EXHIBIT 99.1
[PINNACLE FINANCIAL PARTNERS LOGO]
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Vicki Kessler 615-320-7532
FINANCIAL CONTACT: Harold Carpenter 615-744-3742
WEBSITE: www.mypinnacle.com
PINNACLE FINANCIAL REPORTS CONTINUED RAPID GROWTH IN EARNINGS
EARNINGS FOR THE THIRD QUARTER ARE $0.20 AND ASSETS EXCEED $440 MILLION
NASHVILLE, Tenn., October 21, 2003 - Pinnacle Financial Partners Inc.
(Nasdaq: PNFP), the holding company for Pinnacle National Bank, today reported
net income for the quarter ended September 30, 2003, of $787,000, or $0.20 per
diluted share, compared to a net income of $211,000, or $0.06 per diluted share
for the quarter ended September 30, 2002, an increase of 233 percent. For the
nine months ended September 30, 2003, diluted earnings per share amounted to
$0.44 compared to $0.13 per diluted share for the nine months ended September
30, 2002.
Total assets grew to $440 million as of September 30, 2003, up 58
percent from the $279 million reported at September 30, 2002, and up $135
million from December 31, 2002. Deposits in the third quarter rose to $347
million at September 30, 2003, a 63 percent increase from $213 million in
deposits at September 30, 2002 and up $113 million from December 31, 2002.
Net loan growth for the three months ended September 30, 2003, was $25
million compared to $26.6 million in the second quarter and $19.1 million for
the first quarter of 2003. During the second and third quarters of 2003,
Pinnacle funded a portion of the increased loan volume by altering the mix of
its earning assets and sold certain available-for-sale securities at gains.
"We continue to be pleased about the opportunities for our company,"
said M. Terry Turner, President and CEO of Pinnacle Financial Partners. "The
third quarter was another great quarter for Pinnacle with many of Nashville's
most respected businesses continuing to move their banking relationships to
Pinnacle. We were also successful in attracting several new associates to
Pinnacle during the quarter, all with significant banking and financial services
experience in this market. Additionally, we opened our Cool Springs office in
the high growth market of Williamson County in September and expect to open two
new locations in 2004."
Pinnacle Reports Continued Growth - 2 of 3
Net interest income for the third quarter of 2003 was $3.4 million,
compared to $2.3 million for the third quarter of 2003. The net interest margin
for the third quarter of 2003 was 3.5 percent, compared to a net interest margin
of 3.5 percent for the second quarter of 2003 and 4.0 percent for the third
quarter of 2002. Net interest income for the first nine months of 2003 was $9.0
million, compared to $7.9 million for the same period in 2002.
The provision for loan losses was $318,000 for the third quarter of
2003, compared to $247,000 for the third quarter of 2002. The provision for loan
losses was $953,000 for the first nine months of 2003, compared to $688,000 for
the same period in 2002. The allowance for loan losses represented 1.25 percent
of total loans at September 30, 2003.
Noninterest income for the third quarter of 2003 was $1,024,000,
compared to $497,000 for the third quarter of 2002. This increase was due to the
continued development of a new mortgage origination unit, gains recognized on
loan participations sold, increased depositor service charges due to more
deposit accounts, increased investment services income from Pinnacle Asset
Management and gains on the sale of investment securities. Noninterest income
for the first nine months of 2003 was $2,363,000, compared to $1,259,000 for the
same period in 2002. For the third quarter of 2003 noninterest income
represented approximately 23.3 percent of total revenues (the sum of net
interest income and noninterest income) compared to 17.9 percent for the same
period in 2002.
Noninterest expense for the third quarter of 2003 was $2.8 million,
compared to $2.2 million for the third quarter of 2002. Noninterest expense for
the first nine months of 2003 was $7.8 million, compared to $5.8 million for the
same period in 2002. The efficiency ratio (noninterest expense divided by total
revenues) for the third quarter of 2003 improved to 64.7 percent, compared to
78.6 percent for the third quarter of 2002.
