 30, 2012, Pinnacle’s ratio of tangible common stockholders’ equity to tangible assets was 9.2 percent, compared to 8.7 percent at June 30, 2012, and 8.2 percent at Sept. 30, 2011.

•

At Sept. 30, 2012, Pinnacle’s total risk-based capital ratio was 13.4 percent, compared to 13.5 percent at June 30, 2012, and 15.9 percent at Sept. 30, 2011.

“We continue to be pleased with the loan growth that occurred during the third quarter and anticipate continued loan growth in the fourth quarter given our current business development pipelines,” said Harold R. Carpenter, Pinnacle’s chief financial officer. “We are also pleased with the double-digit growth in average noninterest bearing deposit accounts, which now make up approximately 21.6 percent of our average deposits.”

•

Revenue growth

•

Net interest income for the quarter ended Sept. 30, 2012, was $40.9 million, compared to $40.2 million in the second quarter of 2012 and $38.4 million for the third quarter of 2011. Net interest income for the third quarter of 2012 was at its highest quarterly level since the firm’s founding in 2000.

•

Noninterest income for the quarter ended Sept. 30, 2012, was $10.4 million, compared to $9.9 million for the second quarter of 2012 and $10.1 million for the same quarter last year. Excluding the impact of net securities gains, noninterest income was up 6.8 percent on a linked-quarter basis.

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•

Gains on mortgage loans sold, net of commissions, were $2.0 million during the third quarter of 2012, compared to $1.5 million during the second quarter of 2012 and $1.3 million during the third quarter of 2011.

“Our margin expansion in recent quarters has been largely attributable to reductions in our cost of funds,” Carpenter said. “We have additional opportunities to reduce our funding costs, but the pace of improvement should decrease in future quarters. Declining loan yields are another headwind facing our industry, so we were pleased our third quarter results experienced only a slight decrease on yields.”

•

Noninterest and income tax expense

•

Noninterest expense for the quarter ended Sept. 30, 2012, was $33.6 million, compared to $35.7 million in the third quarter of 2011 and $33.9 million in the second quarter of 2012.

•

Salaries and employee benefits costs increased by 1.2 percent from the second quarter of 2012 and 2.4 percent from the same period last year.

•

Included in noninterest expense for the third quarter of 2012 was $2.4 million in other real estate expenses, compared to $5.1 million in the third quarter of 2011 and $3.1 million in the second quarter of 2012.

•

Income tax expense was $5.0 million for the third quarter of 2012, compared to a benefit of $17.0 million in the third quarter of 2011 and expense of $5.1 million in the second quarter of 2012. The income tax benefit in the third quarter of 2011 was the result of the release of the valuation allowance against our deferred tax assets.

Included in the other real estate expense for the quarter was $1.0 million of additional write downs of existing OREO balances based on updated appraisals. The firm also recorded $933,000 in net losses related to the disposition of $7.4 million of other real estate. Noninterest expense excluding the impact of OREO expenses was approximately $31.2 million in the third quarter of 2012, compared to $30.8 million in the second quarter of 2012 and $30.6 million in the third quarter of 2011.

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Carpenter said that management continues to be pleased with the progress toward increasing the operating leverage of the firm, noting that the efficiency ratio had improved to 65.4 percent, or 60.7 percent, excluding the impact of other real estate expenses. He stated the quarterly expense run rate for the fourth quarter of 2012 should remain consistent with that of the third quarter.

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. (CDT) on Oct. 17, 2012, to discuss third 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 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.

