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SECURITIES AND EXCHANGE COMMISSION
þANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
![](https://capedge.com/proxy/10-K/0000950144-09-001457/g17709g1770901.gif)
Tennessee | 62-1812853 | |
(State or other jurisdiction | (I.R.S. Employer | |
of incorporation) | Identification No.) |
211 Commerce Street, Suite 300, Nashville, Tennessee | 37201 | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Name of Exchange on which Registered | |||
Common Stock, par value $1.00 | Nasdaq Global Select Market |
Large accelerated filero | Accelerated filerþ | Non-accelerated filero | Smaller reporting companyo | |||
(Do not check if a smaller reporting company) |
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1. | Achievement of all major integration milestones on time, | ||
2. | Achievement of the financial synergies that were proposed at the time the Mid-America transaction was announced, | ||
3. | No degradation in service quality as measured by internal client surveys, and | ||
4. | Continued loan growth for the combined firm at rates exceeding those of the previous period. |
• | Clients generally perceive that service levels at large banks are declining. We believe this is largely attributable to cost savings initiatives and/or merger-related integration issues resulting from consolidation in the bank and brokerage industries. Additionally, business owners want a reliable point of contact that is knowledgeable about their business and the financial products and services that are important to the success of their business. Nashville is dominated by three large regional bank holding companies that are headquartered elsewhere, each of whom is experiencing declining market share trends in the Nashville market over the last eight years; and | ||
• | There is significant growth in the demand for convenient access to financial services, particularly through ATMs, telephone banking, remote deposit capture and Internet banking. We have developed best-in-class products and services in these areas, including free ATM usage and a comprehensive Internet banking suite of products. |
• | Hire and retain highly experienced and qualified banking and financial professionals with successful |
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track records and, for client contact personnel, established books of business with small businesses, real estate professionals and affluent households within the Nashville and Knoxville MSAs. On average, our senior client contact associates have in excess of 20 years experience in their local market. We have also achieved an annual associate retention rate of approximately 90 percent. We believe we will continue to experience success in attracting more market-best associates to our firm as well as retaining our highly experienced and successful group of associates. Our compensation has traditionally included cash incentives and equity based awards to all associates to facilitate this employment philosophy and our compensation expense has traditionally been higher than our peers as a result. | |||
• | Provide individualized attention with consistent, local decision-making authority and capitalize on customer dissatisfaction that we believe exists and has been caused by what we believe to be our competitors’ less than satisfactory response to the financial needs of today’s sophisticated consumers and small- to medium-sized businesses. Since we began our company, we have historically surveyed our customers on numerous matters related to their relationship with us. Better than 97 percent of these surveys indicate that Pinnacle is recognizably better than our competitors. | ||
• | Offer a full line of financial services to include traditional depository and credit products, as well as sophisticated investment, trust and insurance products and services. Brokerage products are offered through dual employees licensed by Raymond James Financial Services. As of December 31, 2008, Pinnacle National’s brokerage division, Pinnacle Asset Management, had accumulated approximately $686 million in brokerage assets and in 2008 and 2007, was the top producer among Raymond James Financial Services branches nationwide. Additionally, our trust department had accumulated approximately $588 million in trust assets under management at December 31, 2008. We use our trust department, Pinnacle Asset Management and our insurance agency subsidiary, Miller Loughry and Beach Insurance Services, Inc., to provide a broad array of sophisticated and convenient investment and insurance products and services. | ||
• | Offer extraordinary convenience by building a distribution system with online banking, telephone banking, remote deposit services and global access to ATMs to provide options for clients to access financial services 24/7. |
§ | In 2008,Forbesmagazine ranked Nashville among the “Best Places for Business and Careers” based on job and income growth, as well as migration trends. | ||
§ | In December 2008, Marketwatch.com ranked Nashville No. 8 nationally in its Top 10 Cities for Business ranking because of Nashville’s robust industry sectors. | ||
§ | In 2008, Nashville ranked among the top 100 places in live in America based on education, employment, economy, crime, parks, recreation and housing. | ||
§ | In its Best Cities for Relocating Families ranking,Primacyranked Nashville No. 20 nationally among large market cities based on factors such as home prices, appreciation rates and property taxes. |
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§ | In November 2008,Site Selection, an Atlanta-based magazine that annually ranks states’ attractiveness to investors, placed Tennessee in second place as to investor attractiveness. |
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• Mutual Funds; | • Fixed Annuities; | |||||
• Variable Annuities; | • Stocks; | |||||
• Money Market Instruments; | • Financial Planning; | |||||
• Treasury Securities; | • Asset Management Accounts; and | |||||
• Bonds; | • Listed Options. |
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• | Acquiring direct or indirect ownership or control of any voting shares of any bank if, after the acquisition, the bank holding company will directly or indirectly own or control more than 5% of the bank’s voting shares; | ||
• | Acquiring all or substantially all of the assets of any bank; or | ||
• | Merging or consolidating with any other bank holding company. |
• | The bank holding company has registered securities under Section 12 of the Securities Exchange Act of 1934; or | ||
• | No other person owns a greater percentage of that class of voting securities immediately after the transaction. |
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• | Financial in nature; | ||
• | Incidental to a financial activity; or | ||
• | Complementary to a financial activity and do not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally. |
• | Lending, trust and other banking activities; | ||
• | Insuring, guaranteeing, or indemnifying against loss or harm, or providing and issuing annuities, and acting as principal, agent, or broker for these purposes, in any state; | ||
• | Providing financial, investment, or advisory services; | ||
• | Issuing or selling instruments representing interests in pools of assets permissible for a bank to hold directly; | ||
• | Underwriting, dealing in or making a market in securities; | ||
• | Activities that the Federal Reserve has determined to be so closely related to banking or managing or controlling banks as to be a proper incident to banking or managing or controlling banks; | ||
• | Activities permitted outside of the United States that the Federal Reserve has determined to be usual in connection with banking or other financial operations abroad; | ||
• | Merchant banking through securities or insurance affiliates; and | ||
• | Insurance company portfolio investments. |
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• | Factoring accounts receivable; | ||
• | Acquiring or servicing loans; | ||
• | Leasing personal property; | ||
• | Conducting discount securities brokerage activities; | ||
• | Performing selected data processing services; | ||
• | Acting as agent or broker in selling credit life insurance and other types of insurance in connection with credit transactions; and | ||
• | Performing selected insurance underwriting activities. |
• | Ensure that the incentive compensation programs for its senior executive officers do not encourage unnecessary and excessive risks that threaten the value of Pinnacle Financial; | ||
• | Implement a required clawback of any bonus or incentive compensation paid to Pinnacle Financial’s senior executive officers based on statements of earnings, gains, or other criteria that are later proven to be materially inaccurate; | ||
• | Not make any “golden parachute payment” (as defined in the Internal Revenue Code) to any of Pinnacle Financial’s senior executive officers; and | ||
• | Agree not to deduct for tax purposes executive compensation in excess of $500,000 in any one fiscal year for each of Pinnacle Financial’s senior executive officers. |
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• | A bank’s loans or extensions of credit to affiliates; | ||
• | A bank’s investment in affiliates; | ||
• | Assets a bank may purchase from affiliates, except for real and personal property exempted by the Federal Reserve; | ||
• | The amount of loans or extensions of credit to third parties collateralized by the securities or obligations of affiliates; and | ||
• | A bank’s guarantee, acceptance or letter of credit issued on behalf of an affiliate. |
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• | Federal Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; | ||
• | Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; | ||
• | Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit; | ||
• | Fair Credit Reporting Act of 1978, governing the use and provision of information to credit reporting agencies; | ||
• | Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; | ||
• | Bank Secrecy Act, governing how banks and other firms report certain currency transactions and maintain appropriate safeguards against “money laundering” activities; | ||
• | Soldiers’ and Sailors’ Civil Relief Act of 1940, governing the repayment terms of, and property rights underlying, secured obligations of persons in military service; and | ||
• | Rules and regulations of the various federal agencies charged with the responsibility of implementing the federal laws. |
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• | Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and | ||
• | Electronic Funds Transfer Act and Regulation E issued by the Federal Reserve to implement that act, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services. |
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Price Per Share | ||||||||
High | Low | |||||||
2008: | ||||||||
First quarter | $ | 26.75 | $ | 20.82 | ||||
Second quarter | 29.29 | 20.05 | ||||||
Third quarter | 36.57 | 19.30 | ||||||
Fourth quarter | 32.00 | 22.01 | ||||||
2007: | ||||||||
First quarter | $ | 33.85 | $ | 29.40 | ||||
Second quarter | 31.48 | 28.27 | ||||||
Third quarter | 31.31 | 21.62 | ||||||
Fourth quarter | 30.93 | 24.85 |
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2008 | 2007(1) | 2006(2) | 2005 | 2004 | ||||||||||||||||
(in thousands, except per share data, ratios and percentages) | ||||||||||||||||||||
Statement of Financial Condition Data: | ||||||||||||||||||||
Total assets | $ | 4,754,075 | $ | 3,794,170 | $ | 2,142,187 | $ | 1,016,772 | $ | 727,139 | ||||||||||
Loans, net of unearned income | 3,354,907 | 2,749,641 | 1,497,735 | 648,024 | 472,362 | |||||||||||||||
Allowance for loan losses | 36,484 | 28,470 | 16,118 | 7,858 | 5,650 | |||||||||||||||
Total securities | 849,781 | 522,685 | 346,494 | 279,080 | 208,170 | |||||||||||||||
Goodwill and core deposit intangibles | 261,032 | 260,900 | 125,673 | - | - | |||||||||||||||
Deposits and securities sold under agreements to repurchase | 3,717,544 | 3,081,390 | 1,763,427 | 875,985 | 602,655 | |||||||||||||||
Advances from FHLB and other borrowings | 273,609 | 141,666 | 53,726 | 41,500 | 53,500 | |||||||||||||||
Subordinated debt | 97,476 | 82,476 | 51,548 | 30,929 | 10,310 | |||||||||||||||
Stockholders’ equity | 627,298 | 466,610 | 256,017 | 63,436 | 57,880 | |||||||||||||||
Income Statement Data: | ||||||||||||||||||||
Interest income | $ | 206,082 | $ | 150,931 | $ | 109,696 | $ | 46,308 | $ | 27,679 | ||||||||||
Interest expense | 91,867 | 75,219 | 48,743 | 17,270 | 7,415 | |||||||||||||||
Net interest income | 114,215 | 75,712 | 60,953 | 29,038 | 20,264 | |||||||||||||||
Provision for loan losses | 11,214 | 4,720 | 3,732 | 2,152 | 2,948 | |||||||||||||||
Net interest income after provision for loan losses | 103,001 | 70,992 | 57,221 | 26,886 | 17,316 | |||||||||||||||
Noninterest income | 34,718 | 22,521 | 15,786 | 5,394 | 4,978 | |||||||||||||||
Noninterest expense | 94,478 | 60,480 | 46,624 | 21,032 | 14,803 | |||||||||||||||
Income before income taxes | 43,241 | 33,033 | 26,383 | 11,248 | 7,491 | |||||||||||||||
Income tax expense | 12,367 | 9,992 | 8,456 | 3,193 | 2,172 | |||||||||||||||
Net income | 30,874 | 23,041 | 17,927 | 8,055 | 5,319 | |||||||||||||||
Preferred dividends and accretion on common stock warrants | 309 | - | - | - | - | |||||||||||||||
Net income available to common stockholders | $ | 30,565 | $ | 23,041 | $ | 17,927 | $ | 8,055 | $ | 5,319 | ||||||||||
Per Share Data: | ||||||||||||||||||||
Earnings per share available to common stockholders — basic | $ | 1.34 | $ | 1.43 | $ | 1.28 | $ | 0.96 | $ | 0.69 | ||||||||||
Weighted average shares outstanding — basic | 22,793,699 | 16,100,076 | 13,954,077 | 8,408,663 | 7,750,943 | |||||||||||||||
Earnings per share available to common stockholders — diluted | $ | 1.27 | $ | 1.34 | $ | 1.18 | $ | 0.85 | $ | 0.61 | ||||||||||
Weighted average shares outstanding — diluted | 24,053,972 | 17,255,543 | 15,156,837 | 9,464,500 | 8,698,139 | |||||||||||||||
Book value per share | $ | 26.40 | $ | 20.96 | $ | 16.57 | $ | 7.53 | $ | 6.90 | ||||||||||
Common shares outstanding at end of period | 23,762,124 | 22,264,817 | 15,446,074 | 8,426,551 | 8,389,232 | |||||||||||||||
Performance Ratios and Other Data: | ||||||||||||||||||||
Return on average assets | 0.74 | % | 0.96 | % | 1.01 | % | 0.93 | % | 0.89 | % | ||||||||||
Return on average stockholders’ equity | 6.13 | % | 8.34 | % | 8.66 | % | 13.23 | % | 12.31 | % | ||||||||||
Net interest margin (3) | 3.17 | % | 3.55 | % | 3.90 | % | 3.60 | % | 3.62 | % | ||||||||||
Net interest spread (4) | 2.78 | % | 2.88 | % | 3.20 | % | 3.16 | % | 3.34 | % | ||||||||||
Noninterest income to average assets | 0.84 | % | 0.94 | % | 0.89 | % | 0.62 | % | 0.83 | % | ||||||||||
Noninterest expense to average assets | 2.30 | % | 2.53 | % | 2.61 | % | 2.42 | % | 2.48 | % | ||||||||||
Efficiency ratio (5) | 63.43 | % | 61.57 | % | 60.76 | % | 61.08 | % | 58.64 | % | ||||||||||
Average loan to average deposit ratio | 97.70 | % | 94.88 | % | 88.73 | % | 81.3 | % | 79.0 | % | ||||||||||
Average interest-earning assets to average interest-bearing liabilities | 115.27 | % | 119.46 | % | 122.10 | % | 120.0 | % | 120.0 | % | ||||||||||
Average equity to average total assets ratio | 12.15 | % | 11.56 | % | 11.64 | % | 7.00 | % | 7.23 | % | ||||||||||
Asset Quality Ratios: | ||||||||||||||||||||
Allowance for loan losses to nonaccrual loans | 335.95 | % | 144.69 | % | 227.98 | % | 1708.26 | % | 1007.13 | % | ||||||||||
Allowance for loan losses to total loans | 1.09 | % | 1.04 | % | 1.08 | % | 1.21 | % | 1.20 | % | ||||||||||
Nonperforming assets to total assets | 0.61 | % | 0.56 | % | 0.37 | % | 0.05 | % | 0.08 | % | ||||||||||
Nonaccrual loans to total loans | 0.32 | % | 0.72 | % | 0.47 | % | 0.07 | % | 0.12 | % | ||||||||||
Net loan charge-offs (recoveries) to average loans | 0.11 | % | 0.06 | % | 0.05 | % | (0.01 | )% | 0.27 | % | ||||||||||
Capital Ratios (Pinnacle Financial): | ||||||||||||||||||||
Leverage (6) | 10.5 | % | 11.6 | % | 9.5 | % | 9.9 | % | 9.7 | % | ||||||||||
Tier 1 risk-based capital | 12.1 | % | 9.5 | % | 10.9 | % | 11.7 | % | 11.7 | % | ||||||||||
Total risk-based capital | 13.5 | % | 10.4 | % | 11.8 | % | 12.6 | % | 12.7 | % |
(1) | Information for 2007 fiscal year includes the operations of Mid-America, which Pinnacle Financial merged with on November 30, 2007 and reflects approximately 6.7 million shares of Pinnacle Financial common stock issued in connection with the merger. | |
(2) | Information for 2006 fiscal year includes the operations of Cavalry, which Pinnacle Financial merged with on March 15, 2006 and reflects approximately 6.9 million shares of Pinnacle Financial common stock issued in connection with the merger. | |
(3) | Net interest margin is the result of net interest income for the period divided by average interest earning assets. | |
