First Quarter 2014 Investor Call Terry Turner, President and CEO - - PowerPoint PPT Presentation

First Quarter 2014 Investor Call

Terry Turner, President and CEO Harold Carpenter, EVP and CFO April 15, 2014

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 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 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; (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 on loans or deposits; (ix) the results of regulatory examinations; (x) the ability to fluctuations or unanticipated changes in interest rates on loans or deposits; (ix) the results of regulatory examinations; (x) the ability to retain large, uninsured deposits; (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; (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 changes to capital calculation methodologies and required capital with regulatory capital requirements, including those resulting from changes to capital calculation methodologies and required capital maintenance levels; (xvii) risks associated with litigation, including the applicability of insurance coverage; (xviii) approval of the declaration of any dividend by Pinnacle Financial’s board of directors and, (xix) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy, including implementation of the Dodd‐Frank Wall Street Reform and Consumer Protection Act. A more detailed description of these and other risks is contained in Pinnacle Financial's most recent annual report on Form 10‐K filed with the Securities and Exchange Commission on February 25, 2014. 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. 2

1Q14 Summary Results

$ $2,050

Avg Trans Accts

(millions) $3 969 $4,144 $4,182

Total Loans

(millions)

Growth

Up 10.9% yr/yr Up 18.7% yr/yr

Execution of fundamentals fuels exceptional growth in key valuation drivers

$ $13.22 $13.52 $13.93

Tangible Book Value per Share

$1,666 $1,727 $1,803 $1,883 $1,991 $ , 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 $3,712 $3,772 $3,925 $3,969 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

Balance Sheet

$12.39 $12.64 $12.78 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 $54 949 $57,401 $57,456 $58,644

Total Revenues (1)

(millions) $0.39 $0.42 $0.42 $0.44 $0.47

FD EPS

4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

B s Growth

Up 20.5% yr/yr Up 7.3% yr/yr 12.41% 12.75% 12.73% 12.81% 13.47%

ROTCE

4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 $53,363 $54,661 $54,949 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 $0.34 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

Earnings

(1) Ex: net gains and losses on sale of investment securities

10.83% 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 1.11% 1.02% 0.93% 0.89% 0.80% 0.73%

NPA %

1.87% 1.84% 1.75% 1.70% 1.64% 1.61%

ALL % t Quality

(1) Ex: net gains and losses on sale of investment securities

317.9% 334.1% 336.6% 373.8% 432.7%

ALL Coverage Ratio

4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

Asset

304.2% 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

1Q14 Summary Results

PNFP is now at the mid‐point of its long‐term return on asset target range

Return on Average Assets

3.90% 3.95%

Net Interest Margin

0.97% 0 93% 0.96% 0.92% 0 94% 0 95% 1.00%

Noninterest Income/ Average Assets (1)

1.20% 1.20% 1.30% 1.40%

g

3.74% 3.76% 3.78% 3.80% 3.77% 3.72% 3.70% 3.76% 3.70% 3.75% 3.80% 3.85% 3.90% 0.83% 0.81% 0.86% 0.89% 0.93% % 0.94% 0.70% 0.75% 0.80% 0.85% 0.90% 0.95%

0.93% 0.94% 1.09% 1.10% 1.09% 1.13% 0 90% 1.00% 1.10%

3.60% 3.65% 0.60% 0.65% 2 70%

Noninterest Expense/ Average Assets (2) Net Charge‐off Ratio

0 60% 0.65% 0.70% 0.80% 0.90%

2.60% 2.56% 2.55% 2.52% 2.51% 2.27% 2.44% 2.38% 2.43% 2 20% 2.30% 2.40% 2.50% 2.60% 2.70% 0.44% 0.28% 0.22% 0.24% 0.24% 0.36% 0.21% 0 20% 0.25% 0.30% 0.35% 0.40% 0.45% 0.50%

0.60% 0.50% 0.60%

1.90% 2.00% 2.10% 2.20% 0.15% 0.09% 0.00% 0.05% 0.10% 0.15% 0.20%

4

(1) ‐ Calculation excludes net gains and losses on the sale of investment securities and in the second quarter of 2013 noncredit related loan losses (2) ‐ Calculation excludes OREO expense and FHLB prepayment charges. Noninterest expense for 2Q13 includes the impact of the reversal of a $2.0 million allowance for off‐balance sheet commitments

1Q14 Summary Results

Net loan growth rate approximates the three year growth target

2012 ‐ 2014 Anticipated Net Loan Growth

10.9% AGR 11.2% CAGR (1/1/2012‐3/31/2014)

Thru 1Q2014

$891.0 million net growth thru 1Q2014

(Last 4 Quarters)

Previously reported growth Current quarter growth Financial Advisor capacity

$1 27 Billi T t

FA Capacity $1 27 Billion Capacity 11.5% CAGR

p y

$1.27 Billion Target

FA Capacity $1.27 Billion Capacity

5 (billions of dollars)

