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TheStreet Open House

Pinnacle Financial Increases Quarterly Net Income Per Fully Diluted Share By 24 Percent Over Last Quarter

Stock quotes in this article: PNFP

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. (CT) on April 17, 2012, to discuss first quarter 2012 results and other matters. To access the call for audio only, please call 1-877-602-7944. 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, it will be archived on the investor relations page of Pinnacle's website at www.pnfp.com for 90 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 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 $4.79 billion in assets at March 31, 2012. At March 31, 2012, Pinnacle is the second-largest bank holding company headquartered in Tennessee, with 29 offices in eight Middle Tennessee counties and three offices 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," “goal,” “objective,” "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 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) 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 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) effectiveness of Pinnacle Financial’s asset management activities in improving, resolving or liquidating lower-quality assets; (vi) increased competition with other financial institutions; (vii) 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; (viii) rapid fluctuations or unanticipated changes in interest rates; (ix) the results of regulatory examinations; (x) the development of any new market other than Nashville or Knoxville; (xi) a merger or acquisition; (xii) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including intangible assets; (xiii) the ability to attract additional financial advisors or to attract customers from other financial institutions; (xiv) the impact of governmental restrictions on and discretionary regulatory authority over entities participating in the Capital Purchase Program, of the U.S. Department of the Treasury (the “Treasury”); (xv) further deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xvi) inability to comply with regulatory capital requirements or to secure any required regulatory approvals for capital actions, including redemption of the remaining TARP preferred shares that are outstanding; and, (xvii) 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 March 2, 2012. 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 release, whether as a result of new information, future events or otherwise.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS – UNAUDITED    
 
  March 31, 2012 December 31, 2011
ASSETS
Cash and noninterest-bearing due from banks $ 60,400,972 $ 63,015,997
Interest-bearing due from banks 70,901,830 108,422,470
Federal funds sold and other 764,526 724,573
Short-term discount notes   -     -  
Cash and cash equivalents 132,067,328 172,163,040
 
Securities available-for-sale, at fair value 838,718,889 894,962,246

Securities held-to-maturity (fair value of $1,074,394 and $2,369,118 and at March 31, 2012 and December 31, 2011, respectively)

1,049,793 2,329,917
Mortgage loans held-for-sale 23,541,493 35,363,038
 
Loans 3,337,869,085 3,291,350,857
Less allowance for loan losses   (71,379,400 )   (73,974,675 )
Loans, net 3,266,489,685 3,217,376,182
 
Premises and equipment, net 76,378,894 77,127,361
Other investments 44,990,439 44,653,840
Accrued interest receivable 16,019,272 15,243,366
Goodwill 244,071,513 244,076,492
Core deposit and other intangible assets 7,156,200 7,842,267
Other real estate owned 34,018,658 39,714,415
Other assets   105,080,416     113,098,540  
Total assets $ 4,789,582,580   $ 4,863,950,704  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 756,909,243 $ 717,378,933
Interest-bearing 694,755,093 637,203,420
Savings and money market accounts 1,497,843,377 1,585,260,139
Time   655,783,708     714,496,974  
Total deposits 3,605,291,421 3,654,339,466
Securities sold under agreements to repurchase 118,088,532 131,591,412
Federal Home Loan Bank advances 226,031,695 226,068,796
Subordinated debt 97,476,000 97,476,000
Accrued interest payable 1,912,756 2,233,330
Other liabilities   22,116,728     42,097,132  
Total liabilities 4,070,917,132 4,153,806,136
 
Stockholders’ equity:

Preferred stock, no par value; 10,000,000 shares authorized; 71,250 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively

69,355,475 69,096,828

Common stock, par value $1.00; 90,000,000 shares authorized; 34,616,013 shares and 34,354,960 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively

34,616,013 34,354,960
Common stock warrants 3,348,402 3,348,402
Additional paid-in capital 537,860,446 536,227,537
Retained earnings 56,999,267 49,783,584
Accumulated other comprehensive income, net of taxes   16,485,845     17,333,257  
Stockholders’ equity   718,665,448     710,144,568  
Total liabilities and stockholders’ equity $ 4,789,582,580   $ 4,863,950,704  
 
