First Quarter 2013 Investor Call Terry Turner, President and CEO - PowerPoint PPT Presentation

First Quarter 2013 Investor Call Terry Turner, President and CEO Harold Carpenter, EVP and CFO April 16, 2013

Safe Harbor Statements Forward ‐ looking statements Certain of the statements in this presentation may constitute forward ‐ looking statements within the meaning of Section 27A of the Securities Act Certain of the statements in this presentation 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 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 (“the Nashville 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 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) residential real estate markets; (viii) rapid fluctuations or unanticipated changes in interest rates; (ix) the results of regulatory examinations; (x) the ability to retain large, uninsured deposits with the expiration of the FDIC’s transaction account guarantee program; (xi) the development of any new market other than Nashville or Knoxville; (xii) a merger or acquisition; (xiii) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including intangible assets; (xiv) the ability to attract additional financial advisors or to attract customers from other financial institutions and conversely, the inability to realize the economic benefits of newly hired financial advisors; (xv) further deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xvi) inability to comply with regulatory capital requirements, including those resulting from currently proposed changes to capital calculation methodologies and required capital i l i i l di h l i f l d h i l l l i h d l i d i d i l maintenance levels; 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 (the “Dodd ‐ Frank Act”). A more detailed description of these and other risks is contained in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10 ‐ K filed with the Securities and Exchange Commission on February 22, 2013. 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 quarterly report, whether as a result of new information, future events or otherwise. 2

Delivering Results PNFP has executed its recurring priorities • Reduce the risk in the loan portfolio • Build the core earnings capacity Build the core earnings capacity 3

Delivering Results Asset quality continued to improve in 1Q13 Li k d Qt Linked Qtr Y Year over C Consecutive ti Change Year Change Qtrs. of Progress Credit losses (NCO s + ORE expense) Credit losses (NCO’s + ORE expense) (17 8%) (17.8%) (65 1%) (65.1%) 11 11 NPLs (4.3%) (49.0%) 12 NPAs (6.7%) (49.7%) 11 Classified loans (8.3%) (26.1%) 11 4

Delivering Results Core earnings capacity continued to expand in 1Q13 Linked Qtr Quarterly Year Change g over Year Change Total loans 1.6% 13.0% Avg. noninterest ‐ bearing deposits (2.6%) 35.8% Net interest income 1.2% 8.2% Net interest margin 2.6% 4.3% Cost of funds (8.7%) (33.3%) Noninterest income excl. securities gains 7.0% 21.0% Total revenue excl. securities gains Total revenue excl. securities gains 2.4% 2.4% 10.8% 10.8% 5