Loan, Deposit and Fee Growth Yield Operating Leverage

Annual loan growth is reliable despite wide quarterly variation

$200

Quarterly Net Loan Growth

$500

Annual Net Loan Growth

$50 $100 $150 $200

Loan Volumes ($ millions)

$425 $434 $411

$400 $500

Loan Volumes ($ millions)

Quarterly Pay Offs/ Pay Downs Quarterly New Loan Originations

$0 $300 *: $411 is the required production for 2014 to achieve the 3‐year growth target of $1.27 billion $200 $300 $400 $500

• an Volumes

($ millions)

Quarterly Pay Offs/ Pay Downs

$200 $300 $400 $500

Loan Volumes ($ millions)

Quarterly New Loan Originations

$0 $100 $200

Lo

Source: Pinnacle internal records. New loans include new fundings to new and existing clients as well as net changes in lines of credit. Pay

$0 $100 $

L

6

Source: Pinnacle internal records. New loans include new fundings to new and existing clients as well as net changes in lines of credit. Pay

• ffs and pay downs include amortization and pay offs of existing loans.

Loan, Deposit and Fee Growth Yield Operating Leverage

Net interest income grew as volumes and margin expanded in 1Q14

9

4.00% $46

$43.6 $44.6 $45.0 $45.9

3 78% 3.80% 3.90% 3.76%

3.80% 3.90% $44

0.2 $40.9 $42.2 $42.8 $

3.60% 3.65% 3.74% 3.76% 3.78% 3.77% 3.72% 3.70%

3 50% 3.60% 3.70% $40 $42

t Margin st Income

• ns)

$37.8 $38.4 $39.3 $39.5 $40

3.40% 3.55%

3.30% 3.40% 3.50% $38

Net Interes Net Interes

(millio $36.0

3.10% 3.20% $34 $36

N N

7 Net Interest Income Net Interest Margin

Loan, Deposit and Fee Growth Yield Operating Leverage

Average loans grew meaningfully while loan yields flattened in 1Q14

6.00% $4,200

932 $3,981 $4,130

5.50% $3,900 $4,000 $4,100 $ ,

80 $3,682 $3,845 $3,9 $

4.88%

5.00% $ $3,600 $3,700 $3,800

n Yields age Loans

(millions) 62 280 $3,403 $3,489 $3,58

4.28% 4.30%

4.00% 4.50% $3 200 $3,300 $3,400 $3,500

Loa Avera

( $3,191 $3,212 $3,207 $3,2 $3,2

3.50% $3,000 $3,100 $3,200

8

Avg Loans Loan Yields

Loan, Deposit and Fee Growth Yield Operating Leverage

Deposits grew meaningfully yet cost of funds remained low in 1Q14

1.20% $4,600

$4,408 $4,509 1.01%

0.90% 1.00% 1.10% $4 200 $4,300 $4,400 $4,500

950 963 $4,199

0 50% 0.60% 0.70% 0.80% $3,900 $4,000 $4,100 $4,200

• sit Costs

(%) Deposits

millions)

$3,772 $3,723 $3,700 3,642 597 3,636 $3,706 $3,883 $3,9 $3,9

0.20% 0.30% 0.40% 0.50% $3 500 $3,600 $3,700 $3,800

Depo Avg.

(m

$3 $3,5 $3 0.23%

0.00% 0.10% 0.20% $3,300 $3,400 $3,500

9

Avg Deposits Cost of Deposits

Loan, Deposit and Fee Growth Yield Operating Leverage

The noninterest income to asset ratio continues well above the target range

1Q14 4Q13 3Q13 2Q13 1Q13 Service charges $2,791 $2,739 $2,797 $2,541 $2,480 Investment services 2,128 2,394 1,956 1,895 1,793 Insurance commissions 1,385 1,015 1,021 1,108 1,393 Gain on mortgage loans sold, net 952 1,113 1,326 1,949 1,814 Trust fees 1 146 991 932 880 944 Trust fees 1,146 991 932 880 944 Other: Securities (losses) ‐ ‐ (1,441) (25) ‐ Other 4,334 4,236 4,796 2,978 3,478 Total noninterest income $12,736 $12,488 $11,387 $11,326 $11,902 Less: Securities losses ‐ ‐ 1,441 25 ‐ Noncredit related loan losses ‐ ‐ ‐ 771 ‐ Core noninterest income $12 736 $12 488 $12 828 $12 122 $11 902 Core noninterest income $12,736 $12,488 $12,828 $12,122 $11,902 Total Assets (Quarterly Average) $5,514,031 $5,388,371 $5,313,003 $5,210,600 $4,992,018 Noninterest income/Average Assets 0.94% 0.92% 0.85% 0.87% 0.97% 10 Noninterest income/Average Assets* 0.94% 0.92% 0.96% 0.93% 0.97%