The firm began operations in a single downtown Nashville location in Oct. 2000 and has since grown to over $4.8 billion in assets at Sept. 30, 2012. At Sept. 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

Page 7

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


	September 30, 2012			December 31, 2011
*ASSETS*
Cash and noninterest-bearing due from banks	$	70,730,026		$	63,015,997
Interest-bearing due from banks		76,678,278			108,422,470
Federal funds sold and other		730,583			724,573

Cash and cash equivalents		148,138,887			172,163,040

Securities available-for-sale, at fair value		738,705,182			894,962,246
Securities held-to-maturity (fair value of $586,813 and $2,369,118 and at September 30, 2012 and December 31, 2011, respectively)		574,843			2,329,917
Mortgage loans held-for-sale		39,245,780			35,363,038

Loans		3,525,164,123			3,291,350,857
Less allowance for loan losses		(69,092,075	)		(73,974,675	)

Loans, net		3,456,072,048			3,217,376,182
Premises and equipment, net		74,536,714			77,127,361
Other investments		25,871,346			44,653,840
Accrued interest receivable		15,774,555			15,243,366
Goodwill		244,044,967			244,076,492
Core deposit and other intangible assets		5,786,703			7,842,267
Other real estate owned		21,816,528			39,714,415
Other assets		100,818,517			113,098,540

Total assets	$	4,871,386,070		$	4,863,950,704


*LIABILITIES AND STOCKHOLDERS’ EQUITY*
Deposits:
Noninterest-bearing	$	844,480,484		$	717,378,933
Interest-bearing		673,083,495			637,203,420
Savings and money market accounts		1,606,698,275			1,585,260,139
Time		595,024,885			714,496,974

Total deposits		3,719,287,139			3,654,339,466
Securities sold under agreements to repurchase		134,786,974			131,591,412
Federal Home Loan Bank advances		190,887,031			226,068,796
Subordinated debt and other borrowings		106,783,292			97,476,000
Accrued interest payable		1,570,473			2,233,330
Other liabilities		45,246,690			42,097,132

Total liabilities		4,198,561,599			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; 34,691,659 shares and 34,354,960 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively		34,691,659			34,354,960
Common stock warrants		—			3,348,402
Additional paid-in capital		543,042,267			536,227,537
Retained earnings		75,656,530			49,783,584
Accumulated other comprehensive income, net of taxes		19,434,015			17,333,257

Stockholders’ equity		672,824,471			710,144,568

Total liabilities and stockholders’ equity	$	4,871,386,070		$	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 September 30,						Nine Months Ended September 30,
	2012			2011			2012		2011
Interest income:
Loans, including fees	$	40,405,396		$	38,571,893		$	118,331,163	$	115,830,529
Securities
Taxable		3,973,717			5,952,599			13,356,957		18,792,778
Tax-exempt		1,621,541			1,819,642			4,972,539		5,593,341
Federal funds sold and other		440,254			543,496			1,557,831		1,684,376

Total interest income		46,440,908			46,887,630			138,218,490		141,901,024


Interest expense:
Deposits		3,986,328			7,138,053			13,112,653		24,869,045
Securities sold under agreements to repurchase		99,379			204,107			370,405		931,120
Federal Home Loan Bank advances and other borrowings		1,422,845			1,189,742			4,114,008		3,929,119

Total interest expense		5,508,552			8,531,902			17,597,066		29,729,284

Net interest income		40,932,356			38,355,728			120,621,424		112,171,740
Provision for loan losses		1,412,575			3,632,440			3,080,892		16,358,767

Net interest income after provision for loan losses		39,519,781			34,723,288			117,540,532		95,812,973

Noninterest income:
Service charges on deposit accounts		2,531,707			2,361,803			7,295,045		6,953,466
Investment services		1,676,601			1,698,886			4,934,262		4,844,398
Insurance sales commissions		987,222			1,001,716			3,415,945		3,055,194
Gain on mortgage loans sold, net		1,978,935			1,295,278			4,930,190		2,693,913
(Loss) gain on sale of investment securities, net		(49,784	)		376,509			162,733		827,708
Trust fees		767,042			753,551			2,332,716		2,253,474
Other noninterest income		2,537,863			2,592,170			7,217,879		7,585,231