(4) | Net interest spread is the result of the difference between the interest yield earned on interest earning assets less the interest paid on interest bearing liabilities. | |
(5) | Efficiency ratio is the result of noninterest expense divided by the sum of net interest income and noninterest income. | |
(6) | Leverage ratio is computed by dividing Tier 1 capital by average total assets for the fourth quarter of each year. |
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Years ended | 2008-2007 | 2007-2006 | ||||||||||||||||||
December 31, | Percent | Year ended | Percent | |||||||||||||||||
Increase | December 31, | Increase | ||||||||||||||||||
2008 | 2007 | (Decrease) | 2006 | (Decrease) | ||||||||||||||||
Interest income | $ | 206,082 | $ | 150,931 | 36.5 | % | $ | 109,696 | 37.6 | % | ||||||||||
Interest expense | 91,867 | 75,219 | 22.1 | % | 48,743 | 54.3 | % | |||||||||||||
Net interest income | 114,215 | 75,712 | 50.9 | % | 60,953 | 24.2 | % | |||||||||||||
Provision for loan losses | 11,214 | 4,720 | 137.6 | % | 3,732 | 26.5 | % | |||||||||||||
Net interest income after provision for loan losses | 103,001 | 70,992 | 45.1 | % | 57,221 | 24.1 | % | |||||||||||||
Noninterest income | 34,718 | 22,521 | 54.2 | % | 15,786 | 42.7 | % | |||||||||||||
Noninterest expense | 94,478 | 60,480 | 56.2 | % | 46,624 | 29.7 | % | |||||||||||||
Net income before income taxes | 43,241 | 33,033 | 30.9 | % | 26,383 | 25.2 | % | |||||||||||||
Income tax expense | 12,367 | 9,992 | 23.8 | % | 8,456 | 18.2 | % | |||||||||||||
Net income | 30,874 | 23,041 | 34.0 | % | 17,927 | 28.5 | % | |||||||||||||
Preferred dividends and preferred stock discount accretion | 309 | - | NA | - | NA | |||||||||||||||
Net income available to common shareholders | $ | 30,565 | $ | 23,041 | 32.7 | % | $ | 17,927 | 28.5 | % | ||||||||||
Basic income per common share available to common shareholders | $ | 1.34 | $ | 1.43 | (6.3 | )% | $ | 1.28 | 11.7 | % | ||||||||||
Diluted income per common share available to common shareholders | $ | 1.27 | $ | 1.34 | (5.2 | )% | $ | 1.18 | 13.6 | % | ||||||||||
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Year ended | 2008-2007 | Year ended | 2007-2006 | |||||||||||||||||
December 31, | Percent | December 31, | Percent | |||||||||||||||||
Increase | Increase | |||||||||||||||||||
2008 | 2007 | (Decrease) | 2006 | (Decrease) | ||||||||||||||||
Net income available to common shareholders, as reported | $ | 30,565 | $ | 23,041 | 32.7 | % | $ | 17,927 | 28.5 | % | ||||||||||
Merger related expense, net of tax | 4,325 | 378 | 1044.2 | % | 994 | (62.0 | )% | |||||||||||||
Net income available to common shareholders excluding merger related expense | $ | 34,890 | $ | 23,419 | 49.0 | % | $ | 18,921 | 23.8 | % | ||||||||||
Fully-diluted net income per common share available to common stockholders, as reported | $ | 1.27 | $ | 1.34 | (5.2 | )% | $ | 1.18 | 13.6 | % | ||||||||||
Fully-diluted net income per common share available to common stockholders, excluding merger related expense | $ | 1.45 | $ | 1.36 | 6.6 | % | $ | 1.25 | 8.8 | % | ||||||||||
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2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||
Average | Rates/ | Average | Rates/ | Average | Rates/ | |||||||||||||||||||||||||||||||
Balances | Interest | Yields | Balances | Interest | Yields | Balances | Interest | Yields | ||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||||
Loans (1) | $ | 3,028,932 | $ | 175,128 | 5.78 | % | $ | 1,723,361 | $ | 129,889 | 7.54 | % | $ | 1,226,803 | $ | 92,006 | 7.50 | % | ||||||||||||||||||
Securities: | ||||||||||||||||||||||||||||||||||||
Taxable | 448,229 | 23,432 | 5.23 | % | 280,668 | 13,962 | 4.97 | % | 254,906 | 12,615 | 4.95 | % | ||||||||||||||||||||||||
Tax-exempt (2) | 135,011 | 5,399 | 5.27 | % | 82,001 | 3,066 | 4.93 | % | 54,270 | 2,016 | 4.90 | % | ||||||||||||||||||||||||
Federal funds sold and other | 54,878 | 2,123 | 4.13 | % | 72,344 | 4,014 | 5.57 | % | 53,562 | 3,059 | 6.87 | % | ||||||||||||||||||||||||
Total interest-earning assets | 3,667,050 | 206,082 | 5.67 | % | 2,158,374 | 150,931 | 7.04 | % | 1,589,541 | 109,696 | 6.95 | % | ||||||||||||||||||||||||
Nonearning assets | ||||||||||||||||||||||||||||||||||||
Intangible assets | 260,294 | 135,893 | 100,107 | |||||||||||||||||||||||||||||||||
Other nonearning assets | 176,546 | 93,782 | 89,568 | |||||||||||||||||||||||||||||||||
Total assets | $ | 4,103,890 | $ | 2,388,049 | $ | 1,779,216 | ||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||
Interest checking | $ | 368,995 | 5,191 | 1.41 | % | $ | 261,163 | 8,309 | 3.18 | % | $ | 171,637 | 4,074 | 2.37 | % | |||||||||||||||||||||
Savings and money market | 705,988 | 11,954 | 1.69 | % | 535,468 | 17,618 | 3.29 | % | 435,082 | 13,532 | 3.11 | % | ||||||||||||||||||||||||
Certificates of deposit | 1,620,621 | 59,853 | 3.69 | % | 727,724 | 35,745 | 4.91 | % | 516,394 | 22,426 | 4.34 | % | ||||||||||||||||||||||||
Total deposits | 2,695,604 | 76,998 | 2.86 | % | 1,524,355 | 61,672 | 4.05 | % | 1,123,113 | 40,032 | 3.56 | % | ||||||||||||||||||||||||
Securities sold under agreements to repurchase | 196,601 | 2,667 | 1.36 | % | 181,621 | 7,371 | 4.06 | % | 101,144 | 4,329 | 4.28 | % | ||||||||||||||||||||||||
Federal Home Loan Bank advances and other borrowings | 200,699 | 6,870 | 3.42 | % | 44,072 | 2,211 | 5.02 | % | 39,728 | 1,878 | 4.68 | % | ||||||||||||||||||||||||
Subordinated debt | 88,223 | 5,332 | 6.04 | % | 56,759 | 3,965 | 6.98 | % | 37,372 | 2,504 | 6.70 | % | ||||||||||||||||||||||||
Total interest-bearing liabilities | 3,181,127 | 91,867 | 2.89 | % | 1,806,807 | 75,219 | 4.16 | % | 1,301,357 | 48,743 | 3.75 | % | ||||||||||||||||||||||||
Noninterest-bearing deposits | 404,718 | - | - | 291,983 | - | - | 259,585 | - | - | |||||||||||||||||||||||||||
Total deposits and interest- bearing liabilities | 3,585,845 | 91,867 | 2.56 | % | 2,098,790 | 75,219 | 3.58 | % | 1,560,942 | 48,743 | 3.12 | % | ||||||||||||||||||||||||
Other liabilities | 19,351 | 13,108 | 11,105 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 498,694 | 276,151 | 207,169 | |||||||||||||||||||||||||||||||||
$ | 4,103,890 | $ | 2,388,049 | $ | 1,779,216 | |||||||||||||||||||||||||||||||
Net interest income | $ | 114,215 | $ | 75,712 | $ | 60,953 | ||||||||||||||||||||||||||||||
Net interest spread (3) | 2.78 | % | 2.88 | % | 3.20 | % | ||||||||||||||||||||||||||||||
Net interest margin | 3.17 | % | 3.55 | % | 3.90 | % |
(1) | Average balances of nonperforming loans are included in the above amounts. | |
(2) | Yields based on the carrying value of those tax exempt instruments are shown on a fully tax equivalent basis. | |
(3) | 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 year ended December 31, 2008 would have been 3.11% compared to a net interest spread for the years ended December 31, 2007 and 2006 of 3.46% and 3.83%, respectively. |
• | Our loan yields decreased by 176 basis points between 2008 and 2007 while they increased by 4 basis points between 2006 and 2007. A significant amount of our loan portfolio has variable rate pricing with a large portion of these loans tied to our prime lending rate. Approximately 41.6% of our loan portfolio at December 31, 2008 was subject to a daily floating rate; thus these loans will reprice quickly in concert with the Federal Reserve’s changes to its Federal funds rate. Our weighted average prime rate was 7.94% in 2006 and 7.52% in 2007 compared to 5.21% in 2008. Other factors that impact our loan |
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yields in any period are our evaluation of the credit worthiness, collateral and other factors related to the borrower when we agree to make a loan, the term of the loan and the ongoing relationship we have with a particular borrower. The absolute level of nonaccrual loans during the year will also negatively impact loan yields as these loans serve to reduce the overall loan yield. | |||
• | We have been able to grow our funding base significantly. For asset/liability management purposes, we elected to allocate a greater proportion of such funds to our loan portfolio versus our securities and shorter-term investment portfolio during the three year period noted above. For 2008, average loan balances were 83% of total interest-earning assets compared to 80% in 2007 and 77% in 2006. Loans generally have higher yields than do securities and other shorter-term investments although the difference between loan and securities yields was much less in 2008 compared to previous periods primarily due to the more significant decreases in short term rates (i.e., prime rate) to which loans are more directly correlated in comparison to the more modest decreases in longer term rates to which investments are more directly correlated. | ||
• | During 2008, overall deposit rates were less than in 2007. Changes in interest rates paid on such products as interest checking, savings and money market accounts, securities sold under agreements to repurchase and Federal funds purchased will generally increase or decrease in a manner that is consistent with changes in the short-term rate environment. There was a significant decrease in the short-term rate environment during 2008 when compared to 2007. As a result, the rates for those products experienced a large decrease between the two periods. However, competitive deposit pricing pressures in our market limited our ability to reduce our funding costs more aggressively and negatively impacted our net interest margin. We routinely monitor the pricing of deposit products by our primary competitors. We believe that our markets are very competitive banking markets with several new market entrants seeking deposit growth. As a result, even though the short-term rate environment may allow for rate decreases in our short-term funding base, these decreases will be limited by competitive pressures. During 2007, overall deposit rates were higher than in 2006 primarily due to competitive pressures. | ||
• | During 2008, the average balances of noninterest bearing deposit balances, interest bearing transaction accounts, savings and money market accounts and securities sold under agreements to repurchase amounted to 47% of our total funding compared to 61% in 2007 and 62% in 2006. The decrease in these products as a percentage of total funding is attributable to the competitiveness of these products among the local banking franchises and the significant growth we have experienced as we have elected to fund lending opportunities thru noncore sources. These funding sources generally have lower rates than do other funding sources, such as certificates of deposit and other borrowings. Additionally, noninterest bearing deposits comprised only 10% of total funding in 2008, compared to 12% in 2007 and 17% in 2006. Maintaining our noninterest bearing deposit balances in relation to total funding is critical to maintaining and growing our net interest margin. Management places a great deal of emphasis on this particular product. | ||
• | Also impacting the net interest margin during 2008 was a higher amount of floating rate subordinated indebtedness outstanding. The average balances of subordinated indebtedness increased from $37 million in 2006 to $57 million in 2007 to $88 million in 2008. The interest rate charged on this indebtedness is generally higher than other funding sources. In October 2007, we issued an additional $30 million in floating rate subordinated indebtedness to largely fund the cash component of the Mid-America purchase price. The rate we are required to pay on this indebtedness is 285 points over three-month LIBOR. In August 2008, Pinnacle National issued $15 million in additional subordinated indebtedness at a rate of 350 points over three-month LIBOR. Proceeds from this issuance are expected to be used for the anticipated growth of Pinnacle Financial. These spreads are higher than the spreads associated with our other forms of subordinated indebtedness which were issued in previous periods. |
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2008 Compared to 2007 | 2007 Compared to 2006 | |||||||||||||||||||||||
Increase (decrease) due to | Increase (decrease) due to | |||||||||||||||||||||||
Rate | Volume | Net | Rate | Volume | Net | |||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans | $ | (30,331 | ) | $ | 75,570 | $ | 45,239 | $ | 491 | $ | 37,392 | $ | 37,883 | |||||||||||
Securities: | ||||||||||||||||||||||||
Taxable | 730 | 8,740 | 9,470 | 51 | 1,296 | 1,347 | ||||||||||||||||||
Tax-exempt | 279 | 2,054 | 2,333 | 16 | 1,034 | 1,050 | ||||||||||||||||||
Federal funds sold | (1,042 | ) | (849 | ) | (1,891 | ) | (696 | ) | 1,651 | 955 | ||||||||||||||
Total interest-earning assets | (30,364 | ) | 85,515 | 55,151 | (138 | ) | 41,373 | 41,235 | ||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||
Interest checking | (4,623 | ) | 1,505 | (3,118 | ) | 1,390 | 2,845 | 4,235 | ||||||||||||||||
Savings and money market | (8,567 | ) | 2,903 | (5,664 | ) | 783 | 3,303 | 4,086 | ||||||||||||||||
Certificates of deposit | (8,878 | ) | 32,986 | 24,108 | 2,943 | 10,376 | 13,319 | |||||||||||||||||
Total deposits | (22,068 | ) | 37,394 | 15,326 | 5,116 | 16,524 | 21,640 | |||||||||||||||||
Securities sold under agreements to repurchase | (4,904 | ) | 200 | (4,704 | ) | (223 | ) | 3,265 | 3,042 | |||||||||||||||
Federal Home Loan Bank advances and other borrowings | (705 | ) | 5,364 | 4,659 | 135 | 198 | 333 | |||||||||||||||||
Subordinated debt | (534 | ) | 1,901 | 1,367 | 105 | 1,356 | 1,461 | |||||||||||||||||
Total interest-bearing liabilities | (28,211 | ) | 44,859 | 16,648 | 5,134 | 21,342 | 26,476 | |||||||||||||||||
Net interest income | $ | (2,153 | ) | $ | 40,656 | $ | 38,503 | $ | (5,272 | ) | $ | 20,031 | $ | 14,759 | ||||||||||
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Years ended | 2008-2007 | Year ended | 2007-2006 | |||||||||||||||||
December 31, | Percent | December 31, | Percent | |||||||||||||||||
Increase | Increase | |||||||||||||||||||
2008 | 2007 | (Decrease) | 2006 | (Decrease) | ||||||||||||||||
Noninterest income: | ||||||||||||||||||||
Service charges on deposit accounts | $ | 10,735 | $ | 7,941 | 35.2 | % | $ | 4,645 | 71.0 | % | ||||||||||
Investment services | 4,924 | 3,456 | 42.5 | % | 2,463 | 40.3 | % | |||||||||||||
Insurance sales commissions | 3,520 | 2,487 | 41.5 | % | 2,123 | 17.1 | % | |||||||||||||
Gains on sales of loans and loan participations, net: | ||||||||||||||||||||
Fees from the origination and sale of mortgage loans, net of sales commissions | 3,074 | 1,619 | 89.9 | % | 1,448 | 11.8 | % | |||||||||||||
Gains on loans and loan participations sold, net | 970 | 239 | 305.9 | % | 420 | (43.1 | )% | |||||||||||||
Gain on sale of premises | 1,030 | 75 | 1273.3 | % | - | NA | ||||||||||||||
Trust fees | 2,178 | 1,908 | 14.2 | % | 1,181 | 61.6 | % | |||||||||||||
Other noninterest income: | ||||||||||||||||||||
ATM and other consumer fees | 4,043 | 2,822 | 43.3 | % | 1,796 | 57.1 | % | |||||||||||||
Letters of credit fees | 325 | 293 | 10.9 | % | 506 | (42.1 | )% | |||||||||||||
Bank-owned life insurance | 869 | 631 | 37.7 | % | 470 | 34.3 | % | |||||||||||||
Equity in earnings of Collateral Plus, LLC | 95 | 274 | (65.3 | )% | 120 | 128.3 | % | |||||||||||||
Swap fees on customer loan transactions, net | 892 | 95 | 838.9 | % | - | NA | ||||||||||||||
Visa related gains | 203 | - | NA | - | NA | |||||||||||||||
Loan late fees | 980 | 345 | 184.1 | % | 175 | 97.1 | % | |||||||||||||
Gain on sale of investment securities, net | - | 16 | (100.0 | )% | - | NA | ||||||||||||||
Other noninterest income | 880 | 320 | 175.00 | % | 439 | (10.0 | )% | |||||||||||||
Total noninterest income | $ | 34,718 | $ | 22,521 | 54.2 | % | $ | 15,786 | 42.7 | % | ||||||||||
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Years ended | 2008-2007 | Year ended | 2007-2006 | |||||||||||||||||
December 31, | Percent | December 31, | Percent | |||||||||||||||||
Increase | Increase | |||||||||||||||||||
2008 | 2007 | (Decrease) | 2006 | (Decrease) | ||||||||||||||||
Noninterest expense: | ||||||||||||||||||||
Salaries and employee benefits: | ||||||||||||||||||||
Salaries | $ | 32,391 | $ | 24,204 | 33.8 | % | $ | 18,017 | 34.3 | % | ||||||||||
Commissions | 2,696 | 1,778 | 51.6 | % | 1,298 | 37.0 | % | |||||||||||||
Other compensation, primarily incentives | 2,421 | 2,602 | (7.0 | )% | 4,209 | (38.2 | )% | |||||||||||||
Equity compensation expenses | 2,347 | 2,100 | 11.8 | % | 1,475 | 42.4 | % | |||||||||||||
Employee benefits and other | 9,541 | 5,462 | 74.7 | % | 2,470 | 121.1 | % | |||||||||||||
Total salaries and employee benefits | 49,396 | 36,146 | 36.7 | % | 27,469 | 31.6 | % | |||||||||||||
Equipment and occupancy | 16,600 | 10,261 | 61.8 | % | 7,522 | 36.4 | % | |||||||||||||
Other real estate | 1,403 | 160 | 776.9 | % | - | NA | ||||||||||||||
Marketing and business development | 1,916 | 1,677 | 14.3 | % | 1,234 | 35.9 | % | |||||||||||||
