Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today reported that its net income per fully diluted common share available to common stockholders was $0.72 for the quarter ended Sept. 30, 2011, compared to net income per fully diluted common share available to common stockholders of $0.02 for the quarter ended Sept. 30, 2010, and net income per fully diluted common share available to common stockholders of $0.14 for the quarter ended June 30, 2011.

Fully diluted earnings per share available to common stockholders were $0.21 excluding $0.51 per share related to the full reversal of a valuation allowance for net deferred tax assets which had been established in the second quarter of 2010.

Net income per fully diluted common share available to common stockholders was $0.92 for the nine months ended Sept. 30, 2011, compared to net loss per fully diluted common share available to common stockholders of $1.00 for the first nine months of 2010.

“Several positive events occurred during the third quarter of 2011,” said M. Terry Turner, Pinnacle’s president and chief executive officer. “We experienced meaningful growth in loans, demand deposits and revenues, continued reductions in problem loans and the reversal of a previously established deferred tax valuation allowance. These items clearly signal that our firm is well positioned to capitalize on future growth opportunities in two very strong banking markets.”

Expanding the Core Earnings Capacity of the Firm
  • Loans at Sept. 30, 2011, were $3.24 billion, an increase of $34.0 million from $3.21 billion at June 30, 2011, or an annualized growth rate of 4.2 percent. Commercial and industrial loans combined with owner-occupied commercial real estate loans were $1.65 billion at Sept. 30, 2011, an increase of $50.0 million from $1.60 billion at June 30, 2011, an annualized growth rate of 12.4 percent and the fourth consecutive quarter of net growth.
  • Average balances of noninterest bearing deposit accounts were $672 million in the third quarter of 2011, the sixth consecutive quarterly increase. Average balances increased 6.8 percent over second quarter 2011 and 25.8 percent over the same quarter last year.
  • Revenue for the quarter ended Sept. 30, 2011, amounted to $48.44 million, compared to $47.60 million for the second quarter of 2011 and $44.65 million for the same quarter of last year, an annualized increase of 7.2 percent. The net interest margin increased to 3.60 percent for the quarter ended Sept. 30, 2011, from 3.23 percent for the quarter ended Sept. 30, 2010. Net interest margin for the quarter ended June 30, 2011, was 3.55 percent.
  • Income before income taxes and TARP expenses increased from $6.66 million for the quarter ended June 30, 2011, to $9.13 million for the quarter ended Sept. 30, 2011, a 37.1 percent linked-quarter increase.
  • Four years after expanding to the Knoxville market, Pinnacle’s operation in Knoxville reached over $531.2 million in loans at the end of the third quarter 2011. Pinnacle also moved up to the sixth-largest among 44 financial institutions in the Knoxville metropolitan statistical area (MSA), according to deposit market share data recently released by the Federal Deposit Insurance Corporation (FDIC).

Aggressively Dealing with Credit Issues
  • Nonperforming assets declined by $12.0 million, a linked-quarter reduction of 10.7 percent and the fifth consecutive quarterly reduction. Pinnacle resolved $29.5 million in nonperforming assets during the third quarter of 2011, compared to resolutions of $38.7 million during the second quarter of 2011.
    • Nonperforming loans declined by $5.1 million during the third quarter of 2011, a linked-quarter reduction of 8.5 percent and the sixth consecutive quarterly reduction. Nonperforming loans are down 47.0 percent from a year ago. Additionally, nonperforming loan inflows decreased from $18.4 million during the second quarter of 2011 to $17.5 million in the third quarter of 2011.
    • Other real estate also declined by $6.9 million during the third quarter of 2011, while the firm foreclosed on $8.1 million in property during the third quarter of 2011.
  • Potential problem loans, which are classified loans that continue to accrue interest, also decreased from $148.5 million at June 30, 2011, to $131.0 million at Sept. 30, 2011, a linked-quarter decrease of 11.7 percent and the fifth consecutive quarter of net reductions. Potential problem loans are down by 58.8 percent from their peak in June 2010.
  • Pinnacle’s classified asset ratio declined from 46.62 percent at June 30, 2011, to 40.83 percent at Sept. 30, 2011. The classified asset ratio was 74.55 percent at Sept. 30, 2010. The classified asset ratio is composed primarily of nonperforming assets and potential problem loans expressed as a percentage of the firm’s Tier 1 risk-based capital and allowance for loan losses.
  • Construction and land development loans were $278.7 million, down 1.2 percent from $282.1 million at June 30, 2011, and 22.5 percent from $359.7 million at Sept. 30, 2010. Residential land development loans declined from $125.2 million at Sept. 30, 2010, to $77.1 million at Sept. 30, 2011. Residential land development loans were $84.8 million at June 30, 2011, a decrease of 9.1 percent.

“We are particularly pleased with our growth in C&I lending during the third quarter of 2011,” Turner said. “Our relationship managers are actively pursuing established businesses in our market, as evidenced by the growth in demand deposits and C&I loans. Additionally, we have been successful in recently hiring additional experienced commercial lenders for our franchise, which should further bolster our ability to grow organically and move market share, a longstanding core strategy of our firm. We also experienced net decreases in nonperforming assets of $12.0 million during the third quarter of 2011, marking our fifth consecutive quarter of decreases since our peak in nonperformers in second quarter of 2010.”

