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FOR IMMEDIATE RELEASE
MEDIA CONTACT: | Vicki Kessler 615-320-7532 | |
FINANCIAL CONTACT: | Harold Carpenter 615-744-3742 | |
WEBSITE: | www.pnfp.com |
PINNACLE FINANCIAL’S FULLY DILUTED EARNINGS PER SHARE
INCREASES 26.9% FROM SAME QUARTER LAST YEAR
Annualized loan growth during quarter of 28%
NASHVILLE, Tenn., July 17, 2007 – Pinnacle Financial Partners Inc. (Nasdaq/NGS: PNFP) today reported strong performance, increased loan growth and continued improvement in asset quality for the quarter ended June 30, 2007. Fully diluted earnings per share were $0.33 for the quarter ended June 30, 2007, compared to $0.26 per fully diluted share for the quarter ended June 30, 2006, which included the impact of $0.04 of merger related expenses associated with the Cavalry Bancorp Inc. acquisition consummated on March 15, 2006.
SECOND QUARTER 2007 HIGHLIGHTS:
· | Earnings: |
o | Net income for the second quarter of 2007 was $5.43 million, up 25.5 percent from the prior year’s second quarter net income of $4.32 million. |
o | Diluted earnings per share for the second quarter of 2007 were $0.33, up 26.9 percent from the same quarter last year. |
o | Revenue (the sum of net interest income and noninterest income) for the quarter ended June 30, 2007, amounted to $23.21 million, compared to $21.28 million for the same quarter of last year, an increase of 9.1 percent. |
· | Superior credit quality: |
o | Annualized net charge-offs as a percentage of average loan volumes were 0.05 percent for the six months ended June 30, 2007. |
o | Nonperforming assets were only 0.19 percent of total loans and other real estate at June 30, 2007, down from 0.54 percent at Dec. 31, 2006. |
o | Past due loans over 30 days, excluding nonperforming loans, were only 0.31 percent of total loans and other real estate at June 30, 2007, compared to 0.74 percent of total loans and other real estate at Dec. 31, 2006. |
· | Strong balance sheet growth: |
o | Loans at June 30, 2007, were $1.663 billion, up 22.5 percent from the same period last year, reflecting strong organic growth over the last year. Loans increased by $109 million during the second quarter of 2007, compared to $123 million in organic growth during the same quarter in 2006. Provision for loan losses for the quarter ended June 30, 2007, was $900,000, a decrease of $807,000 from the same quarter in 2006. |
o | Total deposits at June 30, 2007, were $1.798 billion, up 15.2 percent from the same period last year. |
· | Investments in future growth: |
o | Pinnacle has already hired 11 associates for the denovo expansion to Knoxville that was announced on April 9, 2007. Pinnacle opened a limited service facility in June and expects to open its full-service location in Knoxville during the third quarter. |
o | The total increase in the associate base during the quarter, including the Knoxville expansion, was 21.5 FTEs (full-time equivalents), or 5.1 percent. Pinnacle plans to add another 33 associates before the end of 2007. |
“We are extremely pleased with our performance in the second quarter of 2007, particularly with respect to loan growth which was one of the strongest growth quarters in our history. During the same time, we continued to improve our credit quality measurements,” said M. Terry Turner, Pinnacle’s president and CEO. “We continue to be challenged by the current yield curve, and it is fairly evident that 2007 will be a formidable year for all financial institutions. However, we are confident that we can expand our client base and sustain our record of dramatic growth throughout 2007 due to our ability to increase market share in the Nashville-Davidson-Murfreesboro MSA and our recent entry into the Knoxville MSA.”
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Turner said the firm’s recent entry into Knoxville is progressing well. He estimated that the Knoxville expansion impacted the second quarter earnings negatively by approximately $0.02 per fully diluted share.
FINANCIAL PERFORMANCE AND BALANCE SHEET GROWTH
· | Return on average assets for second quarter 2007 was 0.98 percent compared to 0.92 percent for the second quarter of 2006. Excluding the impact of the Knoxville expansion, return on average assets for the second quarter of 2007 would have approximated 1.05 percent. Return on average tangible assets (average assets less goodwill and core deposit intangibles) for second quarter 2007 was 1.03 percent, compared to 0.99 percent for the same quarter last year. |
· | Return on average stockholders’ equity for the quarter ended June 30, 2007, was 8.24 percent compared to 7.40 percent for the second quarter of 2006. Excluding the impact of the Knoxville expansion, return on average stockholders’ equity for the second quarter of 2007 would have approximated 8.85 percent. Return on average tangible stockholders’ equity (average stockholders’ equity less goodwill and core deposit intangibles) for the quarter ended June 30, 2007, was 15.65 percent, compared to 16.37 percent for the same quarter last year. |
Total assets grew to $2.314 billion as of June 30, 2007, up $329 million or 16.6 percent from the $1.986 billion reported at the same time last year. The securities to total assets ratio decreased from 15.40 percent at June 30, 2006, to 14.68 percent at June 30, 2007.
CREDIT QUALITY
· | Provision for loan losses was $900,000 for the second quarter of 2007, compared to $1,707,000 in the second quarter of 2006. |
o | During the second quarter of 2007, the firm recorded net charge-offs of only $317,000, compared to net charge-offs of $441,000 during the same period in 2006. Annualized net charge-offs to total average loans were 0.05 percent for the six months ended June 30, 2007. |
· | Allowance for loan losses represented 1.04 percent of total loans at June 30, 2007, compared to 1.08 percent a year ago. |
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o | Nonperforming assets as a percentage of total loans and other real estate decreased to 0.19 percent at June 30, 2007, from 0.36 percent at Mar. 31, 2007 and 0.54 percent at Dec. 31, 2006. |
o | Loan balances, excluding nonperforming loans, with payments past due more than 30 days as a percentage of total loans and other real estate decreased to 0.31 percent at June 30, 2007, from 0.33 percent at Mar. 31, 2007 and 0.74 percent at Dec. 31, 2006. |
o | The ratio of the allowance for loan losses to nonperforming loans was 726 percent at June 30, 2007 compared to 357 percent at Mar. 31, 2007 and 228 percent at Dec. 31, 2006. |
“We believe our record of excellent asset quality since our founding in 2000 is a key predictor of our ability to create long-term shareholder value,” said Turner. “At the end of last year, several of our credit quality measurements, such as the percentage of nonperforming loans, had increased. Our continued improvement and success in this area is attributed to the special attention our lending and credit associates have put on maintaining excellent asset quality.”
