EXHIBIT 99.1
FOR IMMEDIATE RELEASE
| | | | | |
| | | MEDIA CONTACT: | | Vicki Kessler 615-320-7532 |
| | | FINANCIAL CONTACT: | | Harold Carpenter 615-744-3742 |
| | | WEBSITE: | | www.pnfp.com |
PINNACLE FINANCIAL REPORTS RECORD EARNINGS
OF $0.35 PER FULLY DILUTED SHARE
Mid-America merger anticipated to close in fourth quarter of 2007
NASHVILLE,Tenn., Oct 16, 2007 — Pinnacle Financial Partners Inc. (Nasdaq/NGS: PNFP) today reported record earnings, continued strong growth in loans and consistently strong asset quality for the quarter ended Sept. 30, 2007. Fully diluted earnings per share were $0.35 for the quarter ended Sept. 30, 2007, compared to $0.32 per fully diluted share for the quarter ended Sept. 30, 2006, which included the impact of $0.01 of merger related expenses associated with the Cavalry Bancorp Inc. acquisition consummated on March 15, 2006.
THIRD QUARTER 2007 HIGHLIGHTS:
| | • | | Net income for the third quarter of 2007 was $5.77 million, up 7.9 percent from the prior year’s third quarter net income of $5.35 million. |
| |
| | • | | Diluted earnings per share for the third quarter of 2007 were $0.35, up 9.4 percent from the same quarter last year. |
| |
| | • | | Revenue (the sum of net interest income and noninterest income) for the quarter ended Sept. 30, 2007, amounted to $24.29 million, compared to $21.58 million for the same quarter of last year, an increase of 12.6 percent. |
| | • | | Superior credit quality: |
| | • | | Annualized net charge-offs as a percentage of average loan volumes were 0.05 percent for the nine months ended Sept. 30, 2007. |
| | • | | Nonperforming assets were only 0.19 percent of total loans and other real estate at Sept. 30, 2007, down from 0.54 percent at Dec. 31, 2006. |
| |
| | • | | Past due loans over 30 days, excluding nonperforming loans, were only 0.38 percent of total loans and other real estate at Sept. 30, 2007, compared to 0.74 percent of total loans and other real estate at Dec. 31, 2006. |
| | • | | Strong balance sheet growth: |
| | • | | Loans at Sept. 30, 2007, were $1.731 billion, up 23.2 percent from the same period last year, reflecting strong organic growth over the last year. Loans increased by $68.2 million during the third quarter of 2007, compared to $47.1 million in growth during the same quarter in 2006. Provision for loan losses for the quarter ended Sept. 30, 2007 was $772,000, an increase from $587,000 from the same quarter in 2006. |
| |
| | • | | Total deposits at Sept. 30, 2007, were $1.83 billion, up 15.2 percent from the same period last year. |
| | • | | Investments in future growth: |
| | • | | Pinnacle has hired 18 highly experienced associates for the denovo expansion to Knoxville that was announced on April 9, 2007. Pinnacle opened a full service facility in May, a loan production office in the Fountain City area of Knoxville in June and has begun negotiations on another full service Knoxville location set to open during the first half of 2008. |
| |
| | • | | The total associate base at Sept. 30, 2007, including the Knoxville expansion, was 450.5 FTEs (full-time equivalents), a 13.9 percent increase over the 395.5 associates at Sept. 30, 2006. |
| |
| | • | | On August 15, 2007, Pinnacle announced the in-market acquisition of Mid-America Bancshares, Inc., a $1.1 billion bank holding company located in Nashville. Subject to receipt of customary shareholder and regulatory approvals, the merger is anticipated to close before the end of 2007. |
“We continue to be pleased with our operating performance for 2007,” said M. Terry Turner, Pinnacle’s president and CEO. “We are particularly pleased with the continued growth of our loan portfolio and our ability to continue to attract experienced financial services
Page 2
professionals to our firm. It is fairly evident that 2007 has been and will continue to be a formidable year for all financial institutions. However, we are confident that we can expand our client base and sustain our record of dramatic growth throughout the remainder of 2007 and 2008 due to our ability to increase market share in the Nashville-Davidson-Murfreesboro-Franklin and Knoxville MSA’s.”
Turner said the firm’s recent entry into Knoxville is progressing well. He estimated that the Knoxville expansion impacted the third quarter earnings negatively by approximately $0.03 per fully diluted share. The 2007 year-to-date impact of the Knoxville operation is a loss of approximately $0.06 per fully diluted share and is consistent with Pinnacle’s expectations.
FINANCIAL PERFORMANCE AND BALANCE SHEET GROWTH
| | • | | Return on average assets for third quarter 2007 was 0.96 percent compared to 1.07 percent for the third quarter of 2006. Excluding the impact of the Knoxville expansion, return on average assets for the third quarter of 2007 would have approximated 1.06 percent. |
| |
| | • | | Return on average stockholders’ equity for the quarter ended Sept. 30, 2007, was 8.43 percent compared to 8.66 percent for the third quarter of 2006. Excluding the impact of the Knoxville expansion, return on average stockholders’ equity for the third quarter of 2007 would have approximated 9.29 percent. Return on average tangible stockholders’ equity (average stockholders’ equity less goodwill and core deposit intangibles) for the quarter ended Sept. 30, 2007, was 15.57 percent. |
Total assets grew to $2.37 billion as of Sept. 30, 2007, up $316 million or 15.4 percent from the $2.05 billion reported at the same time last year. The securities to total assets ratio decreased from 16.12 percent at Sept. 30, 2006, to 14.87 percent at Sept. 30, 2007.
CREDIT QUALITY
| | • | | Provision for loan losses was $772,000 for the third quarter of 2007, compared to $587,000 in the third quarter of 2006. |
| | • | | During the third quarter of 2007, the firm recorded net charge-offs of only $169,000, compared to net charge-offs of $101,000 during the same period |
Page 3
in 2006. Annualized net charge-offs to total average loans were 0.05 percent for the nine months ended Sept. 30, 2007 compared to 0.05 percent for the same period in 2006.
| | • | | Allowance for loan losses represented 1.04 percent of total loans at Sept. 30, 2007, compared to 1.08 percent a year ago. |
| | • | | Nonperforming assets as a percentage of total loans and other real estate decreased to 0.19 percent at Sept. 30, 2007 from 0.54 percent at Dec. 31, 2006. |
| |
| | • | | Loan balances, excluding nonperforming loans, with payments past due more than 30 days as a percentage of total loans and other real estate decreased to 0.38 percent at Sept. 30, 2007, from 0.74 percent at Dec. 31, 2006. |
| |
| | • | | The ratio of the allowance for loan losses to nonperforming loans was 760.5 percent at Sept. 30, 2007 compared to 228.0 percent at Dec. 31, 2006. |
“We believe our record of excellent asset quality since our founding in 2000 is a key predictor of our ability to create long-term shareholder value,” said Turner.
Turner also commented on this year’s developments in the sub-prime residential mortgage market. Turner stated that soon after its organization in 2000 Pinnacle elected not to target or develop specific products for this market segment. As a result, he did not currently foresee any direct loss exposure to Pinnacle as a result of the developments in the sub-prime mortgage lending markets.