During the third quarter of 2003, Pinnacle opened its new office in the
Cool Springs area of Williamson County. This brings the company's total number
of locations to five in the metropolitan Nashville market.
Additionally, Pinnacle accelerated certain expenses to capitalize on
continued market opportunities, including:
- During the third quarter of 2003, Pinnacle successfully
recruited two of Nashville's most experienced wealth
management professionals, both of whom are focused on serving
the affluent market segment of Nashville and Middle Tennessee.
During 2003, Pinnacle has added 28 associates and anticipates
continued hiring of market proven professionals for the
foreseeable future. Twenty-three of these associates have been
assigned to customer contact areas and five have been assigned
to operational areas.
Pinnacle Reports Continued Growth - 3 of 3
- Pinnacle also initiated negotiations for two new offices - one
in Nashville and the other in Williamson County. These offices
will represent the firm's sixth and seventh locations and both
are expected to open in 2004.
Based on these anticipated growth trends and the anticipated results
from these trends, Pinnacle estimates its fourth quarter 2003 diluted earnings
per share will approximate $0.20 to $0.22. Additionally, diluted earnings per
share for the year ending December 31, 2003, are currently estimated to be $0.64
to $0.66, an increase over prior guidance of $0.59 to $0.65 per diluted share.
Diluted earnings per share for the year ending December 31, 2004 are estimated
to be $1.15 to $1.25. 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 five offices in the downtown, Green Hills and Rivergate areas
of Nashville and in Brentwood and the Cool Springs area of Williamson County,
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
SEPTEMBER 30, DECEMBER 31,
2003 2002
------------- -------------
ASSETS
Cash and noninterest-bearing due from banks .................. $ 11,633,943 $ 8,061,300
Interest-bearing due from banks .............................. 453,637 4,195,647
Federal funds sold and securities purchased under
agreements to resell ...................................... 20,097,042 685,182
------------- -------------
Cash and cash equivalents ............................... 32,184,622 12,942,129
Securities available-for-sale, at fair value ................. 115,421,439 73,980,054
Mortgage loans held-for-sale ................................. 2,220,020 --
Loans ........................................................ 279,701,750 209,743,436
Less allowance for loan losses ............................... (3,491,767) (2,677,043)
------------- -------------
Loans, net .............................................. 276,209,983 207,066,393
Premises and equipment, net .................................. 6,284,822 3,611,504
Other assets ................................................. 8,372,521 7,678,894
------------- -------------
Total assets ........................................ $ 440,693,407 $ 305,278,974
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand .............................. $ 55,255,123 $ 31,599,897
Interest-bearing demand ................................. 25,567,490 13,234,956
Savings and money market accounts ....................... 121,430,122 75,995,881
Time .................................................... 144,938,528 113,185,655
------------- -------------
Total deposits ...................................... 347,191,263 234,016,389
Securities sold under agreements to repurchase ............... 19,290,587 15,050,208
Federal Home Loan Bank advances .............................. 39,500,000 21,500,000
Other liabilities ............................................ 1,466,833 2,308,730
------------- -------------
Total liabilities ................................... 407,448,683 272,875,327
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
September 30, 2003 and December 31, 2002 ............ 3,692,053 3,692,053
