| NASHVILLE, Tenn., Oct 20, 2009 (BUSINESS WIRE) --
Pinnacle Financial Partners Inc. (Nasdaq/NGS: PNFP) today reported
preliminary quarterly results of a loss per fully diluted common share
available to common stockholders of ($0.15) for the quarter ended Sept.
30, 2009, compared to $0.36 of earnings per fully diluted common share
available to common stockholders for the quarter ended Sept. 30, 2008.
Fully diluted loss per common share available to common stockholders was
($1.39) for the nine months ended Sept. 30, 2009, compared to $0.96 of
earnings per fully diluted common share available to common stockholders
for the nine months ended Sept. 30, 2008.
SUMMARY OF KEY POINTS:
--
Pinnacle increased the loan loss allowance and associated provision
expense during the third quarter of 2009 as a result of continued
weakness in the local real estate market and higher nonperforming
assets.
--
Meaningful growth in loans and core deposits reflect dissatisfaction
with the large regional banks in Nashville and Knoxville, including
core deposit growth of 16.0 percent from Sept. 30, 2008.
--
Net interest margin increased from 2.75 percent for the quarter ended
June 30, 2009, to 3.05 percent for the quarter ended Sept. 30, 2009.
--
Revenue grew 9.73 percent from the third quarter of 2008 to the third
quarter of 2009.
Net loan growth during the third quarter of 2009 was $64 million,
compared to $70 million in the second quarter of 2009 and $119 million
in the first quarter of 2009. At Sept. 30, 2009, Pinnacle's allowance
for loan losses was 2.30 percent of total loans, compared to 1.86
percent at June 30, 2009, and 1.09 percent at Sept. 30, 2008.
"Our third quarter results reflect increased provisioning due primarily
to our assessment of increasing risk associated within our loan
portfolio, particularly the residential construction and land
development portfolio," said M. Terry Turner, Pinnacle's president and
chief executive officer. "Credit quality remains the primary area of
focus for us, but we are also growing our client base with high quality
relationships. With our capital strength we should be well-positioned to
continue to take advantage of the current market turmoil as evidenced by
our core deposit growth of 16.0 percent over last year."
In the 2009 market share report for the Nashville and Knoxville MSAs
issued by the Federal Deposit Insurance Corporation (FDIC) on Oct. 16,
2009, Pinnacle was the fastest-growing financial institution in both
MSAs for the year. It remains the fourth largest institution in
Nashville with a market share of 10.52 percent, up from 9.56 percent the
previous year. Pinnacle Knoxville moved up five places to ninth largest
since its 2007 de novo opening. The report showed Pinnacle and other
smaller competitors continue to take market share from the regionals and
nationals in the two markets.
THIRD QUARTER 2009 HIGHLIGHTS:
--
Operating results
--
Revenue (the sum of net interest income and noninterest income)
for the quarter ended Sept. 30, 2009, amounted to $42.29 million,
compared to $38.53 million for the same quarter of last year, an
increase of 9.73 percent.
--
Net loss available to common stockholders for the third quarter of
2009 was ($4.85 million), compared to the prior year's third
quarter net income available to common shareholders of $8.80
million. Included in the net loss available to common stockholders
for the third quarter of 2009 was $1.21 million of preferred stock
dividends related to securities issued under the U.S. Treasury's
Capital Purchase Program.
--
Continued balance sheet growth
--
Loans at Sept. 30, 2009, were $3.61 billion, up $405 million from
$3.20 billion at Sept. 30, 2008, representing an annual organic
growth rate of 12.6 percent.
--
Total deposits at Sept. 30, 2009, were $3.82 billion, up $525
million from $3.30 billion at Sept. 30, 2008, representing an
annual organic growth rate of 15.9 percent.
--
Core funding (all deposits except time deposits greater than
$100,000) amounted to $2.24 billion at Sept. 30, 2009, an increase
of 16.0 percent from the $1.93 billion at Sept. 30, 2008. Core
funding also increased by $148 million during the third quarter of
2009, or an annualized growth rate of 28.4 percent from balances
as of June 30, 2009.
--
Credit quality
--
Net charge-offs were $5.2 million for the three months ended Sept.
30, 2009, compared to $73,000 for the three months ended Sept. 30,
2008. Net charge-offs as a percentage of average loan balances
were 0.58 percent (annualized) for the three months ended Sept.
30, 2009, compared to 0.41 percent (annualized) for the three
months ended Sept. 30, 2008. Net charge-offs as a percentage of
average loan balances were 2.04 percent (annualized) for the nine
months ended Sept. 30, 2009, compared to 0.05 percent (annualized)
for the nine months ended Sept. 30, 2008. The $21.5 million
charge-off of a loan to a bank holding company disclosed in May of
this year accounted for 0.80 percent annualized net charge-off as
a percentage of average loan balances for the nine months ended
Sept. 30, 2009.
--
Nonperforming assets were 3.98 percent of total loans and other
real estate at Sept. 30, 2009, compared to 0.86 percent at Dec.
31, 2008, and 0.93 percent at Sept. 30, 2008.
--
Past due loans over 30 days, excluding nonperforming loans, were
0.86 percent of total loans at Sept. 30, 2009; 0.60 percent at
Dec. 31, 2008; and 0.61 percent at Sept. 30, 2008.