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
March 31,
  2012 2011
Interest income:
Loans, including fees $ 38,637,719 $ 38,353,481
Securities
Taxable 4,929,284 6,360,899
Tax-exempt 1,703,146 1,935,888
Federal funds sold and other   553,939   574,006  
Total interest income   45,824,088   47,224,274  
 
Interest expense:
Deposits 4,827,476 9,424,241
Securities sold under agreements to repurchase 155,576 381,569
Federal Home Loan Bank advances and other borrowings   1,337,031   1,397,831  
Total interest expense   6,320,083   11,203,641  
Net interest income 39,504,005 36,020,633
Provision for loan losses   1,034,245   6,139,138  
Net interest income after provision for loan losses 38,469,760 29,881,495
 
Noninterest income:
Service charges on deposit accounts 2,323,962 2,261,457
Investment services 1,646,778 1,508,086
Insurance sales commissions 1,287,560 1,049,232
Gain on mortgage loans sold, net 1,494,472 609,377
Gain (loss) on sale of investment securities, net 113,600 (159,103 )
Trust fees 795,435 729,988
Other noninterest income   2,287,531   2,325,020  
Total noninterest income   9,949,338   8,324,057  
 
Noninterest expense:
Salaries and employee benefits 19,792,566 17,923,622
Equipment and occupancy 5,008,655 5,006,710
Other real estate owned 4,676,064 4,334,118
Marketing and other business development 785,325 753,751
Postage and supplies 563,294 489,877
Amortization of intangibles 686,067 715,904
Other noninterest expense   4,307,735   5,476,846  
Total noninterest expense   35,819,706   34,700,828  
Income before income taxes 12,599,392 3,504,724
Income tax expense   4,234,438   -  
Net income 8,364,954 3,504,724
Preferred dividends 900,519 1,187,500
Accretion on preferred stock discount   258,647   305,974  
Net income available to common stockholders $ 7,205,788 $ 2,011,250  
 
Per share information:
Basic net income per common share available to common stockholders $ 0.21 $ 0.06  
Diluted net income per common share available to common stockholders $ 0.21 $ 0.06  
 
Weighted average shares outstanding:
Basic 33,811,871 33,366,053
Diluted 34,423,898 34,013,810
 
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
  March 31, 2012 March 31, 2011
Average Balances Interest Rates/ Yields Average Balances Interest Rates/ Yields
Interest-earning assets :
Loans (1) $ 3,280,030 $ 38,638 4.74 % $ 3,191,076 $ 38,353 4.88 %
Securities
Taxable 688,645 4,929 2.88 % 811,793 6,361 3.18 %
Tax-exempt (2) 186,864 1,703 4.90 % 198,551 1,936 5.21 %
Federal funds sold and other   161,434   554 1.50 %   185,911   574 1.35 %
Total interest-earning assets 4,316,973 $ 45,824 4.33 % 4,387,331 $ 47,224 4.43 %
Nonearning assets
Intangible assets 251,668 254,529
Other nonearning assets   252,310   226,885
Total assets $ 4,820,951 $ 4,868,745
 
Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking $ 664,869 $ 824 0.50 % $ 592,356 $ 956 0.65 %
Savings and money market 1,541,559 2,142 0.56 % 1,579,325 4,061 1.04 %
Time   689,083   1,861 1.09 %   1,005,760   4,408 1.78 %
Total interest-bearing deposits 2,895,511 4,827 0.67 % 3,177,441 9,425 1.20 %
Securities sold under agreements to repurchase 129,892 156 0.48 % 185,471 382 0.83 %

Federal Home Loan Bank advances and other borrowings

238,578 610 1.03 % 113,705 742 2.65 %
Subordinated debt   97,476   727 3.00 %   97,476   656 2.73 %
Total interest-bearing liabilities 3,361,457 6,320 1.29 % 3,574,093 11,204 1.27 %
Noninterest-bearing deposits   701,760   - -     594,651   - -  
Total deposits and interest-bearing liabilities 4,063,217 $ 6,320 0.63 % 4,168,744 $ 11,204 1.09 %
Other liabilities 37,946 17,363
Stockholders' equity   719,788   682,638
Total liabilities and stockholders' equity $ 4,820,951 $ 4,868,745
Net interest income $ 39,504 $ 36,020
Net interest spread (3) 3.58 % 3.16 %
Net interest margin (4) 3.74 % 3.40 %
 
