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 REACHES $541 MILLION IN ASSETS
STRONG LOAN AND DEPOSIT GROWTH FUEL 187 PERCENT INCREASE IN EARNINGS PER SHARE
NASHVILLE, Tenn., April 19, 2004 - Pinnacle Financial Partners Inc.
(Nasdaq: PNFP), the holding company for Pinnacle National Bank, today reported
that net income for the quarter ended March 31, 2004, was $1,071,000, or $0.26
per diluted share, an increase of 187 percent when compared to Pinnacle's net
income of $373,000, or $0.10 per diluted share for the quarter ended March 31,
2003.
Return on average assets for the quarter ended March 31, 2004 was 0.85
percent compared to 0.46 percent for the same quarter last year. Return on
average stockholders' equity for the quarter ended March 31, 2004 was 12.03
percent compared to 4.63 percent for the same quarter last year. The firm's
efficiency ratio (noninterest expense divided by net interest income and
noninterest income) improved to 63.5 percent during the first quarter of 2004
compared to 72.4 percent during the first quarter of 2003.
Total assets grew to $541 million as of March 31, 2004 up 34 percent on an
annualized basis from the $498 million reported at December 31, 2003 and up 55
percent from the $348 million reported at March 31, 2003. Loans as of March 31,
2004 were $323 million compared to $297 million at December 31, 2003 and $228
million at March 31, 2003. Total deposits increased to $438 million at March
31, 2004, compared to $391 million at December 31, 2003 and $267 million at
March 31, 2003.
Net loan growth for the quarter ended March 31, 2004 was $26 million,
compared to $17 million during the fourth quarter of 2003 and $19 million
during the first quarter of 2003. Total deposit growth for the quarter ended
March 31, 2004, was $47 million, compared to $43 million during the fourth
quarter of 2003 and $33 million during the first quarter of 2003.
"Our first quarter results have given us a strong start to the year," said
M. Terry Turner, President and CEO of Pinnacle Financial Partners. "We were
particularly pleased with the acceleration in our loan and deposit growth
during the quarter. Not only did the first quarter reflect the largest deposit
growth in the history of our firm, but our sales pipelines remain
Pinnacle Reports Continued Growth - 2 of 3
strong, and we are optimistic our growth will be at a similar pace in the
second quarter," Turner said.
Net interest income for the quarter ended March 31, 2004, was $4.2
million, compared to $2.6 million for quarter ended March 31, 2003. The net
interest margin for the first quarter of 2004 was 3.5 percent which was the
same as the first quarter in 2003.
The provision for loan losses was $354,000 for the first quarter of 2004,
compared to $288,000 for the same quarter in 2003. The allowance for loan
losses represented 1.25 percent of total loans at March 31, 2004. Annualized
net charge off's to average loans amounted to 0.04% for the quarter ended March
31, 2004.
Noninterest income for the quarter ended March 31, 2004 was $1.2 million,
compared to $462,000 during the same quarter in 2003. This increase was due to
the continued development of Pinnacle's mortgage origination unit, gains
recognized on the sale of loan participations, increased depositor service
charges due to more deposit accounts and increased investment services income
from Pinnacle Asset Management. The company also recorded a gain on the sale of
investment securities of $248,000 during the first quarter of 2004 compared to
a gain on the sale of investment securities of $18,000 during the same quarter
in 2003. For the quarter ended March 31, 2004, noninterest income represented
approximately 22.8 percent of total revenues (the sum of net interest income
and noninterest income), compared to 14.9 percent for the same quarter in 2003.
Noninterest expense for the quarter ended March 31, 2004 was $3.4 million,
compared to $2.2 million for the same quarter in 2003. Pinnacle continues to
increase expense levels in order to capitalize on continued market
opportunities:
- Thus far in 2004, Pinnacle has added five associates and
projects hiring approximately 20 more market proven
professionals this year.