REVENUE
| | • | | Net interest income for third quarter 2007 was $18.96 million, compared to $17.16 million for the same quarter last year, an increase of 10.5 percent. |
| | • | | Net interest margin for the third quarter of 2007 was 3.54 percent, compared to a net interest margin of 3.95 percent for the same period last year. |
| | • | | Noninterest income for the third quarter 2007 was $5.33 million, a 20.6 percent increase over the $4.42 million recorded during the same quarter in 2006. |
Page 4
“Maintenance of our net interest margin has been a key focus all year,” said Harold Carpenter, chief financial officer of Pinnacle Financial Partners. “The recent reduction in the Fed funds rate should help to improve our margins in the fourth quarter. Because our pipelines remain robust, we believe loan growth will continue to increase our revenue streams over the next several quarters. Knoxville ended the quarter with $67 million in loans and a pipeline which we believe should produce approximately $100 million in loans by year end as planned.”
Noninterest income during the third quarter of 2007 represented approximately 21.95 percent of total revenues, compared to 20.50 percent for the same quarter in 2006. The increase in noninterest income between 2007 and 2006 was due primarily to the extension of the former Cavalry fee businesses across the entire Pinnacle franchise and record investment sales commissions from Pinnacle Asset Management and record gains on the sales of mortgage loans from the firm’s mortgage origination unit. Thus far in 2007, Pinnacle’s mortgage origination unit recognized gains on the sales of $126.1 million in mortgages compared to recognized gains on $96.3 million in the first nine months of 2006.
NONINTEREST EXPENSE
| | • | | Noninterest expense for the quarter ended June 30, 2007, was $15.11 million compared to $13.05 million in the third quarter of 2006. Approximately $609,000 of noninterest expense was directly associated with the Knoxville expansion during the quarter. |
| |
| | • | | Compensation expense increased to $9.11 million during the third quarter of 2007, compared to $7.58 million during the third quarter of 2006, an increase of 20.2 percent. At Sept. 30, 2007, the firm employed 450.5 associates (full-time equivalent), an increase of 55 associates, a 13.9 percent increase over the number of associates at Sept. 30, 2006. |
| |
| | • | | During the third quarter 2007 Pinnacle recognized compensation expense related to the expensing of stock options in accordance with Statement of Financial Accounting Standards No. 123R (“SFAS No. 123R”) of approximately $451,000 compared to $285,000 during the same quarter of 2006. For the nine months ended Sept. 30, 2007, Pinnacle recognized $1.25 million in equity compensation |
Page 5
expense related to the expensing of stock options compared to $690,000 in the first nine months of 2006.
| | • | | The efficiency ratio (noninterest expense divided by net interest income and noninterest income) was 62.2 percent during the third quarter of 2007, compared to 60.5 percent during the third quarter of 2006. |
Carpenter noted that linked quarter expense growth of 4.3 percent between the second and third quarters of 2007 was primarily attributable to the Knoxville expansion, the increased number of associates, and increasing variable costs associated with the dramatic growth of the firm. Carpenter stated that expense growth in the fourth quarter, excluding the impact of Mid-America, is anticipated to be in the two to three percent range.
PROGRESS OF THE MID-AMERICA ACQUISITION
On August 15, 2007, Pinnacle reported that the firm had entered into a definitive agreement to acquire the common stock of Mid-America Bancshares, Inc., a two-bank holding company in Nashville, Tenn. with assets of approximately $1.1 billion. Pinnacle anticipates receiving the required shareholder and regulatory approvals during the fourth quarter of 2007 and the closing of the transaction is expected to occur before year end.
Assessing the progress of the acquisition, Turner said, “We are very pleased by the positive reception from Mid-America’s associates and customers and with the significant progress we have made during the initial phase of the integration process. With the anticipated closing of the transaction in the fourth quarter of 2007, we continue to believe that we will meet all major integration milestones on schedule (e.g., system conversions, brand conversions, etc.) and that we should achieve 100 percent of the targeted expense savings of $7.0 million in 2008.”
INVESTMENT OUTLOOK
Management has developed several financial forecast scenarios for the next several quarters. Based on anticipated growth trends and future investments in the franchise, including the impact of the Knoxville expansion, Pinnacle estimates its 2007 diluted earnings per share will approximate $1.38 to $1.42, which includes approximately $0.08 to $0.09
Page 6
dilution attributable to the Knoxville expansion, but excludes the impact of the Mid-America acquisition.
As noted previously, management has developed several scenarios under which these estimates can be achieved and believes these estimates to be reasonable based on these scenarios. However, unanticipated events or developments including the execution of any initiative which could include the development of any markets other than metropolitan Nashville or Knoxville, any merger or acquisition, the opportunity to hire more seasoned professionals than anticipated or the ability to grow loans significantly in excess of the levels contemplated may cause the actual results of Pinnacle to differ materially from these estimates.
Pinnacle Financial Partners provides a full range of banking, investment and insurance products and services designed for small- to mid-sized businesses and their owners, real estate professionals 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 also has a well-established expertise in commercial real estate.
The firm began operations in a single downtown Nashville location in October 2000 and has since grown to $2.3 billion in assets. Earlier this year, Pinnacle launched an expansion into Knoxville, another high growth MSA. The addition of Mid-America will make Pinnacle the second largest bank holding company headquartered in Tennessee, with 31 offices in the Nashville area.
Additional information concerning Pinnacle can be accessed atwww.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,” “intend,” “plan,” “believe,” “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 facts that may cause the actual results, performance or achievements of Pinnacle to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, without limitation, (i) unanticipated deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses, (ii) the inability of Pinnacle to continue to grow its loan portfolio at historic rates in the Nashville-Davidson-Murfreesboro-Franklin MSA or projected rates in the Knoxville MSA, (iii) increased competition with other financial institutions, (iv) lack of sustained growth in the economy in the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA, (v) rapid fluctuations or unanticipated changes in interest rates, (vi) the inability of Pinnacle to satisfy regulatory requirements for its expansion plans, (vii) the inability of Pinnacle to execute its expansion plans and (viii) changes in the legislative and regulatory environment. Additionally, risk factors exist in connection with Pinnacle’s proposed merger with Mid-America including , among others, (1) the risk that the cost savings and any revenue synergies from the merger may not be realized or take longer than anticipated, (2) disruption from the merger with customers, suppliers or employee relationships, (3) the occurrence of any event,
Page 7
change or other circumstances that could give rise to the termination of the merger agreement, (4) the risk of successful integration of the two companies’ businesses, (5) the failure of Mid-America’s or Pinnacle’s shareholders to approve the merger, (6) the amount of the costs, fees, expenses and charges related to the merger, and (7) the ability to obtain required governmental approvals of the proposed terms of the merger and anticipated schedule. A more detailed description of these and other risks is contained in Pinnacle’s most recent annual and quarterly reports filed with the Securities and Exchange Commission. Many of such factors are beyond Pinnacle’s ability to control or predict, and readers are cautioned not to put undue reliance on such forward-looking statements. Pinnacle 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.
