EXHIBIT 99.1
[PINNACLE LOGO]
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Vicki Kessler 615-320-7532
FINANCIAL CONTACT: Harold Carpenter 615-744-3742
WEBSITE: www.pnfp.com
PINNACLE FINANCIAL REPORTS NET INCOME UP 66 PERCENT OVER LAST YEAR
ASSETS GROW TO $787 MILLION AND DILUTED EARNINGS PER SHARE IS $0.19
NASHVILLE, Tenn., April 18, 2005 - - Pinnacle Financial Partners Inc.
(Nasdaq: PNFP) today reported record earnings for the first quarter of 2005.
FIRST QUARTER 2005 HIGHLIGHTS:
- Record net income of $1.78 million, up 66 percent from prior
year's $1.07 million
- Record diluted earnings per share of $0.19, up 46 percent from
prior year's $0.13
- Strong balance sheet growth:
- Average loans up 59 percent from the same period last year
- Average deposits up 48 percent from the same period last year
- Superior credit quality:
- Net charge-off's as a percentage of average loans of only 0.04
percent
- Past due loans over 30 days of only 0.27 percent of total
loans
- Nonperforming assets of only 0.12 percent of total loans and
other real estate
"This marks the ninth consecutive quarter where year over year quarterly
net income growth exceeded 60 percent," said M. Terry Turner, President and CEO
of Pinnacle Financial Partners.
FINANCIAL PERFORMANCE
- Return on average assets for the quarter ended March 31, 2005, was
0.96 percent compared to 0.85 percent for the same quarter last
year.
- Return on average stockholders' equity for the quarter ended March
31, 2005, was 12.48 percent compared to 12.03 percent for the same
quarter last year.
Pinnacle Reports Continued Growth - 2 of 7
- Efficiency ratio (noninterest expense divided by net interest
income and noninterest income) improved to 59.6 percent during the
first quarter of 2005 compared to 62.8 percent during the first
quarter of 2004.
Total assets grew to $787 million as of March 31, 2005, up $246 million or
45 percent from the $541 million reported at March 31, 2004. Loans as of March
31, 2005, were $517 million, or 60 percent higher than the $323 million reported
at March 31, 2004. Total deposits increased to $619 million at March 31, 2005,
or 41 percent higher than the $438 million reported at March 31, 2004.
"Loan and deposit growth continues to be the primary influencer of current
and future profitability," said Turner. "First quarter 2005 loan growth was
exceptionally strong at 68 percent greater than the loan growth we experienced
in the first quarter of 2004. Given the outstanding loan growth and the
increased loan loss provision that accompanies loan growth, we are very pleased
that our return on average assets advanced to 0.96 percent for the quarter.
Additionally, having just completed a significant follow-on stock offering in
the third quarter of last year, we are also pleased that the demand for our loan
and deposit services has enabled us to leverage the additional capital quickly.
We have already achieved a return on average equity which approximates
pre-follow-on stock offering levels."
REVENUE
- Revenue (the sum of net interest income and noninterest income)
for the quarter ended March 31, 2005 amounted to $7.7 million
compared to $5.3 million for the same quarter of last year, an
increase of 45 percent.
- Net interest income for the quarter ended March 31, 2005, was $6.5
million compared to $4.2 million for the quarter ended March 31,
2004.
- Net interest margin for the first quarter of 2005 was 3.78
percent, compared to a net interest margin of 3.49 percent
reported during the first quarter in 2004.
- Percentage of daily floating rate loans to total loans was
54.4 percent at March 31, 2005, compared to 52.4 percent at
March 31, 2004.
- Noninterest income for the quarter ended March 31, 2005, was
$1,178,000 compared to $1,131,000 during the same quarter in 2004.