* Excludes the impact of securities sales and noncredit related loan losses

Loan, Deposit and Fee Growth Yield Operating Leverage

Despite seasonal expense increases the core efficiency ratio stands at 56.3%

1Q14 4Q13 3Q13 2Q13 1Q13 Salaries and benefits $21,750 $21,494 $21,010 $20,570 $19,572 E i t d 5 709 5 543 5 413 5 204 5 113 Equipment and occupancy 5,709 5,543 5,413 5,204 5,113 Other real estate owned 651 302 699 1,390 721 Marketing and business development 909 1,140 721 987 791 Supplies and postage 561 559 581 518 592 I t ibl ti ti 238 247 247 248 521 Intangible amortization 238 247 247 248 521 Other expenses: FHLB restructuring charges ‐ ‐ ‐ ‐ 877 Other expenses 3,832 3,352 4,652 1,944(1) 4,253 Total noninterest expense $33 650 $32 637 $33 323 $30 862 $32 440 Total noninterest expense $33,650 $32,637 $33,323 $30,862 $32,440 Efficiency ratio 57.4% 56.8% 59.5% 56.2% 59.3% Core noninterest expense ** $32,998 $32,335 $32,624 $29,471 $30,842 Core efficiency ratio * 56.3% 56.3% 56.8% 52.9% 56.4% Total Assets (Quarterly Average) $5,514,031 $5,388,371 $5,313,003 $5,210,600 $4,992,018 Expense/Total Average Assets 2.47% 2.40% 2.49% 2.38% 2.64% Core Noninterest Expense**/Total Average Assets 2 43% 2 38% 2 44% 2 27% 2 51%

11

Core Noninterest Expense /Total Average Assets 2.43% 2.38% 2.44% 2.27% 2.51%

* Excludes gain on sale of securities, noncredit related loan losses, ORE and FHLB restructuring charges ** Excludes the impact of OREO expense and FHLB restructuring charges

(1) Includes a $2.0 million reversal of a previously recorded allowance for off‐balance liabilities

Growth in Core Earnings Capacity

Adjusted PTPP expanded at 8.3% annualized rate in 1Q14

(000’s) 1Q14 4Q13 3Q13 2Q13 1Q13 Net interest income $45,908 $44,969 $44,573 $43,599 $42,758 Total noninterest income 12,736 12,488 11,387 11,326 11,902 Total revenue 58,644 57,457 55,960 54,925 54,660 Total noninterest expense 33 650 32 637 33 323 30 862 (*) 32 440 Total noninterest expense 33,650 32,637 33,323 30,862 (*) 32,440 Pre‐tax, pre‐provision income $24,994 $24,820 22,637 24,063 22,220 (Gains) losses on sale of securities ‐ ‐ 1 441 25 ‐ (Gains) losses on sale of securities 1,441 25 Other real estate expenses 651 302 699 1,391 721 FHLB restructuring charges ‐ ‐ ‐ ‐ 877 Noncredit related loan losses ‐ ‐ ‐ 771 ‐ Adjusted PTPP $25,645 $25,123 $24,778 $26,250 $23,818

12

* Includes a $2.0 million reversal of a previously recorded allowance for off‐balance liabilities

PNFP Valuation Drivers

Revenue

• 10.9% average loan growth

18 7% t ti t th

• Revenue growth is primarily organic

1Q14 Execution Future Earnings Stream

Revenue Growth

• 18.7% transaction account growth
• 7.3% year‐over‐year revenue growth
• Organic growth is due to vibrant markets and competitive

distinction

• Track record for continuous market share take‐away
• Competitive distinction is people centric and sustainable
• Two remaining urban markets in Tennessee

Earnings

• 20.5% year‐over‐year EPS growth
• 8.3% annualized adjusted PTPP growth
• Firm produces high growth and high profitability
• Business model is mature with operating leverage

Earnings Growth

j g

• Record profitability
• 1.20% ROAA
• 13.47% ROTCE

Business model is mature with operating leverage

• Short and long‐term incentives require soundness and

top quartile revenue and EPS growth

Asset Quality

• YTD Net Charge‐offs of 0.09%
• NPAs of 0.73%
• Hiring model yields high‐growth, high‐quality loan portfolio
• Track record of 0.05% net charge‐offs during 2000‐2008
• Diversified portfolio with no concentrations