--
Capital
--
At Sept. 30, 2009, Pinnacle's ratio of tangible common
stockholders' equity to tangible assets was 7.5 percent, compared
to 6.2 percent at Dec. 31, 2008. Pinnacle's tangible book value
per common share was $10.99 at Sept. 30, 2009, compared to $11.70
at Dec. 31, 2008.
--
At Sept. 30, 2009, Pinnacle's total risk based capital ratio was
14.7 percent, compared to 13.5 percent at Dec. 31, 2008.
"Although we are disappointed with the increase in nonperforming loans,
we are pleased with another quarter of solid loan and core deposit
growth," Turner said. "We continue to add new, quality relationships,
grow core deposits and improve our margins, resulting in stronger net
interest income this quarter. We have added significant resources to
address problem assets, including the reassignment of experienced
professionals to these areas to pursue the aggressive resolution of
these matters.
"We believe Nashville and Knoxville were late in feeling the impact of
this credit cycle," Turner said. "The indicators we use to signal a
meaningful recovery do not appear to be improving at sufficient levels
at this time. As a result, we believe it is in the best interests of our
shareholders to proceed with caution and postpone redemption of the
preferred stock we issued under the U.S. Treasury's Capital Purchase
Program until we are both confident that there has been sufficient
improvement in economic conditions and we see reductions in the growth
of our problem assets."
CREDIT QUALITY
--
Allowance for loan losses represented 2.30 percent of total loans at
Sept. 30, 2009, compared to 1.86 percent at June 30, 2009, and 1.09
percent a year ago.
--
Provision for loan losses was $22.13 million for the third quarter of
2009, compared to $3.13 million for the third quarter of 2008.
--
During the third quarter of 2009, the firm recorded net
charge-offs of $5.2 million, compared to net charge-offs of
$73,000 during the same period in 2008. Annualized net charge-offs
to total average loans were 2.04 percent for the nine months ended
Sept. 30, 2009.
"Net charge-offs of more than $5 million during the third quarter were
slightly higher than we anticipated," Turner said. "Although it appears
that real estate values are stabilizing, we do not believe a meaningful
real estate market recovery will begin in the near term. In spite of
this, we remain committed to the rapid reduction of our nonperforming
asset levels."
Pinnacle reported that nonperforming loans and other real estate owned
as a percentage of total loans and other real estate owned increased
from 3.34 percent at June 30, 2009, to 3.98 percent at Sept. 30, 2009.
The following is a summary of the activity in various nonperforming
asset categories for the quarter ended Sept. 30, 2009:
Balances Payments, Sales Balances
(in thousands) June 30, 2009 and Reductions Increases Sept. 30, 2009
Nonperforming loans:
Residential construction & development $ 71,303 $ 19,009 $ 34,681 $ 86,975
Other 29,025 8,941 14,666 34,751
Totals 100,328 27,950 49,347 121,726
Other real estate:
Residential construction & development 16,234 8,817 11,461 18,878
Other 2,611 1,383 2,663 3,891
Totals 18,845 10,200 14,124 22,769
Total nonperforming assets $ 119,173 $ 38,150 $ 63,471 $ 144,495
REVENUE
--
Net interest income for third quarter 2009 was $34.55 million,
compared to $29.28 million for the same quarter last year, an increase
of 17.99 percent.
--
Net interest margin for the third quarter of 2009 was 3.05
percent, compared to a net interest margin of 2.75 percent for the
second quarter of 2009 and 3.14 percent for the same period last
year.
--
Noninterest income for the third quarter 2009 was $7.74 million, a
16.38 percent decrease from the $9.25 million recorded during the same
quarter in 2008. The decrease is due to lower consumer deposit fees
and less revenue from Pinnacle's investment and insurance businesses.
Additionally, the second quarter of 2008 included a one-time gain of
$695,000 from the sale of a loan.
"We are pleased with the progress we have made in the improvement of our
net interest margin in the third quarter," said Harold Carpenter,
Pinnacle's chief financial officer. "Our net interest income is up more
than $4 million from the second quarter. That increase is the result of
a focused effort by our relationship managers to increase loan pricing
as well as more emphasis on gathering lower cost core deposits. We are
optimistic that we will continue to improve our margins for the
remainder of this year."
Net interest income was $34.55 million during the third quarter of 2009,
which was an all-time high for Pinnacle and represented an increase of
13.23 percent over second quarter of 2009 and an increase of 17.99
percent over the third quarter of 2008. This increase was attributable
to increased loan volumes as well as lower deposit costs, primarily
related to reductions in interest rates paid on time deposits and a
large funding shift to money market deposit accounts.
Noninterest income was $7.74 million during the third quarter of 2009,
down from the $10.6 million during the second quarter of 2009 and $9.3
million during the third quarter of 2008. Noninterest income declined
27.03 percent on a linked-quarter basis due primarily to a decrease in
the amount of gains on the sale of investment securities and gains on
the sales of loans, the latter of which is attributable to reduced
volumes for the firm's mortgage origination business.
During the third quarter of 2009, Pinnacle's mortgage origination unit
sold $114 million of mortgage loans, compared to $213.2 million sold
during the second quarter of 2009 and $71.9 million during the third
quarter of 2008. Gross fees on these loan sales were $1.83 million in
the third quarter of 2009, compared to $3.03 million in the second
quarter of 2009 and $1.29 million in the third quarter of 2008.