"Our net interest margin was consistent with the fourth quarter of 2004
and higher than the net interest margin we reported in the first quarter of
2004," said Harold Carpenter, Chief
Pinnacle Reports Continued Growth - 3 of 7
Financial Officer of Pinnacle Financial Partners. "Last year at this time, we
reported we were asset sensitive and that our margins should improve once the
Federal Reserve Board initiated increases to the Fed funds rate. Since that time
the Fed funds rate has increased 1.75 percent and our margin has expanded by
almost 30 basis points over the first quarter of last year. This expansion is a
tribute to our associates who have been growing our client base in a very
competitive pricing market. Given the current environment in Nashville, we do
not believe we will experience any significant margin expansion for the
remainder of this year and could, in fact, see modest contraction in order to
meet competitive pricing pressures."
At March 31, 2005, the ratio of investment securities to total assets
declined to 25.7 percent compared to 30.0 percent at March 31, 2004. Pinnacle
anticipates that this ratio will approximate 26.0 to 29.0 percent for the
remainder of 2005.
The increase in noninterest income was due to the further development of
Pinnacle's mortgage origination unit, increased service charges due to more
deposit accounts and increased investment services income from Pinnacle Asset
Management. These increases were partially offset by decreased revenue from the
gains on sales of loans and loan participations and gains on sales of investment
securities. For the quarter ended March 31, 2005, noninterest income represented
approximately 15.3 percent of total revenues, compared to 21.4 percent for the
same quarter in 2004.
NONINTEREST EXPENSE
- Noninterest expense for the quarter ended March 31, 2005, was $4.6
million compared to $3.3 million for the same quarter in 2004.
Compensation and employee benefits expense increased approximately 37
percent over the same quarter last year due primarily to an increase in
personnel. At March 31, 2005, Pinnacle employed 131.5 full-time equivalent
personnel compared to 95.0 at March 31, 2004, an increase of approximately 38
percent. Equipment and occupancy expenses increased 55 percent over the same
period last year due in large part to increased square footage for operating
units at our headquarters location and additional branch offices.
"We continue to be successful in adding experienced and successful
bankers, brokers and mortgage originators, primarily from the larger regional
and national franchises in Nashville. Pinnacle has and will continue to increase
expense levels over time in order to capitalize on current and future market
opportunities and to provide the necessary infrastructure to support our
expectation for continued rapid growth," said Turner.
Pinnacle Reports Continued Growth - 4 of 7
CREDIT QUALITY
- Provision for loan losses was $601,000 for the first quarter of
2005 compared to $354,000 in the first quarter in 2004. The
provision for loan losses was significantly higher in the first
quarter of 2005 due to:
- Loan growth in the first quarter of 2005 of $44 million
compared to loan growth of $26 million in the first quarter of
2004 and
- Net charge-offs of $53,000 in the first quarter of 2005
compared to net charge-offs of $30,000 during the same period
in 2004. Net charge-offs to average loans were 0.04 percent
for both the first quarter of 2005 and the first quarter of
2004.
- Allowance for loan losses represented 1.20 percent of total loans
at March 31, 2005, compared to 1.25 percent at March 31, 2004.
- Nonperforming assets as a percentage of total loans and other
real estate increased to 0.12 percent at March 31, 2005, from
0.03 percent at March 31, 2004.
"We are extremely pleased with the credit quality of our firm," said
Turner. "Last year, we experienced a charge-off rate of 0.27 percent largely due
to the write-down of one particular relationship. In the first quarter of this
year, asset quality indicators returned to the superior levels we have
experienced through most of the life of this firm. Specifically, our
nonperforming assets, net charge-off and past due ratios are at exceptional
levels and better than national peer group averages. We continue to believe that
our asset quality is the best predictor of our ability to create long-term
shareholder value."