 
 
(1) Average balances of nonperforming loans are included in the above amounts.
(2) Yields computed on tax-exempt instruments on a tax equivalent basis.
(3) Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the quarter ended March 31, 2012 would have been 3.71% compared to a net interest spread of 3.34% for the quarter ended March 31, 2011.
(4) 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) March December September June March December
  2012 2011 2011 2011 2011 2010
 
Balance sheet data, at quarter end:
Commercial real estate - mortgage loans $ 1,123,690 1,110,962 1,087,333 1,091,283 1,102,533 1,094,615
Consumer real estate - mortgage loans 688,817 695,745 711,994 708,280 698,693 705,487
Construction and land development loans 281,624 274,248 278,660 282,064 300,697 331,261
Commercial and industrial loans 1,180,578 1,145,735 1,095,037 1,058,263 1,047,754 1,012,091
Consumer and other 63,160 64,661 68,125 67,214 67,753 68,986
Total loans 3,337,869 3,291,351 3,241,149 3,207,104 3,217,430 3,212,440
Allowance for loan losses (71,379 ) (73,975 ) (74,871 ) (76,971 ) (78,988 ) (82,575 )
Securities 839,769 897,292 942,752 925,508 984,200 1,018,637
Total assets 4,789,583 4,863,951 4,868,905 4,831,333 4,820,991 4,909,004
Noninterest-bearing deposits 756,909 717,379 722,694 662,018 608,428 586,517
Total deposits 3,605,291 3,654,339 3,712,650 3,761,520 3,731,883 3,833,057
Securities sold under agreements to repurchase 118,089 131,591 128,954 124,514 165,132 146,294
FHLB advances and other borrowings 226,032 226,069 161,106 111,191 111,351 121,393
Subordinated debt 97,476 97,476 97,476 97,476 97,476 97,476
Total stockholders’ equity 718,665 710,145 724,374 699,228 681,226 677,457
 
Balance sheet data, quarterly averages:
Total loans $ 3,280,030 3,261,972 3,207,213 3,211,591 3,191,076 3,217,738
Securities 875,509 924,153 939,778 972,750 1,010,344 993,236
Total earning assets 4,316,973 4,347,352 4,308,710 4,347,552 4,387,331 4,441,672
Total assets 4,820,951 4,852,311 4,786,485 4,826,731 4,868,745 4,937,181
Noninterest-bearing deposits 701,760 705,580 671,796 628,929 594,651 575,606
Total deposits 3,597,271 3,641,845 3,699,553 3,722,613 3,772,092 3,814,572
Securities sold under agreements to repurchase 129,892 141,818 145,050 175,705 185,471 194,283
FHLB advances and other borrowings 238,578 209,619 111,699 114,072 113,705 121,414
Subordinated debt 97,476 97,476 97,476 97,476 97,476 97,476
Total stockholders’ equity 719,788 729,622 708,973 691,020 682,638 689,976
 
Statement of operations data, for the three months ended:
Interest income $ 45,824 46,446 46,888 47,789 47,224 49,079
Interest expense   6,320   7,153   8,532   9,994   11,204   13,023  
Net interest income 39,504 39,293 38,356 37,795 36,020 36,056
Provision for loan losses   1,034   5,439   3,632   6,587   6,139   5,172  
Net interest income after provision for loan losses 38,470 33,854 34,724 31,208 29,881 30,884
Noninterest income 9,949 9,727 10,080 9,809 8,324 8,666
Noninterest expense   35,820   34,374   35,676   34,357   34,701   36,452  
Income before taxes 12,599 9,207 9,128 6,660 3,504 3,098
Income tax expense (benefit) 4,234 1,447 (16,973 ) 288 - (697 )
Preferred dividends and accretion   1,159   2,079   1,564   1,529   1,492   1,547  
Net income available to common stockholders $ 7,206   5,681   24,537   4,843   2,011   2,248  
 