Total noninterest income		10,429,586			10,079,913			30,288,770		28,213,384


Noninterest expense:
Salaries and employee benefits		19,470,535			19,015,217			58,500,279		55,462,370
Equipment and occupancy		5,156,131			4,942,917			15,217,897		15,009,641
Other real estate expense		2,399,232			5,079,127			10,179,572		13,238,853
Marketing and other business development		834,661			751,094			2,359,760		2,271,267
Postage and supplies		637,906			509,279			1,816,925		1,544,253
Amortization of intangibles		683,430			715,514			2,055,564		2,147,323
Other noninterest expense		4,396,465			4,662,073			13,183,603		15,059,685

Total noninterest expense		33,578,360			35,675,221			103,313,600		104,733,392

Income before income taxes		16,371,007			9,127,980			44,515,702		19,292,965
Income tax expense (benefit)		5,021,882			(16,973,019	)		14,361,979		(16,684,605	)

Net income		11,349,125			26,100,999			30,153,723		35,977,570
Preferred dividends		—			1,213,889			1,660,868		3,602,083
Accretion on preferred stock discount		—			349,817			2,153,172		983,448

Net income available to common stockholders	$	11,349,125		$	24,537,293		$	26,339,683	$	31,392,039


*Per share information:*
Basic net income per common share available to common stockholders	$	0.33		$	0.74		$	0.78	$	0.94

Diluted net income per common share available to common stockholders	$	0.33		$	0.72		$	0.76	$	0.92

Weighted average shares outstanding:
Basic		33,939,248			33,372,980			33,879,186		33,398,029
Diluted		34,523,076			33,993,914			34,473,895		34,037,739

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)*	September 2012			June 2012			March 2012			December 2011			September 2011			June 2011
Balance sheet data, at quarter end:
Commercial real estate - mortgage loans	$	1,167,136			1,167,068			1,123,690			1,110,962			1,087,333			1,091,283
Consumer real estate - mortgage loans		680,890			687,002			688,817			695,745			711,994			708,280
Construction and land development loans		312,788			289,061			281,624			274,248			278,660			282,064
Commercial and industrial loans		1,279,050			1,227,275			1,180,578			1,145,735			1,095,037			1,058,263
Consumer and other		85,300			74,277			63,160			64,661			68,125			67,214
Total loans		3,525,164			3,444,683			3,337,869			3,291,351			3,241,149			3,207,104
Allowance for loan losses		(69,092	)		(69,614	)		(71,379	)		(73,975	)		(74,871	)		(76,971	)
Securities		739,280			790,493			839,769			897,292			942,752			925,508
Total assets		4,871,386			4,931,878			4,789,583			4,863,951			4,868,905			4,831,333
Noninterest-bearing deposits		844,480			806,402			756,909			717,379			722,694			662,018
Total deposits		3,719,287			3,709,820			3,605,291			3,654,339			3,712,650			3,761,520
Securities sold under agreements to repurchase		134,787			127,623			118,089			131,591			128,954			124,514
FHLB advances		190,887			270,995			226,032			226,069			161,106			111,191
Subordinated debt and other borrowings		106,783			122,476			97,476			97,476			97,476			97,476
Total stockholders’ equity		672,824			659,287			718,665			710,145			724,374			699,228

Balance sheet data, quarterly averages:
Total loans	$	3,488,736			3,402,671			3,280,030			3,261,972			3,207,213			3,211,591
Securities		766,547			818,795			875,509			924,153			939,778			972,750
Total earning assets		4,379,742			4,365,715			4,316,973			4,347,352			4,308,710			4,347,552
Total assets		4,860,394			4,847,583			4,820,951			4,852,311			4,786,485			4,826,731
Noninterest-bearing deposits		799,508			755,594			701,760			705,580			671,796			628,929
Total deposits		3,705,672			3,636,240			3,597,271			3,641,845			3,699,553			3,722,613
Securities sold under agreements to repurchase		136,918			130,711			129,892			141,818			145,050			175,705
FHLB advances		214,271			232,606			238,578			209,619			111,699			114,072
Subordinated debt and other borrowings		112,406			101,872			97,476			97,476			97,476			97,476
Total stockholders’ equity		669,673			718,841			719,788			729,622			708,973			691,020