OTHER THIRD QUARTER 2011 HIGHLIGHTS:

  • Core Deposits
    • Core deposits amounted to $3.39 billion at Sept. 30, 2011, an increase of 5.1 percent from the $3.22 billion at Sept. 30, 2010. Core deposits at June 30, 2011, were $3.44 billion.
    • Over the last year the firm has successfully repositioned its deposit base so that average balances for noninterest-bearing demand, interest checking and money market accounts for the third quarter of 2011 increased by 15.6 percent over the average balances for the third quarter of 2010, while average balances for higher-cost time deposits decreased from $1.39 billion to $841.48 million, or 39.3 percent, during the same time period.
  • Operating results
    • Net income available to common stockholders for the third quarter of 2011 was $24.54 million, compared to the prior year s third quarter net income available to common stockholders of $549,000. Included in third quarter 2011 net income available to common stockholders was an income tax benefit of $16.97 million which was composed primarily of the reversal of the valuation allowance of net deferred tax assets of approximately $22.48 million, reduced by estimated 2011 income tax expense. Second quarter 2011 net income available to common stockholders totaled $4.84 million.
    • Net interest income for the third quarter of 2011 was $38.4 million, compared to $37.8 million for the second quarter of 2011 and $36.1 million for the same quarter last year.
    • Noninterest income for the quarter ended Sept. 30, 2011, was $10.1 million, compared to $9.8 million in the second quarter of 2011 and $8.6 million for the same quarter last year. Excluding the impact of net securities gains and losses, noninterest income was up 5.5 percent on a linked-quarter basis and 12.9 percent over the same quarter last year.
    • Wealth management revenues, which include investment services, trust services and insurance, were $3.45 million during the third quarter of 2011, an increase of 18.5 percent over the same period last year due primarily to additional emphasis on internal referral programs and the addition of several new associates over the past two years.
    • Gains on the sale of loans, net, (i.e., mortgage loan production) increased to $1.30 million during the third quarter of 2011 compared to $789,000 during the second quarter of 2011 due primarily to a significant increase in refinance activity consistent with nationwide trends.

“In addition to our third quarter 2011 net interest margin increasing to 3.60 percent, our net interest income increased by $2.3 million over last year’s third quarter net interest income despite a slightly smaller balance sheet,” said Harold R. Carpenter, Pinnacle’s chief financial officer. “Our fourth consecutive quarter of net interest margin expansion is largely attributable to the outstanding work our relationship managers have done communicating our deposit pricing strategies and relative value to their clients in order to lower our cost of funds.

“We believe we will continue to expand our margins in the fourth quarter of 2011 based primarily on continued reductions in our funding costs and increased loan production. Margin expansion into 2012 will be challenging due to increased pricing competition for quality loan opportunities, an anticipated flattening of the yield curve and substantial increases in mortgage refinancing, which is resulting in increased ‘mortgage-backed’ security prepayments and corresponding reduction in investment portfolio yield. We are experiencing strong consumer deposit growth as a result of recently announced charges for debit cards and other fee increases by several of our large-bank competitors. Also, as the official bank of the Tennessee Titans, we are partnering with the NFL team on a campaign aimed at attracting customers who are considering a no-fee debit card.”

  • Capital
    • At Sept. 30, 2011, Pinnacle’s ratio of tangible common stockholders’ equity to tangible assets was 8.2 percent, compared to 7.2 percent at Sept. 30, 2010, and 7.7 percent at June 30, 2011. At Sept. 30, 2011, Pinnacle’s total risk-based capital ratio was 15.9 percent, compared to 15.1 percent at Sept. 30, 2010, and 15.5 percent at June 30, 2011

“We continue to believe we have a solid business case to redeem our TARP preferred shares over the next year or two with minimal common share dilution to our shareholders,” Turner said. “We believe regulators have worked with financial institutions experiencing sustained improvement in earnings capacity and credit quality to allow TARP redemption on a non-dilutive basis.”
  • Credit quality
    • Net charge-offs were $5.73 million for the quarter ended Sept. 30, 2011, down from $7.35 million for the quarter ended Sept. 30, 2010, and $8.61 million for the second quarter of 2011.
    • Provision for loan losses expense decreased from $4.8 million for the third quarter of 2010 to $3.6 million for the third quarter of 2011. For the nine months ended Sept. 30, 2011, provision expense was $16.4 million compared to $48.5 million for the same period last year.
    • The allowance for loan losses represented 2.31 percent of total loans at Sept. 30, 2011, compared to 2.40 percent at June 30, 2011, and 2.60 percent at Sept. 30, 2010.
    • Nonperforming assets were 3.05 percent of total loans plus other real estate at Sept. 30, 2011, compared to 3.44 percent at June 30, 2011, and 4.60 percent at Sept. 30, 2010. The ratio of the allowance for loan losses to nonperforming loans increased to 137.0 percent at Sept. 30, 2011, from 128.9 percent at June 30, 2011 and 82.0 percent at Sept. 30, 2010.
    • Past due loans over 30 days, excluding nonperforming loans, were 0.28 percent of total loans at Sept. 30, 2011, compared to 0.40 percent at June 30, 2011, and 0.67 percent at Sept. 30, 2010.