NONINTEREST EXPENSE AND TAXES
--
Noninterest expense for the quarter ended Sept. 30, 2009, was $27.28
million, compared to $30.6 million in the second quarter of 2009 and
$23.33 million in the third quarter of 2008.
--
Compensation expense was $14.25 million during the third quarter of
2009, compared to $12.68 million during the second quarter of 2009 and
$13.01 million during the third quarter of 2008. The increase in
compensation expense between the second and third quarters of 2009 was
due primarily to the reversal of approximately $1.07 million of
previously accrued incentive costs in the second quarter.
--
Included in noninterest expense for the third quarter of 2009 was $1.3
million in other real estate expenses, of which $0.7 million was
attributable to losses on the sale of other real estate properties.
Third quarter 2009 other real estate expense was approximately $2.7
million less than second quarter 2009 other real estate expense.
--
Also impacting the comparison of third quarter 2009 expense to the
second quarter 2009 expense was the FDIC special assessment, which was
accrued in the second quarter of 2009.
--
The efficiency ratio (noninterest expense divided by net interest
income and noninterest income) was 64.5 percent during the third
quarter of 2009, compared to 74.4 percent for the second quarter of
2009 and 60.5 percent in the third quarter of 2008.
--
Due to the continued operating losses of the company, the effective
tax benefit rate for the third quarter of 2009 was approximately 53.1
percent, compared to a 27.2 percent effective tax expense rate for the
same quarter in 2008.
"Our effective tax rate continues to reflect the impact of our current
loss position and various tax saving initiatives," Carpenter said. "Our
current projections indicate that we will approximate a 45 percent
effective tax benefit rate for the year ending Dec. 31, 2009."
Carpenter noted that the firm would evaluate impairment of goodwill, if
necessary, prior to filing its Form 10-Q with the Securities and
Exchange Commission.
INVESTMENTS IN FUTURE GROWTH
--
Pinnacle has hired 41 highly experienced associates for its denovo
expansion to Knoxville that was announced on April 9, 2007. Loans
outstanding in Knoxville at Sept. 30, 2009, were $385.6 million.
Pinnacle has opened a second full-service office in the Fountain City
area of Knoxville this week and will open another in the Farragut area
later this year.
--
Pinnacle also has three new Nashville offices under construction -- two
in the Belle Meade and 100 Oaks areas in Nashville and one in
Brentwood, Tenn. The Belle Meade and Brentwood offices are expected to
open in late fourth quarter of 2009, with two existing Brentwood
locations consolidating into the new Brentwood office. The firm
anticipates the new 100 Oaks office to open in the first half of 2010.
--
Pinnacle's total associate base at Sept. 30, 2009, was 768.0 full-time
equivalents (FTEs), compared to 723.0 at Sept. 30, 2008. Pinnacle
anticipates increasing its associate base by approximately 20
associates during the remainder of 2009.
WEBCAST AND CONFERENCE CALL INFORMATION
Pinnacle will host a webcast and conference call at 8:30 a.m. (CDT) on
Wednesday, Oct. 21, 2009, to discuss third quarter 2009 results and
other matters. To access the call for audio only, please call 1/888
359-3610. For the presentation and streaming audio, please access the
webcast on the investor relations page of Pinnacle's website at
www.pnfp.com
.
For those unable to participate in the webcast, the presentation will be
archived on the investor relations page of Pinnacle's website at
www.pnfp.com
for 120 days following the presentation.
Pinnacle Financial Partners provides a full range of banking,
investment, mortgage and insurance products and services designed for
small- to mid-sized businesses and their owners, real estate
professionals and individuals interested in a comprehensive relationship
with their financial institution. Comprehensive wealth management
services, such as financial planning and trust, help clients increase,
protect and distribute their assets.
The firm began operations in a single downtown Nashville location in
Oct. 2000 and has since grown to over $5.1 billion in assets at Sept.
30, 2009. In 2007, Pinnacle launched an expansion into Knoxville,
another high growth MSA. At Sept. 30, 2009, Pinnacle is the
second-largest bank holding company headquartered in Tennessee, with 31
offices in eight Middle Tennessee counties and two in Knoxville. The
firm was also added to Standard & Poor's SmallCap 600 index in 2009.
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, and Section 21E of the Securities Exchange Act of
1934, as amended. The words "expect," "anticipate," "intend," "plan,"
"believe,""should," "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) deterioration in the financial
condition of borrowers resulting in significant increases in loan losses
and provisions for those losses; (ii) continuation of the historically
low short-term interest rate environment; (iii) the inability of
Pinnacle Financial to continue to grow its loan portfolio in the
Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA; (iv)
changes in loan underwriting, credit review or loss reserve policies
associated with economic conditions, examination conclusions, or
regulatory developments; (v) increased competition with other financial
institutions; (vi) greater than anticipated deterioration or lack of
sustained growth in the national or local economies including the
Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA,
particularly in commercial and residential real estate markets; (vii)
rapid fluctuations or unanticipated changes in interest rates; (viii)
the results of regulatory examinations; (ix) the development of any new
market other than Nashville or Knoxville; (x) a merger or acquisition;
(xi) any activity in the capital markets that would cause Pinnacle to
conclude that there was impairment of any asset, including intangible
assets; (xii) the impact of governmental restrictions on entities
participating in the Capital Purchase Program, of the U.S. Department of
the Treasury (the "Treasury"); and (xiii) changes in state and federal
legislation, regulations or policies applicable to banks and other
financial service providers, including regulatory or legislative
developments arising out of current unsettled conditions in the economy.
