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

Second Quarter 2013 Investor Call

Terry Turner, President and CEO Harold Carpenter, EVP and CFO July 17, 2013

Forward-looking statements

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

• ther 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

• f 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 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

• ther 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 recently adopted changes to capital calculation methodologies and required capital 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. A more detailed description of these and

• ther risks is contained in Pinnacle Financial's most recent annual report on Form 10-K filed with the Securities and Exchange Commission on

February 22, 2013 and Pinnacle Financial’s most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 3, 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 release, whether as a result of new information, future events or otherwise.

Safe Harbor Statements

2

3

Ratio PNFP 1Q12 PNFP 2Q12 PNFP 3Q12 PNFP 4Q12 PNFP 1Q13 PNFP 2Q13 PNFP Long-term Targets NIM 3.74% 3.76% 3.78% 3.80% 3.90% 3.77% 3.70%-3.90% Net Charge-offs 0.44% 0.28% 0.22% 0.24% 0.24% 0.36% 0.20%-0.35% Noninterest Income / Total Average Assets 0.83%(1) 0.81%(1) 0.86%(1) 0.89%(1) 0.97%(1) 0.93%(1) 0.70%-0.90% Noninterest Expense / Total Average Assets 2.60%(2) 2.56%(2) 2.55%(2) 2.52%(2) 2.51%(2) 2.27%(2) 2.10%-2.30% ROAA 0.60% 0.65% 0.93% 0.94% 1.09% 1.10% 1.10%-1.30%

(1)- Calculation excludes net gains and losses on the sale of investment securities and noncredit related loan losses (2) - Calculation excludes OREO expense and FHLB prepayment charges

PNFP reached the low end of its long-term profitability targets in 2Q13

2Q13 Profitability, Earnings and Quarterly Progress

4

PNFP continued to “hit on all cylinders” in 2Q13

$20,000 $25,000 $30,000 $35,000 $40,000 $45,000 (thousands) Net Interest Income 0% 80% 160% 240% 320% 400% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% ALL % NPL % Growing NPL Coverage $6,000 $7,000 $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 (thousands) Core Non-interest income 2.10% 2.20% 2.30% 2.40% 2.50% 2.60% 2.70% Core Non-interest Expense/ Average Assets

2Q13 Profitability, Earnings and Quarterly Progress

Adjusted PTPP expanded 36.8% in 2Q13 over the same period prior year

5

2Q13 Profitability, Earnings and Quarterly Progress

6

Net interest income grew despite margin contraction

$36.0 $37.8 $38.4 $39.3 $39.5 $40.2 $40.9 $42.2 $42.8 $43.6

$34 $36 $38 $40 $42 $44 $46

(millions)

Net Interest Income

3.40% 3.55% 3.60% 3.65% 3.74% 3.76% 3.78% 3.80% 3.90% 3.77%

3.30% 3.40% 3.50% 3.60% 3.70% 3.80% 3.90% 4.00%

Net Interest Margin

Key Revenue Drivers

• Loan growth
• Reducing cost of deposits
• Continued growth in low-cost funding sources

2Q13 Profitability, Earnings and Quarterly Progress

7

Loan volumes grew meaningfully with expected yield contraction

$3,191 $3,212 $3,207 $3,262 $3,280 $3,403 $3,489 $3,580 $3,682 $3,845

4.88% 4.41%

3.60% 4.00% 4.40% 4.80% 5.20% 5.60% 6.00% $3,000 $3,100 $3,200 $3,300 $3,400 $3,500 $3,600 $3,700 $3,800 $3,900

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Loan Yields Average Loans

(millions)

Avg Loans Loan Yields

2Q13 Profitability, Earnings and Quarterly Progress

8

Lower deposit costs lessened the impact of decreasing loan yields

$3,772 $3,723 $3,700 $3,642 $3,597 $3,636 $3,706 $3,883 $3,950 $3,963 1.01% 0.30%

0.20% 0.35% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% $3,250 $3,350 $3,450 $3,550 $3,650 $3,750 $3,850 $3,950

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Deposit Costs (%)

• Avg. Deposits

(millions)