"Our third quarter 2011 provision expense was impacted by a 0.09 percent reduction in the ‘allowance for loan losses to total loans’ ratio, which was due to continued improvement in the credit quality of our loan portfolio," Carpenter said. "Based on our current loan pipeline, we anticipate provision expense will increase due to anticipated loan growth in the fourth quarter 2011 as compared to the third quarter of 2011.

”The following is a summary of the activity in various nonperforming asset and restructured accruing loan categories for the quarter ended Sept. 30, 2011:

         
(in thousands) Balances

June 30, 2011
 

Payments, Sales and Reductions
  Foreclosures   Inflows   Balances

Sept 30, 2011
Restructured accruing loans:
Residential construction and development $ - $ - $ - $ - $ -
Commercial construction and development - - - - -
Other   12,990     (23 )     -       5,220     18,187
Totals   12,990     (23 )     -       5,220     18,187
Nonperforming loans:
Residential construction and development 11,376 (3,748 ) (919 ) 2,942 9,651
Commercial construction and development 20,276 (3,436 ) (5,099 ) 2,149 13,890
Other   28,075     (7,388 )     (2,032 )     12,444     31,099
Totals   59,727     (14,572 )     (8,050 )     17,535     54,640
Other real estate:
Residential construction and development 15,764 (3,082 ) 919 - 13,601
Commercial construction and development 27,337 (7,493 ) 5,099 - 24,943
Other   9,294     (4,370 )     2,032       -     6,956
Totals   52,395     (14,945 )     8,050       -     45,500
Total nonperforming assets and restructured accruing loans $ 125,112   $ (29,540 )   $ -     $ 22,755   $ 118,327
 
  • Noninterest expenses and taxes
    • Noninterest expense for the quarter ended Sept. 30, 2011, was $35.68 million, compared to $37.77 million in the third quarter of 2010 and $34.36 million in the second quarter of 2011.
    • Included in noninterest expense for the third quarter of 2011 was $5.08 million in other real estate expenses, compared to $8.52 million in the third quarter of 2010 and $3.83 million in the second quarter of 2011.
    • Pursuant to generally accepted accounting principles and as a result of the reversal of the net deferred tax asset valuation allowance, Pinnacle anticipates that its fourth quarter 2011 effective income tax expense rate will be nominal. The firm anticipates that its effective tax rate will range between 29 percent and 32 percent during 2012.

Carpenter said that compensation costs for the third quarter of 2011 increased by 2.65 percent over the second quarter of 2011, driven primarily by increased incentive accruals. Incentive payouts for all associates other than the “named executive officers” during 2011 are based on achievement of predetermined targets for the classified asset ratio and pre-tax earnings.

Included in the other real estate expense for the quarter was $3.67 million of additional write downs of existing balances based on updated appraisals. The firm also recorded $635,000 in losses related to the disposition of $14.95 million of other real estate properties. Carpenter noted that the firm currently anticipates foreclosures of approximately $10 million in the fourth quarter of 2011 but that the timing of resolution of several larger ORE properties will affect ORE balances at year end.

Excluding the impact of ORE expenses in each quarterly period, the third quarter of 2011 noninterest expense was approximately $30.60 million, compared to $30.53 million in the second quarter of 2011 and $29.25 million in the third quarter of 2010. Excluding the impact of other real estate expenses, the firm currently anticipates that fourth quarter 2011 noninterest expense will approximate third quarter noninterest expenses.

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. (CDT) on Wednesday, Oct. 19, 2011, to discuss third quarter 2011 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 $4.87 billion in assets at Sept. 30, 2011. At Sept. 30, 2011, Pinnacle is the second-largest bank holding company headquartered in Tennessee, with 30 offices in eight Middle Tennessee counties and three offices 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," “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 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”); (xiv) further deterioration in the valuation of other real estate owned; (xv) inability to comply with regulatory capital requirements or to secure any required regulatory approvals for capital actions; and, (xvi) 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 23, 2011 and most recent quarterly reports on Form 10-Q filed with the Securities and Exchange commission on May 5, 2011 and July 29, 2011. 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
   
    September 30, 2011   December 31, 2010

ASSETS
Cash and noninterest-bearing due from banks $ 58,786,507 $ 40,154,247
Interest-bearing due from banks 111,701,085 140,647,481
Federal funds sold and other 10,047,791 7,284,685
Short-term discount notes   -       499,768  
Cash and cash equivalents 180,535,383 188,586,181
 
Securities available-for-sale, at fair value 940,162,454 1,014,316,831

Securities held-to-maturity (fair value of $2,641,006 and $4,411,856 at September 30, 2011 and December 31, 2010, respectively)
2,589,506 4,320,486
Mortgage loans held-for-sale 23,814,429 16,206,034
 
Loans 3,241,148,810 3,212,440,190
Less allowance for loan losses   (74,870,538 )     (82,575,235 )
Loans, net 3,166,278,272 3,129,864,955
 