Statement of operations data, for the three months ended:
Interest income	$	46,441			45,953			45,824			46,446			46,888			47,789
Interest expense		5,509			5,768			6,320			7,153			8,532			9,994

Net interest income		40,932			40,185			39,504			39,293			38,356			37,795
Provision for loan losses		1,413			634			1,034			5,439			3,632			6,587

Net interest income after provision for loan losses		39,519			39,551			38,470			33,854			34,724			31,208
Noninterest income		10,430			9,910			9,949			9,727			10,080			9,809
Noninterest expense		33,578			33,916			35,820			34,374			35,676			34,357

Income before taxes		16,371			15,545			12,599			9,207			9,128			6,660
Income tax expense (benefit)		5,022			5,106			4,234			1,447			(16,973	)		288
Preferred dividends and accretion		—			2,655			1,159			2,079			1,564			1,529

Net income available to common stockholders	$	11,349			7,785			7,206			5,681			24,537			4,843


Profitability and other ratios:
Return on avg. assets (1)		0.93	%		0.65	%		0.60	%		0.46	%		2.06	%		0.40	%
Return on avg. equity (1)		6.74	%		4.36	%		4.03	%		3.09	%		13.88	%		2.81	%
Return on avg. tangible equity (1)		10.76	%		7.58	%		6.13	%		4.93	%		20.69	%		4.32	%
Net interest margin (1) (2)		3.78	%		3.76	%		3.74	%		3.65	%		3.60	%		3.55	%
Noninterest income to total revenue (3)		20.31	%		19.78	%		20.12	%		19.84	%		20.81	%		20.61	%
Noninterest income to avg. assets (1)		0.85	%		0.82	%		0.83	%		0.80	%		0.84	%		0.82	%
Noninterest exp. to avg. assets (1)		2.75	%		2.81	%		2.99	%		2.81	%		2.99	%		2.86	%
Noninterest expense (excluding ORE) to avg. assets (1)		2.55	%		2.56	%		2.60	%		2.50	%		2.57	%		2.54	%
Efficiency ratio (4)		65.38	%		67.70	%		72.43	%		70.12	%		73.66	%		72.17	%
Avg. loans to average deposits		94.15	%		93.58	%		91.18	%		89.57	%		86.69	%		86.27	%
Securities to total assets		15.18	%		16.03	%		17.53	%		18.45	%		19.36	%		19.16	%

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* *September 30, 2012*							*Three months ended* *Sepptember 30, 2011*
	Average Balances		*Interest*		*Rates/* *Yields*			Average Balances		*Interest*		*Rates/Yields*
*Interest-earning assets :*
Loans ⁽¹⁾	$	3,488,736	$	40,405		4.62	%	$	3,207,213	$	38,572		4.78	%
Securities
Taxable		585,782		3,974		2.70	%		747,784		5,953		3.16	%
Tax-exempt ⁽²⁾		180,765		1,622		4.77	%		191,994		1,820		5.02	%
Federal funds sold and other		124,459		440		1.55	%		161,719		543		1.44	%

Total interest-earning assets		4,379,742	$	46,441		4.28	%		4,308,710	$	46,888		4.38	%

*Nonearning assets*
Intangible assets		250,274							253,102
Other nonearning assets		230,378							224,673

Total assets	$	4,860,394						$	4,786,485

Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking	$	672,057	$	637		0.38	%	$	564,077	$	821		0.58	%
Savings and money market		1,606,189		1,959		0.49	%		1,622,200		3,299		0.81	%
Time		627,918		1,390		0.88	%		841,480		3,018		1.42	%