Avg Deposits Cost of Deposits

2Q13 Profitability, Earnings and Quarterly Progress

9

Pinnacle’s net interest margin is built on success with clients

2Q13 Profitability, Earnings and Quarterly Progress

1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50%

Treasury Margin Customer Margin Net Interest Margin

10

Core fees progressed to the highest level in firm history

2Q13 1Q13 4Q12 3Q12 2Q12 Service charges $2,541 $2,480 $2,623 $ 2,532 $ 2,439 Investment services 1,895 1,793 2,051 1,677 1,611 Insurance commissions 1,108 1,393 1,045 987 1,141 Gain on mortgage loans sold, net 1,949 1,814 1,768 1,979 1,457 Trust fees 880 944 863 767 770 Other: Securities gains (losses) (25)

• 1,988

(50) 99 Other 2,978 3,478 2,770 2,538 2,392 Total noninterest income 11,326 $11,902 $13,108 $ 10,430 $ 9,909 Less: Securities gains (losses) (25)

• 1,988

(50) 99 Noncredit related loan losses (771)

• Core noninterest income

$12,122 $11,902 $11,120 $ 10,480 $ 9,810 Total Assets (Quarterly Average) $5,210,600 $4,992,018 $4,964,521 $4,860,394 $4,847,583 Noninterest income/Average Assets 0.87% 0.97% 1.05% 0.85% 0.82% Noninterest income/Average Assets* 0.93% 0.97% 0.89% 0.86% 0.81%

* Excludes the impact of securities sales and other non-recurring items described above

2Q13 Profitability, Earnings and Quarterly Progress

11

Existing lenders are leveraging capacity to take share and grow loans

$1.27 Billion Target

FA Capacity Thru 2Q2013

2012 - 2014 Anticipated Net Loan Growth

$634.0 million net growth thru 2Q2013

$1.27 Billion Capacity 11.5% CAGR

14.0% AGR (Last 4 Quarters) 12.5% CAGR (1/1/2012-6/30/2013)

Previously reported growth Current quarter growth FA capacity

Loan, Deposit and Fee Growth Yield Operating Leverage

12

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

Source: Internal loan records, new loans to new clients based on review of new tax ID’s recorded during the first six months of 2013. All accounts > $250,000 reviewed by relationship managers to determine new client vs existing clients. Excludes net change in lines of credit.

Loan, Deposit and Fee Growth Yield Operating Leverage

New clients, 51.8% Existing clients, 48.2%

New Loans 1H13

$957 $959 $1,000 $975 $1,009 $1,054 $1,055 $1,138 $1,105 $1,166 $747 $715 $685 $779 $808 $787 $815 $865 $941 $926 56.15% 54.00% 55.75%

30% 35% 40% 45% 50% 55% 60% 65% 70% $0 $500 $1,000 $1,500 $2,000

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Funded % Total Commitments

(millions)

Net active balance Unfunded Commitments Funded %

Line commitments are growing; may provide future growth in outstandings

13

Note: Excludes HELOCS and credit cards

Loan, Deposit and Fee Growth Yield Operating Leverage

Loan growth is primarily funded by growth in low cost core deposits

14

% of Deposits by Type to Total Deposits

• Avg. Loan & Trans/MMA Account Growth

Loan, Deposit and Fee Growth Yield Operating Leverage

15

Operating leverage continued to expand in 2Q13

2Q13 1Q13 4Q12 3Q12 2Q12 Salaries and benefits $20,570 $19,572 $19,556 $19,470 $19,237 Equipment and occupancy 5,204 5,113 5,202 5,156 5,053 Other real estate owned 1,390 721 1,365 2,399 3,104 Marketing and Bus. Dev. 987 791 1,276 835 740 Supplies and postage 518 592 563 638 616 Intangible amortization 248 521 683 683 686 Other expenses: FHLB restructuring charges

• 877

2,092

• Other expenses

1,944 4,253 4,114 4,397 4,479 Total noninterest expense $30,862 $32,440 $34,851 $33,578 $33,915 Efficiency ratio 56.2% 59.3% 63.0% 65.4% 67.7% Total noninterest expense – excluding ORE and FHLB restructuring charges $29,471 $30,842 $31,395 $31,179 $30,811 Efficiency ratio, excl. gain on sale of securities, noncredit related loan losses, ORE and FHLB restructuring charges 52.9% 56.4% 58.8% 60.6% 61.6% Total Assets (Quarterly Average) $5,210,600 $4,992,018 $4,964,521 $4,860,394 $4,847,583 Expense/Total Average Assets 2.38% 2.64% 2.79% 2.75% 2.81% Expense*/Total Average Assets 2.27% 2.51% 2.52% 2.55% 2.56%