13 Diversified portfolio with no concentrations

Q&A Q&A –

First Quarter 2014 Investor Call

14

Supplemental Information

First Quarter 2014 Investor Call First Quarter 2014 Investor Call

15

Supplemental Information Chart

• Balance Sheet

17

• Asset Quality

30

• Income Statement

36

• Pinnacle Financial Partners profile 40

p f

• Economic and Market Conditions 46

16

Supplemental Information Balance Sheet

17

Balance Sheet

Loan portfolio components are within targeted ranges

Amts. 1Q14 %’s 1Q14 Amts. 4Q13 %’s 4Q13 Amts. 1Q13 %’s 1Q13 Amts. 1Q12 %’s 1Q12 C&D and Land $294.1 7.0% $316.2 7.6% $306.4 8.1% $281.6 8.4% Consumer RE 703.6 16.8% 695.6 16.8% 675.6 17.9% 688.8 20.6% CRE – Owner Occ. 701.3 16.8% 679.3 16.4% 618.3 16.4% 590.4 17.7% CRE Investment 598 0 14 3% 549 1 13 2% 574 6 15 2% 491 7 14 7% CRE – Investment 598.0 14.3% 549.1 13.2% 574.6 15.2% 491.7 14.7% Other RE loans 156.9 3.8% 155.1 3.7% 85.8 2.3% 41.6 1.3% Total real estate 2,453.8 58.7% 2,395.2 57.7% 2,260.7 59.9% 2,094.1 62.7% C&I 1,568.9 37.5% 1,605.5 38.7% 1,403.4 37.2% 1,180.6 35.4% Other loans 158.9 3.8% 143.7 3.6% 108.2 2.9% 63.2 1.9% Total loans $4,181.7 100.0% $4,144.5 100.0% $3,772.4 100.0% $3,337.9 100.0% 18 $ , $ , $ , $ ,

Balance Sheet

Exposure to residential land development is limited

Amts. 1Q14 %’s(*) 1Q14 Amts. 4Q13 %’s(*) 4Q13 Amts. 1Q13 %’s(*) 1Q13 Amts. 1Q12 %’s(*) 1Q12 Residential Spec $34 0 0 8% $28 2 0 7% $ 18 6 0 5% $ 13 5 0 4% Residential – Spec $34.0 0.8% $28.2 0.7% $ 18.6 0.5% $ 13.5 0.4% Residential – Custom 31.7 0.8% 29.3 0.7% 16.5 0.4% 9.7 0.3% Residential – Condo 3.3 0.1% 3.6 0.1% 4.2 0.1% 5.9 0.2% C i l C t t 96 5 2 3% 131 3 3 2% 125 9 3 3% 85 7 2 6% Commercial Construct. 96.5 2.3% 131.3 3.2% 125.9 3.3% 85.7 2.6% Land Dev– Residential 61.2 1.5% 59.8 1.4% 53.4 1.4% 64.0 1.9% Land Dev – Commercial 66.4 1.6% 63.0 1.5% 86.2 2.3% 83.1 2.5% L d U i d 1 1 0 0% 1 1 0 0% 1 6 0 0% 19 7 0 5% Land – Unimproved 1.1 0.0% 1.1 0.0% 1.6 0.0% 19.7 0.5% Total C&D $294.2 7.0% $316.2 7.6% $ 306.4 8.1% $ 281.6 8.4%

(*) as a percentage of total loans

19

Balance Sheet

The C&I loan portfolio is highly diversified

Accomodation and Food Services, 3.8% Administrative & Support & W M & Transportation & Warehousing, 7.1% Utilities, 0.1% Waste Management & Remediation Services, 3.6% Arts, Entertainment & Recreation, 1.9% Construction, 5.3% Real Estate & Rental & Leasing 8 1% Retail Trade, 4.7% Consumer, 7.1% Educational Services, 1.1% i & I 11 6% Public Administration, 4.0% Leasing, 8.1% Finance & Insurance, 11.6% Other Services (except Public Administration), 3.0% Professional, Scientific & Technical Services, 5.2% Healthcare & Social Assistance, 14.7% Information, 2.7% Manufacturing, 8.7% Mining, Quarrying, & Oil & Gas Extraction, 0.1% Administration), 3.0%

Basis: Classification based on NAIC sector as of March 31, 2014

20

Loan, Deposit and Fee Growth Yield Operating Leverage

Loan growth is a function of improving demand and market share movement

N L

New clients

New Loans Q1 2014

clients, 36.2% Existing li clients, 63.8%

Source: Internal loan records, new loans to new clients based on review of new tax ID’s recorded during 2014. All 21 accounts > $250,000 reviewed by relationship managers to determine new client vs existing clients. Excludes net change in lines of credit.

Balance Sheet

Loan growth is primarily funded by growth in low cost deposits

% of Deposits by Type to Total Deposits

• Avg. Loan & Trans, Savings and MMA Account Growth

85% 90% 95% 100% 500,000 600,000 700,000 800,000 50% 60% 70% 70% 75% 80% 85% 200,000 300,000 400,000 500,000 30% 40% 50% 55% 60% 65% (200 000) (100,000) ‐ 100,000 10% 20% 50% (200,000) Net loan growth Trans, Savings and MMDA growth d 0% 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y 1Q14 Trans Accounts CDs Savings & MMA

22

Average Loans to Average deposits

Balance Sheet

PNFP has limited dependence on non‐relationship funding

23

Balance Sheet

60%

Line commitments are up 11.2% over 1Q13 but utilization remains low

5 41 26 $989 1,024 $1,028 56.15% 54.80%

55% $2,000 $2,500

ts

$747 $715 $685 $779 $808 $787 $815 $865 $94 $9 $ $ $

45% 50% $1,500

unded %

• mmitment

millions)

