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 CONTINUES RAPID GROWTH
ASSETS CLIMB TO $498 MILLION AND EARNINGS PER SHARE
INCREASE 210 PERCENT IN 2003
NASHVILLE, Tenn., January 20, 2004 - Pinnacle Financial Partners, Inc.
(Nasdaq: PNFP), the holding company for Pinnacle National Bank, today reported
that net income for the year ended December 31, 2003, was $2,555,000, or $0.65
per diluted share, an increase of 210 percent when compared to Pinnacle's net
income of $648,000, or $0.21 per diluted share for the year ended December 31,
2002.
Total assets grew to $498 million as of December 31, 2003, up 63 percent
from the $305 million reported at December 31, 2002. Loans as of December 31,
2003 were $297 million compared to $210 million a year earlier. Total deposits
increased to $391 million at December 31, 2003, compared to $234 million on
December 31, 2002.
Net loan growth for the year ended December 31, 2003, was $87 million,
compared to $76 million during 2002. Total deposit growth for the year ended
December 31, 2003, was $157 million, compared to $101 million during 2002.
"Our firm has experienced extraordinary growth in its first three years as
evidenced by the fact that we are now the largest of the 181 commercial banks
chartered in the United States during 2000. We are particularly pleased that the
volume of growth during 2003 continued to escalate over the growth we had in our
previous two years," said M. Terry Turner, President and CEO of Pinnacle
Financial Partners. "During 2003, we recruited 37 associates to our firm, a 66%
increase when compared to the number of associates at the end of last year.
Also, during the fourth quarter of 2003, we continued to be successful in
attracting several associates to the firm, all of whom have significant
experience and have been actively involved in the Middle Tennessee banking and
wealth management arena for many years. During 2003, we opened two new full
service banking offices in the Rivergate and Cool Springs areas, and plan to
open an office in the West End area of Nashville and another office in nearby
Franklin, Tennessee in 2004. During the fourth quarter of 2003, we were
successful in issuing $10 million in trust preferred securities. This should
provide, under
Pinnacle Reports Continued Growth - 2 of 3
current guidelines, the regulatory capital we need to support our anticipated
growth in 2004 and for the foreseeable future without diluting our current
shareholder base."
Net interest income for the year ended December 31, 2003, was $12.9
million, compared to $8.2 million for year ended December 31, 2002. The net
interest margin for 2003 was 3.5 percent, compared to a net interest margin of
3.8 percent for the year ended December 31, 2002. The net interest margin for
the fourth quarter of 2003 was 3.6 percent, compared to a net interest margin of
3.5 percent for the third quarter of 2003 and 3.6 percent for the fourth quarter
of 2002.
The provision for loan losses was $1.2 million for the year ended December
31, 2003, compared to $938,000 during 2002. The provision for loan losses was
$204,000 for the fourth quarter of 2003, compared to $318,000 for the third
quarter of 2003 and $250,000 for the fourth quarter of 2002. The allowance for
loan losses represented 1.25 percent of total loans at December 31, 2003.
Noninterest income for the year ended December 31, 2003, was $3.3 million,
compared to $1.7 million during 2002. This increase was due to the continued
development of Pinnacle's 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 fourth quarter of 2003 was $924,000, compared to $1,024,000 for the
third quarter of 2003 and $469,000 for the fourth quarter of 2002. For the year
ended December 31, 2003, noninterest income represented approximately 20.3
percent of total revenues (the sum of net interest income and noninterest
income), compared to 17.4 percent for the same period in 2002.
Noninterest expense for the year ended December 31, 2003, was $11.0
million, compared to $8.0 million for the same period in 2002. Noninterest
expense for the fourth quarter of 2003 was $3.3 million, compared to $2.8
million for the third quarter of 2003 and $2.2 million for the fourth quarter of
2002. The efficiency ratio (noninterest expense divided by total revenues) for
the year ended December 31, 2003, improved to 68.3 percent, compared to 80.4
percent for the year ended December 31, 2002.