REVENUE
· | Net interest income for second quarter 2007 was $17.66 million, compared to $16.90 million for the same quarter last year, an increase of 4.53 percent. |
o | Net interest margin for the second quarter of 2007 was 3.58 percent, compared to a net interest margin of 4.17 percent for the same period last year and 3.64 percent reported for the first quarter of 2007. |
· | Noninterest income for the second quarter 2007 was $5.55 million, a 26.8 percent increase over the $4.38 million recorded during the same quarter in 2006. |
“We, like substantially all other commercial banks, continue to see pricing pressure in our market which has led to a six basis point reduction in our net interest margin between the first and second quarters of 2007,” said Harold Carpenter, chief financial officer of Pinnacle Financial Partners. “However, we are particularly pleased with the growth in loan fundings and the high-quality client relationships our financial advisors are bringing to our firm. Unlike many other firms, this growth has allowed us to continue to grow our revenue streams. Our loan pipelines remain strong and, due to our expected loan growth in both Nashville and Knoxville, we believe that we will experience continued growth in our revenue streams for the next few quarters.”
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The increase in noninterest income between 2007 and 2006 was due primarily to the extension of the former Cavalry fee businesses across the entire Pinnacle franchise and record investment sales commissions from Pinnacle Asset Management and record gains on the sales of mortgage loans from the firm’s mortgage origination unit. Noninterest income during the second quarter of 2007 represented approximately 23.92 percent of total revenues, compared to 20.60 percent for the same quarter in 2006.
NONINTEREST EXPENSE
· | Noninterest expense for the quarter ended June 30, 2007, was $14.48 million compared to $13.12 million in the first quarter of 2007 and $13.11 million in the second quarter of 2006. The firm noted that approximately $466,000 of noninterest expense was directly associated with the Knoxville expansion during the quarter. |
· | Compensation expense increased to $8.79 million during the second quarter of 2007, compared to $8.27 million in the first quarter of 2007 and $7.29 million during the second quarter of 2006. At June 30, 2007, the firm employed 441 associates (full-time equivalent), an increase of 37 associates, or 9.2 percent since the end of 2006. |
· | During the second quarter 2007 Pinnacle recognized compensation expense related to the expensing of stock options in accordance with Statement of Financial Accounting Standards No. 123R (“SFAS No. 123R”) of approximately $305,000 on an after-tax basis. |
· | The efficiency ratio (noninterest expense divided by net interest income and noninterest income) was 62.4 percent during the second quarter of 2007, compared to 61.6 percent during the second quarter of 2006. |
The firm noted that linked quarter expense growth between the first and second quarters of 2007 was primarily attributable to the Knoxville expansion, the increased number of associates, increasing variable costs associated with the dramatic growth of the firm and the opening of the Donelson office in March of 2007.
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INVESTMENT OUTLOOK
Management has developed several financial forecast scenarios for the next several quarters. Based on anticipated growth trends and future investments in the franchise, including the impact of the Knoxville expansion, Pinnacle estimates its third quarter 2007 diluted earnings per share will approximate $0.33 to $0.36, which includes approximately $0.04 dilution attributable to the Knoxville expansion. Additionally, based on anticipated growth trends and future investments in the franchise, Pinnacle estimates that its earnings will approximate $1.39 to $1.45 per fully diluted share for the year ended Dec. 31, 2007, which includes approximately $0.08 dilution attributable to the Knoxville expansion.
As noted previously, management has developed several scenarios under which these estimates can be achieved and believes these estimates to be reasonable based on these scenarios. However, unanticipated events or developments including the execution of any initiative which could include the development of any markets other than metropolitan Nashville or Knoxville, any merger or acquisition, the opportunity to hire more seasoned professionals than anticipated or the ability to grow loans significantly in excess of the levels contemplated may cause the actual results of Pinnacle to differ materially from these estimates.
Pinnacle Financial Partners provides a full range of banking, investment and insurance products and services designed for small- to mid-sized businesses and their owners, real estate professionals and individuals interested in a deep relationship with their financial institution. Pinnacle provides financial planning services and comprehensive wealth management services to help clients increase, protect and distribute their assets. The firm also has a well-established expertise in commercial real estate.
Pinnacle opened its first office in October 2000. Since then the firm has added eight other offices on a denovo basis and acquired Cavalry Bancorp with its nine offices, bringing the total number of offices to 18 in the most attractive trade areas in the Nashville-Davidson-Murfreesboro MSA. The firm plans to open two offices in Knoxville this year, with another three by the end of 2010. Last week construction began on a premier new office building in downtown Nashville named “The Pinnacle at Symphony Place.” When completed in 2010, Pinnacle will move its corporate functions and a full-service office to this new building.
Additional information concerning Pinnacle can be accessed at www.pnfp.com.
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Certain of the statements in this release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking. All forward-looking statements are subject to risks, uncertainties and other facts that may cause the actual results, performance or achievements of Pinnacle to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, without limitation, (i) unanticipated deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses, (ii) the inability of Pinnacle to continue to grow its loan portfolio at historic rates in the Nashville-Davidson-Murfreesboro MSA or projected rates in the Knoxville MSA, (iii) increased competition with other financial institutions, (iv) lack of sustained growth in the economy in the Nashville-Davidson-Murfreesboro MSA and the Knoxville MSA, (v) rapid fluctuations or unanticipated changes in interest rates, (vi) the inability of Pinnacle to satisfy regulatory requirements for its expansion plans, (vii) the inability of Pinnacle to execute its expansion plans and (viii) changes in the legislative and regulatory environment. A more detailed description of these and other risks is contained in Pinnacle's most recent annual report on Form 10-K. Many of such factors are beyond Pinnacle's ability to control or predict, and readers are cautioned not to put undue reliance on such forward-looking statements. Pinnacle disclaims any obligation to update or revise any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.