OTHER FIRST QUARTER 2005 DEVELOPMENTS
- Launched an enhancement project to the company's suite of treasury
management products and services designed for Nashville's commercial
clients. The enhancements will include a robust web-based platform
and highlight technologically advanced delivery of information via
image and other emerging technologies. Specifically, the project
includes enhancements such as "image lockbox" whereby customer
payment receipts are accessed by commercial clients via Pinnacle's
website. Although substantially all of the capital outlays and
feature/functionality enhancements will occur during 2005, the total
project represents a commitment to be phased in over a 24-36 month
period. "Our objective is simply to be the best provider of treasury
management services in
Pinnacle Reports Continued Growth - 5 of 7
Nashville," said Robert A. McCabe, Jr., Chairman of the Board of
Pinnacle Financial Partners. "Our current treasury management
services have been well received by business clients. With this new
initiative, we are continuing to invest in the latest technology and
additional people to ensure we have a significant competitive edge.
We are doing this at a time when the larger regional and national
franchises are consolidating treasury management operations outside
of Nashville. While others in the market may have comparable
technology, we do not believe they have the local treasury
management expertise to address clients' needs face-to-face the way
we can. We believe that with our local expertise and the
enhancements to our current treasury management offerings, no other
firm in Nashville will be able to match our capabilities."
- Pinnacle currently has 133 associates (131.5 full-time equivalent)
at March 31, 2005, with 96 working in client contact areas and 37 in
operational and corporate areas. This represents an increase of 10
employees from the 123 employees as of December 31, 2004. Pinnacle's
annual retention rate rose to 99.2 percent at March 31, 2005,
representing a very high level of engagement for Pinnacle's
associates. Approximately 26 associate additions are currently
planned for the remainder of 2005 with 14 to be in client contact
areas.
- Pinnacle opened its seventh office, located in Franklin, Tenn.,
which is the county seat of Williamson County. The Franklin office
is the firm's third office in Williamson County, which has the
highest per capita income and one of the highest growth rates of all
Tennessee counties.
- Pinnacle began construction of its eighth office in Hendersonville,
Tenn., a high-growth area of the Nashville MSA. It is located
northeast of Nashville's central business district. The firm
anticipates this office to be open in mid-2005. With a population of
over 50,000, Hendersonville is the largest city in Sumner County,
another one of the fastest growing counties in Tennessee.
Additionally, Pinnacle is considering a ninth location to be opened
in late 2005 in the Nashville MSA. Pinnacle expects to add another
two offices in the Nashville MSA in 2006, which would bring the
company's total number of offices to 11.
Pinnacle Reports Continued Growth - 6 of 7
INVESTMENT OUTLOOK
Management has developed several financial forecast scenarios for the next
several quarters. Based on anticipated growth trends and future investments in
the franchise, Pinnacle estimates its second quarter 2005 diluted earnings per
share will approximate $0.19 to $0.21. Pinnacle tightened the estimate for
diluted earnings per share for the year ending Dec. 31, 2005, to range between
$0.84 and $0.88. Additionally, Pinnacle has increased its estimate for total
asset balances to range between $950 million and $1 billion by the end of 2005
as a result of continued organic growth. Pinnacle anticipates more than
previously anticipated loan demand for the remainder of 2005 and, as a result,
has considered the increased provision for loan losses associated with increased
loan balances in these estimates. Additionally, Pinnacle has included in these
estimates additional compensation expense associated with increased number of
personnel and, due to accelerated growth and earnings performance, incentive
expense associated with Pinnacle's annual cash bonus plan which has been
forecasted to be greater than the 80 percent of targeted incentives awarded to
associates in 2004. "This exceptional balance sheet growth during the remainder
of 2005 should put us in a position to continue extraordinary earnings growth
during 2006," said Carpenter.
As noted previously, management has developed several scenarios under
which these estimates can be achieved and believes these estimates to be
reasonable based on these scenarios. However, unanticipated events or
developments, including the execution of any initiative involving the
development of any market other than the current Nashville franchise, the
opportunity to hire more seasoned professionals than anticipated or the ability
to grow loans significantly in excess of the levels contemplated, may cause the
actual results of Pinnacle to differ materially from these estimates.