* Excludes the impact of OREO expense and FHLB restructuring charges

Operating Leverage Enhances Profitability

16

Potential Ongoing Impact on Growth, Earnings and Valuation

Earnings momentum should continue despite rising rates

• Investments primarily collateralize public funds
• Operating account deposits
• Weighted average rate of 0.32% at end of 2Q13 versus 0.55% for 2Q12
• Bond premium amortization likely to decrease
• $2.5 million during first six months of 2013
• Anticipate 25% in investment cash flow next 24 months
• Based on current duration
• Offers potential for reinvestment in higher yielding securities/loans
• Transaction deposit values increase with higher rates
• Steeper yield curve more beneficial
• Third party study reports trans. deposits have a 7-8 year avg. life
• Low cost funding can be deployed across a diverse asset base

17

Potential Ongoing Impact on Growth, Earnings and Valuation

Recent/ongoing initiatives minimize impact of rate increases on TBV

• Relative size of bond book in comparison to peers is low
• Investments down to 13.5% of assets at June 30, 2013 (20.8% at
• Dec. 31, 2010)
• AFS Securities / TBV was 306% at Dec. 2010, reduced to 153% at

June 30, 2013

• Municipal reclassification to HTM during 1Q13
• In April 2013, executed cash flow hedge
• “Shelters” approx. 30% of the bond book’s valuation adjustments

Floors have provided meaningful earnings and are manageable going forward

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Potential Ongoing Impact on Growth, Earnings and Valuation

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Potential Ongoing Impact on Growth, Earnings and Valuation

Revised BASEL III rules provide some relief from 2012 NPR Key Changes that impact PNFP

• Trust Preferred grandfathered at Tier 1 capital
• 1-4 first mortgages receive consistent treatment for RWA

as proposed

• Investment portion of AOCI may be excluded from RBC

calculations ESTIMATED Pro Forma Impact to PNFP

• Anticipate that RWA’s could increase by 3-5% in 2015

20

Potential Ongoing Impact on Growth, Earnings and Valuation

Profitability likely provides opportunity for growth & dividends

PNFP At Dec. 31, 2012 At Jun. 30, 2013 Net Change

% of RBC increase to RW Loan Growth PCA Minimum Requirements BASEL III Minimum Requirements (2015)

Loans $3,712.2 $3,925.4 $213.2 RW % 94.5% 93.9% RW Loans $3,507.4 $3,685.1 $177.7 Tier 1 CTE $418.8 $449.5 $30.7

17.3% NA 6%

Tier 1 RBC $498.8 $529.5 $30.7

17.3% 6% 7%

Total RBC $552.0 $586.6 $34.6

19.5% 10% 10.5%

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Margin outlook for 2013 is consistent with the targeted range

Opportunities:

• 1. Loan growth
• 2. Continued reduction in cost of funds
• 3. Growth in low cost core deposits

Threats:

• 4. Loan yields will continue to re-price below current yields

Anticipated 2013 Margin Range 3.70% to 3.80%

Potential Ongoing Impact on Growth, Earnings and Valuation

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Potential Ongoing Impact on Growth, Earnings and Valuation

Fee income has relatively limited exposure to mortgage originations

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 ($ thousands)

Noninterest income by Line of Business

Deposit & Interchange Wealth Management Mortgage, net of commission

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2008 2009 2010 2011 2012 Q1 2013 Q2 2013 Refinance/Purchase Mix Refinance Purchases

Pinnacle is positioned to leverage existing infrastructure

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$6,000,000 $6,150,000 $6,300,000 $6,450,000 $6,600,000 $6,750,000 $6,900,000 $7,050,000 $7,200,000 $7,350,000 $150,000 $170,000 $190,000 $210,000 $230,000 $250,000 $270,000 $290,000 $310,000 $330,000 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Assets per Associate Revenue Per Associate