A more detailed description of these and other risks is contained in
Pinnacle's most recent annual report on Form 10-K as updated by its
Current Report on Form 8-K filed with the Securities and Exchange
Commission on June 10, 2009. 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, 2009 December 31, 2008
ASSETS
Cash and noninterest-bearing due from banks $ 50,524,482 $ 68,388,961
Interest-bearing due from banks 55,914,345 8,869,680
Federal funds sold and other 14,584,425 12,994,114
Cash and cash equivalents 121,023,252 90,252,755
Securities available-for-sale, at fair value 925,888,875 839,229,428
Securities held-to-maturity (fair value of $6,766,695 and
$10,469,307 at September 30, 2009 and December 31, 2008,
respectively)
6,550,727 10,551,256
Mortgage loans held-for-sale 15,334,959 25,476,788
Loans 3,607,886,366 3,354,907,269
Less allowance for loan losses (82,981,386 ) (36,484,073 )
Loans, net 3,524,904,980 3,318,423,196
Premises and equipment, net 74,105,789 68,865,221
Other investments 37,960,842 33,616,450
Accrued interest receivable 18,008,909 17,565,141
Goodwill 244,116,260 244,160,624
Core deposit and other intangible assets 14,459,850 16,871,202
Other real estate 22,768,379 18,305,880
Other assets 89,587,040 70,756,823
Total assets $ 5,094,709,862 $ 4,754,074,764
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 504,480,992 $ 424,756,813
Interest-bearing 356,390,529 375,992,912
Savings and money market accounts 948,874,564 694,582,319
Time 2,010,162,777 2,037,914,307
Total deposits 3,819,908,862 3,533,246,351
Securities sold under agreements to repurchase 215,673,900 184,297,793
Federal Home Loan Bank advances and other borrowings 222,986,207 201,966,181
Federal Funds purchased - 71,643,000
Subordinated debt 97,476,000 97,476,000
Accrued interest payable 8,018,015 8,326,264
Other liabilities 20,555,751 29,820,779
Total liabilities 4,384,618,735 4,126,776,368
Stockholders' equity:
Preferred stock, no par value; 10,000,000 shares authorized; 95,000
shares issued and outstanding at September 30, 2009 and December 31,
2008
89,167,705 88,348,647
Common stock, par value $1.00; 90,000,000 shares authorized;
32,956,737 issued and outstanding at September 30, 2009 and
23,762,124 issued and outstanding at December 31, 2008
32,956,737 23,762,124
Common stock warrants 3,348,402 6,696,804
Additional paid-in capital 523,232,882 417,040,974
Retained earnings 47,322,426 84,380,447
Accumulated other comprehensive income, net of taxes 14,062,975 7,069,400
Stockholders' equity 710,091,127 627,298,396
Total liabilities and stockholders' equity $ 5,094,709,862 $ 4,754,074,764
This information is preliminary and based on company data available
at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Interest income:
Loans, including fees $ 41,665,915 $ 44,075,167 $ 119,818,533 $ 131,694,867
Securities:
Taxable 8,607,924 6,005,024 26,088,836 15,434,782
Tax-exempt 1,694,323 1,339,930 4,742,447 4,030,699
Federal funds sold and other 473,663 452,690 1,338,587 1,647,725
Total interest income 52,441,825 51,872,811 151,988,403 152,808,073
Interest expense:
Deposits 15,099,627 18,778,955 49,253,606 57,583,697
Securities sold under agreements to repurchase 363,302 681,912 1,147,363 2,081,055
Federal Home Loan Bank advances and other borrowings 2,430,839 3,130,448 7,826,936 8,820,575
Total interest expense 17,893,768 22,591,315 58,227,905 68,485,327
Net interest income 34,548,057 29,281,496 93,760,498 84,322,746
Provision for loan losses 22,134,025 3,124,819 101,063,950 7,503,412
Net interest income (loss) after provision for loan losses 12,414,032 26,156,677 (7,303,452 ) 76,819,334
Noninterest income:
Service charges on deposit accounts 2,559,394 2,778,097 7,604,774 8,036,320
Investment services 1,112,059 1,271,284 3,044,444 3,759,779
Insurance sales commissions 906,298 959,104 3,130,849 2,612,255
Gain on loans and loan participations sold, net 899,553 1,460,478 3,820,667 2,996,390
Net gain on sale of investments securities - - 6,462,241 -
Trust fees 585,737 584,927 1,885,091 1,621,385
Other noninterest income 1,674,051 2,199,051 5,526,975 7,652,700
Total noninterest income 7,737,092 9,252,941 31,475,041 26,678,829
Noninterest expense:
Salaries and employee benefits 14,245,485 13,013,116 41,672,578 39,382,393
Equipment and occupancy 4,445,666 3,731,932 12,991,928 11,235,137
Other real estate owned 1,250,152 95,255 5,864,375 285,061
Marketing and other business development 512,063 380,555 1,417,780 1,234,933
Postage and supplies 515,110 761,744 2,174,796 2,253,371
Amortization of intangibles 776,784 788,267 2,411,351 2,312,333
Other noninterest expense 5,535,079 3,390,326 16,596,965 9,569,734
Merger related expense - 1,165,177 - 5,620,216
Total noninterest expense 27,280,339 23,326,372 83,129,773 71,893,178
Income (loss) before income taxes (7,129,215 ) 12,083,246 (58,958,184 ) 31,604,985