Postage and supplies | 2,953 | 1,995 | 48.0 | % | 1,510 | 32.1 | % | |||||||||||||
Amortization of core deposit intangible | 3,101 | 2,144 | 44.6 | % | 1,783 | 20.2 | % | |||||||||||||
Other noninterest expense: | ||||||||||||||||||||
Professional fees | 1,120 | 1,690 | (33.7 | )% | 1,135 | 48.9 | % | |||||||||||||
Legal, including borrower-related charges | 1,216 | 437 | 178.3 | % | 310 | 41.0 | % | |||||||||||||
OCC exam fees | 509 | 365 | 39.5 | % | 257 | 42.0 | % | |||||||||||||
Directors’ fees | 530 | 233 | 127.5 | % | 257 | (9.3 | )% | |||||||||||||
Insurance, including FDIC assessments | 3,039 | 1,278 | 137.8 | % | 687 | 86.0 | % | |||||||||||||
Charitable contributions | 465 | 334 | 39.2 | % | 186 | 79.6 | % | |||||||||||||
Other noninterest expense | 5,114 | 3,138 | 63.0 | % | 2,638 | 18.95 | % | |||||||||||||
Total other noninterest expense | 11,993 | 7,475 | 60.4 | % | 5,470 | 36.7 | % | |||||||||||||
Merger related expense | 7,116 | 622 | 1044.1 | % | 1,636 | (62.0 | )% | |||||||||||||
Total noninterest expense | $ | 94,478 | $ | 60,480 | 56.2 | % | $ | 46,624 | 29.7 | % | ||||||||||
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2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||
Commercial real estate — Mortgage | $ | 963,530 | 28.7 | % | $ | 710,546 | 25.9 | % | $ | 284,302 | 19.0 | % | $ | 148,102 | 22.9 | % | $ | 117,123 | 24.8 | % | ||||||||||||||||||||
Consumer real estate — Mortgage | 675,606 | 20.1 | % | 539,768 | 19.6 | % | 299,627 | 20.0 | % | 169,953 | 26.2 | % | 126,907 | 26.9 | % | |||||||||||||||||||||||||
Construction and land development | 658,799 | 19.6 | % | 582,959 | 21.2 | % | 253,097 | 16.9 | % | 67,667 | 10.4 | % | 23,419 | 5.0 | % | |||||||||||||||||||||||||
Commercial and industrial | 966,563 | 28.8 | % | 794,419 | 28.9 | % | 608,530 | 40.6 | % | 239,129 | 36.9 | % | 189,456 | 40.1 | % | |||||||||||||||||||||||||
Consumer and other loans | 90,409 | 2.8 | % | 121,949 | 4.4 | % | 52,179 | 3.5 | % | 23,173 | 3.6 | % | 15,457 | 3.2 | % | |||||||||||||||||||||||||
Total loans | $ | 3,354,907 | 100.0 | % | $ | 2,749,641 | 100.0 | % | $ | 1,497,735 | 100.0 | % | $ | 648,024 | 100.0 | % | $ | 472,362 | 100.0 | % | ||||||||||||||||||||
At December 31, 2008 | ||||||||||||||||
Outstanding | Total Exposure at | |||||||||||||||
Principal | Unfunded | December 31, | ||||||||||||||
Balances | Commitments | Total exposure | 2007 | |||||||||||||
Lessors of nonresidential buildings | $ | 338,616 | $ | 68,182 | $ | 406,798 | $ | 249,959 | ||||||||
Lessors of residential buildings | 138,352 | 20,909 | 159,261 | 135,413 | ||||||||||||
Land subdividers | 237,667 | 82,034 | 319,701 | 283,327 | ||||||||||||
New housing operative builders | 201,741 | 59,884 | 261,625 | 269,744 | ||||||||||||
Trucking industry | 76,419 | 23,234 | 99,653 | 109,118 | ||||||||||||
New single family housing construction | 45,038 | 12,980 | 58,018 | 104,980 |
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Amounts at December 31, 2008 | ||||||||||||||||||||
Fixed | Variable | At December 31, | At December 31, | |||||||||||||||||
Rates | Rates | Totals | 2008 | 2007 | ||||||||||||||||
Based on contractual maturity: | ||||||||||||||||||||
Due within one year | $ | 251,279 | $ | 1,121,591 | $ | 1,372,870 | 40.9 | % | 44.5 | % | ||||||||||
Due in one year to five years | 835,839 | 469,983 | 1,305,821 | 38.9 | % | 39.9 | % | |||||||||||||
Due after five years | 141,232 | 534,983 | 676,216 | 20.2 | % | 15.6 | % | |||||||||||||
Totals | $ | 1,228,350 | $ | 2,126,557 | $ | 3,354,907 | 100.0 | % | 100.0 | % | ||||||||||
Based on contractual repricing dates: | ||||||||||||||||||||
Daily floating rate | $ | - | $ | 1,401,972 | $ | 1,401,972 | 41.8 | % | 40.0 | % | ||||||||||
Due within one year | 251,279 | 597,339 | 848,617 | 25.3 | % | 21.2 | % | |||||||||||||
Due in one year to five years | 835,839 | 112,748 | 948,587 | 28.3 | % | 32.4 | % | |||||||||||||
Due after five years | 141,232 | 14,498 | 155,731 | 4.6 | % | 6.4 | % | |||||||||||||
Totals | $ | 1,228,350 | $ | 2,126,557 | $ | 3,354,907 | 100.0 | % | 100.0 | % | ||||||||||
The above information does not consider the impact of scheduled principal payments. Daily floating rate loans are tied to Pinnacle National’s prime lending rate or a national interest rate index with the underlying loan rates changing in relation to changes in these indexes. |
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At December 31, | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Nonaccrual loans (1) | $ | 10,860 | $ | 19,677 | $ | 7,070 | $ | 460 | $ | 561 | ||||||||||
Restructured loans | - | - | - | - | - | |||||||||||||||
Other real estate owned | 18,306 | 1,673 | 995 | - | - | |||||||||||||||
Total nonperforming assets | 29,166 | 21,350 | 8,065 | 460 | 561 | |||||||||||||||
Accruing loans past due 90 days or more | 1,508 | 1,613 | 737 | - | 146 | |||||||||||||||
Total nonperforming assets and accruing loans past due 90 days or more | $ | 30,674 | $ | 22,963 | $ | 8,802 | $ | 460 | $ | 707 | ||||||||||
Total loans outstanding | $ | 3,354,907 | $ | 2,749,641 | $ | 1,497,735 | $ | 648,024 | $ | 472,362 | ||||||||||
Ratio of nonperforming assets and accruing loans past due 90 days or more to total loans outstanding at end of period | 0.91 | % | 0.84 | % | 0.59 | % | 0.07 | % | 0.15 | % | ||||||||||
Ratio of nonperforming assets and accruing loans past due 90 days or more to total allowance for loan losses at end of period | 84.08 | % | 80.66 | % | 54.61 | % | 5.85 | % | 12.51 | % | ||||||||||
(1) | Interest income that would have been recorded in 2008 related to nonaccrual loans was $1,574,000 compared to $485,000 for the year ended December 31, 2007 and $283,000 for the year ended December 31, 2006, none of which is included in interest income or net income for the applicable periods. |
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2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||
Commercial real estate — Mortgage | $ | 11,523 | 28.7 | % | $ | 8,068 | 25.9 | % | $ | 4,550 | 19.0 | % | $ | 1,488 | 22.9 | % | $ | 1,205 | 24.8 | % | ||||||||||||||||||||
Consumer real estate — Mortgage | 5,149 | 20.1 | % | 1,890 | 19.6 | % | 913 | 20.0 | % | 1,286 | 26.2 | % | 869 | 26.9 | % | |||||||||||||||||||||||||
Construction and land development | 7,899 | 19.6 | % | 4,897 | 21.2 | % | 2,869 | 16.9 | % | 690 | 10.5 | % | 227 | 5.0 | % | |||||||||||||||||||||||||
Commercial and industrial | 9,966 | 28.8 | % | 11,660 | 28.9 | % | 6,517 | 40.6 | % | 2,305 | 36.9 | % | 1,711 | 40.0 | % | |||||||||||||||||||||||||
Consumer and other loans | 1,372 | 2.8 | % | 1,400 | 4.4 | % | 870 | 3.5 | % | 552 | 3.5 | % | 396 | 3.3 | % | |||||||||||||||||||||||||
Unallocated | 575 | NA | 555 | NA | 399 | NA | 1,537 | NA | 1,242 | NA | ||||||||||||||||||||||||||||||
Total allowance for loan losses | $ | 36,484 | 100.0 | % | $ | 28,470 | 100.0 | % | $ | 16,118 | 100.0 | % | $ | 7,858 | 100.0 | % | $ | 5,650 | 100.0 | % | ||||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Balance at beginning of period | $ | 28,470 | $ | 16,118 | $ | 7,858 | $ | 5,650 | $ | 3,719 | ||||||||||
Provision for loan losses | 11,214 | 4,720 | 3,732 | 2,152 | 2,948 | |||||||||||||||
Allowance from Mid-America (2007) and Cavalry (2006) acquisitions | - | 8,695 | 5,102 | - | - | |||||||||||||||
Charged-off loans: | ||||||||||||||||||||
Commercial real estate — Mortgage | (62 | ) | (22 | ) | - | - | - | |||||||||||||
Consumer real estate — Mortgage | (1,144 | ) | (364 | ) | (46 | ) | (38 | ) | (834 | ) | ||||||||||
Construction and land development | (2,172 | ) | (271 | ) | - | - | - | |||||||||||||
Commercial and industrial | (773 | ) | (326 | ) | (436 | ) | (61 | ) | (50 | ) | ||||||||||
Consumer and other loans | (982 | ) | (359 | ) | (336 | ) | (109 | ) | (148 | ) | ||||||||||
Total charged-off loans | (5,133 | ) | (1,342 | ) | (818 | ) | (208 | ) | (1,032 | ) | ||||||||||
Recoveries of previously charged-off loans: | ||||||||||||||||||||
Commercial real estate — Mortgage | 731 | - | - | - | - | |||||||||||||||
Consumer real estate — Mortgage | 3 | 125 | - | 231 | - | |||||||||||||||
Construction and land development | 55 | 1 | - | - | 2 | |||||||||||||||
Commercial and industrial | 844 | 51 | 166 | 3 | - | |||||||||||||||
Consumer and other loans | 300 | 102 | 78 | 30 | 13 | |||||||||||||||
Total recoveries of previously charged-off loans | 1,933 | 279 | 244 | 264 | 15 | |||||||||||||||
Net (charge-offs) recoveries | (3,200 | ) | (1,063 | ) | (574 | ) | 56 | (1,017 | ) | |||||||||||
Balance at end of period | $ | 36,484 | $ | 28,470 | $ | 16,118 | $ | 7,858 | $ | 5,650 | ||||||||||
Ratio of allowance for loan losses to total loans outstanding at end of period | 1.09 | % | 1.04 | % | 1.08 | % | 1.21 | % | 1.20 | % | ||||||||||
Ratio of net charge-offs (recoveries) to average loans outstanding for the period | 0.11 | % | 0.06 | % | 0.05 | % | (0.01 | )% | 0.27 | % | ||||||||||
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At December 31, | ||||||||||||||||||||||||||||||||||||||||
U.S. Treasury | U.S. government | State and Municipal | ||||||||||||||||||||||||||||||||||||||
securities | agency securities | securities | Corporate securities | Totals | ||||||||||||||||||||||||||||||||||||
Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | |||||||||||||||||||||||||||||||
At December 31, 2008: | ||||||||||||||||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | - | - | % | $ | 7,499 | 4.0 | % | $ | 606 | 3.8 | % | $ | 859 | 3.5 | % | $ | 8,964 | 3.9 | % | ||||||||||||||||||||
Due in one year to five years | - | - | % | 6,611 | 4.4 | % | 12,882 | 3.5 | % | - | - | % | 19,493 | 3.8 | % | |||||||||||||||||||||||||
Due in five years to ten years | - | - | % | 26,008 | 5.2 | % | 56,143 | 3.9 | % | 522 | 4.1 | % | 82,673 | 4.3 | % | |||||||||||||||||||||||||
Due after ten years | - | - | % | 24,305 | 5.6 | % | 65,194 | 4.3 | % | 243 | 5.3 | % | 89,742 | 4.7 | % | |||||||||||||||||||||||||
$ | - | - | % | $ | 64,423 | 5.1 | % | $ | 134,825 | 4.0 | % | $ | 1,624 | 3.9 | % | 200,872 | 4.4 | % | ||||||||||||||||||||||
Mortgage-backed securities | 638,357 | 5.6 | % | |||||||||||||||||||||||||||||||||||||
Total available-for-sale securities | $ | 839,229 | 5.3 | % | ||||||||||||||||||||||||||||||||||||
Securities held-to-maturity: | ||||||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | - | - | % | $ | - | - | % | $ | 481 | 3.2 | % | $ | - | - | % | $ | 481 | 3.2 | % | ||||||||||||||||||||
Due in one year to five years | - | - | % | 1,998 | 4.2 | % | 6,497 | 3.5 | % | - | - | % | 8,495 | 3.8 | % | |||||||||||||||||||||||||
Due in five years to ten years | - | - | % | - | 4.8 | % | 1,575 | 3.9 | % | - | - | % | 1,575 | 3.9 | % | |||||||||||||||||||||||||
Due after ten years | - | - | % | - | - | % | - | - | % | - | - | % | - | - | % | |||||||||||||||||||||||||
$ | - | - | % | $ | 1,998 | 4.3 | % | $ | 8,553 | 3.5 | % | $ | - | - | % | 10,551 | 3.8 | % | ||||||||||||||||||||||
Mortgage-backed securities | - | - | % | |||||||||||||||||||||||||||||||||||||
Total held-for-sale securities | $ | 10,551 | 3.8 | % | ||||||||||||||||||||||||||||||||||||
At December 31, 2007: | ||||||||||||||||||||||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | - | - | % | $ | 16,612 | 4.3 | % | $ | 12,463 | 5.2 | % | $ | 490 | 3.4 | % | $ | 29,565 | 4.7 | % | ||||||||||||||||||||
Due in one year to five years | - | - | % | 43,097 | 4.5 | % | 27,089 | 5.3 | % | 1,488 | 3.9 | % | 71,674 | 4.8 | % | |||||||||||||||||||||||||
Due in five years to ten years | - | - | % | 6,774 | 5.1 | % | 45,545 | 5.6 | % | - | 5.2 | % | 52,319 | 5.5 | % | |||||||||||||||||||||||||
Due after ten years | - | - | % | 3,180 | 4.9 | % | 40,809 | 5.6 | % | 400 | 5.4 | % | 44,389 | 5.5 | % | |||||||||||||||||||||||||
$ | - | - | % | $ | 69,663 | 4.5 | % | $ | 125,906 | 5.5 | % | $ | 2,378 | 5.2 | % | 197,947 | 5.2 | % | ||||||||||||||||||||||
Mortgage-backed securities | 297,705 | 4.9 | % | |||||||||||||||||||||||||||||||||||||
Total available-for-sale securities | $ | 495,652 | 5.0 | % | ||||||||||||||||||||||||||||||||||||
Securities held-to-maturity: | ||||||||||||||||||||||||||||||||||||||||
Due in one year or less | $ | - | - | % | $ | - | - | % | $ | 1,578 | 5.0 | % | $ | - | - | % | $ | 1,578 | 5.0 | % | ||||||||||||||||||||
Due in one year to five years | - | - | % | 15,750 | 4.2 | % | 6,786 | 4.4 | % | - | - | % | 22,536 | 4.3 | % | |||||||||||||||||||||||||
Due in five years to ten years | - | - | % | 1,997 | 4.8 | % | 922 | 5.0 | % | - | - | % | 2,919 | 4.8 | % | |||||||||||||||||||||||||
Due after ten years | - | - | % | - | - | % | - | - | % | - | - | % | - | - | % | |||||||||||||||||||||||||
$ | - | - | % | $ | 17,747 | 4.3 | % | $ | 9,286 | 4.6 | % | $ | - | - | % | 27,033 | 4.4 | % | ||||||||||||||||||||||
Mortgage-backed securities | - | - | % | |||||||||||||||||||||||||||||||||||||
Total held-for-sale securities | $ | 27,033 | 4.4 | % | ||||||||||||||||||||||||||||||||||||
We computed yields using coupon interest, adding discount accretion or subtracting premium amortization, as appropriate, on a ratable basis over the life of each security. We computed the weighted average yield for each maturity range using the acquisition price of each security in that range. |
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December 31, | December 31, | |||||||||||||||
2008 | Percent | 2007 | Percent | |||||||||||||
Core funding: | ||||||||||||||||
Noninterest-bearing deposit accounts | $ | 424,757 | 10.4 | % | $ | 400,120 | 12.1 | % | ||||||||
Interest-bearing demand accounts | 375,993 | 9.2 | % | 410,661 | 12.4 | % | ||||||||||
Savings and money market accounts | 694,582 | 17.0 | % | 742,354 | 22.5 | % | ||||||||||
Time deposit accounts less than $100,000 | 570,443 | 13.9 | % | 371,881 | 11.2 | % | ||||||||||
Total core funding | 2,065,775 | 50.5 | % | 1,925,016 | 58.2 | % | ||||||||||
Non-core funding: | ||||||||||||||||
Time deposit accounts greater than $100,000 | ||||||||||||||||
Public funds | 538,809 | 13.2 | % | 104,902 | 3.2 | % | ||||||||||
Brokered deposits | 585,599 | 14.3 | % | 163,188 | 4.9 | % | ||||||||||
Other time deposits | 343,062 | 8.4 | % | 732,213 | 22.2 | % | ||||||||||
Securities sold under agreements to repurchase | 184,298 | 4.5 | % | 156,071 | 4.7 | % | ||||||||||
Federal Home Loan Bank advances and other borrowings | 273,609 | 6.7 | % | 141,666 | 4.3 | % | ||||||||||
Subordinated debt — Pinnacle National | 15,000 | 0.4 | % | - | - | |||||||||||
Subordinated debt — Pinnacle Financial | 82,476 | 2.0 | % | 82,476 | 2.5 | % | ||||||||||
Total non-core funding | 2,022,853 | 49.5 | % | 1,380,516 | 41.8 | % | ||||||||||
Totals | $ | 4,088,628 | 100.0 | % | $ | 3,305,532 | 100.0 | % | ||||||||
Balances | Weighted Avg. Rate | |||||||
Denominations less than $100,000 | ||||||||
Three months or less | $ | 264,267 | 2.87 | % | ||||
Over three but less than six months | 96,944 | 3.04 | % | |||||
Over six but less than twelve months | 151,157 | 3.49 | % | |||||
Over twelve months | 58,075 | 3.89 | % | |||||
570,443 | 3.17 | % | ||||||
Denomination $100,000 and greater | ||||||||
Three months or less | 625,066 | 2.23 | % | |||||
Over three but less than six months | 281,961 | 3.42 | % | |||||
Over six but less than twelve months | 397,448 | 3.77 | % | |||||
Over twelve months | 162,996 | 4.15 | % | |||||
1,467,471 | 3.09 | % | ||||||
Totals | $ | 2,037,914 | 3.11 | % | ||||
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Subject to approval by the Federal Reserve Bank of Atlanta and the limitations on repurchase resulting from Pinnacle Financial’s participation in the CPP, the Trust Preferred Securities may be redeemed subject to the limitations imposed under the CPP prior to maturity at our option on or after September 17, 2008 for Trust I; on or after September 30, 2010 for Trust II; September 30, 2011 for Trust III and September 30, 2012 for Trust IV. The Trust Preferred Securities may also be redeemed at any time in whole (but not in part) in the event of unfavorable changes in laws or regulations that result in (1) the Trust becoming subject to federal income tax on income received on the Subordinated Debentures, (2) interest payable by the parent company on the Subordinated Debentures becoming non-deductible for federal tax purposes, (3) the requirement for the Trust to register under the Investment Company Act of 1940, as amended, or (4) loss of the ability to treat the Trust Preferred Securities as “Tier I capital” under the Federal Reserve capital adequacy guidelines.
The Trust Preferred Securities for the Trusts qualify as Tier I capital under current regulatory definitions subject to certain limitations. Debt issuance costs associated with Trust I of $120,000 consisting primarily of underwriting discounts and professional fees are included in other assets in the accompanying consolidated balance sheet. These debt issuance costs are being amortized over ten years using the straight-line method. There were no debt issuance costs associated with Trust II, Trust III or Trust IV.