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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS – UNAUDITED | ||||||||
June 30, 2007 | December 31, 2006 | |||||||
ASSETS | ||||||||
Cash and noninterest-bearing due from banks | $ | 51,816,558 | $ | 43,611,533 | ||||
Interest-bearing deposits due from banks | 10,375,896 | 1,041,174 | ||||||
Federal funds sold and other | 43,808,801 | 47,866,143 | ||||||
Cash and cash equivalents | 106,001,255 | 92,518,850 | ||||||
Securities available-for-sale, at fair value | 312,712,769 | 319,237,428 | ||||||
Securities held-to-maturity (fair value of $26,211,163 and $26,594,235 at June 30, 2007and December 31, 2006, respectively) | 27,068,467 | 27,256,876 | ||||||
Mortgage loans held-for-sale | 4,972,689 | 5,654,381 | ||||||
Loans | 1,663,029,941 | 1,497,734,824 | ||||||
Less allowance for loan losses | (17,375,408 | ) | (16,117,978 | ) | ||||
Loans, net | 1,645,654,533 | 1,481,616,846 | ||||||
Premises and equipment, net | 37,854,546 | 36,285,796 | ||||||
Investments in unconsolidated subsidiaries and other entities | 17,000,500 | 16,200,684 | ||||||
Accrued interest receivable | 11,434,826 | 11,019,173 | ||||||
Goodwill | 114,287,640 | 114,287,640 | ||||||
Core deposit intangible | 10,353,498 | 11,385,006 | ||||||
Other assets | 27,986,475 | 26,724,183 | ||||||
Total assets | $ | 2,315,327,198 | $ | 2,142,186,863 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Deposits: | ||||||||
Noninterest-bearing demand | $ | 294,630,589 | $ | 300,977,814 | ||||
Interest-bearing demand | 284,080,394 | 236,674,425 | ||||||
Savings and money market accounts | 530,081,179 | 485,935,897 | ||||||
Time | 688,744,094 | 598,823,167 | ||||||
Total deposits | 1,797,536,256 | 1,622,411,303 | ||||||
Securities sold under agreements to repurchase | 140,442,583 | 141,015,761 | ||||||
Federal Home Loan Bank advances and other borrowings | 46,698,614 | 53,725,833 | ||||||
Subordinated debt | 51,548,000 | 51,548,000 | ||||||
Accrued interest payable | 5,960,627 | 4,952,422 | ||||||
Other liabilities | 7,946,624 | 12,516,523 | ||||||
Total liabilities | 2,050,132,704 | 1,886,169,842 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding | - | - | ||||||
Common stock, par value $1.00; 90,000,000 shares authorized; 15,545,581 issued and outstanding at June 30, 2007 and 15,446,074 issued and outstanding at December 31, 2006 | 15,545,581 | 15,446,074 | ||||||
Additional paid-in capital | 212,922,658 | 211,502,516 | ||||||
Retained earnings | 42,137,029 | 31,109,324 | ||||||
Accumulated other comprehensive loss, net | (5,410,774 | ) | (2,040,893 | ) | ||||
Stockholders’ equity | 265,194,494 | 256,017,021 | ||||||
Total liabilities and stockholders’ equity | $ | 2,315,327,198 | $ | 2,142,186,863 |
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Interest income: | ||||||||||||||||
Loans, including fees | $ | 30,555,889 | $ | 24,245,895 | $ | 59,533,113 | $ | 37,424,725 | ||||||||
Securities: | ||||||||||||||||
Taxable | 3,394,359 | 3,148,459 | 6,740,479 | 6,009,577 | ||||||||||||
Tax-exempt | 693,417 | 494,849 | 1,362,936 | 895,622 | ||||||||||||
Federal funds sold and other | 864,198 | 415,437 | 1,610,577 | 785,112 | ||||||||||||
Total interest income | 35,507,863 | 28,304,640 | 69,247,105 | 45,115,036 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits | 14,456,629 | 9,563,035 | 27,993,892 | 15,413,344 | ||||||||||||
Securities sold under agreements to repurchase | 1,890,743 | 678,177 | 3,602,834 | 1,186,965 | ||||||||||||
Federal Home Loan Bank advances and other borrowings | 1,499,436 | 1,168,265 | 2,906,896 | 2,112,761 | ||||||||||||
Total interest expense | 17,846,808 | 11,409,477 | 34,503,622 | 18,713,070 | ||||||||||||
Net interest income | 17,661,055 | 16,895,163 | 34,743,483 | 26,401,966 | ||||||||||||
Provision for loan losses | 899,998 | 1,706,865 | 1,687,964 | 2,094,049 | ||||||||||||
Net interest income after provision for loan losses | 16,761,057 | 15,188,298 | 33,055,519 | 24,307,917 | ||||||||||||
Noninterest income: | ||||||||||||||||
Service charges on deposit accounts | 1,920,085 | 1,356,114 | 3,717,234 | 1,794,384 | ||||||||||||
Investment sales commissions | 850,207 | 652,900 | 1,584,767 | 1,166,497 | ||||||||||||
Insurance sales commissions | 628,953 | 748,534 | 1,265,915 | 1,013,362 | ||||||||||||
Gain on loans and loan participations sold, net | 638,895 | 470,809 | 1,002,201 | 795,355 | ||||||||||||