Additional Information About Pinnacle’s Proposed Merger with Mid-America and Where to Find It
In connection with the proposed merger, Pinnacle Financial Partners, Inc. and Mid-America Bancshares, Inc. have filed a joint proxy statement/prospectus with the Securities and Exchange Commission. This joint proxy statement/prospectus is part of a Registration Statement on Form S-4 of Pinnacle that was declared effective on October 12, 2007. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT PINNACLE, MID-AMERICA AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain free copies of these documents through the website maintained by the Securities and Exchange Commission at http://www.sec.gov. Free copies of the joint proxy statement/prospectus also may be obtained by directing a request by telephone or mail to Pinnacle Financial Partners Inc., 211 Commerce Street, Suite 300, Nashville, TN 37201, Attention: Investor Relations (615) 744-3710 or Mid-America Bancshares, Inc., 7651 Highway 70, South, Nashville, TN 37221 Attention: Investor Relations (615) 646-4556. This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Participants in the Solicitation
The directors and executive officers of Pinnacle and Mid-America may be deemed to be participants in the solicitation of proxies with respect to the proposed transaction. Information about Pinnacle’s directors and executive officers is contained in the proxy statement filed by Pinnacle with the Securities and Exchange Commission on March 15, 2007, which is available on Pinnacle’s web site (www.pnfp.com) and at the address provided above. Information about Mid-America’s directors and executive officers is contained in the proxy statement filed by Mid-America with the Securities and Exchange Commission on April 2, 2007 which is available on Mid-America’s website (www.mid-americabancsharesinc.com) and at the address provided above. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests by security holding or otherwise, is or will be contained in the joint proxy statement/prospectus and other relevant material filed or to be filed with the Securities and Exchange Commission. These documents will be available to investors free of charge on the Securities and Exchange Commission’s website at the above address.
Page 8
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS – UNAUDITED
| | | | | | | | | |
| | | September 30, 2007 | | | December 31, 2006 | |
ASSETS | | | | | | | | |
| Cash and noninterest-bearing due from banks | | $ | 48,865,526 | | | $ | 43,611,533 | |
| Interest-bearing deposits due from banks | | | 5,819,607 | | | | 1,041,174 | |
| Federal funds sold and other | | | 26,522,858 | | | | 47,866,143 | |
| | | | | | | |
| Cash and cash equivalents | | | 81,207,991 | | | | 92,518,850 | |
| Securities available-for-sale, at fair value | | | 325,171,126 | | | | 319,237,428 | |
| Securities held-to-maturity (fair value of $26,603,414 and $26,594,235 at September 30, 2007 and December 31, 2006, respectively) | | | 27,050,937 | | | | 27,256,876 | |
| Mortgage loans held-for-sale | | | 5,685,674 | | | | 5,654,381 | |
| Loans | | | 1,731,245,280 | | | | 1,497,734,824 | |
| Less allowance for loan losses | | | (17,978,429 | ) | | | (16,117,978 | ) |
| | | | | | | |
| Loans, net | | | 1,713,266,851 | | | | 1,481,616,846 | |
| Premises and equipment, net | | | 38,208,897 | | | | 36,285,796 | |
| Investments in unconsolidated subsidiaries and other entities | | | 17,424,718 | | | | 16,200,684 | |
| Accrued interest receivable | | | 12,056,089 | | | | 11,019,173 | |
| Goodwill | | | 114,287,640 | | | | 114,287,640 | |
| Core deposit intangible | | | 9,837,744 | | | | 11,385,006 | |
| Other assets | | | 23,881,242 | | | | 26,724,183 | |
| | | | | | | |
| Total assets | | $ | 2,368,078,909 | | | $ | 2,142,186,863 | |
| | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| Deposits: | | | | | | | | |
| Noninterest-bearing demand | | $ | 316,542,088 | | | $ | 300,977,814 | |
| Interest-bearing demand | | | 254,958,551 | | | | 236,674,425 | |
| Savings and money market accounts | | | 538,976,126 | | | | 485,935,897 | |
| Time | | | 716,407,184 | | | | 598,823,167 | |
| | | | | | | |
| Total deposits | | | 1,826,883,949 | | | | 1,622,411,303 | |
| Securities sold under agreements to repurchase | | | 145,331,726 | | | | 141,015,761 | |
| Federal Home Loan Bank advances and other borrowings | | | 55,671,005 | | | | 53,725,833 | |
| Subordinated debt | | | 51,548,000 | | | | 51,548,000 | |
| Accrued interest payable | | | 5,973,825 | | | | 4,952,422 | |
| Other liabilities | | | 8,033,974 | | | | 12,516,523 | |
| | | | | | | |
| Total liabilities | | | 2,093,442,479 | | | | 1,886,169,842 | |
Stockholders’ equity: | | | | | | | | |
| Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding | | | — | | | | — | |
| Common stock, par value $1.00; 90,000,000 shares authorized; 15,553,037 issued and outstanding at September 30, 2007 and 15,446,074 issued and outstanding at December 31, 2006 | | | 15,553,037 | | | | 15,446,074 | |
| Additional paid-in capital | | | 213,644,006 | | | | 211,502,516 | |
| Retained earnings | | | 47,908,839 | | | | 31,109,324 | |
| Accumulated other comprehensive loss, net | | | (2,469,452 | ) | | | (2,040,893 | ) |
| | | | | | | |
| Stockholders’ equity | | | 274,636,430 | | | | 256,017,021 | |
| | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 2,368,078,909 | | | $ | 2,142,186,863 | |
| | | | | | | |
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
Interest income: | | | | | | | | | | | | | | | | |
| Loans, including fees | | $ | 32,750,403 | | | $ | 26,771,110 | | | $ | 92,283,516 | | | $ | 64,195,835 | |
| Securities: | | | | | | | | | | | | | | | | |
| Taxable | | | 3,387,464 | | | | 3,240,878 | | | | 10,127,943 | | | | 9,250,455 | |
| Tax-exempt | | | 743,921 | | | | 521,240 | | | | 2,106,857 | | | | 1,416,862 | |
| Federal funds sold and other | | | 1,464,795 | | | | 806,829 | | | | 3,075,372 | | | | 1,591,941 | |
| | | | | | | | | | | | | |
| Total interest income | | | 38,346,583 | | | | 31,340,057 | | | | 107,593,688 | | | | 76,455,093 | |
| | | | | | | | | | | | | |
Interest expense: | | | | | | | | | | | | | | | | |