Additionally, Pinnacle continues to increment expense levels to capitalize
on continued market opportunities, including:
o During the fourth quarter of 2003, Pinnacle successfully
recruited four of Nashville's most experienced private banking
and wealth management professionals, all of whom are focused
on serving the affluent market segment of Nashville and Middle
Tennessee. During 2003, Pinnacle has added 37 associates
Pinnacle Reports Continued Growth - 3 of 3
and anticipates continued hiring of market proven
professionals for the foreseeable future. Twenty-nine of these
associates have been assigned to customer contact areas and
eight have been assigned to operational areas.
o Further office expansion in 2003, with plans to open two new
offices in 2004 - one in the West End area of Nashville and
the other in Franklin, Tennessee. These offices will represent
the firm's sixth and seventh locations.
Based on these anticipated growth trends and the anticipated results
from these trends, Pinnacle estimates its first quarter 2004 diluted earnings
per share will approximate $0.23 to $0.25. 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, the largest financial services firm
headquartered in Nashville, provides a full range of banking, investment and
insurance products and services targeted at small- to mid-sized businesses and
their owners/operators. A number of Pinnacle's senior financial advisors provide
comprehensive wealth management services to help clients protect and distribute
their assets.
Pinnacle opened its first office in October 2000 in Commerce Center in
Downtown Nashville. Since then the firm has added Nashville offices in Rivergate
and Green Hills and in Brentwood and the Cool Springs area of Williamson County.
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
========================================================================================================
DECEMBER 31, DECEMBER 31,
2003 2002
- --------------------------------------------------------------------------------------------------------
ASSETS
Cash and noninterest-bearing due from banks ..................... $ 13,768,278 $ 8,061,300
Interest-bearing due from banks ................................. 1,180,371 4,195,647
Federal funds sold .............................................. 32,235,401 685,182
------------- -------------
Cash and cash equivalents .................................. 47,184,050 12,942,129
Securities available-for-sale, at fair value .................... 139,944,238 73,980,054
Mortgage loans held-for-sale .................................... 1,582,600 --
Loans ........................................................... 297,004,110 209,743,436
Less allowance for loan losses .................................. (3,718,598) (2,677,043)
------------- -------------
Loans, net ................................................. 293,285,512 207,066,393
Premises and equipment, net ..................................... 6,911,359 3,611,504
Other assets .................................................... 9,512,899 7,678,894
------------- -------------
Total assets ........................................... $ 498,420,658 $ 305,278,974
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand ................................. $ 60,796,396 $ 31,599,897
Interest-bearing demand .................................... 31,407,213 13,234,956
Savings and money market accounts .......................... 140,383,878 75,995,881
Time ....................................................... 157,981,525 113,185,655
------------- -------------
Total deposits ......................................... 390,569,012 234,016,389
Securities sold under agreements to repurchase .................. 15,050,110 15,050,208
Federal Home Loan Bank advances ................................. 44,500,000 21,500,000
Subordinated debt ............................................... 10,310,000 --
Other liabilities ............................................... 3,655,155 2,308,730
------------- -------------
