EXHIBIT 99.1
[PINNEACLE FINANCIAL PARTNERS LOGO]
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Tiffany Carpenter 615-320-7532
FINANCIAL CONTACT: Harold Carpenter 615-744-3742
WEBSITE: www.mypinnacle.com
PINNACLE FINANCIAL REPORTS CONTINUED RAPID GROWTH IN SECOND QUARTER QUARTERLY
EARNINGS UP 250 PERCENT AND ASSETS REACH $403 MILLION
NASHVILLE, Tenn., July 15, 2003 - Pinnacle Financial Partners Inc.
(Nasdaq: PNFP), the holding company for Pinnacle National Bank, today reported
net income for the quarter ended June 30, 2003, of $537,000, or $0.14 per
diluted share, compared to a net income of $107,000, or $0.04 per diluted share
for the quarter ended June 30, 2002, an increase of 250 percent.
Total assets grew to $403 million as of June 30, 2003, up 75 percent
from the $230 million reported at June 30, 2002, and up $98 million from
December 31, 2002. Deposits in the second quarter rose to $309 million at June
30, 2003, an 83 percent increase from $169 million in deposits at June 30, 2002
and up $75 million from December 31, 2002.
"We are extremely pleased with the company's continued growth in the
second quarter," said M. Terry Turner, president and CEO of Pinnacle Financial
Partners. "At the time of our follow-on stock offering in June of 2002, we
projected that we would grow to $400 million in total assets by December 31,
2004. We believe achievement of this milestone 18 months early demonstrates the
strong and growing desire by Nashville's business owners and consumers to deal
with a local bank staffed with experienced professionals."
Net interest income for the second quarter of 2003 was $3.0 million,
compared to $1.8 million for the second quarter of 2002. The net interest margin
for the second quarter of 2003 was 3.5 percent, compared to a net interest
margin of 3.7 percent for the second quarter of 2002. Net interest income for
the first six months of 2003 was $5.6 million, compared to $3.5 million for the
same period in 2002.
The provision for loan losses was $347,000 for the second quarter of
2003, compared to $232,000 for the second quarter of 2002. The provision for
loan losses for the second quarter of 2003 was $59,000 greater than the
provision for the first quarter of 2003. The
- more -
Pinnacle Reports Continued Growth - 2 of 3
provision for loan losses was $635,000 for the first six months of 2003,
compared to $441,000 for the same period in 2002.
"Loan growth for the second quarter was exceptional. As a result, the
associated provision expense related to these new loans was higher than our
usual quarterly charge," said Turner. "We attribute much of the loan growth to
the addition of banking relationships with many of Nashville's most respected
owner-managed businesses and consumers."
Net loan growth for the three months ended June 30, 2003, was $26.6
million compared to $19.1 million for the first quarter of 2003, an increase of
$7.5 million, or 38 percent. Pinnacle funded a portion of the increased loan
volume by altering the mix of its earning assets by selling approximately $7
million of its securities available-for-sale at a gain. The allowance for loan
losses represented 1.25 percent of total loans at June 30, 2003.
Noninterest income for the second quarter of 2003 was $877,000,
compared to $462,000 for the second quarter of 2002. This increase was due to
the development of a new mortgage origination unit, gains recognized on loan
participations sold, increased depositor service charges due to more deposit
accounts and gains on the sale of investment securities. Noninterest income for
the first six months of 2003 was $1,339,000, compared to $761,000 for the same
period in 2002. For the second quarter of 2003 noninterest income represented
approximately 22.7 percent of total revenues (the sum of net interest income and
noninterest income).
Noninterest expense for the second quarter of 2003 was $2.7 million,
compared to $1.9 million for the second quarter of 2002. Noninterest expense for
the first six months of 2003 was $4.9 million, compared to $3.6 million for the
same period in 2002. The efficiency ratio for the second quarter of 2003
improved to 69.3 percent, compared to 82.2 percent for the second quarter of
2002.
During the second quarter of 2003, Pinnacle opened its new office in
the Rivergate area of Davidson County. This brings the company's total number of
locations to four in the metropolitan Nashville market. Additionally, Pinnacle
accelerated expenses associated with new initiatives intended to capitalize on
continued market opportunities, including:
- Began construction of a new office scheduled to open in late
fall or winter of this year in the Cool Springs area in
Williamson County. Williamson County was recently ranked by
American City Business Journals Inc. as the 15th most affluent
- more -
Pinnacle Reports Continued Growth - 3 of 3
county in the United States based on per capita income, home
values, managerial and professional jobs and other factors.