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Weighted | ||||||||
Average | ||||||||
Scheduled | Interest | |||||||
Maturities | Rates | |||||||
2009 | $ | 15,144 | 5.01 | % | ||||
2010 | 57,248 | 3.55 | % | |||||
2011 | 83 | 0.00 | % | |||||
2012 | 30,085 | 3.51 | % | |||||
2013 | 20,066 | 2.67 | % | |||||
Thereafter | 61,340 | 2.93 | % | |||||
$ | 183,966 | |||||||
Weighted average interest rate | 3.36 | % | ||||||
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2008 | 2007 | 2006 | ||||||||||
Amounts outstanding at year-end: | ||||||||||||
Securities sold under agreements to repurchase | $ | 184,298 | $ | 156,071 | $ | 141,016 | ||||||
Federal funds purchased | 71,643 | 39,862 | - | |||||||||
Holding Company line of credit | 18,000 | 9,000 | - | |||||||||
Federal Home Loan Bank advances | 15,000 | 92,804 | 25,000 | |||||||||
Weighted average interest rates at year-end: | ||||||||||||
Securities sold under agreements to repurchase | 0.38 | % | 2.81 | % | 4.33 | % | ||||||
Federal funds purchased | 0.68 | % | 3.75 | % | - | |||||||
Holding Company line of credit | 1.71 | % | 6.25 | % | - | |||||||
Federal Home Loan Bank advances | 5.01 | % | 4.26 | % | 5.36 | % | ||||||
Maximum amount of borrowings at any month-end: | ||||||||||||
Securities sold under agreements to repurchase | $ | 256,472 | $ | 216,321 | $ | 166,520 | ||||||
Federal funds purchased | 81,545 | 39,862 | 9,985 | |||||||||
Holding Company line of credit | 18,000 | 9,000 | - | |||||||||
Federal Home Loan Bank advances | 92,804 | 92,804 | 25,000 | |||||||||
Average balances for the year: | ||||||||||||
Securities sold under agreements to repurchase | $ | 196,601 | $ | 181,621 | $ | 101,144 | ||||||
Federal funds purchased | 25,835 | 5,544 | 1,260 | |||||||||
Holding Company line of credit | 13,525 | 750 | - | |||||||||
Federal Home Loan Bank advances | 40,561 | 38,528 | 6,284 | |||||||||
Weighted average interest rates for the year: | ||||||||||||
Securities sold under agreements to repurchase | 1.36 | % | 4.06 | % | 4.28 | % | ||||||
Federal funds purchased | 2.47 | % | 5.15 | % | 5.26 | % | ||||||
Holding Company line of credit | 4.19 | % | 6.25 | % | - | |||||||
Federal Home Loan Bank advances | 4.31 | % | 4.97 | % | 4.70 | % |
More | ||||||||||||||||||||
Next 12 | 13-36 | 37-60 | than 60 | |||||||||||||||||
months | months | months | months | Totals | ||||||||||||||||
Contractual obligations: | ||||||||||||||||||||
Certificates of deposit | $ | 1,816,844 | $ | 211,214 | $ | 9,703 | $ | 153 | $ | 2,037,914 | ||||||||||
Securities sold under agreements to repurchase | 184,298 | - | - | - | 184,298 | |||||||||||||||
Federal Home Loan Bank advances | 15,000 | 57,149 | 50,000 | 61,817 | 183,966 | |||||||||||||||
Line of credit | 18,000 | - | - | - | 18,000 | |||||||||||||||
Federal funds purchased | 71,643 | - | - | - | 71,643 | |||||||||||||||
Subordinated debt | - | - | - | 97,476 | 97,476 | |||||||||||||||
Minimum operating lease commitments | 2,055 | 5,163 | 5,433 | 25,915 | 38,566 | |||||||||||||||
Totals | $ | 2,107,840 | $ | 273,526 | $ | 65,136 | $ | 185,361 | $ | 2,631,863 | ||||||||||
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Next 12 | 13-36 | 37-60 | More than | |||||||||||||||||
months | months | months | 60 months | Totals | ||||||||||||||||
Unfunded commitments: | ||||||||||||||||||||
Lines of credit | $ | 644,033 | $ | 129,592 | $ | 67,343 | $ | 169,385 | $ | 1,010,353 | ||||||||||
Letters of credit | 78,272 | 6,453 | 1,250 | - | 85,975 | |||||||||||||||
Totals | $ | 722,305 | $ | 136,045 | $ | 68,593 | $ | 169,385 | $ | 1,096,328 | ||||||||||
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56 | ||
57 | ||
58 | ||
Consolidated Financial Statements: | ||
59 | ||
60 | ||
61 | ||
62 | ||
63 |
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Pinnacle Financial Partners, Inc.:
February 19, 2009
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Pinnacle Financial Partners, Inc.:
February 19, 2009
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CONSOLIDATED BALANCE SHEETS
December 31, | ||||||||
2008 | 2007 | |||||||
ASSETS | ||||||||
Cash and noninterest-bearing due from banks | $ | 68,388,961 | $ | 76,941,931 | ||||
Interest-bearing due from banks | 8,869,680 | 24,706,966 | ||||||
Federal funds sold | 12,994,114 | 20,854,966 | ||||||
Cash and cash equivalents | 90,252,755 | 122,503,863 | ||||||
Securities available-for-sale, at fair value | 839,229,428 | 495,651,939 | ||||||
Securities held-to-maturity (fair value of $10,642,973 and $26,883,473 at December 31, 2008 and December 31, 2007, respectively) | 10,551,256 | 27,033,356 | ||||||
Mortgage loans held-for-sale | 25,476,788 | 11,251,652 | ||||||
Loans | 3,354,907,269 | 2,749,640,689 | ||||||
Less allowance for loan losses | (36,484,073 | ) | (28,470,207 | ) | ||||
Loans, net | 3,318,423,196 | 2,721,170,482 | ||||||
Premises and equipment, net | 68,865,221 | �� | 68,385,946 | |||||
Other investments | 33,616,450 | 22,636,029 | ||||||
Accrued interest receivable | 17,565,141 | 18,383,004 | ||||||
Goodwill | 244,160,624 | 243,573,636 | ||||||
Core deposit and other intangible assets | 16,871,202 | 17,325,988 | ||||||
Other assets | 89,062,703 | 46,254,566 | ||||||
Total assets | $ | 4,754,074,764 | $ | 3,794,170,461 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Deposits: | ||||||||
Non-interest-bearing | $ | 424,756,813 | $ | 400,120,147 | ||||
Interest-bearing | 375,992,912 | 410,661,187 | ||||||
Savings and money market accounts | 694,582,319 | 742,354,465 | ||||||
Time | 2,037,914,307 | 1,372,183,317 | ||||||
Total deposits | 3,533,246,351 | 2,925,319,116 | ||||||
Securities sold under agreements to repurchase | 184,297,793 | 156,070,830 | ||||||
Federal Home Loan Bank advances and other borrowings | 201,966,181 | 101,804,133 | ||||||
Federal Funds purchased | 71,643,000 | 39,862,000 | ||||||
Subordinated debt | 97,476,000 | 82,476,000 | ||||||
Accrued interest payable | 8,326,264 | 10,374,538 | ||||||
Other liabilities | 29,820,779 | 11,653,550 | ||||||
Total liabilities | 4,126,776,368 | 3,327,560,167 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, no par value; 10,000,000 shares authorized; 95,000 shares issued and outstanding at December 31, 2008, and no shares issued and outstanding at December 31, 2007 | 88,348,647 | - | ||||||
Common stock, par value $1.00; 90,000,000 shares authorized; 23,762,124 issued and outstanding at December 31, 2008 and 22,264,817 issued and outstanding at December 31, 2007 | 23,762,124 | 22,264,817 | ||||||
Common stock warrants | 6,696,804 | - | ||||||
Additional paid-in capital | 417,040,974 | 390,977,308 | ||||||
Retained earnings | 84,380,447 | 54,150,679 | ||||||
Accumulated other comprehensive income (loss), net of taxes | 7,069,400 | (782,510 | ) | |||||
Total stockholders’ equity | 627,298,396 | 466,610,294 | ||||||
Total liabilities and stockholders’ equity | $ | 4,754,074,764 | $ | 3,794,170,461 | ||||
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For the years ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Interest income: | ||||||||||||
Loans, including fees | $ | 175,128,097 | $ | 129,888,784 | $ | 92,005,602 | ||||||
Securities: | ||||||||||||
Taxable | 23,431,746 | 13,961,714 | 12,614,623 | |||||||||
Tax-exempt | 5,399,312 | 3,066,519 | 2,016,044 | |||||||||
Federal funds sold and other | 2,122,343 | 4,014,424 | 3,059,750 | |||||||||
Total interest income | 206,081,498 | 150,931,441 | 109,696,019 | |||||||||
Interest expense: | ||||||||||||
Deposits | 76,998,042 | 61,671,734 | 40,032,020 | |||||||||
Securities sold under agreements to repurchase | 2,666,760 | 7,371,490 | 4,329,327 | |||||||||
Federal Home Loan Bank advances and other borrowings | 12,201,797 | 6,176,205 | 4,381,878 | |||||||||
Total interest expense | 91,866,599 | 75,219,429 | 48,743,225 | |||||||||
Net interest income | 114,214,899 | 75,712,012 | 60,952,794 | |||||||||
Provision for loan losses | 11,213,543 | 4,719,841 | 3,732,032 | |||||||||
Net interest income after provision for loan losses | 103,001,356 | 70,992,171 | 57,220,762 | |||||||||
Noninterest income: | ||||||||||||
Service charges on deposit accounts | 10,735,080 | 7,941,029 | 4,645,685 | |||||||||
Investment services | 4,923,840 | 3,455,808 | 2,463,205 | |||||||||
Insurance sales commissions | 3,520,205 | 2,486,884 | 2,122,702 | |||||||||
Gains on loan sales, net | 4,044,441 | 1,858,077 | 1,868,184 | |||||||||
Net gain on sale of premises | 1,030,231 | 75,337 | - | |||||||||
Trust fees | 2,178,112 | 1,908,440 | 1,180,839 | |||||||||
Gains on sales of investment securities, net | - | 16,472 | - | |||||||||
Other noninterest income | 8,286,458 | 4,778,880 | 3,505,903 | |||||||||
Total noninterest income | 34,718,367 | 22,520,927 | 15,786,518 | |||||||||
Noninterest expense: | ||||||||||||
Salaries and employee benefits | 49,396,022 | 36,145,588 | 27,469,275 | |||||||||
Equipment and occupancy | 16,600,272 | 10,260,915 | 7,521,602 | |||||||||
Other real estate owned | 1,403,022 | 160,367 | - | |||||||||
Marketing and other business development | 1,915,747 | 1,676,455 | 1,234,497 | |||||||||
Postage and supplies | 2,953,013 | 1,995,267 | 1,510,048 | |||||||||
Amortization of intangibles | 3,100,599 | 2,144,018 | 1,783,230 | |||||||||
Merger related expense | 7,116,770 | 621,883 | 1,635,831 | |||||||||
Other noninterest expense | 11,993,345 | 7,475,072 | 5,469,777 | |||||||||
Total noninterest expense | 94,478,790 | 60,479,565 | 46,624,260 | |||||||||
Income before income taxes | 43,240,933 | 33,033,533 | 26,383,020 | |||||||||
Income tax expense | 12,367,015 | 9,992,178 | 8,455,987 | |||||||||
Net income | 30,873,918 | 23,041,355 | 17,927,033 | |||||||||
Preferred stock dividends | 263,889 | - | - | |||||||||
Accretion on preferred stock discount | 45,451 | - | - | |||||||||
Net income available to common stockholders | $ | 30,564,578 | $ | 23,041,355 | $ | 17,927,033 | ||||||
Per share information: | ||||||||||||
Basic net income per common share available to common stockholders | $ | 1.34 | $ | 1.43 | $ | 1.28 | ||||||
Diluted net income per common share available to common stockholders | $ | 1.27 | $ | 1.34 | $ | 1.18 | ||||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 22,793,699 | 16,100,076 | 13,954,077 | |||||||||
Diluted | 24,053,972 | 17,255,543 | 15,156,837 | |||||||||
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Accumulated | ||||||||||||||||||||||||||||||||||||
Preferred | Common | Additional | Other | Total | ||||||||||||||||||||||||||||||||
Stock | Common Stock | Stock | Paid-in | Unearned | Retained | Comprehensive | Stockholders’ | |||||||||||||||||||||||||||||
Amount | Shares | Amount | Warrants | Capital | Compensation | Earnings | Income (Loss) | Equity | ||||||||||||||||||||||||||||
Balances, December 31, 2005 | - | 8,426,551 | $ | 8,426,551 | - | $ | 44,890,912 | $ | (169,689 | ) | $ | 13,182,291 | $ | (2,893,640 | ) | $ | 63,436,425 | |||||||||||||||||||
Transfer of unearned compensation to additional paid-in capital upon adoption of SFAS 123(R) | - | - | - | - | (169,689 | ) | 169,689 | - | - | - | ||||||||||||||||||||||||||
Exercise of employee incentive common stock options, common stock warrants and related tax benefits | - | 141,168 | 141,168 | - | 1,284,724 | - | - | - | 1,425,892 | |||||||||||||||||||||||||||
Issuance of restricted common shares pursuant to 2004 Equity Incentive Plan | - | 22,057 | 22,057 | - | (22,057 | ) | - | - | - | - | ||||||||||||||||||||||||||
Compensation expense for restricted shares | - | - | - | - | 465,003 | - | - | - | 465,003 | |||||||||||||||||||||||||||
Compensation expense for stock options | - | - | - | - | 1,009,958 | - | - | - | 1,009,958 | |||||||||||||||||||||||||||
Merger with Cavalry Bancorp, Inc. | - | 6,856,298 | 6,856,298 | - | 164,231,274 | - | - | - | 171,087,572 | |||||||||||||||||||||||||||
Costs to register common stock issued in connection with the merger with Cavalry Bancorp, Inc. | - | - | - | - | (187,609 | ) | - | - | - | (187,609 | ) | |||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||
Net income | - | - | - | - | - | - | 17,927,033 | - | 17,927,033 | |||||||||||||||||||||||||||
Net unrealized holding gains on available-for-sale securities, net of deferred tax expense of $521,886 | - | - | - | - | - | - | - | 852,747 | 852,747 | |||||||||||||||||||||||||||
Total comprehensive income | 18,779,780 | |||||||||||||||||||||||||||||||||||
Balances, December 31, 2006 | - | 15,446,074 | $ | 15,446,074 | - | $ | 11,502,516 | $ | - | $ | 31,109,324 | $ | (2,040,893 | ) | $ | 256,017,021 | ||||||||||||||||||||
Exercise of employee incentive common stock options, stock appreciation rights and related tax benefits | - | 99,862 | 99,862 | - | 883,429 | - | - | - | 983,291 | |||||||||||||||||||||||||||
Issuance of restricted common shares pursuant to 2004 Equity Incentive Plan | - | 42,301 | 42,301 | - | (42,301 | ) | - | - | - | - | ||||||||||||||||||||||||||
Compensation expense for restricted shares | - | - | - | - | 396,378 | - | - | - | 396,378 | |||||||||||||||||||||||||||
Compensation expense for stock options | - | - | - | - | 1,703,441 | - | - | - | 1,703,441 | |||||||||||||||||||||||||||
Merger with Mid-America Bancshares, Inc. | - | 6,676,580 | 6,676,580 | - | 176,833,242 | - | - | - | 183,509,822 | |||||||||||||||||||||||||||
Costs to register common stock issued in connection with the merger with Mid-America Bancshares, Inc. | - | - | - | - | (299,397 | ) | - | - | - | (299,397 | ) | |||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||
Net income | - | - | - | - | - | - | 23,041,355 | - | 23,041,355 | |||||||||||||||||||||||||||
Net unrealized holding gains on available-for-sale securities, net of deferred tax expense of $762,956 | - | - | - | - | - | - | - | 1,258,383 | 1,258,383 | |||||||||||||||||||||||||||
Total comprehensive income | 24,299,738 | |||||||||||||||||||||||||||||||||||
Balances, December 31, 2007 | - | 22,264,817 | $ | 22,264,817 | - | $ | 390,977,308 | $ | - | $ | 54,150,679 | $ | (782,510 | ) | $ | 466,610,294 | ||||||||||||||||||||
Cumulative effect of change in accounting principle due to adoption of EITF 06-4, net of tax | - | - | - | - | - | - | (598,699 | ) | - | (598,699 | ) | |||||||||||||||||||||||||
Proceeds from sale of common stock (less offering expenses of $45,242) | - | 1,000,000 | 1,000,000 | - | 20,454,758 | - | - | - | 21,454,758 | |||||||||||||||||||||||||||
Issuance of 95,000 shares of preferred stock and 534,910 common stock warrants, net of expenses | $ | 88,303,196 | - | - | $ | 6,696,804 | (62,065 | ) | - | - | - | 94,937,935 | ||||||||||||||||||||||||
Accretion on preferred stock discount | 45,451 | - | - | - | - | - | (45,451 | ) | - | - | ||||||||||||||||||||||||||
Exercise of employee common stock options, stock appreciation rights, common stock warrants and related tax benefits | - | 314,434 | 314,434 | - | 3,516,569 | - | - | - | 3,831,003 | |||||||||||||||||||||||||||
Issuance of restricted common shares pursuant to 2004 Equity Incentive Plan, net of forfeitures | - | 183,245 | 183,245 | - | (183,245 | ) | - | - | - | - | ||||||||||||||||||||||||||
Restricted shares withheld for taxes | - | (372 | ) | (372 | ) | - | (9,780 | ) | - | - | - | (10,152 | ) | |||||||||||||||||||||||
Compensation expense for restricted shares | - | - | 425,050 | - | - | - | 425,050 | |||||||||||||||||||||||||||||
Compensation expense for stock options | - | - | 1,922,379 | - | - | - | 1,922,379 | |||||||||||||||||||||||||||||
Comprehensive Income: | ||||||||||||||||||||||||||||||||||||
Net income | - | - | - | - | 30,873,918 | - | 30,873,918 | |||||||||||||||||||||||||||||
Net unrealized holdings gains on securities available for sale, net of deferred tax expense of $4,817,491 | - | - | - | - | - | 7,851,910 | 7,851,910 | |||||||||||||||||||||||||||||
Total comprehensive income | 38,725,828 | |||||||||||||||||||||||||||||||||||
Balances, December 31, 2008 | $ | 88,348,647 | 23,762,124 | $ | 23,762,124 | $ | 6,696,804 | $ | 417,040,974 | $ | - | $ | 84,380,447 | $ | 7,069,400 | $ | 627,298,396 | |||||||||||||||||||
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For the years ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Operating activities: | ||||||||||||