Income tax expense (benefit) (3,782,045 ) 3,288,104 (25,925,471 ) 8,783,920
Net income (loss) (3,347,170 ) 8,795,142 (33,032,713 ) 22,821,065
Preferred dividends 1,213,889 - 3,602,083 -
Accretion on preferred stock discount 290,105 - 819,059 -
Net income (loss) available to common stockholders $ (4,851,164 ) $ 8,795,142 $ (37,453,855 ) $ 22,821,065
Per share information:
Basic net income (loss) per common share available to common ($0.15 ) $ 0.38 ($1.39 ) $ 1.01
stockholders
Diluted net income (loss) per common share available to common ($0.15 ) $ 0.36 ($1.39 ) $ 0.96
stockholders
Weighted average shares outstanding:
Basic 32,460,614 23,174,998 27,011,749 22,559,449
Diluted 32,460,614 24,439,642 27,011,749 23,826,368
This information is preliminary and based on company data available
at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND
YIELDS-UNAUDITED
(dollars in thousands) Three months ended Three months ended
September 30, 2009 September 30, 2008
Average Balances Interest Rates/ Yields Average Balances Interest Rates/ Yields
Interest-earning assets:
Loans $ 3,583,182 $ 41,666 4.61 % $ 3,129,549 $ 44,075 5.60 %
Securities:
Taxable 749,457 8,608 4.56 % 455,945 6,005 5.24 %
Tax-exempt (1) 169,171 1,694 5.24 % 134,198 1,340 5.24 %
Federal funds sold and other 74,663 474 2.76 % 45,890 453 4.37 %
Total interest-earning assets 4,576,473 $ 52,442 4.60 % 3,765,582 $ 51,873 5.53 %
Nonearning assets
Intangible assets 259,016 261,584
Other nonearning assets 193,366 175,426
Total assets $ 5,028,855 $ 4,202,592
Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking $ 348,300 $ 508 0.58 % $ 373,567 $ 1,109 1.18 %
Savings and money market 916,669 2,967 1.28 % 706,225 2,856 1.61 %
Certificates of deposit 2,018,814 11,625 2.28 % 1,689,221 14,814 3.49 %
Total interest-bearing deposits 3,283,783 15,100 1.82 % 2,769,013 18,779 2.70 %
Securities sold under agreements to repurchase 223,737 363 0.64 % 204,101 682 1.33 %
Federal Home Loan Bank advances and other borrowings
236,660 1,481 2.48 % 215,739 1,845 3.40 %
Subordinated debt 97,476 950 3.86 % 90,465 1,285 5.65 %
Total interest-bearing liabilities 3,841,656 17,894 1.85 % 3,279,318 22,591 2.74 %
Noninterest-bearing deposits 462,783 - - 409,850 - -
Total deposits and interest-bearing liabilities 4,304,439 $ 17,894 1.65 % 3,689,168 $ 22,591 2.44 %
Other liabilities 8,572 10,849
Stockholders' equity 715,844 502,575
Total liabilities and stockholders' equity $ 5,028,855 $ 4,202,592
Net interest income $ 34,548 $ 29,281
Net interest spread (2) 2.75 % 2.79 %
Net interest margin (3) 3.05 % 3.14 %
(1) Yields computed on tax-exempt instruments on a tax equivalent
basis.
(2) Yields realized on interest-earning assets less the rates
paid on interest-bearing liabilities.
(3) Net interest margin is the result of annualized net interest
income calculated on a tax equivalent basis divided by
average interest-earning assets for the period.
This information is preliminary and based on company data available
at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND
YIELDS-UNAUDITED
(dollars in thousands) Nine months ended Nine months ended
September 30, 2009 September 30, 2008
Average Balances Interest Rates/ Yields Average Balances Interest Rates/ Yields
Interest-earning assets:
Loans $ 3,506,243 $ 119,819 4.57 % $ 2,944,422 $ 131,695 5.98 %
Securities:
Taxable 739,480 26,089 4.72 % 401,268 15,435 5.14 %
Tax-exempt (1) 159,086 4,742 5.26 % 135,702 4,031 5.23 %
Federal funds sold and other 82,614 1,339 2.35 % 48,904 1,648 4.86 %
Total interest-earning assets 4,487,423 $ 151,988 4.58 % 3,530,296 $ 152,808 5.84 %
Nonearning assets
Intangible assets 259,894 259,870
Other nonearning assets 219,859 173,219
Total assets $ 4,967,176 $ 3,963,385
Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking $ 355,677 $ 1,405 0.53 % $ 385,863 $ 4,577 1.58 %
Savings and money market 802,946 7,322 1.22 % 715,019 9,676 1.81 %
Certificates of deposit 2,106,428 40,527 2.57 % 1,509,602 43,331 3.83 %
Total interest-bearing deposits 3,265,051 49,254 2.02 % 2,610,484 57,584 2.95 %
Securities sold under agreements to repurchase 232,450 1,147 0.66 % 182,698 2,081 1.52 %
Federal Home Loan Bank advances and other borrowings
254,145 4,657 2.45 % 189,438 4,958 3.50 %
Subordinated debt 97,476 3,170 4.35 % 85,139 3,862 6.06 %
Total interest-bearing liabilities 3,849,122 58,228 2.02 % 3,067,759 68,485 2.98 %
Noninterest-bearing deposits 445,616 - - 392,200 - -
Total deposits and interest-bearing liabilities 4,294,738 $ 58,228 1.81 % 3,459,959 $ 68,485 2.64 %
Other liabilities 5,436 18,587
Stockholders' equity 667,002 484,839
Total liabilities and stockholders' equity $ 4,967,176 $ 3,963,385
Net interest income $ 93,760 $ 84,323
Net interest spread (2) 2.56 % 2.86 %
Net interest margin (3) 2.84 % 3.24 %
(1) Yields computed on tax-exempt instruments on a tax equivalent
basis.