Additional paid-in capital .............................. 30,682,947 30,682,947
Accumulated deficit ..................................... (1,047,380) (2,743,794)
Accumulated other comprehensive income (loss), net ...... (82,896) 772,441
------------- -------------
Total stockholders' equity .......................... 33,244,724 32,403,647
------------- -------------
Total liabilities and stockholders' equity .......... $ 440,693,407 $ 305,278,974
============= =============
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2003 2002 2003 2002
---------- ---------- ---------- ----------
INTEREST INCOME:
Loans, including fees .................................. $3,674,712 $2,833,005 $ 9,995,068 $7,565,360
Securities, available-for-sale
Taxable ............................................ 918,112 535,022 2,756,584 1,159,472
Tax-exempt ......................................... 57,875 11,567 138,262 11,567
Federal funds sold and other ........................... 51,895 46,480 127,996 138,108
---------- ---------- ----------- ----------
Total interest income .............................. 4,702,594 3,426,074 13,017,910 8,874,507
---------- ---------- ----------- ----------
INTEREST EXPENSE:
Deposits ............................................... 1,069,381 996,584 3,261,641 2,729,158
Securities sold under agreements to repurchase ......... 15,267 23,443 42,233 65,173
Federal funds purchased and other borrowings ........... 232,615 125,982 707,803 299,810
---------- ---------- ----------- ----------
Total interest expense ............................. 1,317,263 1,146,009 4,011,677 3,094,141
---------- ---------- ----------- ----------
Net interest income ................................ 3,385,331 2,280,065 9,006,233 5,780,366
PROVISION FOR LOAN LOSSES ................................... 318,068 247,000 953,360 688,000
---------- ---------- ----------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES ......... 3,067,263 2,033,065 8,052,873 5,092,366
NONINTEREST INCOME:
Service charges on deposit accounts .................... 137,097 80,166 359,211 200,631
Investment services .................................... 324,663 220,721 656,888 677,282
Fees from origination of mortgage loans ................ 244,912 -- 489,005 --
Gain on loan participations sold ....................... 75,238 13,038 201,466 57,997
Gain on sale of investment securities, net ............. 113,707 -- 247,978 --
Other noninterest income ............................... 128,860 182,604 409,158 323,033
---------- ---------- ----------- ----------
Total noninterest income ........................... 1,024,477 496,529 2,363,706 1,258,943
---------- ---------- ----------- ----------
NONINTEREST EXPENSE:
Compensation and employee benefits ..................... 1,882,344 1,427,251 5,010,942 3,764,462
Equipment and occupancy ................................ 480,216 370,495 1,323,002 1,049,435
Marketing and other business development ............... 84,570 70,723 263,834 162,118
Administrative ......................................... 177,812 134,393 491,465 323,275
Postage and supplies ................................... 93,676 59,404 273,167 184,913
Other noninterest expense .............................. 145,335 119,265 418,835 274,433
---------- ---------- ----------- ----------
Total noninterest expense .......................... 2,863,953 2,181,531 7,781,245 5,758,636
---------- ---------- ----------- ----------
INCOME BEFORE INCOME TAXES .................................. 1,227,787 348,063 2,635,334 592,673
Income tax expense ..................................... 441,218 136,585 938,920 229,436
---------- ---------- ----------- ----------
NET INCOME .................................................. $ 786,569 $ 211,478 $ 1,696,414 $ 363,237
========== ========== =========== ==========
PER SHARE INFORMATION:
Basic net income per common share ...................... $ 0.21 $ 0.06 0.46 0.13
========== ========== =========== ==========