Net income | $ | 30,873,918 | $ | 23,041,355 | $ | 17,927,033 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Net amortization/accretion of premium/discount on securities | 726,538 | 492,280 | 629,634 | |||||||||
Depreciation and amortization | 7,285,781 | 3,810,374 | 1,382,401 | |||||||||
Provision for loan losses | 11,213,543 | 4,719,841 | 3,732,032 | |||||||||
Net gains on sale of premises | (1,030,231 | ) | (75,337 | ) | - | |||||||
Gains on sales of investment securities, net | - | (16,472 | ) | - | ||||||||
Gain on loan sales, net | (4,044,441 | ) | (1,858,077 | ) | (1,868,184 | ) | ||||||
Stock-based compensation expense | 2,347,429 | 2,099,819 | 1,474,961 | |||||||||
Deferred tax (benefit) expense | (2,619,989 | ) | 3,977,708 | (1,164,336 | ) | |||||||
Losses on other real estate and other investments | 1,165,145 | - | - | |||||||||
Excess tax benefit from stock compensation | (875,114 | ) | (105,809 | ) | (131,121 | ) | ||||||
Mortgage loans held for sale: | ||||||||||||
Loans originated | (293,906,669 | ) | (169,808,372 | ) | (131,971,094 | ) | ||||||
Loans sold | 283,449,870 | 169,599,685 | 134,301,622 | |||||||||
Increase in other assets | (15,654,171 | ) | (17,471,118 | ) | (6,103,122 | ) | ||||||
Increase (decrease) in other liabilities | 14,701,265 | (2,011,851 | ) | (6,303,665 | ) | |||||||
Net cash provided by operating activities | 33,632,874 | 16,394,026 | 11,906,161 | |||||||||
Investing activities: | ||||||||||||
Activities in available for sale securities: | ||||||||||||
Purchases | (531,736,803 | ) | (78,978,057 | ) | (62,760,686 | ) | ||||||
Sales | - | 770,400 | - | |||||||||
Maturities, prepayments and calls | 200,164,277 | 51,518,109 | 35,568,504 | |||||||||
Activities in held to maturity securities: | ||||||||||||
Maturities, prepayments and calls | 16,420,000 | - | - | |||||||||
Increase in loans, net | (636,979,248 | ) | (386,164,624 | ) | (297,565,733 | ) | ||||||
Purchases of premises and equipment and software | (9,449,780 | ) | (5,793,535 | ) | (4,649,676 | ) | ||||||
Proceeds from the sale of premises and equipment | 2,821,702 | 278,278 | - | |||||||||
Cash and cash equivalents (used for) provided by acquisitions, net of acquisition costs | (3,800,000 | ) | 38,149,471 | 36,230,539 | ||||||||
Increases in other investments | (9,712,133 | ) | (4,905,032 | ) | (6,107,658 | ) | ||||||
Net cash used in investing activities | (972,271,985 | ) | (385,681,546 | ) | (299,284,710 | ) | ||||||
Financing activities: | ||||||||||||
Net increase in deposits | 610,090,035 | 346,584,243 | 229,745,145 | |||||||||
Net increase (decrease) in repurchase agreements | 28,226,963 | (5,481,091 | ) | 75,181,529 | ||||||||
Net increase in Federal funds purchased | 31,781,000 | 39,862,000 | - | |||||||||
Federal Home Loan Bank: | ||||||||||||
Issuances | 120,531,743 | 80,000,000 | 56,000,000 | |||||||||
Payments | (29,163,002 | ) | (102,304,513 | ) | (61,540,828 | ) | ||||||
Net increase in borrowings under lines of credit | 9,000,000 | 9,000,000 | - | |||||||||
Proceeds from issuance of subordinated debt | 15,000,000 | 30,928,000 | 20,619,000 | |||||||||
Exercise of common stock warrants | 250,000 | - | 55,000 | |||||||||
Exercise of common stock options and stock appreciation rights | 3,403,457 | 877,482 | 1,239,771 | |||||||||
Excess tax benefit from stock compensation | 875,114 | 105,809 | 131,121 | |||||||||
Proceeds from the sale of common stock and common stock warrants, net of expenses | 21,454,758 | - | - | |||||||||
Proceeds from issuances of preferred stock, net of expenses | 94,937,935 | - | - | |||||||||
Costs incurred in connection with registration of common stock issued in merger | - | (299,397 | ) | (187,609 | ) | |||||||
Net cash provided by financing activities | 906,388,003 | 399,272,533 | 321,243,129 | |||||||||
Net increase (decrease) in cash and cash equivalents | (32,251,108 | ) | 29,985,013 | 33,864,580 | ||||||||
Cash and cash equivalents, beginning of year | 122,503,863 | 92,518,850 | 58,654,270 | |||||||||
Cash and cash equivalents, end of year | $ | 90,252,755 | $ | 122,503,863 | $ | 92,518,850 | ||||||
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For the years ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Cash Payments: | ||||||||||||
Interest | $ | 96,284,366 | $ | 76,735,790 | $ | 50,752,304 | ||||||
Income taxes | 12,600,000 | 7,900,000 | 8,280,000 | |||||||||
Noncash Transactions: | ||||||||||||
Common stock, stock appreciation rights, and options issued to acquire Mid-America Bancshares, Inc. | - | 183,509,822 | - | |||||||||
Common stock and options issued to acquire Cavalry Bancorp, Inc. | - | - | 171,087,572 | |||||||||
Loans charged-off to the allowance for loan losses | 5,133,274 | 1,341,890 | 818,467 | |||||||||
Loans foreclosed upon with repossessions transferred to other assets | 29,127,163 | 481,915 | 994,781 |
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2008 | 2007 | 2006 | ||||||||||
Basic earnings per share calculation: | ||||||||||||
Numerator- Net income available to common stockholders | $ | 30,564,578 | $ | 23,041,355 | $ | 17,927,033 | ||||||
Denominator- Average common shares outstanding | 22,793,699 | 16,100,076 | 13,954,077 | |||||||||
Basic net income per share available to common stockholders | $ | 1.34 | $ | 1.43 | $ | 1.28 | ||||||
Diluted earnings per share calculation: | ||||||||||||
Numerator- Net income available to common stockholders | $ | 30,564,578 | $ | 23,041,355 | $ | 17,927,033 | ||||||
Denominator- Average common shares outstanding | 22,793,699 | 16,100,076 | 13,954,077 | |||||||||
Dilutive shares contingently issuable | 1,260,273 | 1,155,467 | 1,202,760 | |||||||||
Average diluted common shares outstanding | 24,053,972 | 17,255,543 | 15,156,837 | |||||||||
Diluted net income per share available to common stockholders | $ | 1.27 | $ | 1.34 | $ | 1.18 |
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• | Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
• | Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
• | Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
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Internal | Internal | |||||||||||||||||||
Total | models with | models with | ||||||||||||||||||
carrying | Quoted | significant | significant | |||||||||||||||||
value in the | market prices | observable | unobservable | |||||||||||||||||
consolidated | in an active | market | market | |||||||||||||||||
balance sheet | market | parameters | parameters | |||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
Securities available-for-sale | $ | 839,229 | $ | - | $ | 802,739 | $ | 36,490 | ||||||||||||
Mortgage loans held-for-sale | 25,477 | - | 25,477 | - | ||||||||||||||||
Other investments | 1,549 | - | - | 1,549 | ||||||||||||||||
Other assets | 63,734 | - | 16,309 | 47,425 | ||||||||||||||||
Total assets at fair value | $ | 929,989 | $ | - | $ | 844,525 | $ | 85,464 | ||||||||||||
Other liabilities | 16,431 | - | 16,431 | - | ||||||||||||||||
Total liabilities at fair value | $ | 16,431 | $ | - | $ | 16,431 | $ | - | ||||||||||||
Internal | Internal | |||||||||||||||||||
Total | models with | models with | ||||||||||||||||||
carrying | Quoted | significant | significant | |||||||||||||||||
value in the | market prices | observable | unobservable | |||||||||||||||||
consolidated | in an active | market | market | |||||||||||||||||
balance sheet | market | parameters | parameters | |||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||
Impaired loans | $ | 10,860 | $ | - | $ | - | $ | 10,860 | ||||||||||||
Total assets at fair value | $ | 10,860 | $ | - | $ | - | $ | 10,860 | ||||||||||||
Other liabilities | - | - | - | - | ||||||||||||||||
Total liabilities at fair value | $ | - | $ | - | $ | - | $ | - | ||||||||||||
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Year ended December 31, 2008 (in thousands) | Assets | Liabilities | ||||||
Fair value, January 1, 2008 | $ | 38,287 | $ | - | ||||
Total realized and unrealized gains included in income | 698 | - | ||||||
Purchases, issuances and settlements, net | 46,479 | - | ||||||
Transfers in and/or out of level 3 | - | - | ||||||
Fair value, December 31, 2008 | $ | 85,464 | $ | - | ||||
Total unrealized gains included in income related to financial assets and liabilities still on the consolidated balance sheet at December 31, 2008 | $ | 698 | $ | - | ||||
Changes in | ||||||||||||
purchase price | ||||||||||||
November 30, 2007 | allocation | |||||||||||
purchase price | recorded during | Final purchase | ||||||||||
allocation | 2008 | price allocation | ||||||||||
Mid-America Purchase Price Allocation | ||||||||||||
Cash and cash equivalents | $ | 60,795 | $ | - | $ | 60,795 | ||||||
Investment securities — available-for-sale | 147,766 | - | 147,766 | |||||||||
Loans, net of an allowance for loan losses of $8,695 | 855,887 | - | 855,887 | |||||||||
Goodwill | 129,334 | 3,208 | 132,542 | |||||||||
Core deposit intangible | 8,085 | 1,351 | 9,436 | |||||||||
Other assets | 49,854 | 139 | 49,993 | |||||||||
Total assets acquired | 1,251,721 | 4,698 | 1,256,419 | |||||||||
Deposits | 957,076 | - | 957,076 | |||||||||
Federal Home Loan Bank advances | 61,383 | - | 61,383 | |||||||||
Other liabilities | 27,107 | 79 | 27,186 | |||||||||
Total liabilities assumed | 1,045,566 | 79 | 1,045,645 | |||||||||
Total consideration paid for Mid-America | $ | 206,155 | $ | 4,619 | $ | 210,774 | ||||||
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Year ended December 31, | |||||||||
2008 | 2007 | ||||||||
(unaudited) | |||||||||
Pro Forma Income Statements: | |||||||||
Net interest income | $ | 112,445 | $ | 108,357 | |||||
Provision for loan losses | 11,214 | 14,544 | |||||||
Noninterest income | 34,718 | 29,495 | |||||||
Noninterest expense | 94,445 | 98,631 | |||||||
Net income before income taxes | 41,504 | 24,677 | |||||||
Income tax expense | 11,686 | 8,302 | |||||||
Preferred stock dividend and accretion on preferred stock discount | 309 | - | |||||||
Net income available for common stockholders | $ | 29,509 | $ | 16,376 | |||||
Pro Forma Per Share Information: | |||||||||
Basic net income per common share | $ | 1.29 | $ | 0.72 | |||||
Diluted net income per common share | $ | 1.23 | $ | 0.68 | |||||
Weighted average shares outstanding: | |||||||||
Basic | 22,793,699 | 22,776,656 | |||||||
Diluted | 24,053,972 | 23,932,123 |
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Cash and cash equivalents | $ | 37,420 | ||
Investment securities – available-for-sale | 39,476 | |||
Loans, net of an allowance for loan losses of $5,102 | 545,598 | |||
Goodwill | 114,288 | |||
Core deposit intangible | 13,168 | |||
Other assets | 42,937 | |||
Total assets acquired | 792,887 | |||
Deposits | 583,992 | |||
Federal Home Loan Bank advances | 17,767 | |||
Other liabilities | 18,851 | |||
Total liabilities assumed | 620,610 | |||
Total consideration paid for Cavalry | $ | 172,277 | ||
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Risk free interest rate | 2.64% | |||
Expected life of options | 10 years | |||
Expected dividend yield | 0.00% | |||
Expected volatility | 30.3% | |||
Weighted average fair value | $11.86 |
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December 31, 2008 | ||||||||||||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Securities available-for-sale: | ||||||||||||||||
U.S. Government agency securities | $ | 62,861,379 | $ | 1,561,974 | $ | - | $ | 64,423,353 | ||||||||
Mortgage-backed securities | 626,414,161 | 12,140,209 | 197,086 | 638,357,284 | ||||||||||||
State and municipal securities | 136,727,876 | 1,454,803 | 3,357,443 | 134,825,236 | ||||||||||||
Corporate notes | 1,907,722 | 3,785 | 287,952 | 1,623,555 | ||||||||||||
$ | 827,911,138 | $ | 15,160,771 | $ | 3,842,481 | $ | 839,229,428 | |||||||||
Securities held-to-maturity: | ||||||||||||||||
U.S. Government agency securities | $ | 1,997,967 | $ | 5,593 | $ | - | $ | 2,003,560 | ||||||||
State and municipal securities | 8,553,289 | 172,589 | 86,465 | 8,639,413 | ||||||||||||
$ | 10,551,256 | $ | 178,182 | $ | 86,465 | $ | 10,642,973 | |||||||||
December 31, 2007 | ||||||||||||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Securities available-for-sale: | ||||||||||||||||
U.S. Government agency securities | $ | 69,481,328 | $ | 199,761 | $ | 18,526 | $ | 69,662,563 | ||||||||
Mortgage-backed securities | 297,909,174 | 1,237,808 | 1,441,636 | 297,705,346 | ||||||||||||
State and municipal securities | 127,220,978 | 208,241 | 1,523,412 | 125,905,807 | ||||||||||||
Corporate notes | 2,415,782 | - | 37,559 | 2,378,223 | ||||||||||||
— | ||||||||||||||||
$ | 497,027,262 | $ | 1,645,810 | $ | 3,021,133 | $ | 495,651,939 | |||||||||
Securities held-to-maturity: | ||||||||||||||||
U.S. Government agency securities | $ | 17,747,589 | $ | 4,436 | $ | - | $ | 17,752,025 | ||||||||
State and municipal securities | 9,285,767 | 23,175 | 177,494 | 9,131,448 | ||||||||||||
$ | 27,033,356 | $ | 27,611 | $ | 177,494 | $ | 26,883,473 | |||||||||
Available-for-sale | Held-to-maturity | |||||||||||||||||
Fair | Amortized | Fair | ||||||||||||||||
Amortized Cost | Value | Cost | Value | |||||||||||||||
Due in one year or less | $ | 8,974,164 | $ | 8,964,678 | $ | 480,604 | $ | 484,182 | ||||||||||
Due in one year to five years | 19,111,800 | 19,492,986 | 8,496,057 | 8,555,824 | ||||||||||||||
Due in five years to ten years | 81,462,315 | 82,672,774 | 1,574,595 | 1,602,967 | ||||||||||||||
Due after ten years | 91,948,698 | 89,741,706 | - | - | ||||||||||||||
$ | 201,496,977 | $ | 200,872,144 | $ | 10,551,256 | $ | 10,642,973 | |||||||||||
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Investments with an | ||||||||||||||||||||||||
Unrealized Loss of less than | Investments with an Unrealized | Total Investments with an | ||||||||||||||||||||||
12 months | Loss of 12 months or longer | Unrealized Loss | ||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||||
Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | |||||||||||||||||||
At December 31, 2008: | ||||||||||||||||||||||||
U.S. government agency securities | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Mortgage-backed securities | 29,622,695 | 119,315 | 2,520,127 | 77,771 | 32,142,822 | 197,086 | ||||||||||||||||||
State and municipal securities | 28,560,915 | 1,095,573 | 32,466,087 | 2,348,335 | 61,027,002 | 3,443,908 | ||||||||||||||||||
Corporate notes | 242,520 | 157,480 | 859,475 | 130,472 | 1,101,995 | 287,952 | ||||||||||||||||||
Total temporarily-impaired securities | $ | 58,426,130 | $ | 1,372,368 | $ | 35,845,689 | $ | 2,556,578 | $ | 94,271,819 | $ | 3,928,946 | ||||||||||||
At December 31, 2007: | ||||||||||||||||||||||||
U.S. government agency securities | $ | 13,942,078 | $ | 4,126 | $ | 2,985,600 | $ | 14,400 | $ | 16,927,678 | $ | 18,526 | ||||||||||||
Mortgage-backed securities | 51,240,090 | 181,098 | 97,593,453 | 1,260,538 | 148.833.543 | 1.441.636 | ||||||||||||||||||
State and municipal securities | 54,467,544 | 1,214,835 | 35,481,739 | 486,071 | 89,949,283 | 1,700,906 | ||||||||||||||||||
Corporate notes | 527,115 | 300 | 1,451,108 | 37,259 | 1,978,223 | 37,559 | ||||||||||||||||||
Total temporarily-impaired securities | $ | 120,176,827 | $ | 1,400,359 | $ | 137,511,900 | $ | 1,798,268 | $ | 257,688,727 | $ | 3,198,627 | ||||||||||||
2008 | 2007 | |||||||
Commercial real estate – Mortgage | $ | 963,530,444 | $ | 710,545,533 | ||||
Consumer real estate – Mortgage | 675,605,596 | 539,768,302 | ||||||
Construction and land development | 658,798,934 | 582,958,584 | ||||||
Commercial and industrial | 966,562,521 | 794,419,213 | ||||||
Consumer and other | 90,409,774 | 121,949,057 | ||||||
Total Loans | 3,354,907,269 | 2,749,640,689 | ||||||
Allowance for loan losses | (36,484,073 | ) | (28,470,207 | ) | ||||
Loans, net | $ | 3,318,423,196 | $ | 2,721,170,482 | ||||
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2008 | 2007 | |||||||
Trucking industry | $ | 99,653,000 | $ | 109,118,000 | ||||
Lessors of nonresidential buildings | 406,798,000 | 249,959,000 | ||||||
Lessors of residential buildings | 159,261,000 | 135,413,000 | ||||||
Land subdividers | 319,701,000 | 283,327,000 | ||||||
New housing operative builders | 261,625,000 | 269,744,000 | ||||||
New single family housing construction | 58,018,000 | 104,980,000 |
2008 | 2007 | 2006 | ||||||||||