Assets per FTE Associate Revenue per FTE Associate

Potential Ongoing Impact on Growth, Earnings and Valuation

24

Potential Ongoing Impact on Growth, Earnings and Valuation

PNFP operates in advantaged markets

4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0%

Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13

Unemployment Rates seasonally adjusted (Thru May 2013)

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

Nashville Home Sales

2Q2013 2Q2012 % Change

• Avg. Qtrly. Median

Home Price $195,300 $175,500 11.3% Quarterly Closings 7,402 5,955 24.3% Quarter end Inventory 10,555 11,812 (10.6%) Months of Inventory 4.1 5.7 (0.28%)

• Continued loan and core deposit growth
• Continued NPA reductions
• Continued revenue growth
• Capital planning

25

Management’s Focus for 3Q 2013

Q&A –

Second Quarter 2013 Investor Call

Terry Turner, President and CEO Harold Carpenter, EVP and CFO July 17, 2013

26

Supplemental Information

Second Quarter 2013 Investor Call

Terry Turner, President and CEO Harold Carpenter, EVP and CFO July 17, 2013

27

Supplemental Information

28

Chart

• Balance Sheet

29

• Asset Quality

39

• Income Statement

47

• Economic Conditions & Other 50
• Pinnacle Financial Partners profile 53

Balance Sheet Supplemental Information

29

Keen focus on core earnings capacity produces record results

30

Source: SNL Financial except for Q2 2013– *Total revenues and noninterest income exclude nonrecurring items and investment gains and losses

Balance Sheet

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500

Dec-00 Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13

Millions

Total Loans

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000

Dec-00 Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13

Thousands

Total Revenues (*)

$0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00

Dec-00 Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13

Tangible Common Equity Per Share

$- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000

Dec-00 Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13

Thousands

Non interest income

Loan portfolio components are within targeted ranges

Balance Sheet

31 Amts. 2Q13 %’s 2Q13 Amts. 1Q13 %’s 1Q13 Amts. 4Q12 %’s 4Q12 Amts. 2Q12 %’s 2Q12 C&D and Land $298.5 7.6% $306.4 8.1% $313.6 8.5% $289.1 8.4% Consumer RE 697.5 17.7% 675.6 17.9% 679.9 18.3% 687.0 19.9% CRE – Owner Occ. 647.1 16.5% 618.3 16.4% 594.4 16.0% 601.5 17.5% CRE – Investment 567.7 14.5% 574.6 15.2% 538.6 14.5% 525.4 15.2% Other RE loans 94.1 2.4% 85.8 2.3% 45.2 1.2% 40.1 1.2% Total real estate 2,304.9 58.7% 2,260.7 59.9% 2,171.7 58.5% 2,143.1 62.2% C&I 1,504.1 38.3% 1,403.4 37.2% 1,446.6 39.0% 1,227.3 35.6% Other loans 116.4 3.0% 108.2 2.9% 93.9 2.5% 74.3 2.2% Total loans $3,925.4 100.0% $3,772.4 100.0% $3,712.2 100.0% $3,444.7 100.0%

(*) as a percentage of total loans

Balance Sheet

32

Exposure to residential land development is limited

Amts. 2Q13 %’s(*) 2Q13 Amts. 1Q13 %’s(*) 1Q13 Amts. 4Q12 %’s(*) 4Q12 Amts. 2Q12 %’s(*) 2Q12 Residential – Spec $21.1 0.5% $ 18.6 0.5% $ 17.5 0.5% $ 12.4 0.4% Residential – Custom 22.2 0.6% 16.5 0.4% 16.6 0.4% 11.8 0.3% Residential – Condo 3.8 0.1% 4.2 0.1% 4.7 0.1% 5.2 0.1% Commercial Construct. 118.5 3.0% 125.9 3.3% 123.0 3.3% 98.6 2.9% Land Dev– Residential 52.4 1.3% 53.4 1.4% 57.9 1.6% 58.6 1.7% Land Dev – Commercial 79.2 2.0% 86.2 2.3% 92.2 2.5% 78.5 2.3% Land – Unimproved 1.3 0.0% 1.6 0.0% 1.7 0.0% 24.0 0.7% Total C&D $298.5 7.6% $ 306.4 8.1% $ 313.6 8.4% $ 289.1 8.4%