- Construction has already started on the firm's West End Avenue
office in Nashville. This office is located adjacent to
Vanderbilt University and is within close proximity to
Nashville's thriving medical community, including several of its
most prominent hospitals and medical office facilities. Another
new office - in Franklin, Tennessee, the county seat of
Williamson County - has a planned opening date of late 2004. The
Franklin office will be the firm's third office in Williamson
County, which has the highest per capita income and one of the
highest growth rates of all counties in Tennessee. The West End
and Franklin 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 second quarter 2004 diluted earnings per
share will approximate $0.27
Pinnacle Reports Continued Growth - 3 of 3
to $0.30. Diluted earnings per share for the year ending Dec. 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 increase,
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
MARCH 31, DECEMBER 31,
2004 2003
--------------- ---------------
ASSETS
Cash and noninterest-bearing due from banks ................ $ 17,476,720 $ 13,768,278
Interest-bearing due from banks ............................ 200,444 1,180,371
Federal funds sold ......................................... 21,328,406 32,235,401
--------------- ---------------
Cash and cash equivalents ............................. 39,005,570 47,184,050
Securities available-for-sale, at fair value ............... 134,382,875 139,944,238
Securities held-to-maturity (fair value of $27,655,669) .... 27,655,669 --
Mortgage loans held-for-sale ............................... 4,057,322 1,582,600
Loans ...................................................... 323,415,679 297,004,110
Less allowance for loan losses ............................. (4,042,456) (3,718,598)
--------------- ---------------
Loans, net ............................................ 319,373,223 293,285,512
Premises and equipment, net ................................ 6,946,340 6,911,359
Other assets ............................................... 9,630,504 9,512,899
--------------- ---------------
Total assets ...................................... $ 541,051,503 $ 498,420,658
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand ............................ $ 66,620,906 $ 60,796,396
Interest-bearing demand ............................... 40,039,818 31,407,213
Savings and money market accounts ..................... 165,388,834 140,383,878
Time .................................................. 165,551,209 157,981,525
--------------- ---------------
Total deposits .................................... 437,600,767 390,569,012
Securities sold under agreements to repurchase ............. 14,699,182 15,050,110
Federal Home Loan Bank advances ............................ 40,500,000 44,500,000
Subordinated debt .......................................... 10,310,000 10,310,000
Other liabilities .......................................... 1,675,267 3,655,155
--------------- ---------------
Total liabilities ................................. 504,785,216 464,084,277
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
March 31, 2004 and December 31, 2003 .............. 3,692,053 3,692,053
Additional paid-in capital ............................ 30,682,947 30,682,947
Retained earnings (accumulated deficit) ............... 881,867 (189,155)
Accumulated other comprehensive income, net ........... 1,009,420 150,536
--------------- ---------------
Total stockholders' equity ........................ 36,266,287 34,336,381
--------------- ---------------
Total liabilities and stockholders' equity ........ $ 541,051,503 $ 498,420,658
=============== ===============
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
THREE MONTHS ENDED
MARCH 31,
2004 2003
--------------- ---------------
INTEREST INCOME:
Loans, including fees ................................. $ 3,946,572 2,963,513
Securities, available-for-sale:
Taxable .......................................... 1,550,859 908,046
Tax-exempt ....................................... 85,975 37,863
Federal funds sold and other .......................... 82,716 36,411
--------------- ---------------
Total interest income ............................ 5,666,122 3,945,833
--------------- ---------------
INTEREST EXPENSE:
Deposits .............................................. 1,171,188 1,072,672
Securities sold under agreements to repurchase ........ 9,293 14,796
Federal funds purchased and other borrowings .......... 333,349 222,130
--------------- ---------------
Total interest expense ........................... 1,513,830 1,309,598
--------------- ---------------
Net interest income .............................. 4,152,292 2,636,235
PROVISION FOR LOAN LOSSES ............................. 353,848 288,026
--------------- ---------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES ... 3,798,444 2,348,209
NONINTEREST INCOME:
Service charges on deposit accounts .............. 163,845 101,753
Investment services .............................. 389,579 155,932
Fees from the origination of mortgage loans ...... 191,920 46,188
Gains on loan participations sold, net ........... 121,617 2,189
Gains on sales of investment securities, net ..... 248,353 17,698
Other noninterest income ......................... 110,042 138,422
--------------- ---------------
Total noninterest income ..................... 1,225,356 462,182
--------------- ---------------
NONINTEREST EXPENSE:
Compensation and employee benefits ............... 2,267,342 1,434,912
Equipment and occupancy .......................... 505,690 396,825
Marketing and other business development ......... 149,158 75,490
Administrative ................................... 220,698 150,115
Postage and supplies ............................. 99,138 73,262
Other noninterest expense ........................ 170,760 111,660
--------------- ---------------
Total noninterest expense .................... 3,412,786 2,242,264
--------------- ---------------
INCOME BEFORE INCOME TAXES ............................ 1,611,014 568,127
Income tax expense ............................... 539,992 195,148
--------------- ---------------
NET INCOME ............................................ $ 1,071,022 372,979
=============== ===============
PER SHARE INFORMATION:
Basic net income per common share ................ $ 0.29 0.10
=============== ===============
Diluted net income per common share .............. $ 0.26 0.10
=============== ===============
Weighted average shares outstanding:
Basic ........................................ 3,692,053 3,692,053
Diluted ...................................... 4,106,865 3,841,631
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
(DOLLARS IN THOUSANDS, MAR DEC SEPT JUNE MAR DEC
EXCEPT PER SHARE DATA) 2004 2003 2003 2003 2003 2002
--------- --------- --------- --------- --------- ---------
BALANCE SHEET DATA, AT QUARTER END:
Total assets .............................. $ 541,052 498,421 440,693 403,229 348,366 305,279
Total loans ............................... 323,416 297,004 279,702 255,448 228,842 209,743
Allowance for loan losses ................. (4,042) (3,719) (3,492) (3,189) (2,860) (2,677)
Securities ................................ 162,315 139,944 115,421 99,968 94,600 73,980
Total deposits ............................ 437,601 390,569 347,191 309,089 266,732 234,016
Securities sold under agreements to
repurchase ........................... 14,699 15,050 19,291 17,803 15,846 15,050
Advances from FHLB ........................ 40,500 44,500 39,500 41,500 32,500 21,500
Subordinated debt ......................... 10,310 10,310 -- -- -- --
Total stockholders' equity ................ 36,266 34,336 33,245 33,627 32,403 32,404
BALANCE SHEET DATA, QUARTERLY AVERAGES:
Total assets .............................. $ 508,260 454,700 406,142 365,385 326,108 285,929
Total loans ............................... 306,549 283,387 269,703 245,383 217,690 201,290
Securities ................................ 149,802 137,243 107,162 95,351 87,124 63,150
Total deposits ............................ 402,603 356,030 314,302 277,592 243,545 215,617
Securities sold under agreements to
repurchase ........................... 14,868 16,013 16,136 11,728 14,106 16,685
Advances from FHLB ........................ 42,379 43,630 40,239 38,137 29,994 18,054
Subordinated debt ......................... 10,310 655 -- -- -- --
Total stockholders' equity ................ 35,705 33,935 32,542 32,944 32,675 32,167
STATEMENT OF OPERATIONS DATA,
FOR THE THREE MONTHS ENDED:
Interest income ........................... $ 5,666 5,244 4,702 4,369 3,946 3,691
Interest expense .......................... 1,514 1,351 1,317 1,385 1,310 1,268
--------- --------- --------- --------- --------- ---------
Net interest income ..................... 4,152 3,893 3,385 2,984 2,636 2,423
Provision for loan losses ................. 354 204 318 347 288 250
--------- --------- --------- --------- --------- ---------
Net interest income after
provision for loan losses ............... 3,798 3,689 3,067 2,637 2,348 2,173
Noninterest income ........................ 1,225 924 1,024 877 462 469
Noninterest expense ....................... 3,412 3,268 2,863 2,675 2,242 2,230
--------- --------- --------- --------- --------- ---------
Net income before taxes ................ 1,611 1,345 1,228 839 568 412
Income tax expense ........................ 540 487 441 302 195 127
--------- --------- --------- --------- --------- ---------
Net income ............................. $ 1,071 858 787 537 373 285
========= ========= ========= ========= ========= =========
PER SHARE DATA:
Earnings - basic .......................... $ 0.29 0.23 0.21 0.15 0.10 0.08
Earnings - diluted ........................ $ 0.26 0.21 0.20 0.14 0.10 0.08
Book value at quarter end (1) ............. $ 9.82 9.30 9.00 9.11 8.78 8.78