$957 $959 $1,000 $975 $1,009 $1,054 $1,055 $1,138 $1,105 $1,166 $1,190 $1,216 $1,247

35% 40% $500 $1,000

Fu Total Co

(m

30% $0 Net active balance Unfunded Commitments Funded %

24

Note: Excludes HELOCS and credit cards

Balance Sheet

Bond volumes and yields have stabilized

3.70% $1,050

$1,010 $973 940

3.30% 3.50% $950 $1,000

$9 $924 $876 9

2 70% 2.90% 3.10% $800 $850 $900

nd Yields (%) Securities 00’s)

$81 $767 720 14 $746 $743 $732 $749

2.30% 2.50% 2.70% $700 $750 $800

Bon Average (00

$7 $7

2.10% $650 Avg Investments Bond Yields

25

Avg Investments Bond Yields

Balance Sheet

Conservative bond portfolio

Portfolio: March 31, 2014

Total Investments $773 million Unrealized Gain $ 0.8 million 15.5% 1.4% 23.3% $ QTD Purchases $57.8 million QTD Sales $ 0.0 million Duration Avg Yield ‐ TE Mar 2014 3.5% 3.0% 51.6% 2.2% 6.0% Dec 2013 4.6 % 3.2%

Agency Corporates MBS Asset Backed CMOs Municipals

As of 3/31/2014 Book Yield Avg Life (yrs)

I t t tf li t $723 illi $40 illi Q4

3/31/2014 Book Yield Avg Life (yrs) Agency 2.29% 9.7 Asset Backed 1.42% 1.5 Corporates 4.16% 4.7

• Investment portfolio at $723 million, up $40 million vs Q4

– MBS sector at 50% of portfolio

• Recent purchases targeting shorter durations
• Investments to Total Assets of 13.8% as of 3/31

Corporates 4.16% 4.7 CMOs 2.24% 3.3 MBS 2.49% 4.0 Municipals 4.54% 4.0

26

Municipals 4.54% 4.0 Total 3.04% 4.8

Balance Sheet

Muni Allocation %

The municipal portfolio contains minimal risk

Municipal Bond Portfolio Statistics 1Q14 1Q13

23%

1Q14 1Q13 Weighted Average Life 4.0 years 4.2 years % State Agency Holdings 4.92% 5.40% Tax equivalent yield 4.54% 4.76%

77%

L ti # f I M k t V l % FMV as % of Cost 103.3% 105.9%

All municipals are “A” rated or better. General Obligation Bonds Revenue Bonds

Location # of Issuances Market Value % Tennessee 67 $ 39,300 20.9% Florida ‐ ‐ 0.0% California 1 264 0.1% , 2013 Nevada ‐ ‐ 0.0% Michigan 10 5,186 2.8% Illinois 18 14,987 8.0% Other – 30 states 169 127 933 68 2%

• f December 31,

27 Other – 30 states 169 127,933 68.2% Totals 265 $ 187,670 100.0% As o

Balance Sheet

Elevated tangible common is available for deployment

% % 5% 7% 18% 5% 03% 6% 7%

Tangible Common Ratio

% % % % 7%

Return on Tangible Common Equity

8.77% 8.73% 9.15 8.97 9.1 8.75 9.0 8.96 9.2 13% 7.58% 10.76% 10.83% 12.41% 12.72% 12.71% 12.80% 13.47

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

6.1

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

28

Balance Sheet

Current modeling indicates ability to sustain a long‐term dividend program

Tier 1 Common Tangible Equity

12 40%

Tier 1 Risk Based Capital

13 60%

Risk Based Capital

10.00% 10.20% 10.40% 10.60% 10.80%

q y

11.70% 11.80% 11.90% 12.00% 12.10% 12.20% 12.30% 12.40% 13 00% 13.10% 13.20% 13.30% 13.40% 13.50% 13.60% 9.80% 10.00% 11.60% % As reported Without dividends 12.90% 13.00%

PNFP

Dividend amount $0.08 per share

As reported Without dividends

Dividend amount annualized $0.32 per share Last 12 months of FDEPS $1.67 Dividend payout ratio ‐ PNFP 19.2% ‐ Peer group median ‐ Peer group average 41.0% 47.4%

Supplemental Information

Asset Quality

30

Asset Quality

Past due loans remain very low

• Mar. 31,

As a %

• Dec. 31,

As a % (000’s) 2014

• f total

loans 2013

• f total

loans Past Due Loans (*) Managed by special assets: Nonaccrual loans $4,847 0.12% $7,336 0.18% Accruing loans 11,917 0.28% 10,505 0.25% Managed by relationship managers: Accruing loans 6,362 0.15% 5,784 0.14% Total past due $23,126 0.55% $23,625 0.57% p $ , $ ,

31 (*) > 30 days past due

Asset Quality

Percentage of potential problem loans remain low

Potential Problem Loans (000’s) Potential Problem Loans

• Mar. 31,

2014 As a %

• f total

loans

• Dec. 31,

2013 As a %

• f total

loans

• Mar. 31,

2013 As a % of total loans ( ) PNFP 83,859 2.01% 65,028 1.57% 96,218 2.55% Peer Median* ‐ ‐ 79,537 1.92% 107,548 3.10%

32

*: Substandard Loans per SNL Financial. Peer data not yet available as of 3/31/2014.