The estimates do not include compensation expense related to the expensing
of stock options that have been and may be granted to employees under the firm's
broad-based stock option plans. Compensation expense attributable to the
expensing of stock options would have approximated $0.02 to $0.03 per fully
diluted share in the last six months of 2005, but consistent with recent
announcements by the Securities and Exchange Commission, Pinnacle will begin
including such compensation expense in its statement of income in 2006.
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. Pinnacle provides financial planning services by a
certified financial planner (CFP (R)), and a number of Pinnacle's senior
financial advisors provide comprehensive wealth management services to help
clients increase, protect and distribute their assets.
Pinnacle Reports Continued Growth - 7 of 7
Pinnacle opened its first office in October 2000 in Commerce Center in
Downtown Nashville. Since then the firm has added Nashville offices in the
Rivergate, Green Hills and West End areas and offices in Brentwood, Cool Springs
and Franklin in Williamson County.
Additional information concerning Pinnacle can be accessed at
www.pnfp.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, (vi) the inability of
Pinnacle to execute its branch expansion plans and (i) changes in the
legislative and regulatory environment. A more detailed description of these and
other risks is contained in Pinnacle's most recent annual report on Form 10-K.
Many of such factors are beyond Pinnacle's ability to control or predict, and
readers are cautioned not to put undue reliance on such forward-looking
statements. Pinnacle disclaims any obligation to update or revise any
forward-looking statements contained in this release, whether as a result of new
information, future events or otherwise.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
MARCH 31, DECEMBER 31,
2005 2004
-------------- -------------
ASSETS
Cash and noninterest-bearing due from banks......................................... $ 19,956,737 $ 15,243,796
Interest-bearing due from banks..................................................... 444,090 379,047
Federal funds sold.................................................................. 24,528,028 11,122,944
-------------- -------------
Cash and cash equivalents...................................................... 44,928,855 26,745,787
Securities available-for-sale, at fair value ....................................... 174,646,784 180,573,820
Securities held-to-maturity (fair value of $26,723,605 and
$27,134,913 at March 31, 2005 and December 31,
2004, respectively)............................................................ 27,576,457 27,596,159
Mortgage loans held-for-sale........................................................ 2,837,900 1,634,900
Loans............................................................................... 516,733,302 472,362,219
Less allowance for loan losses...................................................... (6,197,895) (5,650,014)
-------------- -------------
Loans, net .................................................................... 510,535,407 466,712,205
Premises and equipment, net......................................................... 11,582,991 11,130,671
Investments in unconsolidated subsidiary and other entities......................... 3,929,811 3,907,807
Accrued interest receivable......................................................... 3,124,989 2,639,548
Other assets ....................................................................... 8,272,424 6,198,553
-------------- -------------
Total assets............................................................... $ 787,435,618 $ 727,139,450
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand..................................................... $ 119,212,181 $ 114,318,024
Interest-bearing demand........................................................ 57,112,842 51,751,320
Savings and money market accounts.............................................. 207,534,995 199,058,240
Time........................................................................... 235,160,749 205,599,425
-------------- -------------
Total deposits............................................................. 619,020,767 570,727,009
Securities sold under agreements to repurchase...................................... 46,388,184 31,927,860
Federal Home Loan Bank advances..................................................... 51,500,000 53,500,000
Subordinated debt................................................................... 10,310,000 10,310,000
Accrued interest payable............................................................ 937,207 769,300
Other liabilities................................................................... 1,622,480 2,025,106
-------------- -------------
Total liabilities.......................................................... 729,778,638 669,259,275
Stockholders' equity:
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued
and outstanding............................................................ - -
Common stock, par value $1.00; 20,000,000 shares authorized; 8,391,371 issued
and outstanding at March 31, 2005 and 8,389,232 issued and outstanding at
December 31, 2004.......................................................... 8,391,371 8,389,232
Additional paid-in capital..................................................... 44,388,278 44,376,307
Unearned compensation.......................................................... (29,750) (37,250)
Retained earnings.............................................................. 6,906,776 5,127,023
Accumulated other comprehensive (loss) income, net ............................ (1,999,695) 24,863
-------------- -------------
Total stockholders' equity ................................................ 57,656,980 57,880,175
-------------- -------------
Total liabilities and stockholders' equity................................. $ 787,435,618 $ 727,139,450
============== =============
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
THREE MONTHS ENDED
MARCH 31,
2005 2004
------------ ------------
INTEREST INCOME:
Loans, including fees......................................................... $ 6,954,365 3,946,572
Securities:
Taxable.................................................................. 1,951,085 1,550,859
Tax-exempt............................................................... 272,122 85,975
Federal funds sold and other.................................................. 92,162 82,716
------------ ------------
Total interest income.................................................... 9,269,734 5,666,122
------------ ------------
INTEREST EXPENSE:
Deposits...................................................................... 2,153,961 1,171,188
Securities sold under agreements to repurchase................................ 150,262 9,293
Federal funds purchased and other borrowings.................................. 462,537 333,349
------------ ------------
Total interest expense .................................................. 2,766,761 1,513,830
------------ ------------
Net interest income...................................................... 6,502,973 4,152,292
PROVISION FOR LOAN LOSSES..................................................... 601,250 353,848
------------ ------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES........................... 5,901,723 3,798,444
NONINTEREST INCOME:
Service charges on deposit accounts...................................... 261,700 163,845
Investment sales commissions............................................. 437,424 389,579
Gain on loans and loan participations sold, net (*) (#).................. 160,555 219,620
Gain on sales of investment securities, net.............................. 114,410 248,353
Other noninterest income................................................. 203,710 110,042
------------ ------------
Total noninterest income............................................. 1,177,799 1,131,439
------------ ------------
NONINTEREST EXPENSE:
Compensation and employee benefits (#)................................... 2,970,558 2,173,425
Equipment and occupancy.................................................. 784,026 505,690
Marketing and other business development................................. 113,168 149,158
Postage and supplies..................................................... 135,538 99,138
Other noninterest expense................................................ 577,584 391,468
------------ ------------
Total noninterest expense............................................ 4,580,874 3,318,879
------------ ------------
INCOME BEFORE INCOME TAXES.................................................... 2,498,648 1,611,014
Income tax expense....................................................... 718,895 539,992
------------ ------------
NET INCOME.................................................................... $ 1,779,753 1,071,022
============ ============
PER SHARE INFORMATION:
Basic net income per common share........................................ $ 0.21 0.15
============ ============
Diluted net income per common share...................................... $ 0.19 0.13
============ ============
Weighted average shares outstanding:
Basic................................................................ 8,389,256 7,384,106
Diluted.............................................................. 9,437,183 8,213,730
RECLASSIFICATIONS IMPACTING PREVIOUSLY REPORTED AMOUNTS:
(*) Amounts reflect the reclassification of noninterest income previously
reported as "Fees from the origination of mortgage loans" to "Gain on loans
and loan participations sold".
(#) Sales commission expenses associated with mortgage loan originations
previously included in "Compensation and employee benefits" have been
reclassified to offset noninterest income included in "Gain on loans and
loan participations sold".