nonrecurring items and investment gains and losses Source: SNL Financial – *Total revenues and noninterest income exclude Millions $ Keen focus on core earnings capacity produces record results Million ns $ Delivering Results $10,000 $12,000 $14,000 $1,000 $1 500 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $2,000 $4,000 $6,000 $8,000 $500 $0 $0 Dec ‐ 00 D ec ‐ 00 Mar ‐ 01 M ar ‐ 01 Jun ‐ 01 Ju un ‐ 01 Sep ‐ 01 Se ep ‐ 01 Dec ‐ 01 D ec ‐ 01 Mar ‐ 02 M ar ‐ 02 Jun ‐ 02 Ju un ‐ 02 Sep ‐ 02 Se ep ‐ 02 Dec ‐ 02 D ec ‐ 02 Mar ‐ 03 M ar ‐ 03 Jun ‐ 03 Noninterest Income (*) Ju un ‐ 03 Sep ‐ 03 Se ep ‐ 03 Dec ‐ 03 D ec ‐ 03 Mar ‐ 04 M ar ‐ 04 Jun ‐ 04 Ju un ‐ 04 Sep ‐ 04 Se ep ‐ 04 Dec ‐ 04 D ec ‐ 04 Total Loans Mar ‐ 05 M ar ‐ 05 Jun ‐ 05 Ju un ‐ 05 Sep ‐ 05 Se ep ‐ 05 Dec ‐ 05 D ec ‐ 05 Mar ‐ 06 M ar ‐ 06 Jun ‐ 06 Ju un ‐ 06 Sep ‐ 06 Se ep ‐ 06 Dec ‐ 06 D ec ‐ 06 Mar ‐ 07 M ar ‐ 07 Jun ‐ 07 Ju un ‐ 07 Sep ‐ 07 Se ep ‐ 07 Dec ‐ 07 D ec ‐ 07 Mar ‐ 08 M ar ‐ 08 Jun ‐ 08 Ju un ‐ 08 Sep ‐ 08 Se ep ‐ 08 Dec ‐ 08 ec ‐ 08 D Mar ‐ 09 M ar ‐ 09 Jun ‐ 09 Ju un ‐ 09 Sep ‐ 09 Se ep ‐ 09 Dec ‐ 09 D ec ‐ 09 Mar ‐ 10 M ar ‐ 10 Jun ‐ 10 Ju un ‐ 10 Sep ‐ 10 Se ep ‐ 10 Dec ‐ 10 D ec ‐ 10 Mar ‐ 11 M ar ‐ 11 Jun ‐ 11 Ju un ‐ 11 Sep ‐ 11 Se ep ‐ 11 Dec ‐ 11 D ec ‐ 11 Mar ‐ 12 M ar ‐ 12 Jun ‐ 12 Ju un ‐ 12 Sep ‐ 12 Se ep ‐ 12 Dec ‐ 12 D ec ‐ 12 Mar ‐ 13 M ar ‐ 13 Millions $ Dollars s $ $10.00 $12.00 $14.00 $10 $20 $30 $40 $50 $60 $0.00 $2.00 $4.00 $6.00 $8 00 $8.00 $0 Dec ‐ 00 Mar ‐ 01 Jun ‐ 01 Dec ‐ 00 Sep ‐ 01 Mar ‐ … M Dec ‐ 01 Jun ‐ 01 Tangible Common Equity Per Share Mar ‐ 02 Sep ‐ 01 Jun ‐ 02 Dec ‐ 01 Sep ‐ 02 M Mar ‐ … Dec ‐ 02 Jun ‐ 02 Sep ‐ 02 Mar ‐ 03 Dec ‐ 02 Jun ‐ 03 M Mar ‐ … Sep ‐ 03 Jun ‐ 03 Dec ‐ 03 Sep ‐ 03 Mar ‐ 04 Dec ‐ 03 Jun ‐ 04 Total Revenues (*) M Mar ‐ … Sep ‐ 04 Jun ‐ 04 Dec ‐ 04 Sep ‐ 04 Mar ‐ 05 Dec ‐ 04 Jun ‐ 05 Mar ‐ … M Sep ‐ 05 Jun ‐ 05 Dec ‐ 05 Sep ‐ 05 Mar ‐ 06 Dec ‐ 05 M Mar ‐ … Jun ‐ 06 Jun ‐ 06 Sep ‐ 06 Sep ‐ 06 Dec ‐ 06 Dec ‐ 06 Mar ‐ 07 Mar ‐ … M Jun ‐ 07 Jun ‐ 07 Sep ‐ 07 Sep ‐ 07 Dec ‐ 07 Dec ‐ 07 Mar ‐ 08 M Mar ‐ … Jun ‐ 08 Jun ‐ 08 Sep ‐ 08 Sep ‐ 08 Dec ‐ 08 Dec ‐ 08 Mar ‐ 09 Mar ‐ … M Jun ‐ 09 Jun ‐ 09 Sep ‐ 09 Sep ‐ 09 Dec ‐ 09 Dec ‐ 09 6 M Mar ‐ … Mar ‐ 10 Jun ‐ 10 Jun ‐ 10 Sep ‐ 10 Sep ‐ 10 Dec ‐ 10 Dec ‐ 10 Mar ‐ … M Mar ‐ 11 Jun ‐ 11 Jun ‐ 11 Sep ‐ 11 Sep ‐ 11 Dec ‐ 11 M Mar ‐ … Dec ‐ 11 Jun ‐ 12 Mar ‐ 12 Sep ‐ 12 Jun ‐ 12 Dec ‐ 12 Sep ‐ 12 Mar ‐ … M Dec ‐ 12 Mar ‐ 13

First Quarter 2013 Highlights Loan volumes grew meaningfully with modest yield compression 6.00% $3,682 $3,700 5.60% $3,580 $3,600 $3,489 age Loans $3,500 5.20% n Yields 4.88% $3,403 4.87% (millions) $3,400 4.78% 4.74% 4.74% 4.65% 4.80% 4.64% 4.62% 4.58% Avera ( Loa $3,300 4.40% $3,212 $3,207 $3,280 $3,262 $3,191 $3,200 4 00% 4.00% $3,100 $3,000 3.60% 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 Avg Loans Loan Yields 7

First Quarter 2013 Highlights Loan originations outpaced substantial pay offs $300,000 $250,000 es $200,000 $ , an Volum ($ thousands) $150,000 Loa $100,000 $100 000 $50,000 $0 1Q12 2Q12 3Q12 4Q12 1Q13 New loans Pay offs Source: New loans consider only those balances at quarter end with new tax identification numbers which were not present at the Source: New loans consider only those balances at quarter end with new tax identification numbers which were not present at the beginning of the current quarter. Pay ‐ offs include only those tax identification numbers which were removed from our loan systems at the current quarter end, but had a loan balance > $0 as of the beginning of the current quarter. As a result, the chart above does not include net changes in lines of credit or normal recurring amortization to existing loan balances. 8