Total interest-bearing deposits		2,906,164		3,986		0.55	%		3,027,757		7,138		0.94	%
Securities sold under agreements to repurchase		136,918		99		0.29	%		145,050		204		0.56	%
Federal Home Loan Bank advances		214,271		621		1.15	%		111,699		532		1.89	%
Subordinated debt and other borrowings		112,406		802		2.84	%		97,476		658		2.68	%

Total interest-bearing liabilities		3,369,759		5,508		0.65	%		3,381,982		8,532		1.00	%
*Noninterest-bearing deposits*		799,508		—		—			671,796		—		—

Total deposits and interest-bearing liabilities		4,169,267	$	5,508		0.53	%		4,053,778	$	8,532		0.84	%

Other liabilities		21,454							23,734
*Stockholders’ equity*		669,673							708,973

Total liabilities and stockholders’ equity	$	4,860,394						$	4,786,485

*Net interest income*			$	40,933						$	38,356

Net interest spread ⁽³⁾						3.63	%						3.38	%
Net interest margin ⁽⁴⁾						3.78	%						3.60	%

(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 September 30, 2012 would have been 3.76% compared to a net interest spread of 3.54% for the quarter ended September 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)*	Nine months ended September 30, 2012							Nine months ended September 30, 2011
	Average Balances		*Interest*		*Rates/Yields*			Average Balances		*Interest*		*Rates/Yields*
*Interest-earning assets:*
Loans ⁽¹⁾	$	3,390,838	$	118,331		4.67	%	$	3,203,346	$	115,831		4.84	%
Securities
Taxable		636,516		13,357		2.80	%		779,585		18,793		3.22	%
Tax-exempt ⁽²⁾		183,572		4,973		4.83	%		194,447		5,593		5.13	%
Federal funds sold and other		143,311		1,558		1.58	%		170,192		1,684		1.43	%

Total interest-earning assets		4,354,237	$	138,219		4.30	%		4,347,570	$	141,901		4.43	%

*Nonearning assets*
Intangible assets		250,969							253,806
Other nonearning assets		237,805							225,640

Total assets	$	4,843,011						$	4,827,016

*Interest-bearing liabilities:*
Interest-bearing deposits:
Interest checking	$	674,086	$	2,243		0.44	%	$	582,832	$	2,765		0.63	%
Savings and money market		1,562,930		6,068		0.52	%		1,599,737		11,149		0.93	%
Time		657,073		4,802		0.98	%		916,510		10,955		1.60	%

Total interest-bearing deposits		2,894,089		13,113		0.61	%		3,099,079		24,869		1.07	%
Securities sold under agreements to repurchase		132,523		370		0.37	%		168,594		931		0.74	%
Federal Home Loan Bank advances		228,378		1,847		1.08	%		112,181		1,952		2.32	%
Subordinated debt and other borrowings		104,003		2,267		2.91	%		98,446		1,977		2.69	%

Total interest-bearing liabilities		3,358,993		17,597		0.70	%		3,478,300		29,729		1.14	%
*Noninterest-bearing deposits*		752,491		—		—			632,075		—		—

Total deposits and interest-bearing liabilities		4,111,484	$	17,597		0.57	%		4,110,375	$	29,729		0.97	%

Other liabilities		28,881							22,332
*Stockholders’ equity*		702,646							694,309

Total liabilities and stockholders’ equity	$	4,843,011						$	4,827,016

*Net interest Income*			$	120,622						$	112,172

Net interest spread ⁽³⁾						3.60	%						3.29	%
Net interest margin ⁽⁴⁾						3.76	%						3.52	%

(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 nine months ended September 30, 2012 -would have been 3.73% compared to a net interest spread of 3.46% for the nine months ended September 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)*	September 2012			June 2012			March 2012			December 2011			September 2011			June 2011
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans	$	36,571			40,821			42,852			47,855			54,640			59,727
Other real estate (ORE)		21,817			25,450			34,019			39,714			45,500			52,395