Diluted net income per common share .................... $ 0.20 $ 0.06 $ 0.44 $ 0.13
========== ========== =========== ==========
Weighted average shares outstanding:
Basic .............................................. 3,692,053 3,692,053 3,692,053 2,841,943
Diluted ............................................ 3,972,327 3,745,272 3,898,200 2,873,334
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
(DOLLARS IN THOUSANDS, SEPT JUNE MAR DEC SEPT JUNE
EXCEPT PER SHARE DATA) 2003 2003 2003 2002 2002 2002
----------- ---------- ---------- ---------- ---------- ----------
BALANCE SHEET DATA, AT QUARTER END:
Total assets ....................... $ 440,693 403,229 348,366 305,279 278,750 229,795
Total loans ........................ 279,702 255,448 228,842 209,743 191,299 170,427
Allowance for loan losses .......... (3,492) (3,189) (2,860) (2,677) (2,427) (2,182)
Securities available-for-sale ...... 115,421 99,968 94,600 73,980 57,062 37,950
Total deposits ..................... 347,191 309,089 266,732 234,016 212,914 168,752
Securities sold under
agreements to repurchase ....... 19,291 17,803 15,846 15,050 16,720 16,855
Advances from FHLB ................. 39,500 41,500 32,500 21,500 15,500 11,500
Total stockholders' equity ......... 33,245 33,627 32,403 32,404 32,089 31,402
BALANCE SHEET DATA, QUARTERLY AVERAGES:
Total assets ....................... $ 406,142 365,385 326,108 285,929 243,284 204,592
Total loans ........................ 269,703 245,383 217,690 201,290 181,005 158,076
Securities available-for-sale ...... 107,162 95,351 87,124 63,150 42,007 24,904
Total deposits ..................... 268,220 277,592 243,545 215,617 181,844 163,146
Securities sold under
agreements to repurchase ....... 16,136 11,728 14,106 16,685 13,091 10,496
Advances from FHLB ................. 40,239 38,137 29,994 18,054 14,196 11,500
Total stockholders' equity ......... 32,542 32,944 32,675 32,167 31,808 18,694
STATEMENT OF OPERATIONS DATA, FOR THE THREE MONTHS ENDED:
Interest income .................... $ 4,702 4,369 3,946 3,691 3,425 2,872
Interest expense ................... 1,317 1,385 1,310 1,268 1,146 1,057
----------- ---------- ---------- ---------- ---------- ----------
Net interest income ............ 3,385 2,984 2,636 2,423 2,279 1,815
Provision for loan losses .......... 318 347 288 250 247 232
----------- ---------- ---------- ---------- ---------- ----------
Net interest income after
provision for loan losses ...... 3,067 2,637 2,348 2,173 2,032 1,583
Noninterest income ................. 1,024 877 462 469 497 462
Noninterest expense ................ 2,864 2,675 2,242 2,230 2,182 1,872
----------- ---------- ---------- ---------- ---------- ----------
Net income before taxes ........ 1,228 839 568 412 347 173
Income tax expense ................. 441 302 195 127 136 66
----------- ---------- ---------- ---------- ---------- ----------
Net income ..................... $ 787 537 373 285 211 107
=========== ========== ========== ========== ========== ==========
PER SHARE DATA:
Earnings - basic ................... $ 0.21 0.15 0.10 0.08 0.06 0.04
Earnings - diluted ................. $ 0.20 0.14 0.10 0.08 0.06 0.04
Book value at quarter end(1) ....... $ 9.00 9.11 8.78 8.78 8.69 8.51
Weighted avg. shares - basic ....... 3,692,053 3,692,053 3,692,053 3,692,053 3,692,053 2,521,723
Weighted avg. shares - diluted ..... 3,972,327 3,880,642 3,841,631 3,795,967 3,745,272 2,555,844
Common shares outstanding .......... 3,692,053 3,692,053 3,692,053 3,692,053 3,692,053 3,692,053
CAPITAL RATIOS (2):
Equity to total assets ............. 7.5% 10.9% 12.1% 13.8% 15.1% 18.6%
Leverage ........................... 8.2% 8.9% 10.1% 11.1% 13.1% 14.7%
Tier 1 risk-based .................. 9.6% 10.6% 12.1% 12.7% 13.0% 15.4%
Total risk-based ................... 10.6% 11.7% 13.2% 13.8% 14.0% 16.6%
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(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 - End of period 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, SEPT JUNE MAR DEC SEPT JUNE