Profitability and other ratios:
Return on avg. assets (1) 0.60 % 0.46 % 2.06 % 0.40 % 0.17 % 0.18 %
Return on avg. equity (1) 4.03 % 3.09 % 13.88 % 2.81 % 1.19 % 1.29 %
Net interest margin (1) (2) 3.74 % 3.65 % 3.60 % 3.55 % 3.40 % 3.29 %
Noninterest income to total revenue (3) 20.12 % 19.84 % 20.81 % 20.61 % 18.77 % 19.38 %
Noninterest income to avg. assets (1) 0.83 % 0.80 % 0.84 % 0.82 % 0.69 % 0.70 %
Noninterest exp. to avg. assets (1) 2.99 % 2.81 % 2.99 % 2.86 % 2.89 % 2.93 %
Efficiency ratio (4) 72.43 % 70.12 % 73.66 % 72.17 % 78.25 % 81.51 %
Avg. loans to average deposits 91.18 % 89.57 % 86.69 % 86.27 % 84.60 % 84.35 %
Securities to total assets 17.53 % 18.45 % 19.36 % 19.16 % 20.41 % 20.75 %

Average interest-earning assets to average interest-bearing liabilities

128.43 % 128.42 % 127.40 % 124.90 % 122.75 % 121.62 %
Brokered time deposits to total deposits (16) 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.03 %
 
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) March December September June March December
  2012 2011 2011 2011 2011 2010
 
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans $ 42,852 47,855 54,640 59,727 76,368 80,863
Other real estate (ORE)   34,019   39,714   45,500   52,395   56,000   59,608  
Total nonperforming assets $ 76,871   87,569   100,140   112,122   132,368   140,471  

Past due loans over 90 days and still accruing interest

$ 821 858 1,911 481 1,151 138
Troubled debt restructurings (5)

$

22,832

23,416 18,187 12,990 15,285 20,468
 
Net loan charge-offs $ 3,630 6,335 5,732 8,605 9,726 7,146
Allowance for loan losses to nonaccrual loans 166.6 % 154.6 % 137.0 % 128.9 % 103.4 % 102.1 %
As a percentage of total loans:
Past due accruing loans over 30 days 0.34 % 0.36 % 0.28 % 0.40 % 0.36 % 0.30 %
Potential problem loans (6) 3.78 % 3.96 % 4.04 % 4.62 % 5.31 % 6.95 %
Allowance for loan losses 2.14 % 2.25 % 2.31 % 2.40 % 2.46 % 2.57 %
Nonperforming assets to total loans and ORE 2.28 % 2.66 % 3.05 % 3.44 % 4.04 % 4.29 %
Nonperforming assets to total assets 1.60 % 1.80 % 2.06 % 2.32 % 2.75 % 2.86 %

 

Annualized net loan charge-offs year-to-date to avg. loans (7)

0.45 % 0.94 % 1.00 % 1.14 % 1.22 % 1.96 %
Avg. commercial loan internal risk ratings (6) 4.7 4.6 4.7 4.8 4.8 4.8
 
Interest rates and yields:
Loans 4.74 % 4.74 % 4.78 % 4.87 % 4.88 % 4.99 %
Securities 3.31 % 3.26 % 3.54 % 3.67 % 3.58 % 3.48 %
Total earning assets 4.33 % 4.30 % 4.38 % 4.47 % 4.43 % 4.45 %
Total deposits, including non-interest bearing 0.63 % 0.62 % 0.77 % 0.90 % 1.01 % 1.16 %
Securities sold under agreements to repurchase 0.48 % 0.50 % 0.56 % 0.79 % 0.83 % 0.81 %
FHLB advances and other borrowings 1.03 % 1.07 % 1.89 % 2.42 % 2.65 % 2.60 %
Subordinated debt 3.00 % 2.80 % 2.68 % 2.73 % 2.73 % 2.72 %
Total deposits and interest-bearing liabilities 0.63 % 0.69 % 0.84 % 0.98 % 1.09 % 1.22 %
 