Balance at beginning of period | $ | 28,470,207 | $ | 16,117,978 | $ | 7,857,774 | ||||||
Charged-off loans | (5,133,274 | ) | (1,341,890 | ) | (818,467 | ) | ||||||
Recovery of previously charged-off loans | 1,933,597 | 279,491 | 244,343 | |||||||||
Allowance from Mid-America acquisition | - | 8,694,787 | - | |||||||||
Allowance from Cavalry acquisition | - | - | 5,102,296 | |||||||||
Provision for loan losses | 11,213,543 | 4,719,841 | 3,732,032 | |||||||||
Balance at end of period | $ | 36,484,073 | $ | 28,470,207 | $ | 16,117,978 | ||||||
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Range of Useful Lives | 2008 | 2007 | ||||||||||
Land | - | $ | 16,987,937 | $ | 15,365,882 | |||||||
Buildings | 15 to 30 years | 40,802,299 | 41,255,704 | |||||||||
Leasehold improvements | 15 to 20 years | 4,567,108 | 5,087,210 | |||||||||
Furniture and equipment | 3 to 15 years | 33,474,537 | 26,910,636 | |||||||||
95,831,881 | 88,619,432 | |||||||||||
Accumulated depreciation | (26,966,660 | ) | (20,233,486 | ) | ||||||||
$ | 68,865,221 | $ | 68,385,946 | |||||||||
2009 | $ | 2,055,221 | ||
2010 | 2,295,958 | |||
2011 | 2,866,572 | |||
2012 | 2,817,515 | |||
2013 | 2,615,716 | |||
Thereafter | 25,915,454 | |||
$ | 38,566,436 | |||
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2009 | $ | 1,816,843,812 | ||
2010 | 180,673,314 | |||
2011 | 30,541,114 | |||
2012 | 6,760,751 | |||
2013 | 2,942,316 | |||
2014 | 53,000 | |||
2015 | 100,000 | |||
$ | 2,037,914,307 | |||
Scheduled | Weighted average | |||||||
Maturities | interest rates | |||||||
2009 | $ | 15,144,000 | 5.01 | % | ||||
2010 | 57,248,424 | 3.55 | % | |||||
2011 | 83,000 | 0.00 | % | |||||
2012 | 30,085,000 | 3.51 | % | |||||
2013 | 20,066,000 | 2.67 | % | |||||
Thereafter | 61,339,757 | 2.93 | % | |||||
$ | 183,966,181 | |||||||
Weighted average interest rate | 3.36 | % |
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December 31, | December 31, | |||||||
2008 | 2007 | |||||||
Asset– Investment in subordinated debentures issued by Pinnacle Financial | $ | 82,476 | $ | 82,476 | ||||
Liabilities | $ | - | $ | - | ||||
Stockholder’s equity– Trust preferred securities | 80,000 | 80,000 | ||||||
Common securities (100% owned by Pinnacle Financial) | 2,476 | 2,476 | ||||||
Total stockholder’s equity | 82,476 | 82,476 | ||||||
Total liabilities and stockholder’s equity | $ | 82,476 | $ | 82,476 | ||||
Year ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Income –Interest income from subordinated debentures issued by Pinnacle Financial | $ | 4,903 | $ | 3,965 | $ | 2,504 | ||||||
Net Income | $ | 4,903 | $ | 3,965 | $ | 2,504 | ||||||
Trust | Total | |||||||||||||||
Preferred | Common | Retained | Stockholder’s | |||||||||||||
Securities | Stock | Earnings | Equity | |||||||||||||
Balances, December 31, 2005 | $ | 30,000 | $ | 929 | $ | - | $ | 30,929 | ||||||||
Net income | - | - | 2,504 | 2,504 | ||||||||||||
Issuance of trust preferred securities | 20,000 | 619 | - | 20,619 | ||||||||||||
Dividends: | ||||||||||||||||
Trust preferred securities | - | - | (2,428 | ) | (2,428 | ) | ||||||||||
Common paid to Pinnacle Financial | - | - | (76 | ) | (76 | ) | ||||||||||
Balances, December 31, 2006 | $ | 50,000 | $ | 1,548 | $ | - | $ | 51,548 | ||||||||
Net income | - | - | 3,965 | 3,965 | ||||||||||||
Issuance of trust preferred securities | 30,000 | 928 | - | 30,928 | ||||||||||||
Dividends: | ||||||||||||||||
Trust preferred securities | - | - | (3,847 | ) | (3,847 | ) | ||||||||||
Common paid to Pinnacle Financial | - | - | (118 | ) | (118 | ) | ||||||||||
Balances, December 31, 2007 | $ | 80,000 | $ | 2,476 | $ | - | $ | 82,476 | ||||||||
Net income | - | - | 4,903 | 4,903 | ||||||||||||
Issuance of trust preferred securities | - | - | - | - | ||||||||||||
Dividends: | ||||||||||||||||
Trust preferred securities | - | - | (4,756 | ) | (4,756 | ) | ||||||||||
Common paid to Pinnacle Financial | - | - | (147 | ) | (147 | ) | ||||||||||
Balances, December 31, 2008 | $ | 80,000 | $ | 2,476 | $ | - | $ | 82,476 | ||||||||
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2008 | 2007 | 2006 | ||||||||||
Current tax expense (benefit): | ||||||||||||
Federal | $ | 14,830,936 | $ | 6,422,436 | $ | 9,073,193 | ||||||
State | 156,068 | (407,966 | ) | 547,130 | ||||||||
Total current tax expense | 14,987,004 | 6,014,470 | 9,620,323 | |||||||||
Deferred tax expense (benefit): | ||||||||||||
Federal | (2,071,411 | ) | 3,318,644 | (971,418 | ) | |||||||
State | (548,578 | ) | 659,064 | (192,918 | ) | |||||||
Total deferred tax expense (benefit) | (2,619,989 | ) | 3,977,708 | (1,164,336 | ) | |||||||
$ | 12,367,015 | $ | 9,992,178 | $ | 8,455,987 | |||||||
2008 | 2007 | 2006 | ||||||||||
Income taxes at statutory rate | $ | 15,134,326 | $ | 11,561,737 | $ | 9,234,057 | ||||||
State tax expense, net of federal tax effect | (259,056 | ) | 163,214 | 230,238 | ||||||||
Federal tax credits | (360,000 | ) | (360,000 | ) | (300,000 | ) | ||||||
Tax-exempt securities | (1,703,794 | ) | (889,716 | ) | (602,100 | ) | ||||||
Bank owned life insurance | (301,020 | ) | (220,904 | ) | (170,777 | ) | ||||||
Insurance premiums | (370,782 | ) | (304,807 | ) | (91,049 | ) | ||||||
Other items | 227,341 | 42,654 | 155,618 | |||||||||
Income tax expense | $ | 12,367,015 | $ | 9,992,178 | $ | 8,455,987 | ||||||
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2008 | 2007 | |||||||
Deferred tax assets: | ||||||||
Loan loss allowance | $ | 14,266,271 | $ | 11,104,038 | ||||
Loans | 564,842 | 1,398,865 | ||||||
Securities | - | 485,398 | ||||||
Accrued liability for supplemental retirement agreements | 438,049 | 433,049 | ||||||
Deposits | 301,448 | 1,156,680 | ||||||
Restricted stock and stock options | 1,235,124 | 559,888 | ||||||
FHLB discount | 265,316 | 346,402 | ||||||
Mid-America organization costs | 276,484 | 298,169 | ||||||
Net operating loss carryforward | - | 1,662,445 | ||||||
Other deferred tax assets | 1,480,253 | 546,491 | ||||||
Total deferred tax assets | 18,827,787 | 17,991,425 | ||||||
Deferred tax liabilities: | ||||||||
Depreciation and amortization | 4,912,718 | 5,620,575 | ||||||
Core deposit intangible asset | 6,144,146 | 6,803,830 | ||||||
Securities | 4,343,963 | - | ||||||
REIT dividends | 68,054 | 266,981 | ||||||
FHLB dividends | 987,824 | 853,829 | ||||||
Other deferred tax liabilities | 1,023,654 | 838,845 | ||||||
Total deferred tax liabilities | 17,480,359 | 14,384,060 | ||||||
Net deferred tax assets | $ | 1,347,428 | $ | 3,607,365 | ||||
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Commitments to extend credit | $ | 1,010,353,000 | ||
Standby letters of credit | 85,975,000 |
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Weighted- | ||||||||||||||||
Weighted- | Average | Aggregate | ||||||||||||||
Average | Contractual | Intrinsic | ||||||||||||||
Exercise | Remaining Term | Value (1) | ||||||||||||||
Number | Price | (in years) | (000’s) | |||||||||||||
Outstanding at December 31, 2005 | 1,242,393 | $ | 9.78 | |||||||||||||
Additional stock option grants resulting from assumption of the Cavalry Plan | 195,551 | 10.80 | ||||||||||||||
Granted | 365,519 | 24.00 | ||||||||||||||
Exercised | (130,168 | ) | 9.69 | |||||||||||||
Forfeited | (14,836 | ) | 15.45 | |||||||||||||
Outstanding at December 31, 2006 | 1,658,459 | $ | 12.93 | |||||||||||||
Additional stock option grants and stock appreciation rights resulting from assumption of the Mid-America Plan | 487,835 | 14.54 | ||||||||||||||
Granted | 376,543 | 30.66 | ||||||||||||||
Stock options exercised | (99,741 | ) | 8.68 | |||||||||||||
Stock appreciation rights exercised (2) | (465 | ) | 21.37 | |||||||||||||
Forfeited | (23,808 | ) | 28.00 | |||||||||||||
Outstanding at December 31, 2007 | 2,398,823 | $ | 16.84 | |||||||||||||
Granted | 163,360 | 21.51 | ||||||||||||||
Stock options exercised | (264,104 | ) | 12.81 | |||||||||||||
Stock appreciation rights exercised (3) | (3,738 | ) | 15.60 | |||||||||||||
Forfeited | (72,421 | ) | 23.76 | |||||||||||||
Outstanding at December 31, 2008 | 2,221,920 | $ | 17.41 | 5.99 | $ | 28,310 | ||||||||||
Outstanding and expected to vest at December 31, 2008 | 2,189,698 | $ | 17.24 | 5.96 | $ | 28,243 | ||||||||||
Options exercisable at December 31, 2008 | 1,483,381 | $ | 12.68 | 5.05 | $ | 24,656 | ||||||||||
(1) | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of Pinnacle Financial common stock of $29.81 per common share for the 1.8 million options and stock appreciation rights that were in-the-money at December 31, 2008. | |
(2) | The 465 stock appreciation rights exercised during 2007 settled in 121 shares of Pinnacle Financial common stock. | |
(3) | The 3,738 stock appreciation rights exercised during 2008 settled in 1,208 shares of Pinnacle Financial common stock. |
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Awards granted | ||||||||||||
With | ||||||||||||
the intention to be | ||||||||||||
classified | ||||||||||||
as incentive stock | Non-qualified stock | |||||||||||
options | option awards | Totals | ||||||||||
For the year ended December 31,2008: | ||||||||||||
Stock-based compensation expense | $ | 308,901 | $ | 1,613,478 | $ | 1,922,379 | ||||||
Deferred income tax benefit | - | 632,967 | 632,967 | |||||||||
Impact of stock-based compensation expense after deferred income tax benefit | $ | 308,901 | $ | 980,511 | $ | 1,289,412 | ||||||
Impact on earnings per share: | ||||||||||||
Basic –weighted average shares outstanding | $ | 0.01 | $ | 0.04 | $ | 0.06 | ||||||
Fully diluted – weighted average shares outstanding | $ | 0.01 | $ | 0.04 | $ | 0.05 | ||||||
For the year ended December 31,2007: | ||||||||||||
Stock-based compensation expense | $ | 481,009 | $ | 1,222,432 | $ | 1,703,441 | ||||||
Deferred income tax benefit | - | 479,560 | 479,560 | |||||||||
Impact of stock-based compensation expense after deferred income tax benefit | $ | 481,009 | $ | 742,872 | $ | 1,223,881 | ||||||
Impact on earnings per share: | ||||||||||||
Basic –weighted average shares outstanding | $ | 0.03 | $ | 0.05 | $ | 0.08 | ||||||
Fully diluted – weighted average shares outstanding | $ | 0.03 | $ | 0.04 | $ | 0.07 | ||||||
For the year ended December 31,2006: | ||||||||||||
Stock-based compensation expense | $ | 586,924 | $ | 423,034 | $ | 1,009,958 | ||||||
Deferred income tax benefit | - | 165,956 | 165,956 | |||||||||
Impact of stock-based compensation expense after deferred income tax benefit | $ | 586,924 | $ | 257,078 | $ | 844,002 | ||||||
Impact on earnings per share: | ||||||||||||
Basic –weighted average shares outstanding | $ | 0.04 | $ | 0.02 | $ | 0.06 | ||||||
Fully diluted – weighted average shares outstanding | $ | 0.04 | $ | 0.02 | $ | 0.06 | ||||||
2008 | 2007 | 2006 | ||||||||||
Risk free interest rate | 3.20 | % | 4.70 | % | 4.65 | % | ||||||
Expected life of options | 6.50 years | 6.50 years | 6.50 years | |||||||||
Expected dividend yield | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
Expected volatility | 28.5 | % | 21.1 | % | 23.1 | % | ||||||
Weighted average fair value | $ | 7.76 | $ | 10.57 | $ | 10.44 |
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Grant Date | ||||||||
Weighted- | ||||||||
Average | ||||||||
Number | Cost | |||||||
Unvested at December 31, 2005 | 18,930 | $ | 24.77 | |||||
Shares awarded | 22,457 | 33.01 | ||||||
Restrictions lapsed and shares released to associates/directors | (6,739 | ) | 24.68 | |||||
Shares forfeited | (400 | ) | 25.00 | |||||
Unvested at December 31, 2006 | 34,248 | $ | 30.19 | |||||
Shares awarded | 42,551 | 29.16 | ||||||
Restrictions lapsed and shares released to associates/directors | (16,760 | ) | 28.45 | |||||
Shares forfeited | - | - | ||||||
Unvested at December 31, 2007 | 60,039 | $ | 29.94 | |||||
Shares awarded | 190,468 | 23.30 | ||||||
Restrictions lapsed and shares released to associates/directors | (11,153 | ) | 27.56 | |||||
Shares forfeited | (7,473 | ) | 25.20 | |||||
Unvested at December 31, 2008 | 231,881 | $ | 24.76 | |||||
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2008 | 2007 | 2006 | ||||||||||
Stock-based compensation expense | $ | 425,050 | $ | 396,378 | $ | 465,003 | ||||||
Income tax benefit | 166,747 | 155,499 | 182,421 | |||||||||
Impact of stock-based compensation expense, net of income tax benefit | $ | 258,303 | $ | 240,879 | $ | 282,582 | ||||||
Impact on earnings per share: | ||||||||||||
Basic - weighted average shares outstanding | $ | 0.01 | $ | 0.01 | $ | 0.02 | ||||||
Fully diluted - weighted average shares outstanding | $ | 0.01 | $ | 0.01 | $ | 0.02 | ||||||
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December 31, 2008 | ||||||||
Estimated Fair | ||||||||
Notional Amount | Value | |||||||
Interest rate swap agreements: | ||||||||
Pay fixed / receive variable swaps | $ | 156,086 | $ | 16,309 | ||||
Pay variable / receive fixed swaps | 156,086 | (16,431 | ) | |||||
Total | $ | 312,172 | $ | (122 | ) | |||
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December 31, 2008 | December 31, 2007 | |||||||||||||||
Estimated | Estimated | |||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Financial assets: | ||||||||||||||||
Cash, due from banks, and Federal funds sold | $ | 90,253 | $ | 90,253 | $ | 122,504 | $ | 122,504 | ||||||||
Securities available-for-sale | 839,229 | 839,229 | 495,652 | 495,652 | ||||||||||||
Securities held-to-maturity | 10,551 | 10,643 | 27,033 | 26,883 | ||||||||||||
Mortgage loans held-for-sale | 25,477 | 25,477 | 11,252 | 11,252 | ||||||||||||
Loans, net | 3,318,423 | 3,338,609 | 2,721,170 | 2,705,663 | ||||||||||||
Derivative assets | 16,309 | 16,309 | 504 | 504 | ||||||||||||
Financial liabilities: | ||||||||||||||||
Deposits and securities sold under agreements to repurchase | $ | 3,717,544 | $ | 3,727,094 | $ | 3,081,390 | $ | 3,077,828 | ||||||||
Federal Home Loan Bank advances and other borrowings | 201,966 | 205,297 | 101,804 | 101,576 | ||||||||||||
Federal Funds Purchased | 71,643 | 71,643 | 39,862 | 39,862 | ||||||||||||
Subordinated debt | 97,476 | 104,268 | 82,476 | 83,293 | ||||||||||||
Derivative liabilities | 16,431 | 16,431 | 504 | 504 | ||||||||||||
Notional | Notional | |||||||||||||||
Amount | Amount | |||||||||||||||
Off-balance sheet instruments: | ||||||||||||||||
Commitments to extend credit | $ | 1,010,353 | $ | - | $ | 833,893 | $ | - | ||||||||
Standby letters of credit | 85,975 | 325 | 98,305 | 234 |
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Minimum | ||||||||||||||||||||||||
To Be Well-Capitalized | ||||||||||||||||||||||||
Minimum | Under Prompt | |||||||||||||||||||||||
Capital | Corrective | |||||||||||||||||||||||
Actual | Requirement | Action Provisions | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
At December 31, 2008 | ||||||||||||||||||||||||
Total capital to risk weighted assets: | ||||||||||||||||||||||||
Pinnacle Financial | $ | 498,175 | 13.53 | % | $ | 294,636 | 8.0 | % | not applicable | |||||||||||||||
Pinnacle National | $ | 424,798 | 11.58 | % | $ | 293,562 | 8.0 | % | $ | 366,953 | 10.0 | % | ||||||||||||
Tier I capital to risk weighted assets: | ||||||||||||||||||||||||
Pinnacle Financial | $ | 446,635 | 12.13 | % | $ | 147,318 | 4.0 | % | not applicable | |||||||||||||||
Pinnacle National | $ | 373,258 | 10.17 | % | $ | 146,781 | 4.0 | % | $ | 220,172 | 6.0 | % | ||||||||||||
Tier I capital to average assets (*): | ||||||||||||||||||||||||
Pinnacle Financial | $ | 446,635 | 10.47 | % | $ | 170,700 | 4.0 | % | not applicable | |||||||||||||||
Pinnacle National | $ | 373,258 | 8.75 | % | $ | 170,717 | 4.0 | % | $ | 213,396 | 5.0 | % | ||||||||||||
At December 31, 2007 | ||||||||||||||||||||||||
Total capital to risk weighted assets: | ||||||||||||||||||||||||
Pinnacle Financial | $ | 322,146 | 10.4 | % | $ | 248,263 | 8.0 | % | not applicable | |||||||||||||||
Pinnacle National | $ | 214,201 | 10.1 | % | $ | 169,825 | 8.0 | % | $ | 212,282 | 10.0 | % | ||||||||||||
PrimeTrust Bank | $ | 56,822 | 10.1 | % | $ | 45,026 | 8.0 | % | $ | 56,283 | 10.0 | % | ||||||||||||
Bank of the South | $ | 41,946 | 10.4 | % | $ | 32,155 | 8.0 | % | $ | 40,193 | 10.0 | % | ||||||||||||
Tier I capital to risk weighted assets: | ||||||||||||||||||||||||
Pinnacle Financial | $ | 293,676 | 9.5 | % | $ | 124,132 | 4.0 | % | not applicable | |||||||||||||||