Total nonperforming assets	$	58,388			66,271			76,871			87,569			100,140			112,122

Past due loans over 90 days and still accruing interest	$	162			—			821			858			1,911			481
Troubled debt restructurings (5)	$	24,090			26,626			22,832			23,416			18,187			12,990
Net loan charge-offs	$	1,935			2,399			3,630			6,335			5,732			8,605
Allowance for loan losses to nonperforming loans		188.9	%		170.5	%		166.6	%		154.6	%		137.0	%		128.9	%
As a percentage of total loans:
Past due accruing loans over 30 days		0.35	%		0.21	%		0.34	%		0.36	%		0.28	%		0.40	%
Potential problem loans (6)		3.13	%		3.49	%		3.78	%		4.12	%		4.09	%		4.62	%
Allowance for loan losses		1.96	%		2.02	%		2.14	%		2.25	%		2.31	%		2.40	%
Nonperforming assets to total loans and ORE		1.65	%		1.91	%		2.28	%		2.66	%		3.05	%		3.44	%
Nonperforming assets to total assets		1.20	%		1.34	%		1.60	%		1.80	%		2.06	%		2.32	%
Annualized net loan charge-offs year-to-date to avg. loans (7)		0.31	%		0.36	%		0.45	%		0.94	%		1.00	%		1.14	%
Avg. commercial loan internal risk ratings (6)		4.6			4.6			4.7			4.6			4.7			4.8

Interest rates and yields:
Loans		4.62	%		4.65	%		4.74	%		4.74	%		4.78	%		4.87	%
Securities		3.19	%		3.27	%		3.31	%		3.26	%		3.54	%		3.67	%
Total earning assets		4.28	%		4.29	%		4.33	%		4.30	%		4.38	%		4.47	%
Total deposits, including non-interest bearing		0.43	%		0.47	%		0.63	%		0.62	%		0.77	%		0.90	%
Securities sold under agreements to repurchase		0.29	%		0.36	%		0.48	%		0.50	%		0.56	%		0.79	%
FHLB advances		1.15	%		1.07	%		1.03	%		1.07	%		1.89	%		2.42	%
Subordinated debt and other borrowings		2.84	%		2.91	%		3.00	%		2.80	%		2.68	%		2.73	%
Total deposits and interest-bearing liabilities		0.53	%		0.57	%		0.63	%		0.69	%		0.84	%		0.98	%

Pinnacle Financial Partners capital ratios (8):
Stockholders’ equity to total assets		13.8	%		13.4	%		15.0	%		14.6	%		14.9	%		14.5	%
Leverage		10.5	%		10.3	%		11.7	%		11.4	%		11.9	%		11.2	%
Tier one risk-based		12.1	%		12.0	%		14.0	%		13.8	%		14.4	%		13.9	%
Total risk-based		13.4	%		13.5	%		15.4	%		15.3	%		15.9	%		15.5	%
Tier one common equity to risk weighted assets		10.1	%		10.0	%		10.1	%		9.9	%		9.8	%		9.2	%
Tangible common equity to tangible assets		9.2	%		8.7	%		8.8	%		8.4	%		8.2	%		7.7	%
Pinnacle Bank ratios :
Classified Asset Ratio		33.4	%		37.8	%		39.3	%		44.4	%		46.8	%		52.9	%
Leverage		10.5	%		10.4	%		10.6	%		10.3	%		10.2	%		9.7	%
Tier one risk-based		12.0	%		12.0	%		12.6	%		12.5	%		12.3	%		12.0	%
Total risk-based		13.3	%		13.3	%		14.1	%		14.0	%		13.8	%		13.6	%