Trust fees | 425,205 | 311,997 | 845,495 | 363,997 | ||||||||||||
Other noninterest income | 1,088,172 | 839,771 | 2,161,488 | 1,294,781 | ||||||||||||
Total noninterest income | 5,551,517 | 4,380,125 | 10,577,100 | 6,428,376 | ||||||||||||
Noninterest expense: | ||||||||||||||||
Compensation and employee benefits | 8,794,853 | 7,289,996 | 17,061,354 | 11,738,354 | ||||||||||||
Equipment and occupancy | 2,412,528 | 1,911,804 | 4,577,230 | 2,991,059 | ||||||||||||
Marketing and other business development | 430,291 | 357,904 | 682,026 | 548,375 | ||||||||||||
Postage and supplies | 524,197 | 445,211 | 979,114 | 630,619 | ||||||||||||
Amortization of core deposit intangible | 515,755 | 515,755 | 1,031,508 | 647,437 | ||||||||||||
Other noninterest expense | 1,806,680 | 1,663,155 | 3,276,764 | 2,513,865 | ||||||||||||
Merger related expense | - | 921,237 | - | 1,364,567 | ||||||||||||
Total noninterest expense | 14,484,304 | 13,105,062 | 27,607,996 | 20,434,276 | ||||||||||||
Income before income taxes | 7,828,270 | 6,463,361 | 16,024,623 | 10,302,017 | ||||||||||||
Income tax expense | 2,402,405 | 2,140,887 | 4,996,918 | 3,367,647 | ||||||||||||
Net income | $ | 5,425,865 | $ | 4,322,474 | $ | 11,027,705 | $ | 6,934,370 | ||||||||
Per share information: | ||||||||||||||||
Basic net income per common share | $ | 0.35 | $ | 0.28 | $ | 0.71 | $ | 0.56 | ||||||||
Diluted net income per common share | $ | 0.33 | $ | 0.26 | $ | 0.66 | $ | 0.51 | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 15,494,522 | 15,335,754 | 15,464,151 | 12,473,187 | ||||||||||||
Diluted | 16,664,213 | 16,503,692 | 16,640,977 | 13,640,565 |
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED | ||||||||||||||||||||||||
Three months ended | Three months ended | |||||||||||||||||||||||
(dollars in thousands) | June 30, 2007 | June 30, 2006 | ||||||||||||||||||||||
Average Balances | Interest | Rates/ Yields | Average Balances | Interest | Rates/ Yields | |||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans | $ | 1,598,967 | $ | 30,556 | 7.66 | % | $ | 1,328,121 | $ | 24,246 | 7.32 | % | ||||||||||||
Securities: | ||||||||||||||||||||||||
Taxable | 272,024 | 3,394 | 5.00 | % | 248,682 | 3,148 | 5.08 | % | ||||||||||||||||
Tax-exempt (1) | 75,057 | 693 | 4.89 | % | 50,227 | 495 | 5.21 | % | ||||||||||||||||
Federal funds sold and other | 58,836 | 865 | 6.08 | % | 24,932 | 416 | 7.19 | % | ||||||||||||||||
Total interest-earning assets | 2,004,884 | $ | 35,508 | 7.15 | % | 1,651,962 | $ | 28,305 | 6.92 | % | ||||||||||||||
Nonearning assets | 224,343 | 226,950 | ||||||||||||||||||||||
Total assets | $ | 2,229,227 | $ | 1,878,912 | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||||||||
Interest checking | $ | 254,171 | $ | 2,147 | 3.39 | % | $ | 190,055 | $ | 848 | 1.79 | % | ||||||||||||
Savings and money market | 501,373 | 4,239 | 3.39 | % | 434,094 | 3,234 | 2.99 | % | ||||||||||||||||
Certificates of deposit | 646,251 | 8,071 | 5.01 | % | 546,715 | 5,481 | 4.02 | % | ||||||||||||||||
Total interest-bearing deposits | 1,401,795 | 14,457 | 4.14 | % | 1,170,864 | 9,563 | 3.28 | % | ||||||||||||||||
Securities sold under agreements to repurchase | 172,872 | 1,891 | 4.39 | % | 68,079 | 678 | 4.00 | % | ||||||||||||||||
Federal Home Loan Bank advances and other borrowings | 47,998 | 621 | 5.19 | % | 48,113 | 653 | 5.44 | % | ||||||||||||||||
Subordinated debt | 51,548 | 878 | 6.84 | % | 30,929 | 516 | 6.69 | % | ||||||||||||||||
Total interest-bearing liabilities | 1,674,213 | 17,847 | 4.28 | % | 1,317,985 | 11,410 | 3.47 | % | ||||||||||||||||
Noninterest-bearing deposits | 276,241 | - | - | 311,286 | - | - | ||||||||||||||||||
Total deposits and interest-bearing liabilities | 1,950,454 | $ | 17,847 | 3.67 | % | 1,629,271 | $ | 11,410 | 2.81 | % | ||||||||||||||
Other liabilities | 14,718 | 15,241 | ||||||||||||||||||||||
Stockholders' equity | 264,055 | 234,400 | ||||||||||||||||||||||
$ | 2,229,227 | $ | 1,878,912 | |||||||||||||||||||||
Netinterestincome | $ | 17,661 | $ | 16,895 | ||||||||||||||||||||
Net interest spread (2) | 2.88 | % | 3.45 | % | ||||||||||||||||||||
Net interest margin (3) | 3.58 | % | 4.17 | % |
(1) Yields computed on tax-exempt instruments on a tax equivalent basis.
(2) Yields realized on interest-earning assets less the rates paid on interest-bearing liabilities.