Pinnacle National | $ | 194,804 | 9.2 | % | $ | 84,913 | 4.0 | % | $ | 127,369 | 6.0 | % | ||||||||||||
PrimeTrust Bank | $ | 51,550 | 9.2 | % | $ | 22,513 | 4.0 | % | $ | 33,770 | 6.0 | % | ||||||||||||
Bank of the South | $ | 38,089 | 9.5 | % | $ | 16,077 | 4.0 | % | $ | 24,116 | 6.0 | % | ||||||||||||
Tier I capital to average assets (*): | ||||||||||||||||||||||||
Pinnacle Financial | $ | 293,676 | 11.6 | % | $ | 101,515 | 4.0 | % | not applicable | |||||||||||||||
Pinnacle National | $ | 194,804 | 8.5 | % | $ | 91,273 | 4.0 | % | $ | 114,091 | 5.0 | % | ||||||||||||
PrimeTrust Bank | $ | 51,550 | 8.3 | % | $ | 24,976 | 4.0 | % | $ | 31,220 | 5.0 | % | ||||||||||||
Bank of the South | $ | 38,089 | 7.6 | % | $ | 19,908 | 4.0 | % | $ | 24,886 | 5.0 | % |
(*) | Average assets for the above calculations were based on the most recent quarter. |
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Trust and | ||||||||||||||||||||
Commercial | Investment | Mortgage | Insurance | Total | ||||||||||||||||
Banking | Services | Origination | Services | Company | ||||||||||||||||
For the year ended December 31, 2008: | ||||||||||||||||||||
Net interest income | $ | 114,021 | $ | - | $ | 194 | $ | - | $ | 114,215 | ||||||||||
Provision for loan losses | 11,214 | - | - | - | 11,214 | |||||||||||||||
Noninterest income | 20,805 | 6,639 | 3,740 | 3,534 | 34,718 | |||||||||||||||
Noninterest expense | 84,402 | 5,109 | 2,418 | 2,549 | 94,478 | |||||||||||||||
Income tax expense | 10,780 | 600 | 594 | 393 | 12,367 | |||||||||||||||
Net income | $ | 28,430 | $ | 930 | $ | 922 | $ | 592 | $ | 30,874 | ||||||||||
Net income available to common stockholders | $ | 30,565 | $ | - | $ | - | $ | - | $ | 30,565 | ||||||||||
For the year ended December 31, 2007: | ||||||||||||||||||||
Net interest income | $ | 75,541 | $ | - | $ | 171 | $ | - | $ | 75,712 | ||||||||||
Provision for loan losses | 4,720 | - | - | - | 4,720 | |||||||||||||||
Noninterest income | 12,492 | 4,743 | 2,792 | 2,494 | 22,521 | |||||||||||||||
Noninterest expense | 52,929 | 3,484 | 2,249 | 1,818 | 60,480 | |||||||||||||||
Income tax expense | 8,949 | 494 | 280 | 269 | 9,992 | |||||||||||||||
Net income | $ | 21,435 | $ | 765 | $ | 434 | $ | 407 | $ | 23,041 | ||||||||||
For the year ended December 31, 2006: | ||||||||||||||||||||
Net interest income | $ | 60,953 | $ | - | $ | - | $ | - | $ | 60,953 | ||||||||||
Provision for loan losses | 3,732 | - | - | - | 3,732 | |||||||||||||||
Noninterest income | 8,705 | 3,316 | 1,647 | 2,119 | 15,787 | |||||||||||||||
Noninterest expense | 41,930 | 2,375 | 976 | 1,343 | 46,624 | |||||||||||||||
Income tax expense | 7,508 | 369 | 263 | 317 | 8,457 | |||||||||||||||
Net income | $ | 16,488 | $ | 572 | $ | 408 | $ | 459 | $ | 17,927 | ||||||||||
As of December 31, 2008: | ||||||||||||||||||||
End of period assets | $ | 4,720,706 | $ | 783 | $ | 25,816 | $ | 6,770 | $ | 4,754,075 | ||||||||||
As of December 31, 2007: | ||||||||||||||||||||
End of period assets | $ | 3,773,874 | $ | 400 | $ | 15,074 | $ | 4,822 | $ | 3,794,170 | ||||||||||
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2008 | 2007 | |||||||
Assets: | ||||||||
Cash | $ | 85,089,190 | $ | 9,829,126 | ||||
Investments in consolidated subsidiaries | 636,278,407 | 538,364,192 | ||||||
Investment in unconsolidated subsidiaries: | ||||||||
PNFP Statutory Trust I | 310,000 | 310,000 | ||||||
PNFP Statutory Trust II | 619,000 | 619,000 | ||||||
PNFP Statutory Trust III | 619,000 | 619,000 | ||||||
PNFP Statutory Trust IV | 928,000 | 928,000 | ||||||
Other investments | 1,548,615 | 1,255,135 | ||||||
Current income tax receivable | 1,107,618 | 8,365,160 | ||||||
Other assets | 2,070,010 | 8,125,827 | ||||||
$ | 728,569,839 | $ | 568,415,440 | |||||
Liabilities and stockholders’ equity: | ||||||||
Income taxes payable to subsidiaries | $ | 487,763 | $ | 8,916,956 | ||||
Subordinated debt and other borrowings | 100,476,000 | 91,476,000 | ||||||
Other liabilities | 307,680 | 1,412,190 | ||||||
Stockholders’ equity | 627,298,396 | 466,610,294 | ||||||
$ | 728,569,839 | $ | 568,415,440 | |||||
2008 | 2007 | 2006 | ||||||||||
Revenues — Interest income | $ | 242,546 | $ | 347,787 | $ | 267,154 | ||||||
Expenses: | ||||||||||||
Interest expense — subordinated debentures | 5,470,827 | 4,012,243 | 2,504,033 | |||||||||
Stock-based compensation expense | 2,347,429 | 2,099,819 | 1,474,960 | |||||||||
Other expense | 442,654 | 303,827 | 245,528 | |||||||||
Loss before income taxes and equity in undistributed income of subsidiaries | (8,018,364 | ) | (6,068,102 | ) | (3,957,367 | ) | ||||||
Income tax benefit | (3,021,794 | ) | (2,195,146 | ) | (1,632,738 | ) | ||||||
Loss before equity in undistributed income of subsidiaries and accretion on preferred stock discount | (4,996,570 | ) | (3,872,956 | ) | (2,324,629 | ) | ||||||
Equity in undistributed income of subsidiaries | 35,870,488 | 26,914,311 | 20,251,662 | |||||||||
Net income | 30,873,918 | 23,041,355 | 17,927,033 | |||||||||
Preferred stock dividends | (263,889 | ) | - | - | ||||||||
Accretion on preferred stock discount | (45,451 | ) | - | - | ||||||||
Net income available to common stockholders | $ | 30,564,578 | $ | 23,041,355 | $ | 17,927,033 | ||||||
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2008 | 2007 | 2006 | ||||||||||
Operating activities: | ||||||||||||
Net income | $ | 30,873,918 | $ | 23,041,355 | $ | 17,927,033 | ||||||
Adjustments to reconcile net income to net cash provided (used) by operating activities: | ||||||||||||
Stock-based compensation expense | 2,347,429 | 2,099,819 | 1,474,961 | |||||||||
Loss on other investments | 253,153 | - | - | |||||||||
Decrease in income tax payable, net | (1,171,651 | ) | (1,528,956 | ) | (1,921,194 | ) | ||||||
Decrease in other assets | 2,839,142 | 77,960 | 1,118,126 | |||||||||
Decrease in other liabilities | (1,104,509 | ) | 495,586 | 190,000 | ||||||||
Excess tax benefit from stock compensation | (875,114 | ) | (105,809 | ) | (131,121 | ) | ||||||
Deferred tax benefit (expense) | 3,818,553 | 67,501 | (232,866 | ) | ||||||||
Equity in undistributed income of subsidiaries | (35,870,488 | ) | (26,914,311 | ) | (20,251,662 | ) | ||||||
Net cash provided (used) by operating activities | 1,110,433 | (2,766,855 | ) | (1,826,723 | ) | |||||||
Investing activities— Investment in unconsolidated subsidiaries | - | (928,000 | ) | (619,000 | ) | |||||||
Investment in consolidated subsidiaries: | ||||||||||||
Banking subsidiaries | (54,975,000 | ) | (20,250,000 | ) | (10,000,000 | ) | ||||||
Other subsidiaries | (250,000 | ) | - | (350,250 | ) | |||||||
Investments in other entities | (546,633 | ) | (1,189,488 | ) | (65,647 | ) | ||||||
Cash and cash equivalents used in merger with Mid-America | - | (21,557,773 | ) | - | ||||||||
Cash and cash equivalents acquired in merger with Cavalry | - | - | 3,128,116 | |||||||||
Net cash used by investing activities | (55,771,633 | ) | (43,925,261 | ) | (7,906,781 | ) | ||||||
Financing activities— Proceeds from issuance of subordinated debt | - | 30,928,000 | 20,619,000 | |||||||||
Net increase in borrowings from line of credit | 9,000,000 | - | - | |||||||||
Exercise of common stock warrants | 250,000 | - | 55,000 | |||||||||
Exercise of common stock options | 3,403,457 | 983,292 | 1,239,771 | |||||||||
Excess tax benefit from stock compensation arrangements | 875,114 | 105,809 | 31,121 | |||||||||
Issuance of common stock, net of offering costs | 21,454,758 | - | - | |||||||||
Issuance of preferred stock, net of offering costs | 94,937,935 | - | - | |||||||||
Costs incurred in connection with registration of common stock issued in mergers | - | (299,397 | ) | (187,609 | ) | |||||||
Net cash provided by financing activities | 129,921,264 | 31,717,704 | 21,857,283 | |||||||||
Net increase (decrease) in cash | 75,260,064 | (14,974,412 | ) | 12,123,779 | ||||||||
Cash, beginning of year | 9,829,126 | 24,803,538 | 12,679,759 | |||||||||
Cash, end of year | $ | 85,089,190 | $ | 9,829,126 | $ | 24,803,538 | ||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
First | Second | Third | Fourth | |||||||||||||
(in thousands, except per share data) | Quarter | Quarter | Quarter | Quarter | ||||||||||||
2008 | ||||||||||||||||
Interest income | $ | 52,161 | $ | 48,774 | $ | 51,873 | $ | 53,273 | ||||||||
Net interest income | 27,359 | 27,682 | 29,282 | 29,892 | ||||||||||||
Provision for loan losses | 1,591 | 2,787 | 3,125 | 3,710 | ||||||||||||
Net income before taxes | 8,644 | 10,878 | 12,083 | 11,636 | ||||||||||||
Net income | 6,065 | 7,961 | 8,795 | 8,053 | ||||||||||||
Basic net income per share | $ | 0.27 | $ | 0.36 | $ | 0.38 | $ | 0.33 | ||||||||
Diluted net income per share | $ | 0.26 | $ | 0.34 | $ | 0.36 | $ | 0.31 | ||||||||
2007 | ||||||||||||||||
Interest income | $ | 33,739 | $ | 35,508 | $ | 38,347 | $ | 43,338 | ||||||||
Net interest income | 17,082 | 17,661 | 18,960 | 22,009 | ||||||||||||
Provision for loan losses | 788 | 900 | 772 | 2,260 | ||||||||||||
Net income before taxes | 8,196 | 7,828 | 8,410 | 8,599 | ||||||||||||
Net income | 5,602 | 5,426 | 5,772 | 6,242 | ||||||||||||
Basic net income per share | $ | 0.36 | $ | 0.35 | $ | 0.37 | $ | 0.35 | ||||||||
Diluted net income per share | $ | 0.34 | $ | 0.33 | $ | 0.35 | $ | 0.33 | ||||||||
2006 | ||||||||||||||||
Interest income | $ | 16,811 | $ | 28,305 | $ | 31,340 | $ | 33,241 | ||||||||
Net interest income | 9,507 | 16,895 | 17,159 | 17,391 | ||||||||||||
Provision for loan losses | 387 | 1,707 | 587 | 1,051 | ||||||||||||
Net income before taxes | 3,839 | 6,463 | 7,942 | 8,139 | ||||||||||||
Net income | 2,612 | 4,322 | 5,347 | 5,646 | ||||||||||||
Basic net income per share | $ | 0.27 | $ | 0.28 | $ | 0.35 | $ | 0.37 | ||||||||
Diluted net income per share | $ | 0.24 | $ | 0.26 | $ | 0.32 | $ | 0.34 |
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ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
None. |
ITEM 9B.OTHER INFORMATION |
None. |
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Number of Securities | ||||||||||||
Number of | Weighted | Remaining Available | ||||||||||
Securities to be | Average | for Future Issuance | ||||||||||
Issued upon | Exercise Price | Under Equity | ||||||||||
Exercise of | of Outstanding | Compensation Plans | ||||||||||
Outstanding | Options, | (Excluding Securities | ||||||||||
Options, Warrants | Warrants and | Reflected in First | ||||||||||
Plan Category | and Rights | Rights | Column) | |||||||||
Equity compensation plans approved by shareholders: | ||||||||||||
2000 Stock Incentive Plan | 782,693 | $ | 6.09 | - | ||||||||
2004 Equity Incentive Plan | 1,080,145 | $ | 26.81 | 440,016 | ||||||||
1999 Cavalry Bancorp, Inc. Stock Option Plan | 71,590 | $ | 10.74 | - | ||||||||
Bank of the South 2001 Stock Option Plan | 56,038 | $ | 16.87 | - | ||||||||
PrimeTrust Bank 2001 Statutory-Non-Statutory Stock Option Plan | 28,408 | $ | 7.52 | - | ||||||||
PrimeTrust Bank 2005 Statutory-Non-Statutory Stock Option Plan | 58,241 | $ | 12.89 | - | ||||||||
Mid-America Bancshares, Inc. 2006 Omnibus Equity Incentive Plan | 144,805 | $ | 15.66 | 92,318 | ||||||||
Equity compensation plans not approved by shareholders | N/A | N/A | N/A | |||||||||
Total | 2,221,920 | $ | 17.41 | 532,334 |
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Exhibit No. | Description | |
2.1 | Merger Agreement, dated September 30, 2005, by and between Pinnacle Financial Partners, Inc. and Cavalry Bancorp, Inc. (schedules and exhibits to which been omitted pursuant to Items 601(b)(2) of Regulations S-K)(1) | |
2.2 | Agreement and Plan of Merger by and between Pinnacle Financial Partners, Inc. and Mid-America Bancshares, Inc. (schedules and exhibits to which been omitted pursuant to Items 601(b)(2) of Regulations S-K)(2) | |
3.1 | Amended and Restated Charter,(3) | |
3.2 | Bylaws(4) | |
4.1.1 | Specimen Common Stock Certificate(5) | |
4.1.2 | See Exhibits 3.1 and 3.2 for provisions of the Charter and Bylaws defining rights of holders of the Common Stock | |
4.2 | Series A Preferred Stock Certificate(6) | |
10.1 | Lease Agreement by and between TMP, Inc. (former name of Pinnacle Financial Partners, Inc.) and Commercial Street Associates dated March 16, 2000 (main office)(5) | |
10.2 | Form of Pinnacle Financial Partners, Inc.’s Organizers’ Warrant Agreement(5) | |
10.3 | Employment Agreement dated as of August 1, 2000 by and between Pinnacle National Bank, Pinnacle Financial Partners, Inc. and Robert A. McCabe, Jr.(5) * | |
10.4 | Employment Agreement dated as of April 1, 2000 by and between Pinnacle National Bank, Pinnacle Financial Partners, Inc. and Hugh M. Queener(5) * | |
10.5 | Letter Agreement dated March 14, 2000 and accepted March 16, 2000 by and between Pinnacle Financial Corporation (now known as Pinnacle Financial Partners, Inc.) and Atkinson Public Relations(5) | |
10.6 | Employment Agreement dated March 1, 2000 by and between Pinnacle National Bank, Pinnacle Financial Partners, Inc. and M. Terry Turner(5) * | |
10.7 | Pinnacle Financial Partners, Inc. 2000 Stock Incentive Plan(5)* | |
10.8 | Form of Pinnacle Financial Partners, Inc.’s Stock Option Award(5) * | |
10.9 | Agreement for Assignment of Lease by and between Franklin National Bank and TMP, Inc., now known as Pinnacle Financial Partners, Inc., effective July 17, 2000(5) | |
10.10 | Form of Assignment of Lease and Consent of Landlord by Franklin National Bank, Pinnacle Financial Partners, Inc., formerly TMP, Inc., and Stearns Investments, Jack J. Stearns and Edna Stearns, General Partners(5) | |
10.11 | Green Hills Office Lease(7) | |
10.12 | Form of Restricted Stock Award Agreement(8) | |
10.13 | Form of Incentive Stock Option Agreement(9) | |
10.14 | Lease Agreement for West End Lease(9) | |
10.15 | Lease Amendments for Commerce Street location(9) | |
10.16 | Pinnacle Financial Partners, Inc. 2004 Equity Incentive Plan(10) * | |
10.17 | Fourth Amendment to Commerce Street Lease(4) | |
10.18 | Employment Agreement by and between Pinnacle National Bank and William S. Jones(11) * | |
10.19 | Form of Restricted Stock Agreement for non-employee directors(12) * | |
10.20 | Form of Non-Qualified Stock Option Agreement(13)* | |
10.21 | Employment Agreement dated as of March 14, 2006 by and among Pinnacle Financial Partners, Inc., Pinnacle National Bank and Harold R. Carpenter(14)* | |
10.22 | Calvary Bancorp, Inc. 1999 Stock Option Plan(15)* | |
10.23 | Amendment No. 1 to Calvary Bancorp, Inc. 1999 Stock Option Plan(15) * | |
10.24 | Form of Non-Qualified Stock Option Agreement(15)* | |
10.25 | Amendment No. 1 to Pinnacle Financial Partners, Inc. 2000 Stock Incentive Plan(15) * | |
10.26 | Amendment No. 3 to Pinnacle Financial Partners, Inc. 2004 Equity Incentive Plan(15) * | |
10.27 | Form of Restricted Stock Award Agreement(16) * | |
10.28 | Amendment No. 4 to Pinnacle Financial Partners, Inc. 2004 Equity Incentive Plan(17) | |
10.29 | 2008 Annual Cash Incentive Plan(18)* | |
10.30 | Form of Restricted Stock Award Agreement(18)* | |
10.31 | 2008 Special Cash Incentive Plan(19)* | |
10.32 | 2008 Named Executive Officer Compensation Summary(20)* | |
10.33 | Amended Employment Agreement by and among Pinnacle National Bank, Pinnacle Financial Partners, Inc. and M. Terry Turner(20) * | |
10.34 | Amended Employment Agreement by and among Pinnacle National Bank, Pinnacle Financial Partners, Inc. and Robert A. McCabe, Jr.(20) * | |
10.35 | Amended Employment Agreement by and among Pinnacle National Bank, Pinnacle Financial Partners, Inc. and Hugh M. Queener(20) * | |
10.36 | Amended Employment Agreement by and among Pinnacle National Bank, Pinnacle Financial Partners, Inc. and Harold R. Carpenter(20) * | |
10.37 | Bank of the South 2001 Stock Option Plan(20) |
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Exhibit No. | Description | |
10.38 | PrimeTrust Bank 2001 Statutory – Nonstatutory Stock Option Plan(20)* | |
10.39 | PrimeTrust Bank 2005 Statutory – Nonstatutory Stock Option Plan(20)* | |
10.40 | Mid-America Bancshares, Inc. 2006 Equity Incentive Plan(20)* | |
10.41 | Amendment No. 1 to Mid-America Bancshares, Inc. 2006 Omnibus Equity Incentive Plan(3)* | |
10.42 | Revolving Credit Agreement by and between Pinnacle Financial Partners, Inc. and SunTrust Bank dated February 28, 2008(21) | |