Asset Quality

NPLs remain very low

PNFP NPL d >90 d

NPLs Expressed as a % of Total Loans within each Category

(000’s) PNFP NPLs and >90 days

• Mar. 31,

2014 As a % of total loans

• Dec. 31,

2013 As a % of total loans

• Mar. 31,

2013 As a % of total loans

• Const. and land development

$ 1,137 1.53% $ 1,070 0.34% $ 1,799 0.57% CRE – Owner Occupied 8,174 1.17% 7,750 1.14% 7,494 1.18% CRE – Investment 7,736 1.29% 3,258 0.59% 7,244 0.68% Total real estate 22 965 1 07% 17 609 0 74% 20 452 0 93% Total real estate 22,965 1.07% 17,609 0.74% 20,452 0.93% C&I 1,615 0.10% 3,390 0.21% 1,375 0.10% Total loans $24,842 0.67% $21,529 0.51% $21,989 0.60% 33

Asset Quality

Classified assets are contained

(in thousands) Balances March 31, 2014 Balances

• Dec. 31, 2013

Balances March 31, 2013 Classified loans and ORE: ‐ Substandard commercial loans $110,768 $91,445 $ 132,750 ‐ Doubtful commercial loans ‐ ‐ 4 ‐ Other impaired loans 4,848 4,659 2,091 90 d d d i (*) 199 152 ‐ 90 days past due and accruing (*) 199 ‐ 152 ‐ Other real estate 15,038 15,226 16,802 ‐ Other repossessed assets 223 262 26 Total $131 076 $111 593 $ 151 825 Total $131,076 $111,593 $ 151,825 Pinnacle Bank classified asset ratio 21.2% 18.4% 26.4%

34

(*) Includes loans 90 days past due and accruing not included elsewhere

Asset Quality

Balances Fair value as a % of Average Appraisal Age

Current OREO valuations are reasonable

(dollars in thousands)

• Mar. 31, 2014

book value* in Months ORE categories: Developed lots $ 847 138.2% 6.16 Undeveloped land 11,303 164.9% 5.08

• Largest ORE balance ‐ $X.X M

* Excludes costs to sell

Undeveloped land ,303 64.9% 5.08 Other 2,888 121.0% 4.91 Total ORE $ 15,038 155.0% 5.11 (dollars in thousands) Balances

• Mar. 31, 2014

Near‐term liquidation (1) Active Projects (2) Other Properties (3) ORE categories: Developed lots $ 847 $ 129 $ 718 $ ‐ Undeveloped land 11,303 764 9,239 1,300 Other 2,888 2,502 386 ‐ 35 Total ORE $ 15,038 $ 3,395 $ 10,343 $ 1,300

(1) Market indications are that property will liquidate within 6 months (2) Various properties with reasonable activity or anticipated absorption such that liquidation should be realized within 24 months (3) Other properties likely requiring a speculative investor with longer‐term workout potential

Supplemental Information Income Statement

36

Income Statement

Pinnacle’s net interest margin has been built on success with clients

4.50% 3.50% 4.00% 2.50% 3.00% 1.50% 2.00% Client Margin Meas res the ratio of interest earnings of the loan portfolio as s pported b non collaterali ed c stomer deposits pl s holesale f nds Treasury Margin Client Margin Net Interest Margin

37

Client Margin – Measures the ratio of interest earnings of the loan portfolio as supported by non‐collateralized customer deposits plus wholesale funds needed, if any, plus equity. Treasury Margin – Measures the ratio of interest earnings of other earning assets as supported by collateralized customer deposits plus wholesale funds.