| Deposits | | | 16,043,425 | | | | 11,800,394 | | | | 44,037,317 | | | | 27,213,738 | |
| Securities sold under agreements to repurchase | | | 2,061,333 | | | | 1,382,418 | | | | 5,664,167 | | | | 2,569,383 | |
| Federal Home Loan Bank advances and other borrowings | | | 1,282,159 | | | | 997,899 | | | | 4,189,055 | | | | 3,110,660 | |
| | | | | | | | | | | | | |
| Total interest expense | | | 19,386,917 | | | | 14,180,711 | | | | 53,890,539 | | | | 32,893,781 | |
| | | | | | | | | | | | | |
| Net interest income | | | 18,959,666 | | | | 17,159,346 | | | | 53,703,149 | | | | 43,561,312 | |
Provision for loan losses | | | 772,064 | | | | 586,589 | | | | 2,460,028 | | | | 2,680,638 | |
| | | | | | | | | | | | | |
Net interest income after provision for loan losses | | | 18,187,602 | | | | 16,572,757 | | | | 51,243,121 | | | | 40,880,674 | |
| | | | | | | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 1,965,965 | | | | 1,357,280 | | | | 5,683,199 | | | | 3,151,664 | |
| Investment sales commissions | | | 868,738 | | | | 644,931 | | | | 2,453,505 | | | | 1,811,428 | |
| Insurance sales commissions | | | 563,367 | | | | 549,584 | | | | 1,829,282 | | | | 1,562,946 | |
| Gain on loans and loan participations sold, net | �� | | 378,682 | | | | 490,254 | | | | 1,380,883 | | | | 1,285,609 | |
| Trust fees | | | 466,581 | | | | 311,997 | | | | 1,312,076 | | | | 675,994 | |
| Other noninterest income | | | 1,088,430 | | | | 1,069,811 | | | | 3,249,918 | | | | 2,364,592 | |
| | | | | | | | | | | | | |
| Total noninterest income | | | 5,331,763 | | | | 4,423,857 | | | | 15,908,863 | | | | 10,852,233 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Noninterest expense: | | | | | | | | | | | | | | | | |
| Compensation and employee benefits | | | 9,106,256 | | | | 7,576,011 | | | | 26,167,610 | | | | 19,314,365 | |
| Equipment and occupancy | | | 2,632,747 | | | | 2,070,727 | | | | 7,209,977 | | | | 5,325,274 | |
| Marketing and other business development | | | 375,066 | | | | 351,432 | | | | 1,057,092 | | | | 899,807 | |
| Postage and supplies | | | 474,083 | | | | 487,689 | | | | 1,453,197 | | | | 1,118,308 | |
| Amortization of core deposit intangible | | | 515,754 | | | | 534,957 | | | | 1,547,262 | | | | 1,248,335 | |
| Other noninterest expense | | | 2,005,752 | | | | 1,815,392 | | | | 5,282,516 | | | | 3,999,832 | |
| Merger related expense | | | — | | | | 218,167 | | | | — | | | | 1,582,734 | |
| | | | | | | | | | | | | |
| Total noninterest expense | | | 15,109,658 | | | | 13,054,375 | | | | 42,717,654 | | | | 33,488,655 | |
| | | | | | | | | | | | | |
Income before income taxes | | | 8,409,707 | | | | 7,942,239 | | | | 24,434,330 | | | | 18,244,252 | |
| Income tax expense | | | 2,637,897 | | | | 2,595,465 | | | | 7,634,815 | | | | 5,963,112 | |
| | | | | | | | | | | | | |
Net income | | $ | 5,771,810 | | | $ | 5,346,774 | | | $ | 16,799,515 | | | $ | 12,281,140 | |
| | | | | | | | | | | | | |
Per share information: | | | | | | | | | | | | | | | | |
| Basic net income per common share | | $ | 0.37 | | | $ | 0.35 | | | $ | 1.09 | | | $ | 0.91 | |
| | | | | | | | | | | | | |
| Diluted net income per common share | | $ | 0.35 | | | $ | 0.32 | | | $ | 1.01 | | | $ | 0.84 | |
| | | | | | | | | | | | | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 15,503,284 | | | | 15,393,735 | | | | 15,477,339 | | | | 13,450,282 | |
| Diluted | | | 16,609,328 | | | | 16,655,349 | | | | 16,630,311 | | | | 14,649,418 | |
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | | Three months ended | |
| (dollars in thousands) | | September 30, 2007 | | | September 30, 2006 | |
| | | Average Balances | | | Interest | | | Rates/Yields | | | Average Balances | | | Interest | | | Rates/Yields | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 1,697,862 | | | $ | 32,750 | | | | 7.65 | % | | $ | 1,375,036 | | | $ | 26,771 | | | | 7.72 | % |
| Securities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 268,358 | | | | 3,387 | | | | 5.01 | % | | | 260,688 | | | | 3,241 | | | | 4.93 | % |
| Tax-exempt(1) | | | 79,065 | | | | 744 | | | | 4.92 | % | | | 56,644 | | | | 521 | | | | 4.81 | % |
| Federal funds sold and other | | | 106,298 | | | | 1,466 | | | | 5.62 | % | | | 59,191 | | | | 807 | | | | 5.41 | % |
| | | | | | | | | | | | | | | | | | | |
| Total interest-earning assets | | | 2,151,583 | | | $ | 38,347 | | | | 7.12 | % | | | 1,751,559 | | | $ | 31,340 | | | | 7.14 | % |
| | | | | | | | | | | | | | | | | | | | | |
Nonearning assets | | | 226,918 | | | | | | | | | | | | 235,677 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 2,378,501 | | | | | | | | | | | $ | 1,987,236 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest checking | | $ | 261,384 | | | $ | 2,123 | | | | 3.24 | % | | $ | 181,752 | | | $ | 1,202 | | | | 2.62 | % |
| Savings and money market | | | 544,990 | | | | 4,757 | | | | 3.46 | % | | | 473,883 | | | | 3,809 | | | | 3.19 | % |
| Certificates of deposit | | | 714,060 | | | | 9,164 | | | | 5.09 | % | | | 598,220 | | | | 6,789 | | | | 4.50 | % |
| | | | | | | | | | | | | | | | | | | |
| Total interest-bearing deposits | | | 1,520,434 | | | | 16,044 | | | | 4.19 | % | | | 1,253,855 | | | | 11,800 | | | | 3.73 | % |
| Securities sold under agreements to repurchase | | | 194,774 | | | | 2,061 | | | | 4.20 | % | | | 122,292 | | | | 1,383 | | | | 4.49 | % |
| Federal Home Loan Bank advances and other borrowings | | | 29,946 | | | | 385 | | | | 5.10 | % | | | 33,299 | | | | 383 | | | | 4.57 | % |
| Subordinated debt | | | 51,548 | | | | 897 | | | | 6.90 | % | | | 36,084 | | | | 615 | | | | 6.75 | % |
| | | | | | | | | | | | | | | | | | | |
| Total interest-bearing liabilities | | | 1,796,702 | | | | 19,387 | | | | 4.28 | % | | | 1,445,530 | | | | 14,181 | | | | 3.89 | % |
Noninterest-bearing deposits | | | 293,701 | | | | — | | | | — | | | | 281,812 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | |
| Total deposits and interest-bearing liabilities | | | 2,090,403 | | | $ | 19,387 | | | | 3.68 | % | | | 1,727,342 | | | $ | 14,181 | | | | 3.26 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Other liabilities | | | 16,445 | | | | | | | | | | | | 14,914 | | | | | | | | | |