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 ............ 4,106,865 4,057,444 3,972,327 3,880,642 3,841,631 3,795,967
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 .................... 6.7% 6.8% 7.5% 10.9% 12.1% 13.8%
Leverage .................................. 9.0% 10.5% 8.2% 8.9% 10.1% 11.1%
Tier 1 risk-based ......................... 11.2% 11.8% 9.6% 10.6% 12.1% 12.7%
Total risk-based .......................... 12.1% 12.8% 10.6% 11.7% 13.2% 13.8%
- ----------------------------
(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, MAR DEC SEPT JUNE MAR DEC
EXCEPT PER SHARE DATA) 2004 2003 2003 2003 2003 2002
--------- --------- --------- --------- --------- ---------
PERFORMANCE RATIOS AND OTHER DATA:
Return on average assets .................. 0.85% 0.75% 0.77% 0.59% 0.46% 0.40%
Return on average stockholders'
equity ............................... 12.03% 10.02% 9.59% 6.54% 4.63% 3.52%
Net interest margin (3) ................... 3.49% 3.62% 3.51% 3.48% 3.46% 3.59%
Noninterest income to total revenue (4) ... 22.8% 19.2% 23.2% 22.7% 14.9% 16.2%
Noninterest income to avg. assets ......... 0.97% 0.81% 1.00% 0.96% 0.57% 0.65%
Noninterest exp. to avg. assets ........... 2.69% 2.85% 2.80% 2.94% 2.79% 3.09%
Efficiency ratio (5) ...................... 63.5% 67.9% 65.0% 69.3% 72.4% 77.1%
Avg. loans to average deposits ............ 76.6% 80.2% 85.7% 88.4% 89.4% 93.4%
Securities to total assets ................ 30.0% 28.1% 26.2% 24.8% 27.2% 24.2%
Average interest-earning assets
to average interest-bearing
liabilities .......................... 118.1% 118.7% 118.8% 118.9% 119.4% 120.6%
Brokered time deposits to total
deposits ............................. 8.2% 9.9% 11.2% 15.6% 16.8% 18.0%
ASSET QUALITY INFORMATION AND RATIOS:
Nonaccrual loans .......................... $ 86 379 1,095 1,095 1,095 1,845
Past due loans over 90 days and
still accruing interest .............. $ 64 182 88 60 44 22
Net loan charge-offs (recoveries) ......... $ 30 (23) 15 18 105 --
Allowance for loan losses to
total loans .......................... 1.25% 1.25% 1.25% 1.25% 1.25% 1.28%
Nonperforming assets to total
loans and ORE ........................ 0.03% 0.13% 0.39% 0.43% 0.48% 0.88%
Annualized net loan charge-offs
(recoveries) to average loans ........ 0.04% (0.02)% 0.02% 0.03% 0.19% --
Avg. commercial loan internal
risk ratings (6) ..................... 3.9 4.0 3.9 3.9 3.9 3.9
Avg. loan account balances (7) ............ $ 147 153 150 155 158 163
INTEREST RATES AND YIELDS:
Loans ..................................... 5.14% 5.17% 5.41% 5.49% 5.52% 5.81%
Securities ................................ 4.38% 4.31% 3.65% 4.14% 4.44% 4.41%
Federal funds sold and other .............. 1.47% 2.26% 2.28% 2.60% 2.22% 2.58%
Total deposits, including non-
interest bearing ..................... 1.17% 1.21% 1.35% 1.62% 1.79% 1.99%
Securities sold under agreements
to repurchase ........................ 0.25% 0.58% 0.38% 0.42% 0.43% 0.61%
Federal funds purchased and
FHLB Advances ........................ 2.19% 2.05% 2.23% 2.44% 2.63% 3.16%
Subordinated debt ......................... 3.98% 3.98% -- -- -- --
Total deposits and other interest-
bearing liabilities .................. 1.29% 1.28% 1.40% 1.68% 1.82% 1.99%
- ----------------------------
(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, MAR DEC SEPT JUNE MAR DEC
EXCEPT PER SHARE DATA) 2004 2003 2003 2003 2003 2002
--------- --------- --------- --------- --------- ---------
INVESTOR INFORMATION:
Closing price at end of quarter ........... $ 30.50 23.50 19.75 15.95 13.46 12.91
High bid during quarter ................... $ 31.00 25.75 19.94 17.00 14.14 13.30
Low bid during quarter .................... $ 23.30 19.35 16.00 13.05 12.76 11.01
OTHER INFORMATION:
Mortgage loan originations ................ $ 10,845 10,148 14,742 11,388 2,249 --
Fees from origination of
mortgage loans ....................... $ 192 178 245 198 46 --
Fees from origination of
mortgage loans to mortgage
loan originations .................... 1.77% 1.75% 1.66% 1.74% 2.05% --
Gains on sales of investment
securities, net ...................... $ 248 -- 114 117 17 --
Brokerage account assets, at
quarter-end (8) ...................... $ 351,000 319,000 247,000 202,000 177,000 171,000
Balance of loan participations
sold to other banks and
serviced by Pinnacle, at
quarter end .......................... $ 54,772 51,653 45,981 44,355 41,594 43,089
Total assets per full-time equivalent
employee ............................. $ 5,695 5,569 5,474 5,486 5,318 5,501
Annualized revenues per full-
time equivalent employee ............. $ 226.4 215.3 211.2 210.1 189.2 208.4
Number of employees (full-time
equivalent) .......................... 95.0 89.5 83.5 73.5 65.5 55.5
Associate retention rate (9) .............. 97.4% 96.1% 95.7% 94.6% 92.4% 94.5%
- ----------------------------
(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.