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)*	September 2012			June 2012			March 2012			December 2011			September 2011			June 2011
Per share data:
Earnings – basic	$	0.33			0.23			0.21			0.17			0.74			0.14
Earnings – diluted	$	0.33			0.23			0.21			0.17			0.72			0.14
Book value per common share at quarter end (9)	$	19.39			18.92			18.66			18.56			18.34			17.71
Tangible common equity per common share	$	12.19			11.79			11.50			11.33			11.08			10.38

Weighted avg. common shares – basic		33,939,248			33,885,779			33,811,871			33,485,253			33,372,980			33,454,229
Weighted avg. common shares – diluted		34,523,076			34,470,794			.34,423,898			34,127,209			33,993,914			34,095,636
Common shares outstanding		34,691,659			34,675,913			34,616,013			34,354,960			34,306,927			34,136,163

Investor information:
Closing sales price	$	19.32			19.51			18.35			16.15			10.94			15.56
High closing sales price during quarter	$	20.38			19.51			18.44			16.65			16.21			16.82
Low closing sales price during quarter	$	18.88			16.64			15.25			10.28			10.52			14.15

Other information:
Gains on mortgage loans sold:
Mortgage loan sales:
Gross loans sold	$	130,277			105,486			119,426			134,842			104,663			69,123
Gross fees (10)	$	3,193			2,511			2,608			2,766			2,166			1,380
Gross fees as a percentage of mortgage loans originated		2.45	%		2.38	%		2.18	%		2.05	%		2.07	%		2.00	%
(Losses) gains on sales of investment securities, net of OTTI	$	(50	)		99			114			133			377			610
Brokerage account assets, at quarter-end (11)	$	1,244,100			1,191,259			1,176,180			1,061,249			987,908			1,101,000
Trust account assets, at quarter-end	$	761,641			803,904			789,614			632,608			607,668			663,304
Balance of commercial loan participations sold to other banks and serviced by Pinnacle, at quarter end	$	40,662			54,598			52,155			62,209			57,045			50,797
Core deposits (12)	$	3,576,425			3,523,542			3,405,915			3,441,547			3,388,692			3,437,595
Core deposits to total funding (12)		86.1	%		83.3	%		84.3	%		83.7	%		82.6	%		84.0	%
Risk-weighted assets	$	4,033,407			3,992,473			3,826,678			3,780,412			3,751,479			3,693,390
Total assets per full-time equivalent employee	$	6,715			6,724			6,442			6,511			6,580			6,538
Annualized revenues per full-time equivalent employee	$	281.6			273.9			266.8			263.2			262.5			261.3
Number of employees (full-time equivalent)		725.5			733.5			743.5			747.0			740.0			739.0
Associate retention rate (13)		93.4	%		94.0	%		93.7	%		92.0	%		92.6	%		89.6	%

Selected economic information (in thousands) (14):
Nashville MSA nonfarm employment - August 2012		757.6			764.7			747.8			757.3			735.5			738.3
Knoxville MSA nonfarm employment - August 2012		337.3			338.9			330.9			331.7			327.7			325.1
Nashville MSA unemployment - August 2012		7.1	%		6.8	%		7.2	%		7.2	%		8.5	%		8.9	%
Knoxville MSA unemployment - August 2012		6.8	%		6.4	%		6.7	%		6.6	%		7.9	%		8.3	%
Nashville residential median home price	$	177.1			175.5			168.5			168.5			171.6			167.1
Nashville inventory of residential homes for sale (16)		11.0			11.8			11.8			10.6			13.4			14.0

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)*	September 2012			June 2012			March 2012			December 2011			September 2011			June 2011
Tangible assets:
Total assets	$	4,871,386		$	4,931,878		$	4,789,583		$	4,863,951		$	4,868,905		$	4,831,333
Less: Goodwill		(244,045	)		(244,065	)		(244,072	)		(244,076	)		(244,082	)		(244,083	)
Core deposit and other intangible assets		(5,787	)		(6,470	)		(7,156	)		(7,842	)		(8,558	)		(9,273	)