Stockholders’ equity | | | 271,653 | | | | | | | | | | | | 244,980 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 2,378,501 | | | | | | | | | | | $ | 1,987,236 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Net interest income | | | | | | $ | 18,960 | | | | | | | | | | | $ | 17,159 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net interest spread(2) | | | | | | | | | | | 2.84 | % | | | | | | | | | | | 3.25 | % |
| Net interest margin(3) | | | | | | | | | | | 3.54 | % | | | | | | | | | | | 3.95 | % |
| | |
| (1) | | Yields computed on tax-exempt instruments on a tax equivalent basis. |
| |
| (2) | | Yields realized on interest-earning assets less the rates paid on interest-bearing liabilities. |
| |
| (3) | | 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. |
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Nine months ended | | | Nine months ended | |
| (dollars in thousands) | | September 30, 2007 | | | September 30, 2006 | |
| | | Average Balances | | | Interest | | | Rates/Yields | | | Average Balances | | | Interest | | | Rates/Yields | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | $ | 1,609,200 | | | $ | 92,283 | | | | 7.67 | % | | $ | 1,154,828 | | | $ | 64,196 | | | | 7.43 | % |
| Securities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 271,017 | | | | 10,128 | | | | 5.00 | % | | | 250,373 | | | | 9,250 | | | | 4.94 | % |
| Tax-exempt(1) | | | 75,694 | | | | 2,107 | | | | 4.91 | % | | | 50,481 | | | | 1,417 | | | | 4.95 | % |
| Federal funds sold and other | | | 73,677 | | | | 3,076 | | | | 5.60 | % | | | 37,120 | | | | 1,592 | | | | 5.73 | % |
| | | | | | | | | | | | | | | | | | | |
| Total interest-earning assets | | | 2,029,588 | | | $ | 107,594 | | | | 7.14 | % | | | 1,492,802 | | | $ | 76,455 | | | | 6.89 | % |
| | | | | | | | | | | | | | | | | | | | | |
Nonearning assets | | | 222,964 | | | | | | | | | | | | 180,522 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 2,252,552 | | | | | | | | | | | $ | 1,673,324 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest checking | | $ | 253,411 | | | $ | 6,226 | | | | 3.29 | % | | $ | 158,643 | | | $ | 2,532 | | | | 2.13 | % |
| Savings and money market | | | 514,080 | | | | 13,121 | | | | 3.41 | % | | | 417,610 | | | | 9,384 | | | | 3.00 | % |
| Certificates of deposit | | | 661,468 | | | | 24,690 | | | | 4.99 | % | | | 486,642 | | | | 15,298 | | | | 4.20 | % |
| | | | | | | | | | | | | | | | | | | |
| Total interest-bearing deposits | | | 1,428,959 | | | | 44,037 | | | | 4.12 | % | | | 1,062,895 | | | | 27,214 | | | | 3.42 | % |
| Securities sold under agreements to repurchase | | | 174,942 | | | | 5,664 | | | | 4.33 | % | | | 83,364 | | | | 2,569 | | | | 4.12 | % |
| Federal Home Loan Bank advances and other borrowings | | | 39,395 | | | | 1,539 | | | | 5.22 | % | | | 42,708 | | | | 1,495 | | | | 4.67 | % |
| Subordinated debt | | | 51,548 | | | | 2,651 | | | | 6.88 | % | | | 32,648 | | | | 1,616 | | | | 6.62 | % |
| | | | | | | | | | | | | | | | | | | |
| Total interest-bearing liabilities | | | 1,694,844 | | | | 53,891 | | | | 4.25 | % | | | 1,221,615 | | | | 32,894 | | | | 3.60 | % |
Noninterest-bearing deposits | | | 279,935 | | | | — | | | | — | | | | 248,448 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | |
| Total deposits and interest-bearing liabilities | | | 1,974,779 | | | $ | 53,891 | | | | 3.65 | % | | | 1,470,063 | | | $ | 32,894 | | | | 2.99 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Other liabilities | | | 12,714 | | | | | | | | | | | | 11,623 | | | | | | | | | |
Stockholders’ equity | | | 265,059 | | | | | | | | | | | | 191,638 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 2,252,552 | | | | | | | | | | | $ | 1,673,324 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Net interest income | | | | | | $ | 53,703 | | | | | | | | | | | $ | 43,561 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net interest spread(2) | | | | | | | | | | | 2.89 | % | | | | | | | | | | | 3.29 | % |
| Net interest margin(3) | | | | | | | | | | | 3.59 | % | | | | | | | | | | | 3.97 | % |
| | |
| (1) | | Yields computed on tax-exempt instruments on a tax equivalent basis. |
| |
| (2) | | Yields realized on interest-earning assets less the rates paid on interest-bearing liabilities. |
| |
| (3) | | 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. |
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Sept | | | June | | | Mar | | | Dec | | | Sept | | | Jun | |
| (dollars in thousands, except per share data) | | 2007 | | | 2007 | | | 2007 | | | 2006 | | | 2006 | | | 2006 | |
Balance sheet data, at quarter end: | | | | | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 2,368,079 | | | | 2,315,327 | | | | 2,193,132 | | | | 2,142,187 | | | | 2,052,252 | | | | 1,985,625 | |
| Total loans | | | 1,731,245 | | | | 1,663,030 | | | | 1,553,980 | | | | 1,497,735 | | | | 1,405,401 | | | | 1,358,273 | |
| Allowance for loan losses | | | (17,978 | ) | | | (17,375 | ) | | | (16,792 | ) | | | (16,118 | ) | | | (15,172 | ) | | | (14,686 | ) |
| Securities | | | 352,222 | | | | 339,781 | | | | 340,255 | | | | 346,494 | | | | 330,759 | | | | 305,642 | |
| Noninterest-bearing deposits | | | 316,542 | | | | 294,631 | | | | 306,885 | | | | 300,978 | | | | 306,296 | | | | 312,709 | |
| Total deposits | | | 1,826,884 | | | | 1,797,536 | | | | 1,700,132 | | | | 1,622,411 | | | | 1,585,238 | | | | 1,559,885 | |
| Securities sold under agreements to repurchase | | | 145,332 | | | | 140,443 | | | | 116,952 | | | | 141,016 | | | | 122,354 | | | | 104,380 | |
| Advances from FHLB and other borrowings | | | 55,671 | | | | 46,699 | | | | 46,619 | | | | 53,726 | | | | 28,739 | | | | 33,749 | |
| Subordinated debt | | | 51,548 | | | | 51,548 | | | | 51,548 | | | | 51,548 | | | | 51,548 | | | | 30,929 | |
| Total stockholders’ equity | | | 274,636 | | | | 265,194 | | | | 262,917 | | | | 256,017 | | | | 249,059 | | | | 238,739 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Balance sheet data, quarterly averages: | | | | | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 2,378,501 | | | | 2,229,227 | | | | 2,149,928 | | | | 2,096,893 | | | | 1,987,236 | | | | 1,878,912 | |