Income Statement

$150,000 $2,500

Mortgage refinance trends reflect increased interest rates

$120,000 $2,000

ld sold, net

$60,000 $90,000 $1,000 $1,500

ross Loans So (000s’) n mortgages s (000’s)

$30,000 $500

G Gain o

$‐ $‐ Gross Loans Sold, net Gain on Mortgage Loans Sold, net 38 38

Income Statement

1Q14 4Q13 3Q13 2Q13 1Q13 Net interest income $45,908 $44,969 $44,573 $43,599 $42,758

PNFP is highly efficient

Total non‐interest income $12,736 $12,488 $11,387 $11,326 $11,902 Less: Securities (gains) losses ‐ ‐ 1,441 25 ‐ Less: Net noncredit related loan losses 771 Less: Net noncredit related loan losses ‐ ‐ ‐ 771 ‐ Non‐interest income, excluding the impact of net gains (losses) on sale of investment securities and noncredit related loan losses $12,736 $12,488 $12,828 $12,122 $11,902 Total non‐interest expense $33,650 $32,637 $33,323 $30,862 $32,440 Less: ORE expenses (651) (302) (699) (1,391) (721) Less: FHLB restructuring charges ‐ ‐ ‐ ‐ (877) Non‐Interest expense, excluding ORE expense and FHLB restructuring charges $32,998 $32,334 $32,624 $29,471 $30,842 Adjusted pre‐tax pre‐provision income $25,645 $25,123 $24,778 $26,250 $23,818 39 Efficiency ratio, excl. ORE, FHLB prepayment charges, noncredit related loan losses and securities gains and losses 56.3% 56.3% 56.8% 52.9% 56.4%

Supplemental Information Pi l Fi i l P P fil Pinnacle Financial Partners Profile

40

PNFP Profile

PNFP operates in two great banking markets

Headquarters: Nashville, TN Founded: 2000 Offices: 29 in 8 Middle‐TN counties 4 in Knox County

• Avg. daily trading volume **: 184,570 shares

Total assets: $ 5.601 Billion (3/31/14) Shareholders’ equity: $ 743.4 Million

• Avg. daily trading volume

: 184,570 shares % Institutional ownership: 70.6% (12/31/13)

41

(3/31/14)

**: 50 day average per nasdaq.com

PNFP Profile

Name Title Age Years in Banking Years at Pinnacle

PNFP has an extraordinarily experienced management team

Banking Industry Pinnacle

• M. Terry Turner

President and Chief Executive Officer 59 36 14 Robert A. McCabe, Jr. Chairman of the Board 63 38 14 , Hugh M. Queener Chief Administrative Officer 58 27 14 Harold R. Carpenter, Jr. Chief Financial Officer 55 21 14

• J. Harvey White

Chief Credit Officer / Knoxville President 64 40 5 Joanne B. Jackson Manager, Client Services Group 56 39 14

• D. Kim Jenny

Risk Management Officer 59 40 8 William S. Jones Rutherford County Area Executive 54 24 8*

• J. Edward White

Manager, Client Advisory Group 61 40 14

42 * ‐ Mr. Jones was an executive with an entity acquired by Pinnacle in 2006.

PNFP Profile

• Pinnacle Financial Partners (PNFP)
• PacWest Bancorp (PACW)

PNFP compares favorably to high performing peers

• 1st Source Corporation (SRCE)
• Columbia Banking System, Inc.

(COLB)

• Sandy Springs Bancorp, Inc. (SASR)
• SCBT Financial Corp (SCBT)
• Taylor Capital Group, Inc. (TAYC)
• CVB Financial Corp. (CVBF)
• First Busey Corporation (BUSE)
• First Financial Bancorp. (FFBC)
• Texas Capital Bancshares, Inc. (TCBI)
• TowneBank (TOWN)
• Union First Market Bkshs Co (UBSH)
• Flushing Financial Corp (FFIC)
• First Midwest Bancorp, Inc. (FMBI)
• Independent Bank Corp. (INDB)
• United Bankshares, Inc. (UBSI)
• Westamerica Bancorporation

(WABC)

• MB Financial (MBFI)
• Old National Bancorp (ONB)
• Western Alliance Bancorporation

(WAL)

43

PNFP Profile

Highly engaged associates drive market‐best client satisfaction

90% 100% 4.00 5.00

nt Scores

• n Scores

80% 3.00

Engagemen r Satisfactio

60% 70% 1 00 2.00

Associate E Customer

60% 1.00

Customer Satisfaction Scores Associate engagement survey positive responses

44

Source: Annual Associate Survey

PNFP Profile

Nashville‐Davidson‐Rutherford MSA Knoxville MSA

PNFP has a track record for “best‐in‐market” share movement

Top 10 Market Share Rank Holding Company Market Share 6/30/13 Market Share 6/30/00 (1) Chang e in Share Top 10 Market Share Rank Holding Company Market Share 6/30/13 Market Share 6/30/07 (1) Change in Share 4 Pinnacle Financial Partners 8.9% 1.7% 7.2% 6 Pinnacle Financial Partners 3.1% 0.0% 3.1% 6 US Bank 3.6% 0.3% 3.2% 5 Branch Banking and Trust 9.9% 6.7% 3.2% 10 CapStar Bank 2.3% 0.0% 2.3% 8 Clayton Bank and Trust 2.1% 1.2% 0.9% 5 First Horizon 6.9% 4.8% 2.1% 1 First Horizon 21.0% 20.8% 0.2% k f f l 1 Bank of America 16.6% 15.1% 1.5% 9 Citizens of Blount County 2.1% 2.2% ‐0.1% 7 Wilson County B & T 3.5% 2.5% 1.0% 10 Bank of American 1.9% 2.2% ‐0.3% 8 Fifth Third 3.2% 2.4% 0.8% 4 Home Federal Bank of TN 11.7% 12.4% ‐0.7% 9 Wells Fargo 2.6% 2.2% 0.4% 7 First National 2.3% 3.2% ‐0.9% 3 SunTrust 12.3% 19.7% ‐7.4% 2 SunTrust 16.9% 18.1% ‐1.2% 2 Regions 15.9% 30.5% ‐14.6% 3 Regions 13.7% 17.8% ‐4.1% Other 24.2% 20.8% 3.2% Other 15.3% 15.4% ‐0.3% Total 100% 100% Total 100% 100%