(3) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED | ||||||||||||||||||||||||
Six months ended | Six months ended | |||||||||||||||||||||||
(dollars in thousands) | June 30, 2007 | June 30, 2006 | ||||||||||||||||||||||
Average Balances | Interest | Rates/ Yields | Average Balances | Interest | Rates/ Yields | |||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Loans | $ | 1,564,869 | $ | 59,533 | 7.67 | % | $ | 1,044,724 | $ | 37,425 | 7.22 | % | ||||||||||||
Securities: | ||||||||||||||||||||||||
Taxable | 272,346 | 6,740 | 4.99 | % | 245,216 | 6,009 | 4.94 | % | ||||||||||||||||
Tax-exempt (1) | 74,009 | 1,363 | 4.90 | % | 47,399 | 896 | 5.04 | % | ||||||||||||||||
Federal funds sold and other | 57,367 | 1,611 | 5.66 | % | 26,085 | 785 | 6.45 | % | ||||||||||||||||
Total interest-earning assets | 1,968,591 | $ | 69,247 | 7.14 | % | 1,363,424 | $ | 45,115 | 6.72 | % | ||||||||||||||
Nonearning assets | 220,987 | 152,944 | ||||||||||||||||||||||
Total assets | $ | 2,189,578 | $ | 1,516,368 | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||||||||
Interest checking | $ | 249,425 | $ | 4,104 | 3.32 | % | $ | 147,089 | $ | 1,330 | 1.82 | % | ||||||||||||
Savings and money market | 498,625 | 8,364 | 3.38 | % | 389,473 | 5,574 | 2.89 | % | ||||||||||||||||
Certificates of deposit | 635,172 | 15,526 | 4.93 | % | 430,854 | 8,509 | 3.98 | % | ||||||||||||||||
Total interest-bearing deposits | 1,383,222 | 27,994 | 3.41 | % | 967,416 | 15,413 | 3.21 | % | ||||||||||||||||
Securities sold under agreements to repurchase | 165,026 | 3,603 | 4.40 | % | 63,901 | 1,187 | 3.75 | % | ||||||||||||||||
Federal Home Loan Bank advances and other borrowings | 44,120 | 1,152 | 5.04 | % | 47,412 | 1,112 | 4.73 | % | ||||||||||||||||
Subordinated debt | 51,548 | 1,755 | 6.86 | % | 30,929 | 1,001 | 6.53 | % | ||||||||||||||||
Total interest-bearing liabilities | 1,643,916 | 34,504 | 4.23 | % | 1,109,658 | 18,713 | 3.40 | % | ||||||||||||||||
Noninterest-bearing deposits | 273,052 | - | - | 231,767 | - | - | ||||||||||||||||||
Total deposits and interest-bearing liabilities | 1,916,968 | $ | 34,504 | 3.63 | % | 1,341,425 | $ | 18,713 | 2.81 | % | ||||||||||||||
Other liabilities | 10,849 | 9,976 | ||||||||||||||||||||||
Stockholders' equity | 261,761 | 164,967 | ||||||||||||||||||||||
$ | 2,189,578 | $ | 1,516,368 | |||||||||||||||||||||
Netinterestincome | $ | 34,743 | $ | 26,402 | ||||||||||||||||||||
Net interest spread (2) | 2.91 | % | 3.32 | % | ||||||||||||||||||||
Net interest margin (3) | 3.61 | % | 3.97 | % |
(1) Yields computed on tax-exempt instruments on a tax equivalent basis.
(2) Yields realized on interest-earning assets less the rates paid on interest-bearing liabilities.
(3) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED | ||||||||||||||||||||||||
(dollars in thousands, except per share data) | June 2007 | Mar 2007 | Dec 2006 | Sept 2006 | Jun 2006 | Mar 2006 | ||||||||||||||||||
Balance sheet data, at quarter end: | ||||||||||||||||||||||||
Total assets | $ | 2,315,327 | 2,193,132 | 2,142,187 | 2,052,252 | 1,985,625 | 1,828,212 | |||||||||||||||||
Total loans | 1,663,030 | 1,553,980 | 1,497,735 | 1,405,401 | 1,358,273 | 1,235,170 | ||||||||||||||||||
Allowance for loan losses | (17,375 | ) | (16,792 | ) | (16,118 | ) | (15,172 | ) | (14,686 | ) | (13,354 | ) | ||||||||||||
Securities | 339,781 | 340,255 | 346,494 | 330,759 | 305,642 | 315,473 | ||||||||||||||||||
Noninterest-bearing deposits | 294,631 | 306,885 | 300,978 | 306,296 | 312,709 | 263,701 | ||||||||||||||||||
Total deposits | 1,797,536 | 1,700,132 | 1,622,411 | 1,585,238 | 1,559,885 | 1,415,778 | ||||||||||||||||||
Securities sold under agreements to repurchase | 140,443 | 116,952 | 141,016 | 122,354 | 104,380 | 63,912 | ||||||||||||||||||
Advances from FHLB | 46,699 | 46,619 | 53,726 | 28,739 | 33,749 | 67,267 | ||||||||||||||||||
Subordinated debt | 51,548 | 51,548 | 51,548 | 51,548 | 30,929 | 30,929 | ||||||||||||||||||
Total stockholders’ equity | 265,194 | 262,917 | 256,017 | 249,059 | 238,739 | 236,327 | ||||||||||||||||||
Balance sheet data, quarterly averages: | ||||||||||||||||||||||||
Total assets | $ | 2,229,227 | 2,149,928 | 2,096,893 | 1,987,236 | 1,878,912 | 1,153,823 | |||||||||||||||||
Total loans | 1,598,967 | 1,530,771 | 1,442,730 | 1,375,036 | 1,328,121 | 761,326 | ||||||||||||||||||
Securities | 347,081 | 345,630 | 334,426 | 317,332 | 298,909 | 286,321 | ||||||||||||||||||
Total earning assets | 2,004,884 | 1,932,298 | 1,879,759 | 1,751,559 | 1,651,962 | 1,074,885 | ||||||||||||||||||
Noninterest-bearing deposits | 276,241 | 269,864 | 292,996 | 281,812 | 311,286 | 152,247 | ||||||||||||||||||
Total deposits | 1,678,036 | 1,634,513 | 1,596,765 | 1,535,667 | 1,482,150 | 763,967 | ||||||||||||||||||
Securities sold under agreements to repurchase | 172,872 | 157,180 | 154,483 | 122,292 | 68,079 | 59,723 | ||||||||||||||||||