| Total loans | | | 1,697,862 | | | | 1,598,967 | | | | 1,530,771 | | | | 1,442,730 | | | | 1,375,036 | | | | 1,328,121 | |
| Securities | | | 347,423 | | | | 347,081 | | | | 345,630 | | | | 334,426 | | | | 317,332 | | | | 298,909 | |
| Total earning assets | | | 2,151,583 | | | | 2,004,884 | | | | 1,932,298 | | | | 1,879,759 | | | | 1,751,559 | | | | 1,651,962 | |
| Noninterest-bearing deposits | | | 293,701 | | | | 276,241 | | | | 269,864 | | | | 292,996 | | | | 281,812 | | | | 311,286 | |
| Total deposits | | | 1,814,135 | | | | 1,678,036 | | | | 1,634,513 | | | | 1,596,765 | | | | 1,535,667 | | | | 1,482,150 | |
| Securities sold under agreements to repurchase | | | 194,774 | | | | 172,872 | | | | 157,180 | | | | 154,483 | | | | 122,292 | | | | 68,079 | |
| Advances from FHLB and other borrowings | | | 29,946 | | | | 38,516 | | | | 37,828 | | | | 29,817 | | | | 33,299 | | | | 44,417 | |
| Subordinated debt | | | 51,548 | | | | 51,548 | | | | 51,548 | | | | 51,548 | | | | 36,084 | | | | 30,929 | |
| Total stockholders’ equity | | | 271,653 | | | | 264,055 | | | | 259,466 | | | | 253,761 | | | | 244,980 | | | | 234,400 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Statement of operations data, for the three months ended: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income | | $ | 38,347 | | | | 35,508 | | | | 33,739 | | | | 33,241 | | | | 31,340 | | | | 28,305 | |
| Interest expense | | | 19,387 | | | | 17,847 | | | | 16,657 | | | | 15,850 | | | | 14,181 | | | | 11,410 | |
| | | | | | | | | | | | | | | | | | | |
| Net interest income | | | 18,960 | | | | 17,661 | | | | 17,082 | | | | 17,391 | | | | 17,159 | | | | 16,895 | |
| Provision for loan losses | | | 772 | | | | 900 | | | | 788 | | | | 1,051 | | | | 587 | | | | 1,707 | |
| | | | | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 18,188 | | | | 16,761 | | | | 16,294 | | | | 16,340 | | | | 16,572 | | | | 15,188 | |
| Noninterest income | | | 5,332 | | | | 5,552 | | | | 5,026 | | | | 4,934 | | | | 4,424 | | | | 4,380 | |
| Noninterest expense | | | 15,110 | | | | 14,484 | | | | 13,124 | | | | 13,135 | | | | 13,054 | | | | 13,105 | |
| | | | | | | | | | | | | | | | | | | |
| Income before taxes | | | 8,410 | | | | 7,828 | | | | 8,196 | | | | 8,139 | | | | 7,942 | | | | 6,463 | |
| Income tax expense | | | 2,638 | | | | 2,402 | | | | 2,594 | | | | 2,493 | | | | 2,595 | | | | 2,141 | |
| | | | | | | | | | | | | | | | | | | |
| Net income | | $ | 5,772 | | | | 5,426 | | | | 5,602 | | | | 5,646 | | | | 5,347 | | | | 4,322 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Profitability and other ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on avg. assets(1) | | | 0.96 | % | | | 0.98 | % | | | 1.06 | % | | | 1.07 | % | | | 1.07 | % | | | 0.92 | % |
| Return on avg. equity(1) | | | 8.43 | % | | | 8.24 | % | | | 8.76 | % | | | 8.83 | % | | | 8.66 | % | | | 7.40 | % |
| Net interest margin(2) | | | 3.54 | % | | | 3.58 | % | | | 3.64 | % | | | 3.74 | % | | | 3.95 | % | | | 4.17 | % |
| Noninterest income to total revenue(3) | | | 21.95 | % | | | 23.92 | % | | | 22.73 | % | | | 22.10 | % | | | 20.50 | % | | | 20.60 | % |
| Noninterest income to avg. assets(1) | | | 0.89 | % | | | 1.00 | % | | | 0.95 | % | | | 0.93 | % | | | 0.89 | % | | | 0.94 | % |
| Noninterest exp. to avg. assets(1) | | | 2.52 | % | | | 2.61 | % | | | 2.48 | % | | | 2.49 | % | | | 2.63 | % | | | 2.80 | % |
| Efficiency ratio(4) | | | 62.20 | % | | | 62.40 | % | | | 59.36 | % | | | 58.84 | % | | | 60.48 | % | | | 61.60 | % |
| Avg. loans to average deposits | | | 93.59 | % | | | 95.29 | % | | | 93.65 | % | | | 90.40 | % | | | 89.50 | % | | | 89.60 | % |
| Securities to total assets | | | 14.87 | % | | | 14.68 | % | | | 15.51 | % | | | 16.17 | % | | | 16.12 | % | | | 15.39 | % |
| Average interest-earning assets to average interest-bearing liabilities | | | 119.75 | % | | | 119.75 | % | | | 119.75 | % | | | 122.00 | % | | | 121.20 | % | | | 125.30 | % |
| Brokered time deposits to total deposits | | | 8.04 | % | | | 8.17 | % | | | 5.83 | % | | | 3.71 | % | | | 4.50 | % | | | 5.00 | % |
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Sept | | | June | | | Mar | | | Dec | | | Sept | | | Jun | |
| (dollars in thousands, except per share data) | | 2007 | | | 2007 | | | 2007 | | | 2006 | | | 2006 | | | 2006 | |
Loan portfolio balances, end of period: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial real estate — mortgage | | $ | 315,340 | | | | 307,757 | | | | 287,498 | | | | 284,302 | | | | 265,174 | | | | 260,168 | |
| Commercial real estate — construction | | | 176,131 | | | | 177,426 | | | | 160,222 | | | | 161,903 | | | | 152,627 | | | | 164,049 | |
| Other commercial loans | | | 780,341 | | | | 738,866 | | | | 665,857 | | | | 608,530 | | | | 554,617 | | | | 503,797 | |
| Consumer real estate — mortgage | | | 297,360 | | | | 288,325 | | | | 301,525 | | | | 299,627 | | | | 292,206 | | | | 294,119 | |
| Consumer real estate — construction | | | 112,890 | | | | 102,998 | | | | 92,162 | | | | 91,194 | | | | 87,890 | | | | 86,978 | |
| Other consumer loans | | | 49,184 | | | | 47,657 | | | | 46,716 | | | | 52,179 | | | | 52,887 | | | | 49,162 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Asset quality information and ratios: | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonperforming assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | $ | 2,364 | | | | 2,392 | | | | 4,705 | | | | 7,070 | | | | 3,477 | | | | 2,800 | |
| Other real estate | | | 878 | | | | 687 | | | | 927 | | | | 995 | | | | — | | | | 67 | |
| Past due loans over 90 days and still accruing interest | | | 633 | | | | 606 | | | | 98 | | | | 737 | | | | 1,123 | | | | 492 | |
| Net loan charge-offs(6) | | | 169 | | | | 317 | | | | 114 | | | | 105 | | | | 101 | | | | 441 | |
| Allowance for loan losses to total loans | | | 1.04 | % | | | 1.04 | % | | | 1.08 | % | | | 1.08 | % | | | 1.08 | % | | | 1.08 | % |
| Allowance for loan losses to nonaccrual loans | | | 760.5 | % | | | 726.4 | % | | | 356.9 | % | | | 228.0 | % | | | 436.4 | % | | | 524.5 | % |
| As a percentage of total loans and ORE: | | | | | | | | | | | | | | | | | | | | | | | | |
| Past due loans over 30 days | | | 0.38 | % | | | 0.31 | % | | | 0.33 | % | | | 0.74 | % | | | 0.69 | % | | | 0.25 | % |