- Continued to recruit experienced individuals in the Nashville
market with strong client relationships and the ability to
provide distinctive service and effective financial advice.
During the first half of 2003, the company added 18 associates
and anticipates continued hiring of market proven
professionals during the remainder of this year. Fourteen of
the new employees have been assigned to client contact
positions and four were assigned to the company's operational
areas.
- Began the site selection process for two new offices
anticipated to open in 2004.
Based on these incremental investments, anticipated growth trends and
the anticipated results from these trends, Pinnacle estimates its third quarter
2003 diluted earnings per share will approximate $0.16 to $0.19. Additionally,
diluted earnings per share for the year ending December 31, 2003, are currently
estimated to be $0.59 to $0.65. 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 may cause the actual results, performance or achievements of
Pinnacle to differ materially from these estimates.
Pinnacle Financial Partners, a Nashville-based financial services firm,
was founded in March 2000 by prominent Nashville business leaders, including
five former First American Corporation executives. Pinnacle, which opened for
business October 2000, offers a full-range of banking, investment, and insurance
products targeted at small and medium-sized businesses and their owner/managers.
Pinnacle operates four offices in the downtown, Green Hills and Rivergate areas
of Nashville and in Brentwood, Tennessee.
Additional information concerning Pinnacle can be accessed at
www.mypinnacle.com.
###
Certain of the statements in this release may constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"). 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) increased
competition with other financial institutions, (iii) lack of sustained growth in
the economy in the Nashville, Tennessee area, (iv) rapid fluctuations or
unanticipated changes in interest rates, (v) the inability of Pinnacle to
satisfy regulatory requirements for its expansion plans, and (vi) changes in the
legislative and regulatory environment, a more detailed description of various
risks is contained in Pinnacle's most recent annual report on Form 10-KSB. 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.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
===============================================================================================
JUNE 30, DECEMBER 31,
2003 2002
- -----------------------------------------------------------------------------------------------
ASSETS
Cash and noninterest-bearing due from banks ................ $ 15,432,885 $ 8,061,300
Interest-bearing due from banks ............................ 486,100 4,195,647
Federal funds sold and securities purchased under
agreements to resell .................................... 19,272,996 685,182
------------- -------------
Cash and cash equivalents ............................. 35,191,981 12,942,129
Securities available-for-sale, at fair value ............... 99,968,214 73,980,054
Mortgage loans held-for-sale ............................... 2,311,700 --
Loans ...................................................... 255,448,309 209,743,436
Less allowance for loan losses ............................. (3,188,610) (2,677,043)
------------- -------------
Loans, net ................................................. 252,259,699 207,066,393
Premises and equipment, net ................................ 5,676,540 3,611,504
Other assets ............................................... 7,821,229 7,678,894
------------- -------------
Total assets ...................................... $ 403,229,363 $ 305,278,974
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand ............................ $ 51,094,951 $ 31,599,897
Interest-bearing demand ............................... 15,705,948 13,234,956
Savings and money market accounts ..................... 96,884,781 75,995,881
Time .................................................. 145,403,698 113,185,655
------------- -------------
Total deposits .................................... 309,089,378 234,016,389
Securities sold under agreements to repurchase ............. 17,803,361 15,050,208
Federal Home Loan Bank advances ............................ 41,500,000 21,500,000
Other liabilities .......................................... 1,209,284 2,308,730