Advances from FHLB | 38,516 | 37,828 | 29,817 | 33,299 | 44,417 | 46,336 | ||||||||||||||||||
Subordinated debt | 51,548 | 51,548 | 51,548 | 36,084 | 30,929 | 30,929 | ||||||||||||||||||
Total stockholders’ equity | 264,055 | 259,466 | 253,761 | 244,980 | 234,400 | 95,535 | ||||||||||||||||||
Statement of operations data, for the three months ended: | ||||||||||||||||||||||||
Interest income | $ | 35,508 | 33,739 | 33,241 | 31,340 | 28,305 | 16,811 | |||||||||||||||||
Interest expense | 17,847 | 16,657 | 15,850 | 14,181 | 11,410 | 7,304 | ||||||||||||||||||
Net interest income | 17,661 | 17,082 | 17,391 | 17,159 | 16,895 | 9,507 | ||||||||||||||||||
Provision for loan losses | 900 | 788 | 1,051 | 587 | 1,707 | 387 | ||||||||||||||||||
Net interest income after provision for loan losses | 16,761 | 16,294 | 16,340 | 16,572 | 15,188 | 9,120 | ||||||||||||||||||
Noninterest income | 5,552 | 5,026 | 4,934 | 4,424 | 4,380 | 2,048 | ||||||||||||||||||
Noninterest expense | 14,484 | 13,124 | 13,135 | 13,054 | 13,105 | 7,329 | ||||||||||||||||||
Income before taxes | 7,828 | 8,196 | 8,139 | 7,942 | 6,463 | 3,839 | ||||||||||||||||||
Income tax expense | 2,402 | 2,594 | 2,493 | 2,595 | 2,141 | 1,227 | ||||||||||||||||||
$ | 5,426 | 5,602 | 5,646 | 5,347 | 4,322 | 2,612 | ||||||||||||||||||
Profitability and other ratios: | ||||||||||||||||||||||||
Return on avg. assets (1) | 0.98 | % | 1.06 | % | 1.07 | % | 1.07 | % | 0.92 | % | 0.92 | % | ||||||||||||
Return on avg. equity (1) | 8.24 | % | 8.76 | % | 8.83 | % | 8.66 | % | 7.40 | % | 11.09 | % | ||||||||||||
Net interest margin (2) | 3.58 | % | 3.64 | % | 3.74 | % | 3.95 | % | 4.17 | % | 3.65 | % | ||||||||||||
Noninterest income to total revenue (3) | 23.92 | % | 22.73 | % | 22.10 | % | 20.50 | % | 20.60 | % | 17.73 | % | ||||||||||||
Noninterest income to avg. assets (1) | 1.00 | % | 0.95 | % | 0.93 | % | 0.89 | % | 0.94 | % | 0.72 | % | ||||||||||||
Noninterest exp. to avg. assets (1) | 2.61 | % | 2.48 | % | 2.49 | % | 2.63 | % | 2.80 | % | 2.58 | % | ||||||||||||
Efficiency ratio (4) | 62.40 | % | 59.36 | % | 58.80 | % | 60.50 | % | 61.60 | % | 63.40 | % | ||||||||||||
Avg. loans to average deposits | 95.29 | % | 93.65 | % | 90.40 | % | 89.50 | % | 89.60 | % | 83.10 | % | ||||||||||||
Securities to total assets | 14.68 | % | 15.51 | % | 16.20 | % | 16.10 | % | 15.40 | % | 17.30 | % | ||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 119.75 | % | 119.75 | % | 122.00 | % | 121.20 | % | 125.30 | % | 119.30 | % | ||||||||||||
Brokered time deposits to total deposits | 8.17 | % | 5.83 | % | 3.71 | % | 4.50 | % | 5.00 | % | 3.30 | % |
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED | ||||||||||||||||||||||||
(dollars in thousands, except per share data) | June 2007 | Mar 2007 | Dec 2006 | Sept 2006 | Jun 2006 | Mar 2006 | ||||||||||||||||||
Loan portfolio balances, end of period: | ||||||||||||||||||||||||
Commercial real estate - mortgage | $ | 307,757 | 287,498 | 284,302 | 265,174 | 260,168 | 246,391 | |||||||||||||||||
Commercial real estate - construction | 177,426 | 160,222 | 161,903 | 152,627 | 164,049 | 162,867 | ||||||||||||||||||
Other commercial loans | 738,866 | 665,857 | 608,530 | 554,617 | 503,797 | 410,059 | ||||||||||||||||||
Consumer real estate - mortgage | 288,325 | 301,525 | 299,627 | 292,206 | 294,119 | 283,590 | ||||||||||||||||||
Consumer real estate - construction | 102,998 | 92,162 | 91,194 | 87,890 | 86,978 | 84,381 | ||||||||||||||||||
Other consumer loans | 47,657 | 46,716 | 52,179 | 52,887 | 49,162 | 47,882 | ||||||||||||||||||
Asset quality information and ratios: | ||||||||||||||||||||||||
Nonperforming assets: | ||||||||||||||||||||||||
Nonaccrual loans | $ | 2,392 | 4,705 | 7,070 | 3,477 | 2,800 | 1,201 | |||||||||||||||||
Other real estate | 687 | 927 | 995 | - | 67 | - | ||||||||||||||||||
Past due loans over 90 days and still accruing interest | 606 | 98 | 737 | 1,123 | 492 | - | ||||||||||||||||||
Net loan charge-offs (recoveries) (6) | 317 | 114 | 105 | 101 | 441 | (73 | ) | |||||||||||||||||
Allowance for loan losses to total loans | 1.04 | % | 1.08 | % | 1.08 | % | 1.08 | % | 1.08 | % | 1.08 | % | ||||||||||||
As a percentage of total loans and ORE: | ||||||||||||||||||||||||
Past due loans over 30 days | 0.31 | % | 0.33 | % | 0.74 | % | 0.69 | % | 0.25 | % | 0.52 | % | ||||||||||||
Nonperforming assets | 0.19 | % | 0.36 | % | 0.54 | % | 0.25 | % | 0.21 | % | 0.10 | % | ||||||||||||
Potential problem loans (5) | 0.16 | % | 0.21 | % | 0.24 | % | 0.77 | % | 0.31 | % | 0.63 | % | ||||||||||||
Annualized net loan charge-offs (recoveries) year-to-date to avg. loans (6) | 0.05 | % | 0.03 | % | 0.05 | % | 0.05 | % | 0.07 | % | (0.04 | )% | ||||||||||||
Avg. commercial loan internal risk ratings (5) | 4.1 | 4.1 | 4.1 | 4.1 | 4.1 | 4.1 | ||||||||||||||||||
Avg. loan account balances (7) | $ | 164 | 156 | 140 | 132 | 115 | 105 | |||||||||||||||||
Interest rates and yields: | ||||||||||||||||||||||||