Capital ratios (8):
Stockholders’ equity to total assets 15.0 % 14.6 % 14.9 % 14.5 % 14.1 % 13.8 %
Leverage 11.7 % 11.4 % 11.9 % 11.2 % 11.0 % 10.7 %
Tier one risk-based 14.0 % 13.8 % 14.4 % 13.9 % 13.6 % 13.8 %
Total risk-based 15.4 % 15.3 % 15.9 % 15.5 % 15.2 % 15.4 %
Tangible common equity to tangible assets 8.8 % 8.4 % 8.2 % 7.7 % 7.4 % 7.1 %
Tangible common equity to risk weighted assets 10.3 % 10.3 % 10.3 % 9.6 % 9.1 % 9.1 %
 
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) March December September June March December
  2012 2011 2011 2011 2011 2010  
 
Per share data:
Earnings – basic $ 0.21 0.17 0.74 0.14 0.06 0.07
Earnings – diluted $ 0.21 0.17 0.72 0.14 0.06 0.07
Book value per common share at quarter end (9) $ 18.66 18.56 18.34 17.71 17.19 17.22
Tangible common equity per common share $ 11.50 11.33 11.08 10.38 9.85 9.80
 
Weighted avg. common shares – basic 33,811,871 33,485,253 33,372,980 33,454,229 33,366,053 33,062,533
Weighted avg. common shares – diluted 34,423,898 34,127,209 33,993,914 34,095,636 34,013,810 33,670,890
Common shares outstanding 34,616,013 34,354,960 34,306,927 34,136,163 34,132,256 33,870,380
 
Investor information:
Closing sales price $ 18.35 16.15 10.94 15.56 16.54 13.58
High closing sales price during quarter $ 18.44 16.65 16.21 16.82 16.60 13.74
Low closing sales price during quarter $ 15.25 10.28 10.52 14.15 13.55 9.27
 
Other information:
Gains on sale of loans and loan participations sold:
Mortgage loan sales:
Gross loans sold $ 119,023 134,794 104,716 68,506 70,981 143,793
Gross fees (10) $ 2,465 2,610 2,166 1,380 1,129 2,610

Gross fees as a percentage of mortgage loans originated

2.07 % 1.94 % 2.07 % 2.01 % 1.59 % 1.81 %
Gains (losses) on sales of investment securities, net of OTTI $ 114 133 377 610 (159 ) -
Brokerage account assets, at quarter-end (11) $ 1,176,180 1,061,249 987,908 1,101,000 1,110,000 1,038,000
Trust account assets, at quarter-end $ 789,614 632,608 607,668 663,304 730,000 693,000
Floating rate loans as a percentage of total loans (12) 32.2 % 32.9 % 33.3 % 34.7 % 35.4 % 36.9 %

Balance of commercial loan participations sold to other banks and serviced by Pinnacle, at quarter end

$ 52,155 62,209 57,045 50,797 60,784 55,632
Core deposits (13) $ 3,405,915 3,441,547 3,388,692 3,437,595 3,382,230 3,425,571
Core deposits to total funding (13) 84.3 % 83.7 % 82.6 % 84.0 % 82.4 % 81.6 %
Risk-weighted assets

$

3,826,678

3,780,412 3,751,479 3,693,390 3,711,179 3,639,095
Total assets per full-time equivalent employee $ 6,442 6,511 6,580 6,538 6,373 6,384
Annualized revenues per full-time equivalent employee $ 266.8 263.2 262.5 261.3 237.7 230.4
Number of employees (full-time equivalent) 743.5 747.0 740.0 739.0 756.5 769.0
Associate retention rate (14) 93.7 % 92.0 % 92.6 % 89.6 % 92.4 % 93.5 %
 
Selected economic information (in thousands) (15):
Nashville MSA nonfarm employment 747.8 757.3 735.5 738.3 735.5 748.1
Knoxville MSA nonfarm employment 330.9 331.7 327.7 325.1 325.2 326.6
Nashville MSA unemployment 7.2 % 7.2 % 8.5 % 8.9 % 8.3 % 8.1 %
Knoxville MSA unemployment 6.7 % 6.6 % 7.9 % 8.3 % 7.5 % 7.3 %
Nashville residential median home price $ 168.5 168.5 171.6 167.1 166.8 171.0
Nashville inventory of residential homes for sale (18) 11.8 10.6 13.4 14.0 13.0 13.3
 