------------- -------------
Total liabilities ................................. 369,602,023 272,875,327
Commitments and contingent liabilities
Stockholders' equity:
Preferred stock, no par value; 10,000,000 shares
authorized; no shares issued and outstanding ...... -- --
Common stock, par value $1.00; 10,000,000 shares
authorized; 3,692,053 issued and outstanding at
June 30, 2003 and December 31, 2002 ............... 3,692,053 3,692,053
Additional paid-in capital ............................ 30,682,947 30,682,947
Accumulated deficit ................................... (1,833,947) (2,743,794)
Accumulated other comprehensive income, net ........... 1,086,287 772,441
------------- -------------
Total stockholders' equity ........................ 33,627,340 32,403,647
------------- -------------
Total liabilities and stockholders' equity ........ $ 403,229,363 $ 305,278,974
============= =============
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
===================================================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2003 2002 2003 2002
- -------------------------------------------------------------------------------------------------------------------
INTEREST INCOME:
Loans, including fees ............................ $3,356,843 $2,463,873 $6,320,353 $4,733,465
Securities, available-for-sale
Taxable ..................................... 930,427 350,228 1,833,697 624,450
Tax-exempt .................................. 42,523 -- 85,162 --
Federal funds sold and other ..................... 39,690 57,466 76,101 91,628
---------- ---------- ---------- ----------
Total interest income ........................ 4,369,483 2,871,567 8,315,313 5,449,543
---------- ---------- ---------- ----------
INTEREST EXPENSE:
Deposits ......................................... 1,119,586 936,448 2,192,258 1,732,574
Securities sold under agreements to repurchase ... 12,170 20,118 26,966 41,729
Federal funds purchased and other borrowings ..... 253,060 100,161 475,189 173,829
---------- ---------- ---------- ----------
Total interest expense ....................... 1,384,816 1,056,727 2,694,413 1,948,132
---------- ---------- ---------- ----------
Net interest income .......................... 2,984,667 1,814,840 5,620,900 3,501,411
PROVISION FOR LOAN LOSSES ............................. 347,266 232,000 635,292 441,000
---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES ... 2,637,401 1,582,840 4,985,608 3,060,411
NONINTEREST INCOME:
Service charges on deposit accounts .............. 120,360 66,826 222,113 120,466
Investment services .............................. 176,292 275,051 332,224 456,561
Fees from origination of mortgage loans .......... 197,906 12,094 244,093 12,094
Gain on loan participations sold ................. 124,039 23,267 126,229 44,959
Gain on sale of investment securities, net ....... 116,573 -- 134,270 --
Other noninterest income ......................... 141,879 84,814 280,304 127,226
---------- ---------- ---------- ----------
Total noninterest income ..................... 877,049 462,052 1,339,233 761,306
---------- ---------- ---------- ----------
NONINTEREST EXPENSE:
Compensation and employee benefits ............... 1,693,685 1,229,159 3,128,597 2,337,471
Equipment and occupancy .......................... 445,961 338,068 842,786 678,939
Marketing and other business development ......... 103,775 45,496 179,264 91,394
Administrative ................................... 183,692 92,802 321,913 191,605
Postage and supplies ............................. 106,229 70,595 179,491 125,509
Other noninterest expense ........................ 141,685 96,071 265,242 152,187
---------- ---------- ---------- ----------
Total noninterest expense .................... 2,675,027 1,872,191 4,917,293 3,577,105
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES ............................ 839,423 172,701 1,407,548 244,612
Income tax expense ............................... 302,556 65,526 497,702 92,853
---------- ---------- ---------- ----------
NET INCOME ............................................ $ 536,867 $ 107,175 $ 909,846 $ 151,759
========== ========== ========== ==========
PER SHARE INFORMATION:
Basic net income per common share ................ $ 0.15 $ 0.04 $ 0.25 $ 0.06
========== ========== ========== ==========
Diluted net income per common share .............. $ 0.14 $ 0.04 $ 0.24 $ 0.06
========== ========== ========== ==========