Premises and equipment, net 78,534,670 82,374,228
Other investments 42,781,814 42,282,255
Accrued interest receivable 15,827,730 16,364,573
Goodwill 244,081,519 244,090,311
Core deposit and other intangible assets 8,557,782 10,705,105
Other real estate owned 45,499,852 59,608,224
Other assets   120,241,811       100,284,697  
Total assets $ 4,868,905,222     $ 4,909,003,880  
 

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 722,694,096 $ 586,516,637
Interest-bearing 577,683,159 573,670,188
Savings and money market accounts 1,554,858,658 1,596,306,386
Time   857,413,879       1,076,564,179  
Total deposits 3,712,649,792 3,833,057,390
Securities sold under agreements to repurchase 128,953,750 146,294,379
Federal Home Loan Bank advances 161,105,866 121,393,026
Subordinated debt 97,476,000 97,476,000
Accrued interest payable 2,681,791 5,197,925
Other liabilities   41,664,132       28,127,875  
Total liabilities 4,144,531,331 4,231,546,595
 
Stockholders’ equity:

Preferred stock, no par value; 10,000,000 shares authorized; 95,000 shares issued and outstanding at September 30, 2011 and December 31, 2010
91,772,130 90,788,682

Common stock, par value $1.00; 90,000,000 shares authorized; 34,306,927 issued and outstanding at September 30, 2011 and 33,870,380 issued and outstanding at December 31, 2010
34,306,927 33,870,380
Common stock warrants 3,348,402 3,348,402
Additional paid-in capital 534,971,880 530,829,019
Retained earnings 44,427,826 12,996,202
Accumulated other comprehensive income, net of taxes   15,546,726       5,624,600  
Stockholders’ equity   724,373,891       677,457,285  
Total liabilities and stockholders’ equity $ 4,868,905,222     $ 4,909,003,880  
 
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,
    2011   2010   2011   2010
Interest income:
Loans, including fees $ 38,571,893 $ 41,105,351 $ 115,830,529 $ 122,504,151
Securities:
Taxable 5,952,599 7,004,256 18,792,778 24,150,109
Tax-exempt 1,819,642 1,942,650 5,593,341 5,978,849
Federal funds sold and other   543,496       598,181     1,684,376       1,635,934  
Total interest income   46,887,630       50,650,438     141,901,024       154,269,043  
 
Interest expense:
Deposits 7,138,053 12,306,145 24,869,045 38,695,099
Securities sold under agreements to repurchase 204,107 435,054 931,120 1,352,015
Federal Home Loan Bank advances and other borrowings   1,189,742       1,849,300     3,929,119       5,904,792  
Total interest expense   8,531,902       14,590,499     29,729,284       45,951,906  
Net interest income 38,355,728 36,059,939 112,171,740 108,317,137
Provision for loan losses   3,632,440       4,789,322     16,358,767       48,523,927  
Net interest income after provision for loan losses 34,723,288 31,270,617 95,812,973 59,793,210
 
Noninterest income:
Service charges on deposit accounts 2,361,803 2,444,077 6,953,466 7,238,588
Investment services 1,698,886 1,234,421 4,844,398 3,786,067
Insurance sales commissions 1,001,716 954,015 3,055,194 2,957,393
Gain on loans sold, net 1,295,278 1,310,169 2,693,913 2,733,977
Net gain on sale of investment securities 376,509 - 827,708 2,623,674
Trust fees 753,551 726,094 2,253,474 2,377,182
Other noninterest income   2,592,170       1,925,459     7,585,231       5,932,154  
Total noninterest income   10,079,913       8,594,235     28,213,384       27,649,035  
 
Noninterest expense:
Salaries and employee benefits 19,015,217 16,069,360 55,462,370 48,921,007
Equipment and occupancy 4,942,917 5,230,730 15,009,641 16,089,323
Other real estate owned 5,079,127 8,522,346 13,238,853 21,335,705
Marketing and other business development 751,094 748,206 2,271,267 2,295,820
Postage and supplies 509,279 636,492 1,544,253 2,070,536
Amortization of intangibles 715,514 744,492 2,147,323 2,236,494
Other noninterest expense   4,662,073       5,822,252     15,059,685       17,482,907  
Total noninterest expense   35,675,221       37,773,878     104,733,392       110,431,792  
Income (loss) before income taxes 9,127,980 2,090,974 19,292,965 (22,989,547 )
Income tax expense (benefit)   (16,973,019 )     -     (16,684,605 )     5,106,734  
Net Income (loss) 26,100,999 2,090,974 35,977,570 (28,096,281 )
Preferred dividends 1,213,889 1,213,889 3,602,083 3,602,083
Accretion on preferred stock discount   349,817       328,037     983,448       992,496  
Net income (loss) available to common stockholders $ 24,537,293     $ 549,048   $ 31,392,039     $ (32,690,860 )
 
Per share information:
Basic net income (loss) per common share available to common stockholders $ 0.74     $ 0.02   $ 0.94       ($1.00 )
Diluted net income (loss) per common share available to common stockholders $ 0.72     $ 0.02   $ 0.92       ($1.00 )
 
Weighted average shares outstanding:
Basic 33,372,980 32,857,428 33,398,029 32,697,985
Diluted 33,993,914 33,576,963 34,037,739 32,697,985
 