Balance Sheet

Basis: Classification based on NAIC sector as of June 30, 2013

The C&I loan portfolio is highly diversified

33

Accomodation and Food Services, 1.3% Administrative & Support & Waste Management & Remediation Services, 2.0% Arts, Entertainment & Recreation, 0.6% Construction, 2.3% Consumer, 3.3% Educational Services, 0.3% Finance & Insurance, 5.3% Healthcare & Social Assistance, 4.6% Information, 1.3% Manufacturing, 2.7% Mining, Quarrying, & Oil & Gas Extraction, 0.1% Other Services (except Public Administration), 1.5% Professional, Scientific & Technical Services, 2.1% Public Administration, 0.8% Real Estate & Rental & Leasing, 3.0% Retail Trade, 1.5% Transportation & Warehousing, 2.6% Utilities, 0.1% Wholesale Trade, 3.5%

34

Balance Sheet

Bond volumes have stabilized to collateralize funding

$1,010 $973 $940 $924 $876 $819 $767 $720 $714 $746

3.58% 3.67% 3.54% 3.26% 3.31% 3.27% 3.19% 3.16% 3.34% 3.08%

2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.70% $650 $700 $750 $800 $850 $900 $950 $1,000 $1,050

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Bond Yields (%) Average Securities (000’s)

Avg Investments Bond Yields

PNFP maintains a conservative bond portfolio

Balance Sheet

35

Portfolio: June 30, 2013

Total Investments $728 million Unrealized Gain $0.8 million QTD Purchases $65.9 million QTD sales, maturities, calls $22.2 million Duration Avg Yield - TE Jun 2013 4.5 % 3.0%

Dec 2012 3.2 % 3.3%

Sep 2012 2.1 % 3.1% 19.7% 1.4% 47.9% 2.5% 5.5% 23.0%

Agency Corporates MBS Asset Backed CMOs Municipals

As of 6/30/2013 Tax Equivalent Book Yield Avg Life (yrs) Agency 2.15% 9.9 Asset Backed 1.42% 2.5 Corporates 4.35% 5.1 CMOs 2.41% 4.4 MBS 3.14% 4.8 Municipals 4.69% 4.2

• Investment portfolio at $728 million, up $4 million vs Q1

– MBS sector at 48% of portfolio – Avg TE yield down linked quarter

• Recent purchases targeting shorter durations
• Unrealized gain down significantly due to recent rise in

Treasury rates

82% 18% Muni Allocation % General Obligation Bonds Revenue Bonds

The municipal portfolio contains minimal risk

Balance Sheet

36 Location # of Issuances Balances % Tennessee 66 $ 39,239 22.2% Florida

• 0.0%

California 2 774 0.4% Nevada

• 0.0%

Michigan 11 5,426 3.1% Illinois 19 15,348 8.7% Other – 30 states 174 116,097 65.6% Totals 270 $ 176,884 100.0% As of June 30, 2013 Municipal Bond Portfolio Statistics 2Q13 2Q12 Weighted Average Life 4.2 years 4.4 years % State Agency Holdings 5.3% 5.2% Tax equivalent yield 4.69% 4.83% FMV as % of Cost 104.20% 108.30%

All municipals are “A” rated or better.

Balance Sheet

37

PNFP has limited dependence on non-relationship funding

6/30/2013 Percent 6/30/2012 Percent Core Funding: Transaction accounts 1,903,487 41.03% 1,504,450 35.56% Money Market accounts 1,424,910 30.71% 1,510,174 35.69% Time deposits less than $250,000 443,028 9.55% 461,600 10.91% Total Core Funding 3,771,425 81.29% 3,476,224 82.16% Non-core funding: Relationship based non-core funding: Reciprocating NOW deposits 12,963 0.28%

• 0.00%

Reciprocating MMDA deposits 182,779 3.94% 47,433 1.12% Time deposits Reciprocating time deposits 40,034 0.86% 94,307 2.23% Other time deposits 89,379 1.93% 91,856 2.17% Securities sold under agreements to repurchase 117,345 2.53% 127,623 3.02% Total relationship based non-core funding 442,500 9.54% 361,219 8.54% Wholesale funding: FHLB advances 325,762 7.02% 270,995 6.41% Holding Company Loan 17,432 0.38% 25,000 0.59% Subordinated debt 82,476 1.78% 97,476 2.30% Total wholesale funding 425,670 9.17% 393,471 9.30% Total non-core funding 868,170 18.71% 754,690 17.84% Totals 4,639,595 100.00% 4,230,914 100.00%