Weighted average shares outstanding:
Basic ....................................... 3,692,053 2,521,723 3,692,053 2,416,888
Diluted ..................................... 3,880,642 2,555,844 3,861,137 2,437,365
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
==================================================================================================================================
(DOLLARS IN THOUSANDS, JUNE MAR DEC SEPT JUNE MAR
EXCEPT PER SHARE DATA) 2003 2003 2002 2002 2002 2002
==================================================================================================================================
BALANCE SHEET DATA, AT QUARTER END:
Total assets ........................... $ 403,229 348,366 305,279 278,750 229,795 192,476
Total loans ............................ 255,448 228,842 209,743 191,299 170,427 151,280
Allowance for loan losses .............. (3,189) (2,860) (2,677) (2,427) (2,182) (2,041)
Securities available-for-sale .......... 99,968 94,600 73,980 57,062 37,950 20,302
Total deposits ......................... 309,089 266,732 234,016 212,914 168,752 149,460
Securities sold under
agreements to repurchase ............ 17,803 15,846 15,050 16,720 16,855 10,223
Advances from FHLB ..................... 41,500 32,500 21,500 15,500 11,500 11,500
Total stockholders' equity ............. 33,627 32,403 32,404 32,089 31,402 18,172
BALANCE SHEET DATA, QUARTERLY AVERAGES:
Total assets ........................... $ 365,385 326,108 285,929 243,284 204,592 177,994
Total loans ............................ 245,383 217,690 201,290 181,005 158,076 143,402
Securities available-for-sale .......... 95,351 87,124 63,150 42,007 24,904 19,438
Total deposits ......................... 277,592 243,545 215,617 181,844 163,146 137,933
Securities sold under agreements
to repurchase ....................... 11,728 14,106 16,685 13,091 10,496 10,644
Advances from FHLB ..................... 38,137 29,994 18,054 14,196 11,500 8,600
Total stockholders' equity ............. 32,944 32,675 32,167 31,808 18,694 18,292
STATEMENT OF OPERATIONS DATA,
FOR THE THREE MONTHS ENDED:
Interest income ........................ $ 4,369 3,946 3,691 3,425 2,872 2,573
Interest expense ....................... 1,385 1,310 1,268 1,146 1,057 891
----------- --------- --------- --------- --------- ---------
Net interest income .................. 2,984 2,636 2,423 2,279 1,815 1,682
Provision for loan losses .............. 347 288 250 247 232 209
----------- --------- --------- --------- --------- ---------
Net interest income after
provision for loan losses ............ 2,637 2,348 2,173 2,032 1,583 1,473
Noninterest income ..................... 877 462 469 497 462 304
Noninterest expense .................... 2,675 2,242 2,230 2,182 1,872 1,705
----------- --------- --------- --------- --------- ---------
Net income before taxes ................ 839 568 412 347 173 72
Income tax expense ..................... 302 195 127 136 66 27
----------- --------- --------- --------- --------- ---------
Net income ............................. $ 537 373 285 211 107 45
=========== ========= ========= ========= ========= =========
PER SHARE DATA:
Earnings - basic ....................... $ 0.15 0.10 0.08 0.06 0.04 0.02
Earnings - diluted ..................... $ 0.14 0.10 0.08 0.06 0.04 0.02
Book value at quarter end (1) .......... $ 9.11 8.78 8.78 8.69 8.51 7.86
Weighted avg. shares - basic ........... 3,692,053 3,692,053 3,692,053 3,692,053 2,521,723 2,312,053
Weighted avg. shares - diluted ......... 3,880,642 3,841,631 3,795,967 3,745,272 2,555,844 2,323,076
Common shares outstanding .............. 3,692,053 3,692,053 3,692,053 3,692,053 3,692,053 2,312,053
CAPITAL RATIOS (2):
Equity to total assets ................. 10.9% 12.1% 13.8% 15.1% 18.6% 12.2%
Leverage ............................... 8.9% 10.1% 11.1% 13.1% 14.7% 9.5%
Tier 1 risk-based ...................... 10.6% 12.1% 12.7% 13.0% 15.4% 9.4%
Total risk-based ....................... 11.7% 13.2% 13.8% 14.0% 16.6% 10.4%
- --------------------------------
(1) Book value per share computed by dividing total stockholders' equity by
common shares outstanding
(2) Capital ratios are for Pinnacle Financial Partners, Inc. and are
defined as follows:
Equity to total assets - Total stockholders' equity as a percentage
of end of period assets.
Leverage - Tier 1 capital (pursuant to risk-based capital guidelines)
as a percentage of adjusted average assets.