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, 2011   September 30, 2010

Average Balances
  Interest  

Rates/ Yields
 

Average Balances
  Interest  

Rates/ Yields
Interest-earning assets :
Loans (1) $ 3,207,213 $ 38,572 4.78 % $ 3,295,531 $ 41,105 4.96 %
Securities:
Taxable 747,784 5,953 3.16 % 750,427 7,004 3.70 %
Tax-exempt (2) 191,994 1,820 5.02 % 204,442 1,943 4.97 %
Federal funds sold and other   161,719     543   1.44 %     269,556     598   0.95 %
Total interest-earning assets 4,308,710 $ 46,888   4.38 % 4,519,956 $ 50,650   4.51 %
Nonearning assets
Intangible assets 253,102 256,011
Other nonearning assets   224,673   225,406
Total assets $ 4,786,485 $ 5,001,373
 
Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking $ 564,077 $ 821 0.58 % $ 540,387 $ 890 0.65 %
Savings and money market 1,622,200 3,299 0.81 % 1,397,396 4,787 1.36 %
Time   841,480     3,018   1.42 %     1,387,170     6,629   1.90 %
Total interest-bearing deposits 3,027,757 7,138 0.94 % 3,324,953 12,306 1.47 %
Securities sold under agreements to repurchase 145,050 204 0.56 % 210,037 435 0.82 %

Federal Home Loan Bank advances and other borrowings
111,699 532 1.89 % 126,130 921 2.90 %
Subordinated debt   97,476     658   2.68 %     97,476     928   3.78 %
Total interest-bearing liabilities 3,381,982 8,532 1.00 % 3,758,596 14,590 1.54 %
Noninterest-bearing deposits   671,796     -   -       534,171     -   -  
Total deposits and interest-bearing liabilities 4,053,778 $ 8,532   0.84 % 4,292,767 $ 14,590   1.35 %
Other liabilities 23,734 21,708
Stockholders' equity   708,973   686,898
Total liabilities and stockholders' equity $ 4,786,485 $ 5,001,373
Net interest income $ 38,356 $ 36,060
Net interest spread (3) 3.38 % 2.97 %
Net interest margin (4) 3.60 % 3.23 %
 
 
 
(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 September 30, 2011 would have been 3.54% compared to a net interest spread of 3.16% for the quarter ended September 30, 2010.
(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
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
           
(dollars in thousands) Nine months ended Nine months ended
  September 30, 2011   September 30, 2010

Average Balances
  Interest   Rates/ Yields  

Average Balances
  Interest   Rates/ Yields
Interest-earning assets:
Loans (1) $ 3,203,346 $ 115,831 4.84 % $ 3,410,648 $ 122,504 4.81 %
Securities:
Taxable 779,585 18,793 3.22 % 778,117 24,150 4.15 %
Tax-exempt (2) 194,447 5,593 5.13 % 205,006 5,979 5.14 %
Federal funds sold and other   170,192     1,684   1.43 %     173,732     1,636   1.36 %
Total interest-earning assets 4,347,570 $ 141,901   4.43 % 4,567,503 $ 154,269   4.58 %
Nonearning assets
Intangible assets 253,806 256,754
Other nonearning assets   225,640   215,492
Total assets $ 4,827,016 $ 5,039,749
 
Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking $ 582,832 $ 2,765 0.63 % $ 516,024 $ 2,593 0.67 %
Savings and money market 1,599,737 11,149 0.93 % 1,312,209 13,623 1.39 %
Time   916,510     10,955   1.60 %     1,503,524     22,479   2.00 %
Total interest-bearing deposits 3,099,079 24,869 1.07 % 3,331,757 38,695 1.55 %
Securities sold under agreements to repurchase 168,594 931 0.74 % 231,580 1,352 0.78 %
Federal Home Loan Bank advances and
other borrowings 113,151 1,952 2.31 % 150,772 3,249 2.88 %
Subordinated debt   97,476     1,977   2.71 %     97,476     2,656   3.64 %
Total interest-bearing liabilities 3,478,300 29,729 1.71 % 3,811,585 45,952 1.61 %
Noninterest-bearing deposits   632,075     -   -       511,519     -   -  
Total deposits and interest-bearing liabilities 4,110,375 $ 29,729   0.97 % 4,323,104 $ 45,952   1.42 %
Other liabilities 22,332 17,297
Stockholders' equity   694,309   699,348
Total liabilities and stockholders' equity $ 4,827,016 $ 5,039,749
Net interest income $ 112,172 $ 108,317
Net interest spread (3) 2.72 % 2.97 %
Net interest margin (4) 3.52 % 3.24 %
 
 
 
(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-earning 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 nine months ended September 30, 2011 would have been 3.46% compared to a net interest spread of 3.16% for the nine months ended September 30, 2010.
(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) September June March December September June
  2011   2011   2011   2010   2010   2010
 