(2) Yields realized on interest-earning assets less the rates
paid on interest-bearing liabilities.
(3) Net interest margin is the result of annualized net interest
income calculated on a tax equivalent basis divided by
average interest-earning assets for the period.
This information is preliminary and based on company data available
at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
(dollars in thousands) September June March Dec Sept June
2009 2009 2009 2008 2008 2008
Balance sheet data, at quarter end:
Total assets $ 5,094,710 5,036,742 4,952,151 4,754,075 4,337,552 4,106,055
Total loans 3,607,886 3,544,176 3,473,959 3,354,907 3,202,909 3,032,272
Allowance for loan losses (82,981 ) (66,075 ) (45,334 ) (36,484 ) (34,841 ) (31,789 )
Securities 932,440 926,085 868,472 849,781 628,807 521,214
Noninterest-bearing deposits 504,481 470,049 451,418 424,757 457,543 438,458
Total deposits 3,819,909 3,761,444 3,750,958 3,533,246 3,295,163 3,152,514
Securities sold under agreements to repurchase 215,674 215,135 209,591 184,298 198,807 183,188
FHLB advances and other borrowings 222,986 228,317 221,642 273,609 207,239 187,315
Subordinated debt 97,476 97,476 97,476 97,476 97,476 82,476
Total stockholders' equity 710,091 703,772 631,646 627,298 512,569 481,709
Balance sheet data, quarterly averages:
Total assets $ 5,028,855 5,001,489 4,869,390 4,525,406 4,202,592 3,913,519
Total loans 3,583,182 3,517,254 3,416,462 3,282,461 3,129,549 2,941,973
Securities 918,628 912,192 864,280 722,051 590,143 516,949
Total earning assets 4,576,473 4,523,003 4,354,177 4,077,310 3,765,582 3,500,853
Noninterest-bearing deposits 462,783 455,709 417,861 442,267 409,850 398,337
Total deposits 3,746,566 3,735,789 3,648,567 3,393,234 3,178,863 2,947,669
Securities sold under agreements to repurchase 223,737 243,765 229,918 238,310 204,101 174,847
Advances from FHLB and other borrowings 236,660 255,263 234,887 234,482 215,739 208,773
Subordinated debt 97,476 97,476 97,476 97,476 90,465 82,476
Total stockholders' equity 715,844 649,792 634,481 540,260 502,575 477,502
Statement of operations data, for the three months ended:
Interest income $ 52,442 50,028 49,518 53,273 51,873 48,774
Interest expense 17,894 19,516 20,818 23,381 22,591 21,092
Net interest income 34,548 30,512 28,700 29,892 29,282 27,682
Provision for loan losses 22,134 65,320 13,610 3,710 3,125 2,787
Net interest income (loss) after provision for loan losses 12,414 (34,808 ) 15,090 26,182 26,157 24,895
Noninterest income 7,737 10,602 13,136 8,040 9,253 9,058
Noninterest expense 27,281 30,607 25,243 22,586 23,326 23,075
Income (loss) before taxes (7,130 ) (54,813 ) 2,983 11,636 12,084 10,878
Income tax expense (benefit) (3,782 ) (23,036 ) 893 3,583 3,288 2,917
Preferred dividends and accretion 1,504 1,470 1,447 309 - -
Net income (loss) available to common stockholders $ (4,852 ) (33,247 ) 643 7,744 8,796 7,961
Profitability and other ratios:
Return on avg. assets (1) (0.38 %) (2.67 %) 0.05 % 0.68 % 0.83 % 0.82 %
Return on avg. equity (1) (2.69 %) (20.52 %) 0.41 % 5.70 % 6.96 % 6.71 %
Net interest margin (1) (2) 3.05 % 2.75 % 2.72 % 2.96 % 3.14 % 3.24 %
Noninterest income to total revenue (3) 18.30 % 25.79 % 31.40 % 21.19 % 24.01 % 24.66 %
Noninterest income to avg. assets (1) 0.61 % 0.85 % 1.09 % 0.71 % 0.88 % 0.93 %
Noninterest exp. to avg. assets (1) 2.15 % 2.45 % 2.10 % 1.99 % 2.21 % 2.36 %
Efficiency ratio (4) 64.52 % 74.44 % 60.34 % 59.54 % 60.53 % 62.81 %
Avg. loans to average deposits 95.64 % 94.15 % 93.64 % 96.74 % 98.45 % 99.81 %
Securities to total assets 18.30 % 18.39 % 17.54 % 17.87 % 14.50 % 12.69 %
Average interest-earning assets to average interest-bearing
liabilities
119.13 % 116.67 % 114.80 % 115.79 % 114.83 % 116.10 %
Brokered time deposits to total deposits (16) 13.83 % 16.51 % 17.39 % 16.55 % 13.95 % 12.53 %
This information is preliminary and based on company data available
at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
(dollars in thousands) September June March Dec Sept June
2009 2009 2009 2008 2008 2008
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans $ 121,726 100,328 33,863 10,860 17,743 13,067
Other real estate (ORE) $ 22,768 18,845 19,817 18,306 12,142 9,181
Restructured accruing loans $ 12,827 - - - - -
Past due loans over 90 days and still
accruing interest $ 65 - 3,871 1,508 3,241 2,272
Net loan charge-offs $ 5,228 44,579 4,760 2,068 73 870