| Nonperforming assets | | | 0.19 | % | | | 0.19 | % | | | 0.36 | % | | | 0.54 | % | | | 0.25 | % | | | 0.21 | % |
| Potential problem loans(5) | | | 0.40 | % | | | 0.16 | % | | | 0.21 | % | | | 0.24 | % | | | 0.77 | % | | | 0.31 | % |
| Annualized net loan charge-offs year-to-date to avg. loans(6) | | | 0.05 | % | | | 0.06 | % | | | 0.03 | % | | | 0.05 | % | | | 0.05 | % | | | 0.07 | % |
| Avg. commercial loan internal risk ratings(5) | | | 4.1 | | | | 4.1 | | | | 4.1 | | | | 4.1 | | | | 4.1 | | | | 4.1 | |
| Avg. loan account balances(7) | | $ | 169 | | | | 164 | | | | 156 | | | | 140 | | | | 132 | | | | 115 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Interest rates and yields: | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans | | | 7.65 | % | | | 7.66 | % | | | 7.68 | % | | | 7.65 | % | | | 7.72 | % | | | 7.32 | % |
| Securities | | | 4.99 | % | | | 4.98 | % | | | 4.96 | % | | | 4.97 | % | | | 4.91 | % | | | 5.10 | % |
| Total earning assets | | | 7.12 | % | | | 7.15 | % | | | 7.13 | % | | | 7.06 | % | | | 7.14 | % | | | 6.92 | % |
| Total deposits, including non-interest bearing | | | 3.51 | % | | | 3.46 | % | | | 3.36 | % | | | 3.18 | % | | | 3.05 | % | | | 2.59 | % |
| Securities sold under agreements to repurchase | | | 4.20 | % | | | 4.39 | % | | | 4.42 | % | | | 4.52 | % | | | 4.49 | % | | | 4.00 | % |
| FHLB advances and other borrowings | | | 5.10 | % | | | 5.19 | % | | | 5.36 | % | | | 4.93 | % | | | 4.57 | % | | | 5.46 | % |
| Subordinated debt | | | 6.90 | % | | | 6.84 | % | | | 6.89 | % | | | 6.84 | % | | | 6.75 | % | | | 6.69 | % |
| Total deposits and interest-bearing liabilities | | | 3.68 | % | | | 3.67 | % | | | 3.59 | % | | | 3.43 | % | | | 3.26 | % | | | 2.81 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Capital ratios(9): | | | | | | | | | | | | | | | | | | | | | | | | |
| Stockholders’ equity to total assets | | | 11.6 | % | | | 11.5 | % | | | 12.0 | % | | | 11.9 | % | | | 12.1 | % | | | 12.0 | % |
| Leverage | | | 9.2 | % | | | 9.5 | % | | | 9.5 | % | | | 9.5 | % | | | 9.2 | % | | | 8.6 | % |
| Tier one risk-based | | | 10.4 | % | | | 10.4 | % | | | 10.9 | % | | | 10.9 | % | | | 10.6 | % | | | 9.5 | % |
| Total risk-based | | | 11.3 | % | | | 11.3 | % | | | 11.8 | % | | | 11.8 | % | | | 12.0 | % | | | 10.4 | % |
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Sept | | | June | | | Mar | | | Dec | | | Sept | | | Jun | |
| (dollars in thousands, except per share data) | | 2007 | | | 2007 | | | 2007 | | | 2006 | | | 2006 | | | 2006 | |
Per share data: | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings – basic | | $ | 0.37 | | | | 0.35 | | | | 0.36 | | | | 0.37 | | | | 0.35 | | | | 0.28 | |
| Earnings – diluted | | $ | 0.35 | | | | 0.33 | | | | 0.34 | | | | 0.34 | | | | 0.32 | | | | 0.26 | |
| Book value at quarter end (8) | | $ | 17.66 | | | | 17.06 | | | | 16.93 | | | | 16.57 | | | | 16.16 | | | | 15.53 | |
| Weighted avg. shares – basic | | | 15,503,284 | | | | 15,494,522 | | | | 15,433,442 | | | | 15,427,908 | | | | 15,393,735 | | | | 15,335,754 | |
| Weighted avg. shares – diluted | | | 16,609,328 | | | | 16,664,213 | | | | 16,617,484 | | | | 16,641,425 | | | | 16,655,349 | | | | 16,503,692 | |
| Common shares outstanding | | | 15,553,037 | | | | 15,545,581 | | | | 15,530,975 | | | | 15,446,074 | | | | 15,409,341 | | | | 15,370,116 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Investor information: | | | | | | | | | | | | | | | | | | | | | | | | |
| Closing sales price | | $ | 28.82 | | | | 29.36 | | | | 30.51 | | | | 33.18 | | | | 35.80 | | | | 30.43 | |
| High sales price during quarter | | $ | 31.31 | | | | 31.48 | | | | 33.85 | | | | 36.17 | | | | 37.41 | | | | 30.92 | |
| Low sales price during quarter | | $ | 21.62 | | | | 28.27 | | | | 29.40 | | | | 31.23 | | | | 28.93 | | | | 27.09 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other information: | | | | | | | | | | | | | | | | | | | | | | | | |
| Gains on sale of loans and loan participations sold: | | | | | | | | | | | | | | | | | | | | | | | | |
| Mortgage loan sales: | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross loans sold | | $ | 42,895 | | | | 52,197 | | | | 31,044 | | | | 36,551 | | | | 37,371 | | | | 37,585 | |
| Gross fees(10) | | $ | 659 | | | | 846 | | | | 544 | | | | 653 | | | | 679 | | | | 668 | |
| Gross fees as a percentage of mortgage loans originated | | | 1.54 | % | | | 1.62 | % | | | 1.75 | % | | | 1.79 | % | | | 1.82 | % | | | 1.78 | % |
| Commercial loan participations sold | | $ | 19 | | | | 171 | | | | 45 | | | | 224 | | | | 31 | | | | 49 | |
| Gains on sales of investment securities, net | | $ | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| Brokerage account assets, at quarter-end (11) | | $ | 590,000 | | | | 643,000 | | | | 617,000 | | | | 597,000 | | | | 553,000 | | | | 501,000 | |
| Trust account assets, at quarter-end | | $ | 512,000 | | | | 475,000 | | | | 400,000 | | | | 380,000 | | | | 361,000 | | | | 295,000 | |
| Floating rate loans as a percentage of loans(12) | | | 44.6 | % | | | 45.5 | % | | | 46.3 | % | | | 46.3 | % | | | 47.3 | % | | | 47.0 | % |
| Balance of commercial loan participations sold to other banks and serviced by Pinnacle, at quarter end | | $ | 125,370 | | | | 115,913 | | | | 114,143 | | | | 95,398 | | | | 85,291 | | | | 80,359 | |
| Core deposits to total funding(13) | | | 61.4 | % | | | 62.3 | % | | | 63.7 | % | | | 63.3 | % | | | 63.7 | % | | | 63.8 | % |
| Risk-weighted assets | | $ | 1,998,401 | | | | 1,921,648 | | | | 1,780,107 | | | | 1,721,633 | | | | 1,628,596 | | | | 1,591,071 | |
| Total assets per full-time equivalent employee | | $ | 5,257 | | | | 5,250 | | | | 5,228 | | | | 5,302 | | | | 5,189 | | | | 5,531 | |
| Annualized revenues per full-time equivalent employee | | $ | 213.9 | | | | 211 | | | | 210.8 | | | | 219.2 | | | | 218.3 | | | | 237.0 | |
| Number of employees (full-time equivalent) | | | 450.5 | | | | 441.0 | | | | 419.5 | | | | 404.0 | | | | 395.5 | | | | 359.0 | |
| Associate retention rate(14) | | | 89.4 | % | | | 88.1 | % | | | 85.3 | % | | | 85.1 | % | | | 91.1 | % | | | 94.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Selected economic information (15): | | | | | | | | | | | | | | | | | | | | | | | | |