Tier 1 risk-based - Tier 1 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.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
================================================================================================================================
(DOLLARS IN THOUSANDS, JUNE MAR DEC SEPT JUNE MAR
EXCEPT PER SHARE DATA) 2003 2003 2002 2002 2002 2002
- --------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE RATIOS AND OTHER DATA:
Return on average assets ............................... 0.59 0.46% 0.40% 0.34% 0.21% 0.10%
Return on average stockholders' equity ................. 6.54 4.63% 3.52% 2.64% 1.83% 0.98%
Net interest margin (3) ................................ 3.48 3.46% 3.59% 3.97% 3.74% 4.10%
Noninterest income to total revenue (4) ................ 22.7% 14.9% 16.2% 17.9% 20.3% 15.1%
Noninterest income to avg. assets ...................... 0.96 0.57% 0.65% 0.81% 0.90% 0.68%
Noninterest exp. to avg. assets ........................ 2.94 2.79% 3.09% 3.56% 3.64% 3.89%
Efficiency ratio (5) ................................... 69.3% 72.4% 77.1% 78.6% 82.2% 85.9%
Avg. loans to average deposits ......................... 88.4% 89.4% 93.4% 97.7% 97.1% 103.4%
Average interest-earning assets
to average interest-bearing liabilities .............. 118.9% 119.4% 120.6% 119.0% 115.0% 114.5%
Brokered time deposits to total deposits ............... 15.6% 16.8% 18.0% 19.8% 23.7% 26.5%
ASSET QUALITY INFORMATION AND RATIOS:
Nonaccrual loans ....................................... $ 1,095 1,095 1,845 70 90 220
Past due loans over 90 days and still
accruing interest .................................... $ 60 44 22 41 15 20
Net loan charge-offs ................................... $ 18 105 -- 2 91 --
Allowance for loan losses to total loans ............... 1.25% 1.25% 1.28% 1.27% 1.28% 1.35%
Nonperforming assets to total loans and ORE ............ 0.43% 0.48% 0.88% 0.04% 0.05% 0.15%
Net loan charge-offs to average loans (annualized) ..... 0.03% 0.19% -- 0.00% 0.23% --
Allowance for loan losses to nonperforming loans ....... 291% 261% 145% 3,467% 2,424% 927%
Avg. commercial loan internal risk ratings (6) ......... 3.9 3.9 3.9 4.0 4.0 3.9
Avg. loan account balances (7) ......................... $ 155 158 163 155 151 149
INTEREST RATES AND YIELDS:
Loans .................................................. 5.49% 5.52% 5.81% 6.21% 6.18% 6.42%
Securities, available-for-sale ......................... 4.14% 4.44% 4.41% 5.16% 5.58% 5.73%
Federal funds sold and other ........................... 2.60% 2.22% 2.58% 2.92% 2.15% 2.82%
Total deposits, including non-interest bearing ......... 1.62% 1.79% 1.99% 2.17% 2.34% 2.34%
Securities sold under agreements to repurchase ......... 0.42% 0.43% 0.61% 0.71% 0.76% 0.82%
Federal funds purchased and other borrowings ........... 2.44% 2.63% 3.16% 3.26% 3.45% 2.89%
Total deposits and other interest-bearing liabilities .. 1.68% 1.82% 1.99% 2.16% 2.32% 2.28%
- -------------------------------
(3) Net interest margin is the result of net interest income on a tax
equivalent basis divided by average interest earning assets
(4) Total revenue is equal to the sum of net interest income and
noninterest income.
(5) Efficiency ratio is calculated by dividing noninterest expense by the
sum of net interest income and noninterest income.
(6) 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). Loans rated "8"
or worse are considered potential problem credits. Generally,
consumer loans are not subjected to internal risk ratings.
(7) Computed by dividing the balance of all loans by the number of loan
accounts as of the end of each quarter.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
========================================================================================================================
(DOLLARS IN THOUSANDS, JUNE MAR DEC SEPT JUNE MAR
EXCEPT PER SHARE DATA) 2003 2003 2002 2002 2002 2002
- ------------------------------------------------------------------------------------------------------------------------
INVESTOR INFORMATION:
Closing price at end of quarter......... $ 15.95 13.46 12.91 11.19 11.74 9.75
High bid during quarter................. $ 17.00 14.14 13.30 13.00 11.90 10.50
Low bid during quarter.................. $ 13.05 12.76 11.01 10.90 9.70 8.75
OTHER INFORMATION:
Brokerage account assets, at
quarter-end (8).................... $ 202,000 177,000 171,000 166,000 165,000 169,000
Balance of commercial loan
participations sold to other
banks and serviced by Pinnacle,
at quarter end..................... $ 44,355 41,594 43,089 28,942 29,294 24,355
Total assets per full-time
equivalent employee................ $ 5,486 5,318 5,501 5,210 4,462 3,888
Quarterly revenues per full-time
equivalent employee................ $ 52.5 47.3 52.1 51.9 44.2 40.1
Number of employees (full-time
equivalent)........................ 73.5 65.5 55.5 53.5 51.5 49.5
Associate retention rate (9)............ 94.6% 92.4% 94.5% 94.4% 96.2% 96.2%
- ---------------------
(8) At market value, based on information obtained from the company's
third party broker/dealer for non-FDIC insured financial products and
services.
(9) 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.