Balance sheet data, at quarter end:
Commercial real estate - mortgage loans $ 1,087,333 1,091,283 1,102,533 1,094,615 1,103,261 1,125,823
Consumer real estate - mortgage loans 711,994 708,280 698,693 705,487 720,140 709,121
Construction and land development loans 278,660 282,064 300,697 331,261 359,729 411,455
Commercial and industrial loans 1,095,037 1,058,263 1,047,754 1,012,091 995,743 1,009,991
Consumer and other 68,125 67,214 67,753 68,986 73,052 77,510
Total loans 3,241,149 3,207,104 3,217,430 3,212,440 3,251,923 3,333,900
Allowance for loan losses (74,871 ) (76,971 ) (78,988 ) (82,575 ) (84,550 ) (87,107 )
Securities 942,752 925,508 984,200 1,018,637 968,532 907,296
Total assets 4,868,905 4,831,333 4,820,991 4,909,004 4,961,603 4,958,478
Noninterest-bearing deposits 722,694 662,018 608,428 586,517 581,181 529,867
Total deposits 3,712,650 3,761,520 3,731,883 3,833,057 3,825,634 3,853,400
Securities sold under agreements to repurchase 128,954 124,514 165,132 146,294 191,392 159,490
FHLB advances and other borrowings 161,106 111,191 111,351 121,393 121,435 131,477
Subordinated debt 97,476 97,476 97,476 97,476 97,476 97,476
Total stockholders’ equity 724,374 699,228 681,226 677,457 686,529 681,915
 
Balance sheet data, quarterly averages:
Total loans $ 3,207,213 3,211,591 3,191,076 3,217,738 3,295,531 3,418,928
Securities 939,778 972,750 1,010,344 993,236 954,869 962,401
Total earning assets 4,308,710 4,347,552 4,387,331 4,441,672 4,519,956 4,527,471
Total assets 4,786,485 4,826,731 4,868,745 4,937,181 5,001,373 4,996,448
Noninterest-bearing deposits 671,796 628,929 594,651 575,606 534,171 504,354
Total deposits 3,699,553 3,722,613 3,772,092 3,814,572 3,859,124 3,816,973
Securities sold under agreements to repurchase 145,050 175,705 185,471 194,283 210,037 210,798
FHLB advances and other borrowings 111,699 114,072 113,705 121,414 126,130 147,491
Subordinated debt 97,476 97,476 97,476 97,476 97,476 97,476
Total stockholders’ equity 708,973 691,020 682,638 689,976 686,898 704,186
 
Statement of operations data, for the three months ended:
Interest income $ 46,888 47,789 47,224 49,079 50,650 50,929
Interest expense   8,532     9,994     11,204     13,023     14,590     15,231  
Net interest income 38,356 37,795 36,020 36,056 36,060 35,697
Provision for loan losses   3,632     6,587     6,139     5,172     4,789     30,509  
Net interest income after provision for loan losses 34,724 31,208 29,881 30,884 31,271 5,189
Noninterest income 10,080 9,809 8,324 8,666 8,594 10,569
Noninterest expense   35,676     34,357     34,701     36,452     37,774     36,491  
Income (loss) before taxes 9,128 6,660 3,504 3,098 2,091 (20,734 )
Income tax expense (benefit) (16,973 ) 288 - (697 ) - 5,630
Preferred dividends and accretion   1,564     1,529     1,492     1,547     1,542     1,507  
Net income (loss) available to common stockholders $ 24,537     4,843     2,011     2,248     549     (27,871 )
 
Profitability and other ratios:
Return on avg. assets (1) 2.06 % 0.40 % 0.17 % 0.18 % 0.04 % (2.24 %)
Return on avg. equity (1) 13.88 % 2.81 % 1.19 % 1.29 % 0.32 % (15.88 %)
Net interest margin (1) (2) 3.60 % 3.55 % 3.40 % 3.29 % 3.23 % 3.23 %
Noninterest income to total revenue (3) 20.81 % 20.61 % 18.77 % 19.38 % 19.25 % 22.84 %
Noninterest income to avg. assets (1) 0.84 % 0.82 % 0.69 % 0.70 % 0.68 % 0.85 %
Noninterest exp. to avg. assets (1) 2.99 % 2.86 % 2.89 % 2.93 % 3.00 % 2.93 %
Efficiency ratio (4) 73.66 % 72.17 % 78.25 % 81.51 % 84.59 % 78.87 %
Avg. loans to average deposits 86.69 % 86.27 % 84.60 % 84.35 % 85.40 % 89.57 %
Securities to total assets 19.36 % 19.16 % 20.41 % 20.75 % 19.52 % 18.30 %
Average interest-earning assets to average
interest-bearing liabilities 127.40 % 124.90 % 122.75 % 121.62 % 120.26 % 120.14 %
Brokered time deposits to total deposits (16) 0.00 % 0.00 % 0.00 % 0.03 % 1.80 % 3.70 %
 
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 December September June
  2011   2011   2011   2010   2010   2010
 
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans $ 54,640 59,727 76,368 80,863 103,127 118,331
Other real estate (ORE)   45,500     52,395     56,000     59,608     48,710     42,616  
Total nonperforming assets $ 100,140     112,122     132,368     140,471     151,837     160,947  

Past due loans over 90 days and still accruing interest
$ 1,911 481 1,151 138 3,639 3,116
Restructured accruing loans (5) 18,187 12,990 15,285 20,468 13,468 10,861
 