45

Total 100% 100% Total 100% 100%

Source: SNL; FDIC Summary of Deposits 2013; Amounts reflect aggregation of previously merged banks. (1): First year Pinnacle’s deposits were reflected in FDIC Summary of Deposits data

Supplemental Information E i & M k C di i Economic & Market Conditions

46

PNFP operates in advantaged markets

Rapid job growth leads to rapid real estate absorption

Nashville Home Sales

1Q2014 1Q2013 % Change

• Avg. Qtrly. Median

Home Price $193,000 $170,333 13.31% Quarterly Closings 4,992 4,914 1.59% Quarter end Inventory 9,439 9,923 (4.88%) Quarter end Inventory 9,439 9,923 (4.88%) Months of Inventory 4.6 4.8 (2.40%)

47

Source: BERC – Middle Tennessee State University & Bureau of Labor Statistics, Greater Nashville Area Realtors

Future Outlook

Nashville MSA

Projected Population Growth (2012-2017)* 7.64% Median HHI Change (2012-2017)* 11.20% Cost of Living Index** 88.7 In Market Deposits* $40.8 B Market Share* 8.9%

Retail office locations

*

Sources: *SNL ** c2er-ACCRA Cost of Living Index Index

Future Outlook‐Knoxville

Knoxville MSA

Projected Projected Population Growth* (2012-2017) 4.33% Median HHI Change* (2012-2017) 18.9% Cost of Living Index** 89.0 g In Market Deposits* $14.6 B Market Share* 3.1%

Retail office locations

*

Sources: *SNL ** c2er-ACCRA Cost of Living Index Index

PNFP Operates in Advantaged Markets

Nashville and Knoxville are healthy business markets

TENNESSEE Tennessee named ’2013 State of the Year’ for economic development Business Facilities magazine e essee a ed 0 3 State o t e ea

• eco o

c de e op e t us ess ac t es aga e NASHVILLE Nashville has achieved “it city” status, landing on several major national publications’ lists of hot spots. Nashville’s diverse economy, thriving cultural base and strong business community are major attractions for corporations. The accolades continued in the first quarter of 2014:

• Nashville lauded as “The South’s Red‐Hot Town” due to its economy, booming

TIME cultural scene, world‐class health care and rising universities

• Nashville ranked No. 2 in study of most cost‐attractive mid‐sized cities for business

KPMG LLP h ill f i i i di d f

• Nashville among 10 fastest‐growing U.S. cities, according to data from U.S. Census Bureau

CNN Money

• Nashville is highlighted for its hot commercial real estate market; “office deals

Bloomberg beat U.S. average” KNOXVILLE Knoxville also enjoys a very healthy and diverse economy with an excellent transportation and technology infrastructure. The Knoxville metropolitan area currently enjoys the lowest unemployment rate of Tennessee’s metro areas. Good news in the first quarter of 2014 includes: 50

• Knoxville named fifth “most affordable city”

Forbes

PNFP Operates in Advantaged Markets

Nashville’s commercial vacancy rates indicate a healthy market

Nashville CRE Vacancy Rates National CRE Vacancy Rates 1Q 2014(**) YE 2013 (**) YE 2012 (**) YE 2011 (**) YE 2010 (**) YE 2009 (***) YE 2008 (***) 1Q 2014 (**) Industrial / Warehouse 8.6% 8.7% 9.1% 10.1% 10.2% 10.6% 9.6% 7.8% **C

h 1Q14

Multifamily** 8.8% 7.9% 7.0% 6.6% 6.7% 9.6% 7.6% 10.8% Retail 7.2% 7.3% 7.0% 7.3% 6.7% 8.1% 6.3% 6.5% Office 8.0% 7.9% 8.5% 9.7% 10.6% 12.7% 10.5% 11.5%

C f li *

**Costar thru 1Q14 ***REIS thru 1Q14

Retail 16.2% Office Other 21.8%

PNFP CRE Portfolio*

6.5%

Warehouse

7.4%

51

Own/Occ 48.2%

*: As of 3/31/2014

First Quarter 2014 Investor Call Investor Call

Terry Turner, President and CEO Harold Carpenter, EVP and CFO April 15, 2014