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 FINANCIAL DATA – UNAUDITED
           
March December September June March December
(dollars in thousands , except per share data)   2012 2011 2011 2011 2011 2010
Reconciliation of certain financial measures:
Tangible assets:
Total assets $ 4,789,583 $ 4,863,951 $ 4,868,905 $ 4,831,333 $ 4,820,991 $ 4,909,004
Less: Goodwill (244,072 ) (244,076 ) (244,082 ) (244,083 ) (244,083 ) (244,090 )
Core deposit and other intangibles   (7,156 )   (7,842 )   (8,558 )   (9,273 )   (9,989 )   (10,705 )
Net tangible assets $ 4,538,355   $ 4,612,033   $ 4,616,265   $ 4,577,976   $ 4,566,919   $ 4,654,208  
 
Tangible equity:
Total stockholders' equity $ 718,665 $ 710,145 $ 724,374 $ 699,228 $ 681,226 $ 677,457
Less: Goodwill (244,072 ) (244,076 ) (244,082 ) (244,083 ) (244,083 ) (244,090 )
Core deposit and other intangibles   (7,156 )   (7,842 )   (8,558 )   (9,273 )   (9,989 )   (10,705 )
Net tangible equity 467,437 458,226 471,734 445,872 427,154 422,662
Less: Preferred stock   (69,355 )   (69,097 )   (91,772 )   (91,422 )   (91,094 )   (90,789 )
Net tangible common equity $ 398,082   $ 389,130   $ 379,962   $ 354,449   $ 336,060   $ 331,873  
 
Ratio of tangible common equity to tangible assets   8.77 %   8.44 %   8.23 %   7.74 %   7.36 %   7.13 %
 
 
For the three months ended
March December September June March December
  2012 2011 2011 2011 2011 2010
 
Net interest income $ 39,504 $ 39,293 $ 38,356 $ 37,795 $ 36,020 $ 36,056
 
Noninterest income 9,949 9,727 10,080 9,809 8,324 8,666
Less: Net gains (losses) on sale of investment securities   114     133     377     610     (159 )   -  
Noninterest income excluding the impact of other net gains (losses) on sale of investment securities $ 9,834   $ 9,594   $ 9,703   $ 9,199   $ 8,483   $ 8,666  
 
Noninterest expense 35,820 34,374 35,676 34,357 34,701 36,452
Other real estate owned expense   4,676     4,193     5,079     3,826     4,334     7,874  
Noninterest expense excluding the impact of other real estate owned expense $ 31,144   $ 30,181   $ 30,597   $ 30,532   $ 30,367   $ 28,578  
 
Adjusted pre-tax pre-provision income (17) $ 18,195   $ 18,706   $ 17,462   $ 16,463   $ 14,136   $ 16,145  
 
 
Efficiency Ratio (4) 72.4 % 70.1 % 73.7 % 72.2 % 78.3 % 81.5 %
 

Efficiency Ratio excluding the impact of other real estate owned expense (4)

 

63.0 % 61.6 % 63.2 % 64.1 % 68.5 % 63.9 %
 
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.

Troubled debt restructurings include loans where the company, as a result of the borrower’s financial difficulties, has granted a credit concession to the borrower (i.e., interest only payments for a significant period of time, extending the maturity of the loan, etc.). All of these loans continue to accrue interest at the contractual rate.

6.

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 or restructured loans are considered potential problem loans. Generally, consumer loans are not subjected to internal risk ratings.

7.

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.

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 loans sold, net”, 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 $250,000.

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 reciprocal balances under the Certificate of Deposit Account Registry Service (CDARS).

17.

Adjusted pre-tax, pre-provision income excludes the impact of net gains (losses) on investment security sales as well as other real estate owned expenses.

18.

Represents homes currently listed with MLS in the Nashville MSA.





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