Net loan charge-offs $ 5,732 8,605 9,726 7,146 7,346 33,463
Allowance for loan losses to nonaccrual loans 137.0 % 128.9 % 103.4 % 102.1 % 82.0 % 73.6 %
As a percentage of total loans:
Past due accruing loans over 30 days 0.28 % 0.40 % 0.36 % 0.30 % 0.67 % 0.66 %
Potential problem loans (6) 4.04 % 4.62 % 5.31 % 6.95 % 8.23 % 9.30 %
Allowance for loan losses 2.31 % 2.40 % 2.46 % 2.57 % 2.60 % 2.61 %
Nonperforming assets to total loans and ORE 3.05 % 3.44 % 4.04 % 4.29 % 4.60 % 4.77 %
Nonperforming assets to total assets 2.06 % 2.32 % 2.75 % 2.86 % 3.06 % 3.25 %

Annualized net loan charge-offs year-to-date to avg. loans (7)
1.00 % 1.14 % 1.22 % 1.96 % 2.26 % 2.84 %
Avg. commercial loan internal risk ratings (6) 4.7 4.8 4.8 4.8 4.9 4.9
 
Interest rates and yields:
Loans 4.78 % 4.87 % 4.88 % 4.99 % 4.96 % 4.74 %
Securities 3.54 % 3.67 % 3.58 % 3.48 % 3.97 % 4.45 %
Total earning assets 4.38 % 4.47 % 4.43 % 4.45 % 4.51 % 4.58 %
Total deposits, including non-interest bearing 0.77 % 0.90 % 1.01 % 1.16 % 1.27 % 1.36 %
Securities sold under agreements to repurchase 0.56 % 0.79 % 0.83 % 0.81 % 0.82 % 0.69 %
FHLB advances and other borrowings 1.89 % 2.42 % 2.65 % 2.60 % 2.90 % 2.88 %
Subordinated debt 2.68 % 2.73 % 2.73 % 2.72 % 3.78 % 3.63 %
Total deposits and interest-bearing liabilities 0.84 % 0.98 % 1.09 % 1.22 % 1.35 % 1.43 %
 
Capital ratios (8):
Stockholders’ equity to total assets 14.9 % 14.5 % 14.1 % 13.8 % 13.8 % 13.8 %
Leverage 11.9 % 11.2 % 11.0 % 10.7 % 10.5 % 10.4 %
Tier one risk-based 14.4 % 13.9 % 13.6 % 13.8 % 13.5 % 13.1 %
Total risk-based 15.9 % 15.5 % 15.2 % 15.4 % 15.1 % 14.8 %
Tangible common equity to tangible assets 8.2 % 7.7 % 7.4 % 7.1 % 7.2 % 7.1 %
Tangible common equity to risk weighted assets 10.3 % 9.6 % 9.1 % 9.1 % 9.3 % 9.0 %
 
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 December September June
  2011   2011   2011   2010   2010   2010
 
Per share data:
Earnings (loss) – basic $ 0.74 0.14 0.06 0.07 0.02 (0.85 )
Earnings (loss) – diluted $ 0.72 0.14 0.06 0.07 0.02 (0.85 )
Book value per common share at quarter end (9) $ 18.34 17.71 17.19 17.22 17.61 17.61
Tangible common equity per common share $ 11.08 10.38 9.85 9.80 10.12 10.04
 
Weighted avg. common shares – basic 33,372,980 33,454,229 33,366,053 33,062,533 32,857,428 32,675,221
Weighted avg. common shares – diluted 33,993,914 34,095,636 34,013,810 33,670,890 33,576,963 32,675,221
Common shares outstanding 34,306,927 34,136,163 34,132,256 33,870,380 33,660,462 33,421,741
 
Investor information:
Closing sales price $ 10.94 15.56 16.54 13.58 9.19 12.85
High closing sales price during quarter $ 16.21 16.82 16.60 13.74 14.33 18.93
Low closing sales price during quarter $ 10.52 14.15 13.55 9.27 8.51 11.81
 
Other information:
Gains on sale of loans and loan participations sold:
Mortgage loan sales:
Gross loans sold $ 104,716 68,506 70,981 143,793 137,094 92,144
Gross fees (10) $ 2,166 1,380 1,129 2,610 2,503 1,669

Gross fees as a percentage of mortgage loans originated
2.07 % 2.01 % 1.59 % 1.81 % 1.83 % 1.81 %
Gains (losses) on sales of investment securities, net $ 377 610 (159 ) - - 2,259
Brokerage account assets, at quarter-end (11) $ 987,908 1,101,000 1,110,000 1,038,000 966,000 921,000
Trust account assets, at quarter-end $ 607,668 663,304 730,000 693,000 647,000 627,000
Floating rate loans as a percentage of total loans (12) 33.3 % 34.7 % 35.4 % 36.9 % 37.9 % 37.8 %