EXCEPT PER SHARE DATA) 2003 2003 2003 2002 2002 2002
---------- ------- ------- ------- ------- ------
PERFORMANCE RATIOS AND OTHER DATA:
Return on average assets ............... 0.77% 0.59% 0.46% 0.40% 0.34% 0.21%
Return on average stockholders'
equity ............................. 9.59% 6.54% 4.63% 3.52% 2.64% 1.83%
Net interest margin (3) ................ 3.51% 3.48% 3.46% 3.59% 3.97% 3.74%
Noninterest income to total
revenue (4) ........................ 23.2% 22.7% 14.9% 16.2% 17.9% 20.3%
Noninterest income to avg. assets ...... 1.00% 0.96% 0.57% 0.65% 0.81% 0.90%
Noninterest exp. to avg. assets ........ 2.80% 2.94% 2.79% 3.09% 3.56% 3.64%
Efficiency ratio (5) ................... 65.0% 69.3% 72.4% 77.1% 78.6% 82.2%
Avg. loans to average deposits ......... 85.7% 88.4% 89.4% 93.4% 97.7% 97.1%
Securities available-for-sale to
total assets ....................... 26.2% 24.8% 27.2% 24.2% 20.5% 16.5%
Average interest-earning assets
to average interest-bearing
liabilities ........................ 118.8% 118.9% 119.4% 120.6% 119.0% 115.0%
Brokered time deposits to total
deposits ........................... 11.2% 15.6% 16.8% 18.0% 19.8% 23.7%
ASSET QUALITY INFORMATION AND RATIOS:
Nonaccrual loans ....................... $ 1,095 1,095 1,095 1,845 70 90
Past due loans over 90 days and
still accruing interest ............ $ 88 60 44 22 41 15
Net loan charge-offs ................... $ 15 18 105 -- 2 91
Allowance for loan losses to
total loans ........................ 1.25% 1.25% 1.25% 1.28% 1.27% 1.28%
Nonperforming assets to total
loans and ORE ...................... 0.39% 0.43% 0.48% 0.88% 0.04% 0.05%
Net loan charge-offs to average
loans (annualized) ................. 0.02% 0.03% 0.19% -- 0.00% 0.23%
Allowance for loan losses to
nonperforming loans ................ 319% 291% 261% 145% 3,467% 2,424%
Avg. commercial loan internal risk
ratings (6) ........................ 3.9 3.9 3.9 3.9 4.0 4.0
Avg. loan account balances(7) .......... $ 150 155 158 163 155 151
INTEREST RATES AND YIELDS:
Loans .................................. 5.41% 5.49% 5.52% 5.81% 6.21% 6.18%
Securities, available-for-sale ......... 3.65% 4.14% 4.44% 4.41% 5.16% 5.58%
Federal funds sold and other ........... 2.28% 2.60% 2.22% 2.58% 2.92% 2.15%
Total deposits, including non-
interest bearing ................... 1.35% 1.62% 1.79% 1.99% 2.17% 2.34%
Securities sold under agreements
to repurchase ...................... 0.38% 0.42% 0.43% 0.61% 0.71% 0.76%
Federal funds purchased and
other borrowings ................... 2.23% 2.44% 2.63% 3.16% 3.26% 3.45%
Total deposits and other interest-
bearing liabilities ................ 1.40% 1.68% 1.82% 1.99% 2.16% 2.32%
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(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, SEPT JUNE MAR DEC SEPT JUNE
EXCEPT PER SHARE DATA) 2003 2003 2003 2002 2002 2002
--------- ------- ------- ------- ------- -------
INVESTOR INFORMATION:
Closing price at end of quarter ........ $ 19.75 15.95 13.46 12.91 11.19 11.74
High bid during quarter ................ $ 19.94 17.00 14.14 13.30 13.00 11.90
Low bid during quarter ................. $ 16.00 13.05 12.76 11.01 10.90 9.70
OTHER INFORMATION:
Brokerage account assets, at
quarter-end (8) .................... $ 247,000 202,000 177,000 171,000 166,000 165,000
Balance of commercial loan
participations sold to other
banks and serviced by
Pinnacle, at quarter end ........... $ 45,981 44,355 41,594 43,089 28,942 29,294
Total assets per full-time
equivalent employee ................ $ 5,474 5,486 5,318 5,501 5,210 4,462
Quarterly revenues per full-time
equivalent employee ................ $ 54.8 52.5 47.3 52.1 51.9 44.2
Number of employees (full-time
equivalent) ....................... 83.5 73.5 65.5 55.5 53.5 51.5
Associate retention rate (9) ........... 95.7% 94.6% 92.4% 94.5% 94.4% 96.2%
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(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.