Total liabilities ...................................... 464,084,277 272,875,327
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 December 31, 2003
and 2002 ............................................... 3,692,053 3,692,053
Additional paid-in capital ................................. 30,682,947 30,682,947
Accumulated deficit ........................................ (189,155) (2,743,794)
Accumulated other comprehensive income, net ................ 150,536 772,441
------------- -------------
Total stockholders' equity ............................. 34,336,381 32,403,647
------------- -------------
Total liabilities and stockholders' equity ............. $ 498,420,658 $ 305,278,974
============= =============
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
=========================================================================================================================
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2003 2002 2003 2002
- -------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME:
Loans, including fees ................................... $ 3,714,091 $2,944,295 $13,709,159 $10,509,655
Securities, available-for-sale:
Taxable............................................. 1,401,480 678,102 4,158,064 1,837,574
Tax-exempt.......................................... 79,022 23,518 217,284 35,085
Federal funds sold and other ............................ 49,408 40,510 177,404 178,618
----------- ---------- ----------- -----------
Total interest income .............................. 5,244,001 3,686,425 18,261,911 12,560,932
----------- ---------- ----------- -----------
INTEREST EXPENSE:
Deposits ................................................ 1,087,724 1,083,861 4,349,365 3,813,019
Securities sold under agreements to repurchase........... 23,483 25,861 65,716 91,034
Federal funds purchased and other borrowings............. 240,220 157,766 948,023 457,576
----------- ---------- ----------- -----------
Total interest expense .............................. 1,351,427 1,267,488 5,363,104 4,361,629
----------- ---------- ----------- -----------
Net interest income ................................. 3,892,574 2,418,937 12,898,807 8,199,303
PROVISION FOR LOAN LOSSES .................................... 203,920 250,000 1,157,280 938,000
----------- ---------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES .......... 3,688,654 2,168,937 11,741,527 7,261,303
NONINTEREST INCOME:
Service charges on deposit accounts...................... 153,863 80,378 513,074 281,009
Investment services...................................... 341,231 132,555 998,119 809,837
Fees from origination of mortgage loans.................. 177,848 - 666,853 -
Gain on loan participations sold......................... 132,783 62,300 334,249 120,297
Gain on sale of investment securities, net............... - - 247,978 -
Other noninterest income ................................ 118,049 197,767 527,207 520,800
----------- ---------- ----------- -----------
Total noninterest income ............................ 923,774 473,000 3,287,480 1,731,943
----------- ---------- ----------- -----------
NONINTEREST EXPENSE:
Compensation and employee benefits ...................... 2,250,040 1,472,330 7,260,982 5,236,792
Equipment and occupancy ................................. 504,258 392,853 1,827,260 1,442,288
Marketing and other business development................. 123,071 82,382 386,905 244,500
Administrative .......................................... 164,264 113,709 655,729 436,984
Postage and supplies .................................... 74,517 70,711 347,684 255,624
Other noninterest expense................................ 151,227 98,441 570,062 372,874
----------- ---------- ----------- -----------
Total noninterest expense ........................... 3,267,377 2,230,426 11,048,622 7,989,062
----------- ---------- ----------- -----------
INCOME BEFORE INCOME TAXES ................................... 1,345,051 411,511 3,980,385 1,004,184
Income tax expense....................................... 486,826 126,688 1,425,746 356,124