Balance of commercial loan participations sold to other banks and serviced by Pinnacle, at quarter end
$ 57,045 50,797 60,784 55,632 57,964 66,503
Core deposits (13) $ 3,388,692 3,437,595 3,382,230 3,425,571 3,224,424 3,136,367
Core deposits to total funding (13) 82.6 % 84.0 % 82.4 % 81.6 % 76.1 % 73.9 %
Risk-weighted assets $ 3,751,479 3,693,390 3,711,179 3,639,095 3,679,436 3,748,498
Total assets per full-time equivalent employee $ 6,580 6,538 6,373 6,384 6,349 6,229
Annualized revenues per full-time equivalent employee $ 262.5 261.3 237.7 230.4 235.0 233.1
Number of employees (full-time equivalent) 740.0 739.0 756.5 769.0 781.0 796.0
Associate retention rate (14) 92.6 % 89.6 % 92.4 % 93.5 % 95.2 % 97.3 %
 
Selected economic information (in thousands) (15):
Nashville MSA nonfarm employment 735.5 738.3 735.5 748.1 741.3 728.8
Knoxville MSA nonfarm employment 327.7 325.1 325.2 326.6 326.7 321.7
Nashville MSA unemployment 8.5 % 8.9 % 8.3 % 8.1 % 8.4 % 9.0 %
Knoxville MSA unemployment 7.9 % 8.3 % 7.5 % 7.3 % 7.8 % 8.1 %
Nashville residential median home price $ 171.6 167.1 166.8 171.0 178.0 171.3
Nashville inventory of residential homes for sale 13.4 14.0 13.0 13.3 14.9 14.9
 
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
           
September June March December September June
(dollars in thousands , except per share data)   2011   2011   2011   2010   2010   2010
Reconciliation of certain financial measures:
Tangible assets:
Total assets $ 4,868,905 $ 4,831,333 $ 4,820,991 $ 4,909,004 $ 4,961,603 $ 4,958,478
Less: Goodwill (244,082 ) (244,083 ) (244,083 ) (244,090 ) (244,097 ) (244,097 )
Core deposit and other intangibles   (8,558 )     (9,273 )     (9,989 )     (10,705 )     (11,450 )     (12,194 )
Net tangible assets $ 4,616,266     $ 4,577,976     $ 4,566,919     $ 4,654,208     $ 4,706,056     $ 4,702,187  
 
Tangible equity:
Total stockholders' equity $ 724,374 $ 699,228 $ 681,226 $ 677,457 $ 686,529 $ 681,915
Less: Goodwill (244,082 ) (244,083 ) (244,083 ) (244,090 ) (244,097 ) (244,097 )
Core deposit and other intangibles   (8,558 )     (9,273 )     (9,989 )     (10,705 )     (11,450 )     (12,194 )
Net tangible equity 471,735 445,872 427,154 422,662 430,982 425,624
Less: Preferred stock   (91,772 )     (91,422 )     (91,094 )     (90,789 )     (90,455 )     (90,127 )
Net tangible common equity $ 379,962     $ 354,449     $ 336,060     $ 331,873     $ 340,527     $ 335,497  
 
Ratio of tangible common equity to tangible assets   8.23 %     7.74 %     7.36 %     7.13 %     7.24 %     7.13 %
 
 
For the three months ended
September June March December September June
  2011   2011   2011   2010   2010   2010
 
Net interest income $ 38,356 $ 37,795 $ 36,020 $ 36,056 $ 36,060 $ 35,697
 
Noninterest income 10,080 9,809 8,324 8,666 8,594 10,569
Net gains (losses) on sale of investment securities   377       610       (159 )     -       -       2,259  
Noninterest income excluding the impact of other net gains (losses) on sale of investment securities $ 9,703     $ 9,199     $ 8,483     $ 8,666     $ 8,594     $ 8,310  
 
Noninterest expense 35,676 34,357 34,701 36,452 37,774 36,491
Other real estate owned expense   5,079       3,826       4,334       7,874       8,522       7,411  
Noninterest expense excluding the impact of other real estate owned expense $ 30,597     $ 30,532     $ 30,367     $ 28,578     $ 29,252     $ 29,080  
 
Pre-tax pre-provision income (17) $ 17,462     $ 16,463     $ 14,136     $ 16,145     $ 15,402     $ 14,927  
 
 
Efficiency Ratio (4) 73.7 % 72.2 % 78.3 % 81.5 % 84.6 % 78.9 %
 

Efficiency Ratio excluding the impact of other real estate owned expense (4)
63.2 % 64.1 % 68.5 % 63.9 % 65.5 % 62.9 %
 

For the three months ended, September 30,

For the year ended, September 30,
(dollars in thousands)           2011   2011        
 
Net income available to common stockholders $ 24,537 $ 31,392

Reversal of valuation allowance based on net deferred tax assets and liabilities
(22,480 ) (22,480 )
Anticipated 2011 current tax expense   5,211       5,211  
$ 7,268     $ 14,123  
 
Diluted net income per common share available to common stockholders before impact of reversal of valuation reserve $ 0.21     $ 0.41  
 
 
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. Restructured Accruing Loans 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 period of time, extending the maturity of the loan, etc.). These loans continue to accrue interest at the contractual rate and are considered to be troubled debt restructurings.
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 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 $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. Pre-tax, pre-provision income excludes the impact of net gains (losses) on investment security sales as well as other real estate owned expenses.

Copyright Business Wire 2010

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