| Nashville MSA nonfarm employment | | | 763.6 | | | | 759.5 | | | | 757.5 | | | | 768.8 | | | | 758.4 | | | | 749.6 | |
| Knoxville MSA nonfarm employment | | | 337.2 | | | | 335.9 | | | | 335.2 | | | | 337.3 | | | | 335.1 | | | | 337.2 | |
| Nashville MSA unemployment | | | 3.5 | % | | | 3.7 | % | | | 4.0 | % | | | 3.5 | % | | | 3.5 | % | | | 4.7 | % |
| Knoxville MSA unemployment | | | 3.2 | % | | | 3.4 | % | | | 3.8 | % | | | 3.3 | % | | | 3.2 | % | | | 4.6 | % |
| Nashville residential median home price | | $ | 182.3 | | | | 196.0 | | | | 173.4 | | | | 184.6 | | | | 178.9 | | | | 181.0 | |
| Knoxville residential median home price | | na | | | 199.9 | | | | 199.5 | | | | 189.9 | | | | 187.0 | | | | 184.9 | |
| Nashville inventory of residential homes for sale | | | 15.4 | | | | 14.6 | | | | 12.9 | | | | 10.8 | | | | 11.7 | | | | 11.1 | |
| Knoxville inventory of residential homes for sale | | na | | | 7.8 | | | | 7.0 | | | | 5.0 | | | | 6.4 | | | | 6.7 | |
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY AND YEAR-TO-DATE FINANCIAL DATA – UNAUDITED
| | | | | | | | | |
| | | As of September 30, | | | As of December 31, | |
| (dollars in thousands,except per share data) | | 2007 | | | 2006 | |
Reconciliation of certain financial measures: | | | | | | | | |
| Tangible assets: | | | | | | | | |
| Total assets | | $ | 2,368,079 | | | $ | 2,142,187 | |
| Less: Goodwill | | | (114,288 | ) | | | (114,288 | ) |
| Core deposit intangible | | | (9,838 | ) | | | (11,385 | ) |
| | | | | | | |
| Net tangible assets | | $ | 2,243,954 | | | $ | 2,016,514 | |
| | | | | | | |
| Tangible equity: | | | | | | | | |
| Total stockholders’ equity | | $ | 274,636 | | | $ | 256,017 | |
| Less: Goodwill | | | (114,288 | ) | | | (114,288 | ) |
| Core deposit intangible | | | (9,838 | ) | | | (11,385 | ) |
| | | | | | | |
| Net tangible equity | | $ | 150,511 | | | $ | 130,344 | |
| | | | | | | |
Tangible equity divided by tangible assets | | | 6.71 | % | | | 6.46 | % |
| | | | | | | |
Tangible equity per common share | | $ | 9.68 | | | $ | 8.44 | |
| | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | For the three months ended | | | For the nine months ended | |
| | | September 30, | | | September 30, | |
| (dollars in thousands) | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| Average tangible assets: | | | | | | | | | | | | | | | | |
| Total average assets | | $ | 2,378,501 | | | $ | 1,987,236 | | | $ | 2,252,552 | | | $ | 1,673,324 | |
| Less: Average goodwill | | | (114,288 | ) | | | (113,683 | ) | | | (114,288 | ) | | | (82,893 | ) |
| Average core deposit intangible | | | (10,289 | ) | | | (12,265 | ) | | | (10,611 | ) | | | (9,076 | ) |
| | | | | | | | | | | | | |
| Net average tangible assets | | $ | 2,253,924 | | | $ | 1,861,288 | | | $ | 2,127,653 | | | $ | 1,581,355 | |
| | | | | | | | | | | | | |
| Average tangible equity: | | | | | | | | | | | | | | | | |
| Total average stockholders’ equity | | $ | 271,653 | | | $ | 244,980 | | | $ | 271,653 | | | $ | 191,638 | |
| Less: Average goodwill | | | (114,288 | ) | | | (113,683 | ) | | | (114,288 | ) | | | (82,893 | ) |
| Average core deposit intangible | | | (10,289 | ) | | | (12,265 | ) | | | (10,611 | ) | | | (9,076 | ) |
| | | | | | | | | | | | | |
| Net average tangible stockholders’ equity | | $ | 147,076 | | | $ | 119,032 | | | $ | 146,754 | | | $ | 99,669 | |
| | | | | | | | | | | | | |
| Net income | | $ | 5,772 | | | $ | 5,347 | | | $ | 16,800 | | | $ | 12,281 | |
| | | | | | | | | | | | | |
| Return on average tangible assets (annualized) | | | 1.02 | % | | | 1.15 | % | | | 1.06 | % | | | 1.04 | % |
| | | | | | | | | | | | | |
| Return on average tangible stockholders’ equity (annualized) | | | 15.57 | % | | | 18.02 | % | | | 15.31 | % | | | 16.47 | % |
| | | | | | | | | | | | | |
| Net income | | $ | 5,772 | | | $ | 5,347 | | | $ | 16,800 | | | $ | 12,281 | |
| Impact of merger related expense, net of tax | | | — | | | | 133 | | | | — | | | | 962 | |
| | | | | | | | | | | | | |
Net income before impact of merger related expense | | $ | 5,772 | | | $ | 5,479 | | | $ | 16,800 | | | $ | 13,243 | |
| | | | | | | | | | | | | |
Fully-diluted earnings per share before impact of merger related expense | | $ | 0.35 | | | $ | 0.33 | | | $ | 1.01 | | | $ | 0.90 | |
| | | | | | | | | | | | | |
| Net income | | $ | 5,772 | | | $ | 5,347 | | | $ | 16,800 | | | $ | 12,281 | |
| Impact of Knoxville expansion, net of tax | | | 587 | | | | — | | | | 989 | | | | — | |
| | | | | | | | | | | | | |
Net income before impact of Knoxville expansion | | $ | 6,359 | | | $ | 5,347 | | | $ | 17,789 | | | $ | 12,281 | |
| | | | | | | | | | | | | |
Fully-diluted earnings per share before impact of Knoxville expansion | | $ | 0.38 | | | $ | 0.32 | | | $ | 1.07 | | | $ | 0.84 | |
| | | | | | | | | | | | | |
Return on average assets before impact of Knoxville expansion | | | 1.06 | % | | | 1.07 | % | | | 1.06 | % | | | 0.98 | % |
| | | | | | | | | | | | | |
Return on average equity before impact of Knoxville expansion | | | 9.29 | % | | | 8.66 | % | | | 8.75 | % | | | 8.57 | % |
| | | | | | | | | | | | | |
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. |
| |
| 5. | | 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 are considered potential problem loans. Potential problem loans do not include nonperforming loans. Generally, consumer loans are not subjected to internal risk ratings. |
| |
| 6. | | 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. |
| |
| 7. | | Computed by dividing the balance of all loans by the number of loan accounts as of the end of each quarter. |
| |
| 8. | | Book value per share computed by dividing total stockholders’ equity by common shares outstanding |
| |
| 9. | | 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. |
| |
| 10. | | Amounts are included in the statement of income in “Gains on the sale of loans and loan participations sold”, 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 $100,000. 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. Knoxville data is from the Knoxville Association of Realtors. September 2007 was not available from Knoxville at press time. |