----------- ---------- ----------- -----------
NET INCOME ................................................... $ 858,225 $ 284,823 $ 2,554,639 $ 648,060
=========== ========== =========== ===========
PER SHARE INFORMATION:
Basic net income per common share........................ $ 0.23 $ 0.08 $ 0.69 $ 0.21
=========== ========== =========== ===========
Diluted net income per common share...................... $ 0.21 $ 0.08 $ 0.65 $ 0.21
=========== ========== =========== ===========
Weighted average shares outstanding:
Basic .............................................. 3,692,053 3,692,053 3,692,053 3,054,471
Diluted ............................................ 4,057,444 3,795,967 3,938,003 3,118,422
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
=======================================================================================================================
(DOLLARS IN THOUSANDS, DEC SEPT JUNE MAR DEC SEPT
EXCEPT PER SHARE DATA) 2003 2003 2003 2003 2002 2002
- -----------------------------------------------------------------------------------------------------------------------
BALANCE SHEET DATA, AT QUARTER END:
Total assets...................... $498,421 440,693 403,229 348,366 305,279 278,750
Total loans....................... 297,004 279,702 255,448 228,842 209,743 191,299
Allowance for loan losses......... (3,719) (3,492) (3,189) (2,860) (2,677) (2,427)
Securities available-for-sale..... 139,944 115,421 99,968 94,600 73,980 57,062
Total deposits.................... 390,569 347,191 309,089 266,732 234,016 212,914
Securities sold under
agreements to repurchase..... 15,050 19,291 17,803 15,846 15,050 16,720
Advances from FHLB................ 44,500 39,500 41,500 32,500 21,500 15,500
Total stockholders' equity........ 34,336 33,245 33,627 32,403 32,404 32,089
BALANCE SHEET DATA, QUARTERLY AVERAGES:
Total assets...................... $454,700 406,142 365,385 326,108 285,929 243,284
Total loans....................... 283,387 269,703 245,383 217,690 201,290 181,005
Securities available-for-sale..... 137,243 107,162 95,351 87,124 63,150 42,007
Total deposits.................... 356,030 314,302 277,592 243,545 215,617 181,844
Securities sold under
agreements to repurchase..... 16,013 16,136 11,728 14,106 16,685 13,091
Advances from FHLB................ 43,630 40,239 38,137 29,994 18,054 14,196
Total stockholders' equity........ 33,935 32,542 32,944 32,675 32,167 31,808
STATEMENT OF OPERATIONS DATA, FOR THE THREE MONTHS ENDED:
Interest income................... $ 5,244 4,702 4,369 3,946 3,691 3,425
Interest expense.................. 1,351 1,317 1,385 1,310 1,268 1,146
-------- ------- ------- ------- ------ -------
Net interest income............. 3,893 3,385 2,984 2,636 2,423 2,279
Provision for loan losses......... 204 318 347 288 250 247
-------- ------- ------- ------- ------ -------
Net interest income after
provision for loan losses....... 3,689 3,067 2,637 2,348 2,173 2,032
Noninterest income................ 924 1,024 877 462 469 497
Noninterest expense............... 3,268 2,864 2,675 2,242 2,230 2,182
-------- ------- ------- ------- ------ -------
Net income before taxes........ 1,345 1,228 839 568 412 347
Income tax expense................ 487 441 302 195 127 136
-------- ------- ------- ------- ------ -------
Net income..................... $ 858 787 537 373 285 211
======== ======= ======= ======= ====== -------
PER SHARE DATA:
Earnings - basic.................. $ 0.23 0.21 0.15 0.10 0.08 0.06
Earnings - diluted................ $ 0.21 0.20 0.14 0.10 0.08 0.06
Book value at quarter end (1)..... $ 9.19 9.00 9.11 8.78 8.78 8.69
Weighted avg. shares - basic...... 3,692,053 3,692,053 3,692,053 3,692,053 3,692,053 3,692,053
Weighted avg. shares - diluted.... 4,057,444 3,972,327 3,880,642 3,841,631 3,795,967 3,745,272
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............ 6.8% 7.5% 10.9% 12.1% 13.8% 15.1%
Leverage.......................... 9.6% 8.2% 8.9% 10.1% 11.1% 13.1%
