Pinnacle Financial Receives Preliminary Approval to Participate in the U.S. Treasury Capital Purchase Program

NASHVILLE, Tenn.--(BUSINESS WIRE)--Pinnacle Financial Partners Inc. (Nasdaq/NGS: PNFP) today reported that it has received preliminary approval for the sale of $95 million of preferred stock and related warrants to the U.S. Treasury under the Capital Purchase Program of the Emergency Economic Stabilization Act of 2008 (the “CPP”). Receipt of the funding is subject to execution of definitive agreements and satisfaction of closing conditions.

“We anticipate that we will incur a modest amount of near-term dilution to our fully diluted earnings per share through mid-2009”

“We believe the government’s Capital Purchase Program should help stabilize the very difficult economic challenges our nation is facing,” said M. Terry Turner, president and chief executive officer. “While some banks desperately need the capital to survive, others lack the momentum to be able to effectively deploy any additional capital for the benefit of their community. At Pinnacle, we are pleased with the fact that we have avoided the traps that are currently plaguing many banks and that we are positioned to seize the many strategic opportunities that inevitably result for those that are well prepared.”

At September 30, 2008, Pinnacle Financial’s capital levels were well above “well-capitalized” regulatory benchmarks. The additional capital resulting from participation in the Treasury program will immediately increase Pinnacle Financial’s capital ratios. Assuming the same level of risk weighted assets at September 30, 2008, Pinnacle’s Tier 1 Risk Based Capital Ratio would increase from 9.8 percent to a pro forma ratio of approximately 12.3 percent. The Total Risk Based Capital Ratio would increase from 11.2 percent to approximately 13.7 percent.

“We anticipate that we will incur a modest amount of near-term dilution to our fully diluted earnings per share through mid-2009,” said Harold R. Carpenter, executive vice-president and chief financial officer. “Our loan pipelines remain robust, so we believe we will be able to leverage this additional capital quickly and consistently with the goals of the CPP.”

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 also has a well-established expertise in commercial real estate.

The firm began operations in a single downtown Nashville location in October 2000 and has since grown to $4.34 billion in assets. In 2007, Pinnacle launched an expansion into Knoxville, another high growth MSA. Pinnacle is the second-largest bank holding company headquartered in Tennessee, with 31 offices in eight Middle Tennessee counties and two in Knoxville.

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," "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) the inability of Pinnacle to continue to grow its loan portfolio at historic rates in the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA, (iii) increased competition with other financial institutions, (iv) lack of sustained growth in the economy in the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA, (v) rapid fluctuations or unanticipated changes in interest rates, and (vi) changes in state and Federal legislation or regulations applicable to Banks and other financial services providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy. In addition, Pinnacle cannot assure investors that it or the United States Treasury will ultimately execute definitive documents related to the CPP or that the closing of the issuance of the preferred shares to the United States Treasury pursuant to the CPP will occur. 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.