Allowance for loan losses to nonaccrual loans 68.2 % 65.9 % 133.9 % 335.9 % 196.4 % 243.3 %
As a percentage of total loans:
Past due accruing loans over 30 days 0.86 % 0.52 % 1.13 % 0.60 % 0.61 % 0.34 %
Potential problem loans (5) 7.24 % 4.03 % 2.56 % 0.80 % 0.83 % 0.40 %
Allowance for loan losses 2.30 % 1.86 % 1.30 % 1.09 % 1.09 % 1.05 %
Nonperforming assets tot total loans and ORE 3.98 % 3.34 % 1.54 % 0.86 % 0.93 % 0.73 %
Annualized net loan charge-offs
year-to-date to avg. loans (6) 2.04 % 2.81 % 0.56 % 0.10 % 0.05 % 0.07 %
Avg. commercial loan internal risk ratings (5) 4.7 4.6 4.3 4.2 4.2 4.0
Avg. loan account balances (7) $ 193 189 185 177 170 163
Interest rates and yields:
Loans 4.61 % 4.52 % 4.57 % 5.27 % 5.60 % 5.77 %
Securities 4.69 % 4.60 % 5.18 % 5.40 % 5.24 % 5.10 %
Total earning assets 4.60 % 4.49 % 4.66 % 5.25 % 5.53 % 5.66 %
Total deposits, including non-interest bearing 1.60 % 1.76 % 1.97 % 2.28 % 2.35 % 2.42 %
Securities sold under agreements to repurchase 0.64 % 0.70 % 0.64 % 0.98 % 1.33 % 1.30 %
FHLB advances and other borrowings 2.48 % 2.52 % 2.71 % 3.24 % 3.40 % 3.20 %
Subordinated debt 3.86 % 4.39 % 4.80 % 5.99 % 5.65 % 5.46 %
Total deposits and interest-bearing liabilities 1.65 % 1.81 % 2.01 % 2.35 % 2.44 % 2.48 %
Capital ratios (8):
Stockholders' equity to total assets 13.9 % 14.0 % 12.8 % 13.2 % 11.8 % 11.7 %
Leverage 10.9 % 11.1 % 9.7 % 10.5 % 8.7 % 8.5 %
Tier one risk-based 13.1 % 13.3 % 11.8 % 12.1 % 9.8 % 9.3 %
Total risk-based 14.7 % 15.0 % 13.3 % 13.5 % 11.2 % 10.3 %
Tangible common equity to tangible assets 7.5 % 7.4 % 6.0 % 6.2 % 6.2 % 5.8 %
Tangible common equity to risk weighted assets 9.1 % 9.0 % 7.4 % 7.5 % 7.2 % 6.6 %
This information is preliminary and based on company data available
at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
(dollars in thousands, except per share data) September June March Dec Sept June
2009 2009 2009 2008 2008 2008
Per share data:
Earnings (loss) - basic $ (0.15 ) (1.33 ) 0.03 0.33 0.38 0.36
Earnings (loss) - diluted $ (0.15 ) (1.33 ) 0.03 0.31 0.36 0.34
Book value per common share at quarter end (9) $ 18.74 18.57 22.30 22.40 21.63 21.33
Weighted avg. common shares - basic 32,460,614 24,965,291 23,510,994 23,491,356 23,174,998 22,356,667
Weighted avg. common shares - diluted 32,460,614 24,965,291 24,814,408 24,739,044 24,439,642 23,629,234
Common shares outstanding 32,956,737 32,929,747 24,060,703 23,762,124 23,699,790 22,587,564
Investor information:
Closing sales price $ 12.71 13.32 23.71 29.81 30.80 20.09
High sales price during quarter $ 17.03 24.01 29.90 32.00 36.57 29.29
Low sales price during quarter $ 12.15 12.86 13.32 22.01 19.30 20.05
Other information:
Gains on sale of loans and loan participations sold:
Mortgage loan sales:
Gross loans sold $ 114,049 213,218 192,932 72,097 71,903 79,693
Gross fees (10) $ 1,832 3,032 2,656 1,464 1,293 1,364
Gross fees as a percentage of mortgage loans originated
1.61 % 1.42 % 1.38 % 2.03 % 1.80 % 1.71 %
Commercial loans sold $ - - - - 695 8
Gains on sales of investment securities, net $ - 2,116 4,346 - - -
Brokerage account assets, at quarter-end (11) $ 898,000 786,000 671,000 686,000 848,000 826,000
Trust account assets, at quarter-end $ 607,000 580,000 544,000 588,000 537,000 527,000
Floating rate loans as a percentage of total loans (12) 38.0 % 39.8 % 40.0 % 41.4 % 41.4 % 44.0 %
Balance of commercial loan participations sold to other banks and
serviced by Pinnacle, at quarter end
$ 92,837 102,515 122,123 125,429 136,069 125,308
Core deposits to total funding (13) 51.5 % 48.7 % 46.7 % 50.5 % 50.9 % 52.3 %
Risk-weighted assets $ 4,000,359 3,942,844 3,825,590 3,705,606 3,493,361 3,353,142
Total assets per full-time equivalent employee $ 6,634 6,752 6,728 6,614 5,999 5,828
Annualized revenues per full-time equivalent employee $ 221.4 222 226 209.9 214.4 209.8
Number of employees (full-time equivalent) 768.0 746.0 736.0 719.0 723.0 704.5
Associate retention rate (14) 94.2 % 92.5 % 92.1 % 88.9 % 90.8 % 90.9 %
Selected economic information (in thousands) (15):
Nashville MSA nonfarm employment 727.9 725.1 733.0 755.4 760.4 758.1
Knoxville MSA nonfarm employment 321.9 322.5 324.5 332.0 335.7 335.7
Nashville MSA unemployment 9.8 % 10.0 % 8.8 % 6.5 % 6.0 % 5.8 %
Knoxville MSA unemployment 9.3 % 9.3 % 8.2 % 6.4 % 5.6 % 5.6 %
Nashville residential median home price $ 163.7 170.7 161.0 163.8 169.9 183.6
Nashville inventory of residential homes for sale 14.7 15.0 14.0 12.9 15.1 15.8