38

Balance Sheet

8.77% 8.73% 9.15% 8.97% 9.18% 8.75% 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Tangible Common Ratio

Elevated tangible common is available for deployment

6.13% 7.58% 10.76% 10.83% 12.41% 12.72% 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Return on Tangible Common Equity

Supplemental Information

Asset Quality

39

40

Past due loans remain very low

Asset Quality

(*) > 30 days past due

(000’s) June 30, 2013 As a %

• f total

loans March 31, 2013 As a %

• f total

loans Past Due Loans (*) Managed by special assets: Nonaccrual loans $9,610 0.24% $15,851 0.42% Accruing loans 11,617 0.30% 3,396 0.09% Managed by relationship managers: Accruing loans 4,203 0.11% 5,287 0.14% Total past due $25,430 0.65% $24,534 0.65%

7.24% 7.18% 8.63% 9.30% 8.64% 7.65% 5.78% 5.04% 4.09% 4.12% 3.78% 3.49% 3.13% 2.84% 2.57% 2.11%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0%

Potential Problem loans/Total loans

Percentage of potential problem loans continued to decline

41

Asset Quality

Note: Classified loans (or loans with an identified credit weakness) that continue to accrue interest are considered potential problem loans.

42

Asset Quality

Classified assets continued to decline

(in thousands) Balances June 30, 2013 Balances

• Dec. 31, 2012

Balances June 30, 2012 Classified loans and ORE:

• Substandard commercial loans

$ 118,046 $ 144,684 $ 174,500

• Doubtful commercial loans
• 33

397

• Other impaired loans

1,940 2,083 3,113

• 90 days past due and accruing (*)

747

• Other real estate

15,992 18,580 25,450

• Other repossessed assets

95 63 9 Total $ 136,820 $ 165,443 $203,469 Pinnacle Bank classified asset ratio 23.3% 29.4% 37.8%

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

NPLs continued to decline

43

Asset Quality

NPLs Expressed as a % of Total Loans within each Category

PNFP NPLs and > 90 days 2Q13 PNFP NPLs and > 90 days 1Q13 PNFP NPLs and > 90 days 4Q12 PNFP NPLs and > 90 days 3Q12 PNFP NPLs and > 90 days 2Q12

• Const. and land development

0.61% 0.57% 1.44% 1.92% 2.09%

CRE – Owner Occupied

0.45% 1.18% 1.36% 1.80% 1.84%

CRE – Investment

0.00% 0.68% 0.21% 0.75% 0.75%

Total real estate

0.48% 0.93% 0.82% 1.46% 1.63%

C&I

0.18% 0.10% 0.21% 0.38% 0.44%

Total loans

0.37% 0.60% 0.61% 1.04% 1.19%

• Largest ORE balance - $4.1 M

* Excludes costs to sell 44

Asset Quality

ORE is 44.8% of NPAs with resolution in bank’s control

Balances June 30, 2013 (dollars in thousands) Fair value as a %

• f book value*

Average Appraisal Age in Months

ORE categories: Developed lots $1,659 210.3% 8.4 Undeveloped land 3,145 191.9% 4.1 Other 11,188 133.8% 5.8 Total ORE $15,992 153.2% 5.6

(*) ORE dispositions > $250,000 from 7/1/12 thru 6/30/13 excluding partial sales 45

Asset Quality

Current OREO valuations are below historical disposition results

ORE Dispositions (*) thru June 30, 2013 ORE Balance at June 30, 2013 Loan balances prior to charge offs 100.00% 100.00% Charge off’s prior to foreclosure 18.62% 27.02% Balance @ foreclosure 81.38% 72.98% Valuation losses while in ORE 27.86% 31.51% Balance in ORE 53.52% 41.47% Loss (gain) on disposition 0.15% Net realized 53.37%

(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

46

Asset Quality

OREO disposition plans suggest limited unresolved issues

(dollars in thousands) Balances June 30, 2013 Near-term liquidation (1) Active Projects (2) Other Properties (3)