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
MAR DEC SEPT JUNE MAR DEC
(dollars in thousands, except per share data) 2005 2004 2004 2004 2004 2003
- --------------------------------------------- ---------- --------- --------- --------- --------- ---------
BALANCE SHEET DATA, AT QUARTER END:
Total assets........................ $ 787,436 727,139 685,408 586,313 541,052 498,421
Total loans......................... 516,733 472,362 434,909 355,267 323,416 297,004
Allowance for loan losses........... (6,198) (5,650) (5,434) (4,466) (4,042) (3,719)
Securities.......................... 202,223 208,170 191,323 165,528 162,315 139,944
Total deposits...................... 619,021 570,727 541,859 467,321 437,601 390,569
Securities sold under agreements
to repurchase................. 46,388 31,928 22,958 23,772 14,699 15,050
Advances from FHLB.................. 51,500 53,500 51,500 47,500 40,500 44,500
Subordinated debt................... 10,310 10,310 10,310 10,310 10,310 10,310
Total stockholders' equity.......... 57,657 57,880 56,668 35,125 36,266 34,336
BALANCE SHEET DATA, QUARTERLY AVERAGES:
Total assets........................ $ 756,884 707,131 618,694 555,437 508,260 454,700
Total loans......................... 488,313 448,611 392,220 343,974 306,549 283,387
Securities.......................... 208,253 203,728 183,721 169,192 149,802 137,243
Total earning assets................ 708,690 670,839 589,554 527,070 482,572 432,691
Total deposits...................... 597,358 562,936 485,300 439,964 402,603 356,030
Securities sold under agreements
to repurchase................. 38,149 23,520 25,953 17,523 14,868 16,013
Advances from FHLB.................. 50,233 48,022 49,000 45,736 42,379 43,630
Subordinated debt................... 10,310 10,310 10,310 10,310 10,310 655
Total stockholders' equity.......... 58,420 57,721 43,868 35,542 35,705 33,935
STATEMENT OF OPERATIONS DATA, FOR THE
THREE MONTHS ENDED:
Interest income..................... $ 9,270 8,574 7,214 6,225 5,666 5,244
Interest expense.................... 2,767 2,296 1,915 1,689 1,514 1,351
---------- --------- --------- --------- --------- ---------
Net interest income............. 6,503 6,278 5,299 4,536 4,152 3,893
Provision for loan losses........... 601 1,134 1,012 449 354 204
---------- --------- --------- --------- --------- ---------
Net interest income after
provision for loan losses....... 5,902 5,144 4,287 4,087 3,798 3,689
Noninterest income.................. 1,178 1,246 1,534 1,067 1,131 852
Noninterest expense................. 4,581 4,127 3,860 3,499 3,318 3,196
---------- --------- --------- --------- --------- ---------
Income before taxes.............. 2,499 2,263 1,961 1,655 1,611 1,345
Income tax expense.............. 719 574 570 487 540 487
---------- --------- --------- --------- --------- ---------
Net income..................... $ 1,780 1,689 1,391 1,168 1,071 858
========== ========= ========= ========= ========= =========
PER SHARE DATA:
Earnings - basic................... $ 0.21 0.20 0.18 0.16 0.15 0.12
Earnings - diluted.................. $ 0.19 0.18 0.16 0.14 0.13 0.11
Book value at quarter end (1)....... $ 6.87 6.90 6.75 4.74 4.91 4.65
Weighted avg. shares - basic........ 8,389,256 8,389,232 7,832,512 7,397,920 7,384,106 7,384,106
Weighted avg. shares - diluted...... 9,437,183 9,448,696 8,857,015 8,279,114 8,213,730 8,114,888
Common shares outstanding........... 8,391,371 8,389,232 8,389,232 7,404,586 7,384,106 7,384,106
CAPITAL RATIOS (2):
Equity to total assets.............. 7.3% 8.0% 8.3% 6.0% 6.7% 6.8%
Leverage............................ 9.2% 9.7% 10.9% 8.4% 9.0% 10.5%
Tier 1 risk-based................... 10.6% 11.7% 12.4% 10.2% 11.2% 11.8%
Total risk-based.................... 11.5% 12.7% 13.4% 11.2% 12.1% 12.8%
INVESTOR INFORMATION:
Closing sales price................. $ 20.72 22.62 21.50 18.30 15.25 11.75