This information is preliminary and based on company data available
at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY AND YEAR-TO-DATE
FINANCIAL DATA - UNAUDITED
As of September 30,As of December 31,
(dollars in thousands, except per share data) 2009 2008
Reconciliation of certain financial measures:
Tangible assets:
Total assets $ 5,094,710 $ 4,754,075
Less: Goodwill (244,116 ) (244,161 )
Core deposit and other intangibles (14,460 ) (16,871 )
Net tangible assets $ 4,836,134 $ 4,493,043
Tangible common equity:
Total stockholders' equity $ 710,091 $ 627,298
Less: Preferred stock (89,168 ) (88,348 )
Goodwill (244,116 ) (244,161 )
Core deposit and other intangibles (14,460 ) (16,871 )
Net tangible common equity $ 362,347 $ 277,918
Tangible common equity divided by tangible assets 7.49 % 6.19 %
Tangible common equity per common share $ 10.99 $ 11.70
For the three months ended September 30, For the nine months ended September 30,
(dollars in thousands) 2009 2008 2009 2008
Average tangible assets:
Total average assets $ 5,028,855 $ 4,202,592 $ 4,967,176 $ 3,963,384
Less: Average intangible assets (259,016 ) (261,584 ) (259,894 ) (259,869 )
Net average tangible assets $ 4,769,839 $ 3,941,008 $ 4,707,282 $ 3,703,515
Average tangible equity:
Total average stockholders' equity $ 715,844 $ 502,575 $ 667,002 $ 484,839
Less: Average intangible assets (259,016 ) (261,584 ) (259,894 ) (259,869 )
Net average tangible stockholders' equity $ 456,828 $ 240,991 $ 407,108 $ 224,970
Net income (loss) available to common stockholders $ (4,851 ) $ 8,795 $ (37,454 ) $ 22,821
Return on average tangible assets (annualized) (0.40 %) 0.89 % (1.06 %) 0.82 %
Return on average tangible stockholders' equity (annualized) (4.21 %) 14.52 % (12.30 %) 13.55 %
This information is preliminary and based on company data available
at the time of the presentation.
PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA - UNAUDITED
1. Ratios are presented on an annualized basis.
2. Net interest margin is the result of net interest income on a tax
equivalent basis divided by average interest earning assets.
3. Total revenue is equal to the sum of net interest income and
noninterest income.
4. Efficiency ratios are calculated by dividing noninterest expense
by the sum of net interest income and noninterest income.
5. 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 that are not
nonperforming loans are considered potential problem loans.
Generally, consumer loans are not subjected to internal risk ratings.
6. 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.
7. Computed by dividing the balance of all loans by the number of
loan accounts as of the end of each quarter.
8. 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 one capital (pursuant to risk-based capital
guidelines) as a percentage of adjusted average assets.
Tier one risk-based - Tier one 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.
9. Book value per share computed by dividing total stockholders'
equity less preferred stock and common stock warrants by common
shares outstanding.
10. Amounts are included in the statement of operations in "Gains on
the sale of loans and loan participations sold", net of commissions
paid on such amounts.
11. At fair value, based on information obtained from Pinnacle's
third party broker/dealer for non-FDIC insured financial products
and services.
12. 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.
13. Core deposits include all transaction deposit accounts, money
market and savings accounts and all certificates of deposit issued
in a denomination of less than $100,000. 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.
14. 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.
15. Employment and unemployment data is from the US Dept. of Labor
Bureau of Labor Statistics. Labor force data is not seasonally
adjusted. The most recent quarter data presented is as of the most
recent month that data is available as of the release date. The
Nashville home data is from the Greater Nashville Association of
Realtors.
16. Brokered deposits do not include balances under the Certificate
of Deposit Account Registry Service (CDARS).
SOURCE: Pinnacle Financial Partners Inc.
Pinnacle Financial Partners Inc.
MEDIA CONTACT:
Sue Atkinson, 615-320-7532
or
FINANCIAL CONTACT:
Harold Carpenter, 615-744-3742
WEBSITE:
www.pnfp.com
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