ORE categories: Developed lots $1,659 $147 $1,512 $ - Undeveloped land 3,145 543 8,609 2,036 Other 11,188 808 1,803 534 Total ORE $15,992 $1,498 $11,924 $ 2,570

Income Statement Supplemental Information

47

48 $- $30,000 $60,000 $90,000 $120,000 $150,000 $- $500 $1,000 $1,500 $2,000 $2,500 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Gross Loans Sold (000s’) Gain on mortgages sold, net (000’s)

Gross Loans Sold, net Gain on Mortgage Loans Sold, net

Income Statement

Mortgage originations continued to be elevated

48

Income Statement

49 2Q13 1Q13 4Q12 3Q12 2Q12 Net interest income $43,599 $42,758 $42,243 $40,932 $40,185 Total non-interest income $11,326 $11,902 $13,108 $10,430 $9,909 Less: Securities (gains) losses 25

• (1,988)

50 (99) Less: Noncredit related loan losses (771) Non-interest income, excluding securities (gains) losses and noncredit related loan losses $12,122 $11,902 $11,120 $10,480 $9,810 Total non-interest expense $30,862 $32,440 $34,851 $33,578 $33,915 Less: ORE expenses (1,391) (721) (1,365) (2,399) (3,104) Less: FHLB restructuring charges

• (877)

(2,092)

• Non-Interest expense, excluding ORE expense and FHLB

restructuring charges $29,471 $30,842 $31,394 $31,179 $30,811 Adjusted pre-tax pre-provision income $26,250 $23,818 $21,969 $20,233 $19,185 Efficiency ratio, excl. ORE, FHLB prepayment charges, noncredit related loan losses and securities gains and losses 52.9% 56.4% 58.8% 60.6% 61.6%

PNFP continues to improve operating leverage

Economic Conditions & Other Supplemental Information

50

Nashville and Knoxville are healthy business markets

NASHVILLE Nashville achieved “it city” status in 2012, 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 second quarter of 2013:

• Nashville named “America’s New Boomtown City”

AOL.com (May 7)

• Nashville No. 2 on “Best Big Cities For Jobs 2013” list

Forbes (May 7)

• Nashville ranks No. 6 of most business-friendly cities in “Best Places to Launch”

CNN Money (June 19)

• Nashville No. 7 on “Top 10 Best Cities to Work” list

Quantum Workforce Rutherford County, included in the Nashville MSA, ranked third in the nation for percentage increase in employment, according to a report recently released from the U.S. Bureau of Labor Statistics. 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 on that front in the second quarter of 2013 includes:

• ‘Brisk’ hiring expected in Knoxville – 23% plan to hire in 3Q

Manpower Inc.’s

• Knoxville named No. 2 on the list of “Happiest Cities to Work in Right Now”

CareerBliss.com

Economic Conditions

51

Nashville’s commercial vacancy rates indicate a healthy market

*Costar **REIS

Economic Conditions

52 Nashville CRE Vacancy Rates National CRE Vacancy Rates 2Q 2013(*) YE 2012(*) YE 2011 (*) YE 2010 (*) YE 2009 (**) YE 2008 (**) 2Q 2013 (*) Industrial / Warehouse 8.5% 9.1% 10.1% 10.2% 10.6% 9.6% 8.5% Multifamily** 7.7% 7.0% 6.6% 6.7% 9.6% 7.6% NA Retail 7.5% 7.0% 7.3% 6.7% 8.1% 6.3% 6.7% Office 8.5% 8.5% 9.7% 10.6% 12.7% 10.5% 11.7%

Retail 14.6% Office 7.3%

Warehouse

9.0% Own/Occ 50.5% Other 18.6%

PNFP CRE Portfolio

Pinnacle Financial Partners Profile Supplemental Information

53

PNFP Profile

54

Headquarters: Nashville, TN Founded: 2000 Total assets: $ 5.373 Billion (6/30/13) Shareholders’ equity: $ 696.6 Million (6/30/13) Offices: 29 in 8 Middle-TN counties/3 in Knoxville

• Avg. daily trading vol.: 125,114 shares

(6/30/13) % Institutional ownership: 69% (6/30/13)