High sales price during quarter..... $ 24.05 25.10 23.70 18.67 15.50 12.95
Low sales price during quarter...... $ 20.72 22.05 17.70 13.50 11.65 9.68
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
MAR DEC SEPT JUNE MAR DEC
(dollars in thousands, except per share data) 2005 2004 2004 2004 2004 2003
- ------------------------------------------------ ------- ----- ----- ----- ----- -----
PERFORMANCE RATIOS AND OTHER DATA:
Return on average assets...................... 0.96% 0.95% 0.89% 0.82% 0.85% 0.75%
Return on avg. stockholders' equity........... 12.48% 11.61% 12.58% 12.83% 12.03% 10.02%
Net interest margin (3)....................... 3.78% 3.78% 3.62% 3.51% 3.49% 3.62%
Noninterest income to total revenue (4)....... 15.3% 16.6% 22.5% 19.0% 21.4% 18.0%
Noninterest income to avg. assets............. 0.62% 0.70% 0.99% 0.77% 0.89% 0.75%
Noninterest exp. to avg. assets......... ..... 2.42% 2.33% 2.50% 2.52% 2.61% 2.81%
Efficiency ratio (5).......................... 59.6% 54.9% 56.5% 62.4% 62.8% 67.4%
Avg. loans to average deposits................ 81.7% 79.7% 80.8% 78.2% 76.6% 80.2%
Securities to total assets.................... 25.7% 29.1% 27.9% 28.2% 30.0% 28.1%
Average interest-earning assets to
average interest-bearing liabilities....... 119.0% 121.9% 121.0% 118.3% 118.1% 118.7%
Brokered time deposits to total deposits ..... 8.3% 7.6% 8.2% 8.8% 8.2% 9.9%
SELECTED GROWTH RATES, LAST TWELVE MONTHS (6):
Total average assets.......................... 48.9% 55.6% 52.3% 52.0% 55.9% 59.0%
Average loans................................. 59.3% 58.3% 45.4% 40.2% 40.8% 40.8%
Total average deposits........................ 48.4% 58.2% 54.4% 58.5% 65.3% 65.1%
Total revenue (4)............................. 45.4% 58.6% 58.1% 48.2% 71.2% 66.6%
Total noninterest expense..................... 38.0% 29.1% 38.4% 34.9% 48.9% 46.5%
Diluted earnings per share.................... 46.2% 68.3% 58.5% 104.0% 168.6% 181.7%
ASSET QUALITY INFORMATION AND RATIOS:
Nonaccrual loans and other real estate........ $ 596 561 1,332 1,339 86 379
Past due loans over 90 days and still
accruing interest.......................... $ 47 146 95 35 64 182
Net loan charge-offs (7)...................... $ 53 918 43 25 30 (23)
Allowance for loan losses to total loans ..... 1.20% 1.20% 1.25% 1.26% 1.25% 1.25%
As a percentage of total loans and ORE:
Past due loans over 30 days ............... 0.27% 0.37% 0.69% 0.21% 0.30% 0.48%
Nonperforming assets....................... 0.12% 0.12% 0.31% 0.38% 0.03% 0.13%
Potential problem loans (8)................ 0.08% 0.02% 0.08% 0.11% 0.57% 0.57%
Annualized net loan charge-offs
(recoveries) to avg. loans (9)............. 0.04% 0.27% 0.04% 0.03% 0.04% 0.05%
Avg. commercial loan internal risk
ratings (8)................................ 3.8 3.9 3.8 3.9 3.9 4.0
Avg. loan account balances (10)............... $ 162 161 157 149 147 153
INTEREST RATES AND YIELDS:
Loans ....................................... 5.78% 5.58% 5.25% 5.27% 5.14% 5.17%
Securities.................................... 4.44% 4.34% 4.33% 4.00% 4.45% 4.35%
Federal funds sold and other.................. 3.41% 2.72% 2.50% 2.20% 1.47% 2.26%
Total earning assets.......................... 5.34% 5.12% 4.90% 4.78% 4.73% 4.83%
Total deposits, including
non-interest bearing....................... 1.46% 1.30% 1.22% 1.21% 1.17% 1.21%
Securities sold under agreements to
repurchase................................. 1.60% 0.85% 0.51% 0.26% 0.25% 0.58%
Federal funds purchased and FHLB advances..... 2.61% 2.34% 2.14% 2.08% 2.19% 2.05%
Subordinated debt............................. 5.32% 4.77% 4.58% 3.54% 3.98% 3.98%
Total deposits and other interest-bearing
liabilities................................ 1.88% 1.66% 1.33% 1.31% 1.29% 1.28%
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
