Pinnacle Financial Announces Pricing of Private Offering of Bank-Issued Subordinated Notes

NASHVILLE, Tenn.--()--Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) announced today that its subsidiary, Pinnacle Bank, has priced the issuance, through a private placement, of $60 million in aggregate principal amount of subordinated notes due 2025 to certain institutional accredited investors. The subordinated notes will bear a fixed interest rate of 4.875 percent per annum until July 30, 2020, payable semi-annually in arrears. From July 30, 2020, the subordinated notes will bear a floating rate of interest equal to 3-Month LIBOR + 3.128 percent per annum until the notes mature on July 30, 2025, or such earlier redemption date, payable quarterly in arrears. The notes will be redeemable by Pinnacle Bank, in whole or in part, on or after July 30, 2020 or upon the occurrence of certain specified tax events, capital events or investment company events. The notes will not be subject to redemption at the option of the holders.

Pinnacle estimates that the net proceeds from the sale of the notes will be approximately $59.1 million, and the notes are expected to qualify initially as Tier 2 capital for regulatory purposes. Pinnacle Bank intends to use the net proceeds in connection with its proposed acquisitions of Magna Bank in Memphis and CapitalMark Bank and Trust in Chattanooga and for other general corporate purposes.

In anticipation of the subordinated debt offering, Pinnacle recently obtained ratings from Kroll Bond Rating Agency (“KBRA”). KBRA has assigned investment grade ratings of BBB+ and BBB for Pinnacle Financial Partners’ senior unsecured debt and subordinated debt, respectively, and A- and BBB+ for Pinnacle Bank’s senior unsecured debt and subordinated debt, respectively.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful. The above referenced securities offered and to be sold by Pinnacle Bank have not been, and will not be, registered under the Securities Act of 1933, as amended, and may not be offered or sold absent registration or an exemption from registration thereunder or under any applicable state securities laws.

FORWARD-LOOKING STATEMENTS

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," "goal," "objective," "intend," "plan," "believe," "should," "hope," "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 factors that may cause the actual results, performance or achievements of Pinnacle Financial to differ materially from any results expressed or implied by such forward-looking statements. Such risks include, without limitation, (i) the failure of the closing conditions related to the notes offering to be satisfied (ii) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (iii) continuation of the historically low short-term interest rate environment; (iv) the inability of Pinnacle Financial to maintain the historical growth of its loan portfolio; (v) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (vi) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower-quality assets; (vii) increased competition with other financial institutions; (viii) greater than anticipated adverse conditions 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; (ix) rapid fluctuations or unanticipated changes in interest rates on loans or deposits; (x) the results of regulatory examinations; (xi) the ability to retain large, uninsured deposits; (xii) the development of any new market other than Nashville or Knoxville; (xiii) a merger or acquisition, like the proposed mergers with CapitalMark and Magna; (xiv) risks of expansion into new geographic or product markets, like the proposed expansion into the Chattanooga, TN-GA and Memphis, TN-MS-AR MSAs associated with the proposed mergers with CapitalMark and Magna; (xv) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including intangible assets; (xvi) reduced ability to attract additional financial advisors (or failure of such advisors to cause their clients to switch to Pinnacle Financial) or otherwise to attract customers from other financial institutions; (xvii) further deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xviii) inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies and required capital maintenance levels; (xix) risks associated with litigation, including the applicability of insurance coverage; (xx) the risk that the cost savings and any revenue synergies from the proposed mergers with CapitalMark and Magna may not be realized or take longer than anticipated to be realized; (xxi) disruption from the mergers with customers, suppliers or employee relationships; (xxii) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreements that Pinnacle Financial and Pinnacle Bank have entered into with CapitalMark and Magna; (xxiii) the risk of successful integration of CapitalMark’s and Magna’s business with ours; (xxiv) the failure of CapitalMark’s and Magna’s shareholders to approve the mergers; (xxv) the amount of the costs, fees, expenses and charges related to the mergers; (xxvi) reputational risk and the reaction of Pinnacle Financial’s, CapitalMark’s and Magna’s customers to the proposed mergers; (xxvii) the failure of the closing conditions to be satisfied; (xxviii) the risk that the integration of CapitalMark’s and Magna’s operations with Pinnacle Financial’s will be materially delayed or will be more costly or difficult than expected; (xxix) the possibility that the mergers may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (xxx) the dilution caused by Pinnacle’s issuance of additional shares of its common stock in the mergers; (xxxi) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xxxii) the vulnerability of our network and online banking portals to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (xxxiii) the possibility of increased compliance costs as a result of increased regulatory oversight, including oversight of companies in which Pinnacle Financial has significant investments, and the development of additional banking products for our corporate and consumer clients; and (xxxiv) 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, including implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. A more detailed description of these and other risks is contained in Pinnacle Financial's most recent annual report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2015 and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 8, 2015. Many of such factors are beyond Pinnacle Financial's ability to control or predict, and readers are cautioned not to put undue reliance on such forward-looking statements. Pinnacle Financial disclaims any obligation to update or revise any forward-looking statements contained in this report, whether as a result of new information, future events or otherwise.

Contacts

Pinnacle Financial Partners, Inc.
Media Contact:
Nikki Klemmer, 615-743-6132
or
Financial Contact:
Harold Carpenter, 615-744-3742
www.pnfp.com

Contacts

Pinnacle Financial Partners, Inc.
Media Contact:
Nikki Klemmer, 615-743-6132
or
Financial Contact:
Harold Carpenter, 615-744-3742
www.pnfp.com