Net tangible assets	$	4,621,554		$	4,681,343		$	4,538,355		$	4,612,033		$	4,616,265		$	4,577,976

Tangible equity:
Total stockholders’ equity	$	672,824		$	659,287		$	718,665		$	710,145		$	724,374		$	699,228
Less: Goodwill		(244,045	)		(244,065	)		(244,072	)		(244,076	)		(244,082	)		(244,083	)
Core deposit and other intangible assets		(5,787	)		(6,470	)		(7,156	)		(7,842	)		(8,558	)		(9,273	)

Net tangible equity		422,992			408,752			467,437			458,226			471,734			445,872
Less: Preferred stock		—			—			(69,355	)		(69,097	)		(91,772	)		(91,422	)

Net tangible common equity	$	422,992		$	408,752		$	398,082		$	389,130		$	379,962		$	354,449

Ratio of tangible common equity to tangible assets		9.15	%		8.73	%		8.77	%		8.44	%		8.23	%		7.74	%


	For the three months ended
	September 2012			June 2012			March 2012			December 2011			September 2011			June 2011
Net interest income	$	40,932		$	40,185		$	39,504		$	39,293		$	38,356		$	37,795

Noninterest income		10,430			9,910			9,949			9,727			10,080			9,809
Less: Net (losses) gains on sale of investment securities		(50	)		99			114			133			377			610

Noninterest income excluding the impact of other net (losses) gains on sale of investment securities	$	10,480		$	9,811		$	9,835		$	9,594		$	9,703		$	9,199


Noninterest expense		33,578			33,915			35,820			34,374			35,676			34,357
Other real estate owned expense		2,399			3,104			4,676			4,193			5,079			3,826

Noninterest expense excluding the impact of other real estate owned expense	$	31,179		$	30,811		$	31,144		$	30,181		$	30,597		$	30,532


Adjusted pre-tax pre-provision income ⁽¹⁵⁾	$	20,233		$	19,185		$	18,195		$	1 8,706		$	17,462		$	16,463


Efficiency Ratio ⁽⁴⁾		65.4	%		67.7	%		72.4	%		70.1	%		73.7	%		72.2	%

Efficiency Ratio excluding the impact of other real estate owned expense ⁽⁴⁾		60.7	%		61.5	%		63.0	%		61.6	%		63.2	%		64.1	%

Noninterest expense	$	33,578		$	33,915		$	35,820		$	34,374		$	35,676		$	34,357
Other real estate owned expense		2,399			3,104			4,676			4,193			5,079			3,826

Noninterest expense excluding the impact of other real estate owned expense	$	31,179		$	30,811		$	31,144		$	30,181		$	30,597		$	30,532

Total average assets		4,860,394			4,847,583			4,820,951			4,852,311			4,786,485			4,826,731

Noninterest expense (excluding ORE) to avg. assets ⁽¹⁾		2.55	%		2.56	%		2.60	%		2.50	%		2.57	%		2.54	%


	For the three months ended September 30, 2011			For the nine months ended September 30,
				2012		2011
Net income available to common stockholders	$	24,537		$	26,340	$	31,392
Reversal of valuation allowance based on net deferred tax assets		(22,480	)		—		(22,480	)
Actual 2011 current tax expense		5,211			—		5,211
Accelerated accretion on preferred stock discount		—		$	1,664		—

	$	7,268		$	28,004	$	14,123

Diluted net income per common share available to common stockholders, as adjusted	$	0.21		$	0.81	$	0.41

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 defined as follows:

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

Tangible common equity to total assets – End of period total stockholders’ equity less end of period goodwill, core deposit and other intangibles 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.

Classified asset – Classified assets as a percentage of Tier 1 Capital less allowance for loan losses.

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.

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.

13.	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.

14.

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.

15.	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.

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

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PINNACLE FINANCIAL PARTNERS INC Reports