Loans | 7.66 | % | 7.68 | % | 7.65 | % | 7.72 | % | 7.32 | % | 7.02 | % | ||||||||||||
Securities | 4.98 | % | 4.96 | % | 4.97 | % | 4.91 | % | 5.10 | % | 4.80 | % | ||||||||||||
Total earning assets | 7.15 | % | 7.13 | % | 7.06 | % | 7.14 | % | 6.92 | % | 6.39 | % | ||||||||||||
Total deposits, including non-interest bearing | 3.46 | % | 3.36 | % | 3.18 | % | 3.05 | % | 2.59 | % | 2.59 | % | ||||||||||||
Securities sold under agreements to repurchase | 4.39 | % | 4.42 | % | 4.52 | % | 4.49 | % | 4.00 | % | 3.46 | % | ||||||||||||
FHLB advances and other borrowings | 5.19 | % | 5.36 | % | 4.93 | % | 4.57 | % | 5.46 | % | 3.99 | % | ||||||||||||
Subordinated debt | 6.84 | % | 6.89 | % | 6.84 | % | 6.75 | % | 6.69 | % | 6.36 | % | ||||||||||||
Total deposits and interest-bearing liabilities | 3.67 | % | 3.59 | % | 3.43 | % | 3.26 | % | 2.81 | % | 2.81 | % | ||||||||||||
Capital ratios (9): | ||||||||||||||||||||||||
Stockholders’ equity to total assets | 11.5 | % | 12.0 | % | 11.9 | % | 12.1 | % | 12.0 | % | 12.9 | % | ||||||||||||
Leverage | 9.5 | % | 9.5 | % | 9.5 | % | 9.2 | % | 8.6 | % | 11.5 | % | ||||||||||||
Tier one risk-based | 10.4 | % | 10.9 | % | 10.9 | % | 10.6 | % | 9.5 | % | 10.2 | % | ||||||||||||
Total risk-based | 11.3 | % | 11.8 | % | 11.8 | % | 12.0 | % | 10.4 | % | 11.1 | % |
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED | ||||||||||||||||||||||||
(dollars in thousands, except per share data) | June 2007 | Mar 2007 | Dec 2006 | Sept 2006 | Jun 2006 | Mar 2006 | ||||||||||||||||||
Per share data: | ||||||||||||||||||||||||
Earnings – basic | $ | 0.35 | 0.36 | 0.37 | 0.35 | 0.28 | 0.27 | |||||||||||||||||
Earnings – diluted | $ | 0.33 | 0.34 | 0.34 | 0.32 | 0.26 | 0.24 | |||||||||||||||||
Book value at quarter end (8) | $ | 17.06 | 16.93 | 16.57 | 16.16 | 15.53 | 15.45 | |||||||||||||||||
Weighted avg. shares – basic | 15,494,522 | 15,433,442 | 15,427,908 | 15,393,735 | 15,335,754 | 9,578,813 | ||||||||||||||||||
Weighted avg. shares – diluted | 16,664,213 | 16,617,484 | 16,641,425 | 16,655,349 | 16,503,692 | 10,745,626 | ||||||||||||||||||
Common shares outstanding | 15,545,581 | 15,530,975 | 15,446,074 | 15,409,341 | 15,370,116 | 15,300,629 | ||||||||||||||||||
Investor information: | ||||||||||||||||||||||||
Closing sales price | $ | 29.36 | 30.51 | 33.18 | 35.80 | 30.43 | 27.44 | |||||||||||||||||
High sales price during quarter | $ | 31.48 | 33.85 | 36.17 | 37.41 | 30.92 | 28.84 | |||||||||||||||||
Low sales price during quarter | $ | 28.27 | 29.40 | 31.23 | 28.93 | 27.09 | 24.87 | |||||||||||||||||
Other information: | ||||||||||||||||||||||||
Gains on sale of loans and loan participations sold: | ||||||||||||||||||||||||
Mortgage loan sales: | ||||||||||||||||||||||||
Gross loans sold | $ | 52,197 | 31,044 | 36,551 | 37,371 | 37,585 | 21,346 | |||||||||||||||||
Gross fees (10) | $ | 846 | 544 | 653 | 679 | 668 | 389 | |||||||||||||||||
Gross fees as a percentage of mortgage loans originated | 1.62 | % | 1.75 | % | 1.79 | % | 1.82 | % | 1.78 | % | 1.82 | % | ||||||||||||
Commercial loan participations sold | $ | 171 | 45 | 224 | 31 | 49 | 74 | |||||||||||||||||
Gains on sales of investment securities, net | $ | - | - | - | - | - | - | |||||||||||||||||
Brokerage account assets, at quarter-end (11) | $ | 643,000 | 617,000 | 597,000 | 553,000 | 501,000 | 470,000 | |||||||||||||||||
Floating rate loans as a percentage of loans (12) | 45.5 | % | 46.3 | % | 46.3 | % | 47.3 | % | 47.0 | % | 48.5 | % | ||||||||||||
Balance of commercial loan participations sold to other banks and serviced by Pinnacle, at quarter end | $ | 115,913 | 114,143 | 95,398 | 85,291 | 80,359 | 73,171 | |||||||||||||||||
Core deposits to total funding (13) | 62.3 | % | 63.7 | % | 63.3 | % | 63.7 | % | 63.8 | % | 68.1 | % | ||||||||||||
Total assets per full-time equivalent employee | $ | 5,250 | 5,228 | 5,302 | 5,189 | 5,531 | 4,968 | |||||||||||||||||
Annualized revenues per full-time equivalent employee | $ | 211.1 | 210.8 | 219.2 | 218.3 | 237.0 | 205.0 | |||||||||||||||||
Number of employees (full-time equivalent) | 441.0 | 419.5 | 404.0 | 395.5 | 359.0 | 368.0 | ||||||||||||||||||
Associate retention rate (14) | 88.1 | % | 85.3 | % | 85.1 | % | 91.1 | % | 94.7 | % | 93.2 | % |
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES |
SELECTED QUARTERLY AND YEAR-TO-DATE FINANCIAL DATA – UNAUDITED |
As of June 30, | As of December 31, | |||||||
(dollars in thousands, except per share data) | 2007 | 2006 | ||||||
Reconciliation of Non-GAAP measures: | ||||||||
Tangible assets: | ||||||||
Total assets | $ | 2,315,327 | $ | 2,142,187 | ||||
Less: Goodwill | (114,288 | ) | (114,288 | ) | ||||
Core deposit intangible | (10,353 | ) | (11,385 | ) | ||||
Net tangible assets | $ | 2,190,686 | $ | 2,016,514 | ||||
Tangible equity: | ||||||||
Total stockholders’ equity | $ | 265,194 | $ | 256,017 | ||||