MAR DEC SEPT JUNE MAR DEC
(dollars in thousands, except per share data) 2005 2004 2004 2004 2004 2003
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OTHER INFORMATION:
Mortgage loan originations
Gross loans originated......... $ 21,360 17,584 22,382 16,061 10,845 10,148
Gross fees (11)................ $ 364 378 419 266 192 178
Gross fees as a percentage
of mortgage loans originated.. 1.70% 2.14% 1.87% 1.66% 1.77% 1.75%
Gains on sales of investment
securities, net $ 114 - 109 - 248 -
Brokerage account assets,at
quarter-end (12)............... $400,000 398,000 368,000 344,000 351,000 319,000
Floating rate loans as a percentage
of loans (13).................. 54.4% 55.1% 55.8% 52.5% 52.4% 52.7%
Balance of loan participations sold
to other banks and serviced
by Pinnacle, at quarter end.... $ 58,844 57,678 53,343 58,530 54,772 51,653
Total core deposits to total
funding (14)................... 62.5% 60.8% 61.8% 59.8% 62.8% 60.1%
Total assets per full-time equivalent
employee....................... $ 5,988 5,960 5,909 5,776 5,695 5,569
Annualized revenues per full-time
equivalent employee............ $ 233.6 246.7 235.6 220.8 222.4 212.1
Number of employees (full-time
equivalent).................... 131.5 122.0 116.0 101.5 95.0 89.5
Associate retention rate (15)......... 99.2% 98.4% 97.4% 97.5% 97.4% 96.1%
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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.
(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 ratios are calculated by dividing noninterest expense by the
sum of net interest income and noninterest income.
(6) Growth rates are calculated by dividing amounts for the current quarter by
the same quarter of the previous year.
(7) During the fourth quarter of 2004, the Company incurred two large
commercial charge-offs of approximately $850,000 which had been previously
on nonaccruing status.
(8) Average risk ratings are based on an internal loan review system which
assigns a numeric value of 1 to 10 to all loans to commercial entities
based on their underlying risk characteristics as of the end of each
quarter. A "1" risk rating is assigned to credits that exhibit Excellent
risk characteristics, "2" exhibit Very Good risk characteristics, "3"
Good, "4" Satisfactory, "5" Acceptable or Average, "6" Watch List, "7"
Criticized, "8" Classified or Substandard, "9" Doubtful and "10" Loss
(which are charged-off immediately). Additionally, loans rated "8" or
worse are considered potential problem loans. Potential problem loans do
not include nonperforming loans. Generally, consumer loans are not
subjected to internal risk ratings.
(9) Annualized net loan charge-offs to average loans ratios are computed by
annualizing year-to-date net loan charge-offs and dividing the result by
average loans for the year-to-date period.
(10) Computed by dividing the balance of all loans by the number of loan
accounts as of the end of each quarter.
(11) Amounts are included in the statement of income in "Gains on the sale of
loans and loan participations sold".
(12) At fair value, based on information obtained from the company's third
party broker/dealer for non-FDIC insured financial products and services.
(13) Floating rate loans are those loans that are eligible for repricing on a
daily basis subject to changes in Pinnacle's prime lending rate or other
factors.
(14) Core deposits include all transaction deposit accounts, money market and
savings accounts and all certificates of deposit issued in a denomination
of $100,000 or less. The ratio noted above represents total core deposits
divided by total funding, which includes total deposits, FHLB advances,
securities sold under agreements to repurchase, subordinated indebtedness
and all other interest-bearing liabilities.
(15) 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.