Tier 1 risk-based................. 11.8% 9.6% 10.6% 12.1% 12.7% 13.0%
Total risk-based.................. 12.8% 10.6% 11.7% 13.2% 13.8% 14.0%
- ----------------------------
(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, DEC SEPT JUNE MAR DEC SEPT
EXCEPT PER SHARE DATA) 2003 2003 2003 2003 2002 2002
- -----------------------------------------------------------------------------------------------------------------------
PERFORMANCE RATIOS AND OTHER DATA:
Return on average assets.......... 0.75% 0.77% 0.59% 0.46% 0.40% 0.34%
Return on average stockholders'
equity....................... 10.02% 9.59% 6.54% 4.63% 3.52% 2.64%
Net interest margin (3)........... 3.62% 3.51% 3.48% 3.46% 3.59% 3.97%
Noninterest income to total
revenue (4).................. 19.2% 23.2% 22.7% 14.9% 16.2% 17.9%
Noninterest income to avg. assets. 0.81% 1.00% 0.96% 0.57% 0.65% 0.81%
Noninterest exp. to avg. assets... 2.85% 2.80% 2.94% 2.79% 3.09% 3.56%
Efficiency ratio (5).............. 67.9% 65.0% 69.3% 72.4% 77.1% 78.6%
Avg. loans to average deposits.... 80.2% 85.7% 88.4% 89.4% 93.4% 97.7%
Securities available-for-sale
to total assets.............. 28.1% 26.2% 24.8% 27.2% 24.2% 20.5%
Average interest-earning
assets to average
interest-bearing
liabilities.................. 118.7% 118.8% 118.9% 119.4% 120.6% 119.0%
Brokered time deposits to
total deposits............... 9.9% 11.2% 15.6% 16.8% 18.0% 19.8%
ASSET QUALITY INFORMATION AND RATIOS:
Nonaccrual loans.................. $ 379 1,095 1,095 1,095 1,845 70
Past due loans over 90 days
and still accruing interest.. $ 182 88 60 44 22 41
Net loan charge-offs
(recoveries)................. $ (23) 15 18 105 -- 2
Allowance for loan losses to
total loans.................. 1.25% 1.25% 1.25% 1.25% 1.28% 1.27%
Nonperforming assets to
total loans and ORE.......... 0.13% 0.39% 0.43% 0.48% 0.88% 0.04%
Net loan charge-offs
(recoveries) to average
loans (annualized)........... (0.02)% 0.02% 0.03% 0.19% -- 0.00%
Allowance for loan losses to
nonperforming loans.......... 9,813% 319% 291% 261% 145% 3,467%
Avg. commercial loan internal
risk ratings (6)............. 4.0 3.9 3.9 3.9 3.9 4.0
Avg. loan account balances (7).... $ 153 150 155 158 163 155
INTEREST RATES AND YIELDS:
Loans............................. 5.17% 5.41% 5.49% 5.52% 5.81% 6.21%
Securities, available-for-sale.... 4.31% 3.65% 4.14% 4.44% 4.41% 5.16%
Federal funds sold and other...... 2.26% 2.28% 2.60% 2.22% 2.58% 2.92%
Total deposits, including
non-interest bearing......... 1.28% 1.35% 1.62% 1.79% 1.99% 2.17%
Securities sold under
agreements to repurchase..... 0.58% 0.38% 0.42% 0.43% 0.61% 0.71%
Federal funds purchased and
other borrowings............. 2.05% 2.23% 2.44% 2.63% 3.16% 3.26%
Total deposits and other
interest-bearing
liabilities.................. 1.28% 1.40% 1.68% 1.82% 1.99% 2.16%
- --------------
(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, DEC SEPT JUNE MAR DEC SEPT
EXCEPT PER SHARE DATA) 2003 2003 2003 2003 2002 2002
- -----------------------------------------------------------------------------------------------------------------------
INVESTOR INFORMATION:
Closing price at end of quarter... $ 23.50 19.75 15.95 13.46 12.91 11.19
High bid during quarter........... $ 25.75 19.94 17.00 14.14 13.30 13.00
Low bid during quarter............ $ 19.35 16.00 13.05 12.76 11.01 10.90
OTHER INFORMATION:
Brokerage account assets, at
quarter-end (8).............. $319,000 247,000 202,000 177,000 171,000 166,000
Balance of commercial loan
participations sold to
other banks and serviced
by Pinnacle, at quarter
end.......................... $ 51,653 45,981 44,355 41,594 43,089 28,942
Total assets per full-time
equivalent employee.......... $ 5,569 5,474 5,486 5,318 5,501 5,210
Quarterly revenues per
full-time equivalent
employee..................... $ 53.9 54.8 52.5 47.3 52.1 51.9
Number of employees
(full-time equivalent)....... 89.5 83.5 73.5 65.5 55.5 53.5
Associate retention rate (9)...... 96.1% 95.7% 94.6% 92.4% 94.5% 94.4%
- ---------------------
(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.