Pinnacle Financial Reports Third Quarter 2009 Results
NASHVILLE, Tenn.--(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.
“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”
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 stockholders | ($0.15 | ) | $ | 0.38 | ($1.39 | ) | $ | 1.01 | |||||
| Diluted net income (loss) per common share available to common stockholders | ($0.15 | ) | $ | 0.36 | ($1.39 | ) | $ | 0.96 | |||||
| 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 | |||||||