Less: Goodwill | (114,288 | ) | (114,288 | ) | ||||
Core deposit intangible | (10,353 | ) | (11,385 | ) | ||||
Net tangible equity | $ | 140,553 | $ | 130,344 | ||||
Tangible equity divided by tangible assets | 6.42 | % | 6.46 | % | ||||
Tangible equity per common share | $ | 9.04 | $ | 8.44 | ||||
For the three months ended June 30, | ||||||||
(dollars in thousands) | 2007 | 2006 | ||||||
Average tangible assets: | ||||||||
Total average assets | $ | 2,229,227 | $ | 1,878,912 | ||||
Less: Average goodwill | (114,288 | ) | (115,727 | ) | ||||
Average core deposit intangible | (10,740 | ) | (12,779 | ) | ||||
Net average tangible assets | $ | 2,104,199 | $ | 1,750,406 | ||||
Average tangible equity: | ||||||||
Total average stockholders’ equity | $ | 264,055 | $ | 234,400 | ||||
Less: Average goodwill | (114,288 | ) | (115,727 | ) | ||||
Average core deposit intangible | (10,740 | ) | (12,779 | ) | ||||
Net average tangible stockholders’ equity | $ | 139,027 | $ | 105,894 | ||||
Net income | $ | 5,426 | $ | 4,322 | ||||
Return on average tangible assets (annualized) | 1.03 | % | 0.99 | % | ||||
Return on average tangible stockholders’ equity (annualized) | 15.65 | % | 16.37 | % | ||||
Net income | $ | 5,426 | $ | 4,322 | ||||
Impact of merger related expense, net of tax | - | 560 | ||||||
Net income before impact of merger related expense | $ | 5,426 | $ | 4,882 | ||||
Fully-diluted earnings per share before impact of merger related expense | $ | 0.33 | $ | 0.30 | ||||
Net income | $ | 5,426 | $ | 4,322 | ||||
Impact of Knoxville expansion, net of tax | 402 | - | ||||||
Net income before impact of Knoxville expansion | $ | 5,828 | $ | 4,322 | ||||
Fully-diluted earnings per share before impact of Knoxville expansion | $ | 0.35 | $ | 0.26 |
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES |
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED |
1. Ratios are presented on an annualized basis.
2. Net interest margin is the result of net interest income on a tax equivalent basis divided by average interest earning assets.
3. Total revenue is equal to the sum of net interest income and noninterest income.
4. Efficiency ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.
5. Average risk ratings are based on an internal loan review system which assigns a numeric value of 1 to 10 to all loans to commercial entities based on their underlying risk characteristics as of the end of each quarter. A “1” risk rating is assigned to credits that exhibit Excellent risk characteristics, “2” exhibit Very Good risk characteristics, “3” Good, “4” Satisfactory, “5” Acceptable or Average, “6” Watch List, “7” Criticized, “8” Classified or Substandard, “9” Doubtful and “10” Loss (which are charged-off immediately). Additionally, loans rated “8” or worse are considered potential problem loans. Potential problem loans do not include nonperforming loans. Generally, consumer loans are not subjected to internal risk ratings.
6. Annualized net loan charge-offs to average loans ratios are computed by annualizing year-to-date net loan charge-offs and dividing the result by average loans for the year-to-date period.
7. Computed by dividing the balance of all loans by the number of loan accounts as of the end of each quarter.
8. Book value per share computed by dividing total stockholders’ equity by common shares outstanding
9. Capital ratios are for Pinnacle Financial Partners, Inc. and are defined as follows:
Equity to total assets – End of period total stockholders’ equity as a percentage of end of period assets.
Leverage – Tier one capital (pursuant to risk-based capital guidelines) as a percentage of adjusted average assets.
Tier one risk-based – Tier one capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.
Total risk-based – Total capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.
10. Amounts are included in the statement of income in “Gains on the sale of loans and loan participations sold”, net of commissions paid on such amounts.
11. At fair value, based on information obtained from Pinnacle’s third party broker/dealer for non-FDIC insured financial products and services.
12. Floating rate loans are those loans that are eligible for repricing on a daily basis subject to changes in Pinnacle’s prime lending rate or other factors.
13. Core deposits include all transaction deposit accounts, money market and savings accounts and all certificates of deposit issued in a denomination of less than $100,000. The ratio noted above represents total core deposits divided by total funding, which includes total deposits, FHLB advances, securities sold under agreements to repurchase, subordinated indebtedness and all other interest-bearing liabilities.
14. Associate retention rate is computed by dividing the number of associates employed at quarter-end less the number of associates that have resigned in the last 12 months by the number of associates employed at quarter-end.