PNFP operates in two great banking markets

PNFP Profile

55

Name Title Age Years in Banking Industry Years at Pinnacle

• M. Terry Turner

President and Chief Executive Officer 59 35 13 Robert A. McCabe, Jr. Chairman of the Board 62 37 13 Hugh M. Queener Chief Administrative Officer 57 26 13 Harold R. Carpenter, Jr. Chief Financial Officer 55 20 13

• J. Harvey White

Chief Credit Officer 64 39 4 Joanne B. Jackson Manager, Client Services Group 55 38 13

• D. Kim Jenny

Risk Management Officer 58 39 7 William S. Jones Rutherford County Area Executive 53 23 7*

• J. Edward White

Manager, Client Advisory Group 60 39 13 Jason K. West Manager, Special Assets Group 46 26 6*

* - Messrs. Jones and West were executives with entities acquired by Pinnacle in 2006 and 2007, respectively.

PNFP has an extraordinarily experienced management team

56

PNFP Profile

Engaged associates drive market-best client satisfaction

60% 70% 80% 90% 100% 1.00 2.00 3.00 4.00 5.00

Associate Engagement Scores Customer Satisfaction Scores

Customer Satisfaction Scores Associate engagement survey positive responses

PNFP Profile

57 Nashville-Davidson-Rutherford MSA Knoxville MSA

Rank Holding Company Market Share 6/30/12 Market Share 6/30/00 Change in Share Holding Company Market Share 6/30/12 Market Share 6/30/07 Change in Share 4 Pinnacle Financial Partners 8.4% 1.7% 6.7% Branch Banking and Trust 11.0% 6.7% 4.3% 6 US Bank 3.5% 0.3% 3.2% Pinnacle Financial Partners 3.0% 0.0% 3.0% 2 Bank of America 17.2% 15.1% 2.1% Citizens of Blount County 2.1% 2.2%

• 0.1%

5 First Horizon 6.6% 4.8% 1.8% Bank of America 1.7% 2.2%

• 0.5%

10 CapStar Bank 1.8% 0.0% 1.8% SunTrust 17.5% 18.1%

• 0.6%

7 Wilson County B & T 3.4% 2.5% 0.9% First National 2.4% 3.2%

• 0.8%

8 Fifth Third 3.0% 2.4% 0.6% Clayton Bank and Trust 2.1% 1.2%

• 0.9%

9 Wells Fargo 2.3% 2.2% 0.1% Home Federal Bank of TN 11.4% 12.4%

• 1.0%

3 SunTrust 12.2% 19.7%

• 7.5%

First Horizon 18.9% 20.8%

• 1.9%

1 Regions 18.1% 30.5%

• 12.4%

Regions 13.7% 17.8%

• 4.1%

Other 23.5% 20.8% 2.7% Other 16.2% 15.4% 0.80% Total 100% 100% Total 100% 100%

PNFP has proven experience in market share take-away

Source: FDIC Summary of Deposits 2012; Amounts reflect aggregation of previously merged banks.

PNFP Profile

58

MSA Market Rank Number

• f

Branches Company Deposits in Market ($000) Deposit Market Share (%) Percent of Franchise (%) Total Population 2012 (Actual) Population Change 2010-2012 (%) Projected Population Change 2012-2017 (%) Median HH Income 2012 ($) Projected HH Income Change 2012-2017 (%) Nashville- Davidson- Murfreesboro- Franklin, TN 4 28 3,270,266 8.43 87.68 1,635,341 2.86 7.64 49,741 11.20 Knoxville, TN 6 4 410,036 2.98 10.99 709,798 1.69 4.33 42,595 18.90 Shelbyville, TN 5 1 49,512 8.24 1.33 45,655 1.32 4.02 36,770 11.53 MSA Totals 33 3,729,814 100.00 2,390,794

Source: SNL Deposit data from the June 30, 2012 FDIC Summary of Deposits Weighted Average is calculated as the sum of (Percent of State/National Franchise * demographic item) within each market. Banks, Thrifts, and Savings Banks included (Retail Branches Only) Demographic data is provided by ESRI based primarily on US Census data. For non-census year data, ESRI uses samples and projections to estimate the demographic data. SNL performs calculations on the underlying data provided by ESRI for some of the data presented on this page.

Second Quarter 2013 Investor Call

Terry Turner, President and CEO Harold Carpenter, EVP and CFO July 17, 2013