10.43 | Pinnacle Financial Partners, Inc. Stock Purchase Agreement by and between Pinnacle Financial Partners, Inc. and T. Rowe Price Associates, Inc. dated July 17, 2008(22) | |
10.44 | Registration Rights Agreement by and between Pinnacle Financial Partners, Inc. and T. Rowe Price Associates, Inc. dated July 17, 2008.(22) | |
10.45 | Subordinated Capital Note Series 2008-1 Note Purchase/Loan Agreement by and between Pinnacle National Bank and SunTrust Bank dated August 5, 2008(23) | |
10.46 | Pinnacle National Bank Subordinated Capital Note Series 2008-1 dated August 5, 2008(23) | |
10.47 | Securities Purchase Agreement by and between the United States Department of the Treasury and Pinnacle Financial Partners, Inc. dated December 12, 2008(6) | |
10.48 | Warrant to purchase 534,910 shares of Common Stock of Pinnacle Financial Partners, Inc.(6) | |
10.49 | Senior Executive Officer Letter Agreement by and between Pinnacle Financial Partners, Inc. and M. Terry Turner dated December 12, 2008* | |
10.50 | Senior Executive Officer Letter Agreement by and between Pinnacle Financial Partners, Inc. and Robert A. McCabe, Jr. dated December 12, 2008* | |
10.51 | Senior Executive Officer Letter Agreement by and between Pinnacle Financial Partners, Inc. and Hugh M. Queener dated December 12, 2008* | |
10.52 | Senior Executive Officer Letter Agreement by and between Pinnacle Financial Partners, Inc. and Harold R. Carpenter dated December 12, 2008* | |
10.53 | Senior Executive Officer Letter Agreement by and between Pinnacle Financial Partners, Inc. and Charles B. McMahan dated December 12, 2008* | |
10.54 | 2009 Named Executive Officer Compensation Summary* | |
21.1 | Subsidiaries of Pinnacle Financial Partners, Inc. | |
23.1 | Consent of KPMG LLP | |
31.1 | Certification pursuant to Rule 13a-14(a)/15d-14(a) | |
31.2 | Certification pursuant to Rule 13a-14(a)/15d-14(a) | |
32.1 | Certification pursuant to 18 USC Section 1350 – Sarbanes-Oxley Act of 2002 | |
32.2 | Certification pursuant to 18 USC Section 1350 – Sarbanes-Oxley Act of 2002 |
(*) | Management compensatory plan or arrangement |
(1) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on October 3, 2005. | ||
(2) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on August 15, 2007. | ||
(3) | Registrant hereby incorporates by reference to Registrant’s Form 8-A/A filed on January 12, 2009. | ||
(4) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 21, 2009. | ||
(5) | Registrant hereby incorporates by reference to the Registrant’s Registration Statement on Form SB-2, as amended (File No. 333-38018). | ||
(6) | Registrant hereby incorporates by reference to the Registrant’s Current Report on Form 8-K filed on December 17, 2008. | ||
(7) | Registrant hereby incorporates by reference to the Registrant’s Form 10-KSB for the fiscal year ended December 31, 2000 as filed with the SEC on March 29, 2001. | ||
(8) | Registrant hereby incorporates by reference to Registrant’s Form 10-Q for the quarter ended September 30, 2004. | ||
(9) | Registrant hereby incorporates by reference to Registrant’s Form 10-K for the fiscal year ended December 31, 2004 as filed with the SEC on February 28, 2005. | ||
(10) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on April 19, 2005. | ||
(11) | Registrant hereby incorporates by reference to Registrant’s Registration Statement on Form S-4, as amended (File No. 333-129076). | ||
(12) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 23, 2006. |
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(13) | Registrant hereby incorporates by reference to Registrant’s Form 10-K for the fiscal year ended December 31, 2005 as filed with the SEC on February 24, 2006. | ||
(14) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on March 20, 2006. | ||
(15) | Registrant hereby incorporates by reference to Registrant’s Form 10-Q for the quarter ended on September 30, 2006. | ||
(16) | Registrant hereby incorporates by reference to Registrant’s Form 10-K for the fiscal year ended December 31, 2006 as filed with the SEC on February 28, 2007. | ||
(17) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on December 4, 2007. | ||
(18) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 25, 2008. | ||
(19) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 25, 2008. | ||
(20) | Registrant hereby incorporates by reference to Registrant’s Form 10-K for the fiscal year ended December 31, 2007 as filed with the SEC on March 7, 2008. | ||
(21) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on March 5, 2008. | ||
(22) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on July 18, 2008. | ||
(23) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on August 5, 2008. |
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PINNACLE FINANCIAL PARTNERS, INC | ||||
By: | /s/ M. Terry Turner | |||
M. Terry Turner | ||||
Date: February 19, 2009 | President and Chief Executive Officer | |||
SIGNATURES | TITLE | DATE | ||
/s/ Robert A. McCabe, Jr. | Chairman of the Board | February 19, 2009 | ||
Robert A. McCabe, Jr. | ||||
/s/ M. Terry Turner | Director, President and Chief Executive Officer | February 19, 2009 | ||
M. Terry Turner | (Principal Executive Officer) | |||
/s/ Harold R. Carpenter | Chief Financial Officer | February 19, 2009 | ||
Harold R. Carpenter | (Principal Financial and Accounting Officer) | |||
/s/ Sue R. Atkinson | Director | February 19, 2009 | ||
Sue R. Atkinson | ||||
/s/ H. Gordon Bone | Director | February 19, 2009 | ||
H. Gordon Bone | ||||
/s/ Gregory L. Burns | Director | February 19, 2009 | ||
Gregory L. Burns | ||||
/s/ James C. Cope | Director | February 19, 2009 | ||
James C. Cope | ||||
/s/ Colleen Conway-Welch | Director | February 19, 2009 | ||
Colleen Conway-Welch | ||||
/s/ Clay T. Jackson | Director | February 19, 2009 | ||
Clay T. Jackson | ||||
/s/ William H. Huddleston | Director | February 19, 2009 | ||
William H. Huddleston | ||||
/s/ Ed C. Loughry, Jr. | Director | February 19, 2009 | ||
Ed C. Loughry, Jr. | ||||
/s/ David Major | Director | February 19, 2009 | ||
David Major | ||||
/s/ Hal N. Pennington | Director | February 19, 2009 | ||
Hal N. Pennington | ||||
Director | February 19, 2009 | |||
Dale W. Polley |
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SIGNATURES | TITLE | DATE | ||
Director | February 19, 2009 | |||
Wayne J. Riley | ||||
Director | February 19, 2009 | |||
Gary Scott | ||||
/s/ Reese L. Smith, III | Director | February 19, 2009 | ||
Reese L. Smith, III |
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Exhibit No. | Description | |
2.1 | Merger Agreement, dated September 30, 2005, by and between Pinnacle Financial Partners, Inc. and Cavalry Bancorp, Inc. (schedules and exhibits to which been omitted pursuant to Items 601(b)(2) of Regulations S-K)(1) | |
2.2 | Agreement and Plan of Merger by and between Pinnacle Financial Partners, Inc. and Mid-America Bancshares, Inc. (schedules and exhibits to which been omitted pursuant to Items 601(b)(2) of Regulations S-K)(2) | |
3.1 | Amended and Restated Charter,(3) | |
3.2 | Bylaws(4) | |
4.1.1 | Specimen Common Stock Certificate(5) | |
4.1.2 | See Exhibits 3.1 and 3.2 for provisions of the Charter and Bylaws defining rights of holders of the Common Stock | |
4.2 | Series A Preferred Stock Certificate(6) | |
10.1 | Lease Agreement by and between TMP, Inc. (former name of Pinnacle Financial Partners, Inc.) and Commercial Street Associates dated March 16, 2000 (main office)(5) | |
10.2 | Form of Pinnacle Financial Partners, Inc.’s Organizers’ Warrant Agreement(5) | |
10.3 | Employment Agreement dated as of August 1, 2000 by and between Pinnacle National Bank, Pinnacle Financial Partners, Inc. and Robert A. McCabe, Jr.(5) * | |
10.4 | Employment Agreement dated as of April 1, 2000 by and between Pinnacle National Bank, Pinnacle Financial Partners, Inc. and Hugh M. Queener(5) * | |
10.5 | Letter Agreement dated March 14, 2000 and accepted March 16, 2000 by and between Pinnacle Financial Corporation (now known as Pinnacle Financial Partners, Inc.) and Atkinson Public Relations(5) | |
10.6 | Employment Agreement dated March 1, 2000 by and between Pinnacle National Bank, Pinnacle Financial Partners, Inc. and M. Terry Turner(5) * | |
10.7 | Pinnacle Financial Partners, Inc. 2000 Stock Incentive Plan(5)* | |
10.8 | Form of Pinnacle Financial Partners, Inc.’s Stock Option Award(5) * | |
10.9 | Agreement for Assignment of Lease by and between Franklin National Bank and TMP, Inc., now known as Pinnacle Financial Partners, Inc., effective July 17, 2000(5) | |
10.10 | Form of Assignment of Lease and Consent of Landlord by Franklin National Bank, Pinnacle Financial Partners, Inc., formerly TMP, Inc., and Stearns Investments, Jack J. Stearns and Edna Stearns, General Partners(5) | |
10.11 | Green Hills Office Lease(7) | |
10.12 | Form of Restricted Stock Award Agreement(8) | |
10.13 | Form of Incentive Stock Option Agreement(9) | |
10.14 | Lease Agreement for West End Lease(9) | |
10.15 | Lease Amendments for Commerce Street location(9) | |
10.16 | Pinnacle Financial Partners, Inc. 2004 Equity Incentive Plan(10) * | |
10.17 | Fourth Amendment to Commerce Street Lease(4) | |
10.18 | Employment Agreement by and between Pinnacle National Bank and William S. Jones(11) * | |
10.19 | Form of Restricted Stock Agreement for non-employee directors(12) * | |
10.20 | Form of Non-Qualified Stock Option Agreement(13)* | |
10.21 | Employment Agreement dated as of March 14, 2006 by and among Pinnacle Financial Partners, Inc., Pinnacle National Bank and Harold R. Carpenter(14)* | |
10.22 | Calvary Bancorp, Inc. 1999 Stock Option Plan(15)* | |
10.23 | Amendment No. 1 to Calvary Bancorp, Inc. 1999 Stock Option Plan(15) * | |
10.24 | Form of Non-Qualified Stock Option Agreement(15)* | |
10.25 | Amendment No. 1 to Pinnacle Financial Partners, Inc. 2000 Stock Incentive Plan(15) * | |
10.26 | Amendment No. 3 to Pinnacle Financial Partners, Inc. 2004 Equity Incentive Plan(15) * | |
10.27 | Form of Restricted Stock Award Agreement(16) * | |
10.28 | Amendment No. 4 to Pinnacle Financial Partners, Inc. 2004 Equity Incentive Plan(17) | |
10.29 | 2008 Annual Cash Incentive Plan(18)* | |
10.30 | Form of Restricted Stock Award Agreement(18)* | |
10.31 | 2008 Special Cash Incentive Plan(19)* | |
10.32 | 2008 Named Executive Officer Compensation Summary(20)* | |
10.33 | Amended Employment Agreement by and among Pinnacle National Bank, Pinnacle Financial Partners, Inc. and M. Terry Turner(20) * | |
10.34 | Amended Employment Agreement by and among Pinnacle National Bank, Pinnacle Financial Partners, Inc. and Robert A. McCabe, Jr.(20) * | |
10.35 | Amended Employment Agreement by and among Pinnacle National Bank, Pinnacle Financial Partners, Inc. and Hugh M. Queener(20) * | |
10.36 | Amended Employment Agreement by and among Pinnacle National Bank, Pinnacle Financial Partners, Inc. and Harold R. Carpenter(20) * | |
10.37 | Bank of the South 2001 Stock Option Plan(20) | |
10.38 | PrimeTrust Bank 2001 Statutory – Nonstatutory Stock Option Plan(20)* |
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Exhibit No. | Description | |
10.39 | PrimeTrust Bank 2005 Statutory – Nonstatutory Stock Option Plan(20)* | |
10.40 | Mid-America Bancshares, Inc. 2006 Equity Incentive Plan(20)* | |
10.41 | Amendment No. 1 to Mid-America Bancshares, Inc. 2006 Omnibus Equity Incentive Plan(3)* | |
10.42 | Revolving Credit Agreement by and between Pinnacle Financial Partners, Inc. and SunTrust Bank dated February 28, 2008(21) | |
10.43 | Pinnacle Financial Partners, Inc. Stock Purchase Agreement by and between Pinnacle Financial Partners, Inc. and T. Rowe Price Associates, Inc. dated July 17, 2008(22) | |
10.44 | Registration Rights Agreement by and between Pinnacle Financial Partners, Inc. and T. Rowe Price Associates, Inc. dated July 17, 2008.(22) | |
10.45 | Subordinated Capital Note Series 2008-1 Note Purchase/Loan Agreement by and between Pinnacle National Bank and SunTrust Bank dated August 5, 2008(23) | |
10.46 | Pinnacle National Bank Subordinated Capital Note Series 2008-1 dated August 5, 2008(23) | |
10.47 | Securities Purchase Agreement by and between the United States Department of the Treasury and Pinnacle Financial Partners, Inc. dated December 12, 2008(6) | |
10.48 | Warrant to purchase 534,910 shares of Common Stock of Pinnacle Financial Partners, Inc.(6) | |
10.49 | Senior Executive Officer Letter Agreement by and between Pinnacle Financial Partners, Inc. and M. Terry Turner dated December 12, 2008* | |
10.50 | Senior Executive Officer Letter Agreement by and between Pinnacle Financial Partners, Inc. and Robert A. McCabe, Jr. dated December 12, 2008* | |
10.51 | Senior Executive Officer Letter Agreement by and between Pinnacle Financial Partners, Inc. and Hugh M. Queener dated December 12, 2008* | |
10.52 | Senior Executive Officer Letter Agreement by and between Pinnacle Financial Partners, Inc. and Harold R. Carpenter dated December 12, 2008* | |
10.53 | Senior Executive Officer Letter Agreement by and between Pinnacle Financial Partners, Inc. and Charles B. McMahan dated December 12, 2008* | |
10.54 | 2009 Named Executive Officer Compensation Summary* | |
21.1 | Subsidiaries of Pinnacle Financial Partners, Inc. | |
23.1 | Consent of KPMG LLP | |
31.1 | Certification pursuant to Rule 13a-14(a)/15d-14(a) | |
31.2 | Certification pursuant to Rule 13a-14(a)/15d-14(a) | |
32.1 | Certification pursuant to 18 USC Section 1350 – Sarbanes-Oxley Act of 2002 | |
32.2 | Certification pursuant to 18 USC Section 1350 – Sarbanes-Oxley Act of 2002 |
(*) | Management compensatory plan or arrangement |
(1) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on October 3, 2005. | ||
(2) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on August 15, 2007. | ||
(3) | Registrant hereby incorporates by reference to Registrant’s Form 8-A/A filed on January 12, 2009. | ||
(4) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 21, 2009. | ||
(5) | Registrant hereby incorporates by reference to the Registrant’s Registration Statement on Form SB-2, as amended (File No. 333-38018). | ||
(6) | Registrant hereby incorporates by reference to the Registrant’s Current Report on Form 8-K filed on December 17, 2008. | ||
(7) | Registrant hereby incorporates by reference to the Registrant’s Form 10-KSB for the fiscal year ended December 31, 2000 as filed with the SEC on March 29, 2001. | ||
(8) | Registrant hereby incorporates by reference to Registrant’s Form 10-Q for the quarter ended September 30, 2004. | ||
(9) | Registrant hereby incorporates by reference to Registrant’s Form 10-K for the fiscal year ended December 31, 2004 as filed with the SEC on February 28, 2005. | ||
(10) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on April 19, 2005. | ||
(11) | Registrant hereby incorporates by reference to Registrant’s Registration Statement on Form S-4, as amended (File No. 333-129076). | ||
(12) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 23, 2006. |
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(13) | Registrant hereby incorporates by reference to Registrant’s Form 10-K for the fiscal year ended December 31, 2005 as filed with the SEC on February 24, 2006. | ||
(14) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on March 20, 2006. | ||
(15) | Registrant hereby incorporates by reference to Registrant’s Form 10-Q for the quarter ended on September 30, 2006. | ||
(16) | Registrant hereby incorporates by reference to Registrant’s Form 10-K for the fiscal year ended December 31, 2006 as filed with the SEC on February 28, 2007. | ||
(17) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on December 4, 2007. | ||
(18) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 25, 2008. | ||
(19) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 25, 2008. | ||
(20) | Registrant hereby incorporates by reference to Registrant’s Form 10-K for the fiscal year ended December 31, 2007 as filed with the SEC on March 7, 2008. | ||
(21) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on March 5, 2008. | ||
(22) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on July 18, 2008. | ||
(23) | Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on August 5, 2008. |
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