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

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

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Second Quarter 2014 Investor Call Terry Turner, President and CEO Harold Carpenter, EVP and CFO July 16, 2014 Safe Harbor Statements Forward-looking statements Certain of the statements in this presentation may constitute forward-looking

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Second Quarter 2014 Investor Call

Terry Turner, President and CEO Harold Carpenter, EVP and CFO July 16, 2014

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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 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 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 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 presentation, whether as a result of new information, future events or otherwise.

Safe Harbor Statements

2

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SLIDE 3

29.4% 26.4% 23.3% 20.6% 18.5% 21.2% 18.1% 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Classified Asset Ratio

$12.39 $12.64 $12.78 $13.22 $13.52 $13.93 $14.53 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Tangible Book Value per Share

$1,666 $1,727 $1,803 $1,883 $1,991 $2,050 $2,115 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Avg Trans Accts

(millions)

1.87% 1.84% 1.75% 1.70% 1.64% 1.61% 1.55%

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

ALL %

1.11% 1.02% 0.93% 0.89% 0.80% 0.73% 0.66%

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

NPA %

10.83% 12.41% 12.72% 12.73% 12.79% 13.45% 13.50%

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

ROTCE

$0.34 $0.39 $0.42 $0.42 $0.44 $0.47 $0.49

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

FD EPS

$53,363 $54,661 $54,949 $57,401 $57,456 $58,640 $59,820

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

Total Revenues (1)

(millions)

$3,712 $3,772 $3,925 $3,969 $4,144 $4,182 $4,316

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

Total Loans

(millions)

2Q14 Summary Results

Balance Sheet Growth Earnings Growth Asset Quality

Up 9.9% yr/yr Up 17.3% yr/yr Up 16.7% yr/yr Up 8.9% yr/yr

Execution of fundamentals fuels exceptional growth in key valuation drivers

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

Up 13.7% yr/yr

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FA Capacity Thru 2Q2014 (billions of dollars)

2012-2014 Anticipated Net Loan Growth

Previously Reported Growth Current Quarter Growth Financial Advisor Capacity 11.5% CAGR (1/1/2012- 6/30/2014)

$1.02 billion net growth thru 2Q14

11.5% CAGR 4

11.5% actual net loan CAGR equals the stated three year growth target

$1.27 Billion Capacity

2Q14 Summary Results

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SLIDE 5

$0 $100 $200 $300 $400 $500

Loan Volumes ($ millions)

Quarterly Pay Offs/ Pay Downs

5

Annual loan growth is reliable despite wide quarterly variation

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

$0 $100 $200 $300 $400 $500

Loan Volumes ($ millions)

Quarterly New Loan Originations

$0 $50 $100 $150 $200

Loan Volumes ($ millions)

Quarterly Net Loan Growth

$153 $213 $272 $221 $243

$- $100 $200 $300 $400 $500

Loan Volumes ($ millions)

Annual Net Loan Growth

Actual net loan growth 1/1 - 6/30 Actual net loan growth 7/1 - 12/31 Required net loan growth 7/1/14 - 12/31/14 in order to meet the 2012-2014 target

$411 $168 $434 $425

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6

Net interest income grew as loan and deposit volumes increased in 2Q14

$36.0 $37.8 $38.4 $39.3 $39.5 $40.2 $40.9 $42.2 $42.8 $43.6 $44.6 $45.0 $45.9 $47.2

3.40% 3.71%

3.10% 3.20% 3.30% 3.40% 3.50% 3.60% 3.70% 3.80% 3.90% 4.00% $34 $36 $38 $40 $42 $44 $46 $48

Net Interest Margin Net Interest Income

(millions)

Net Interest Income Net Interest Margin

Loan, Deposit and Fee Growth Yield Operating Leverage

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SLIDE 7

7

Average loans grew meaningfully; loan yields contracted slightly

$3,191 $3,212 $3,207 $3,262 $3,280 $3,403 $3,489 $3,580 $3,682 $3,845 $3,932 $3,981 $4,130 $4,251

4.88% 4.27%

3.50% 4.00% 4.50% 5.00% 5.50% 6.00% $3,000 $3,200 $3,400 $3,600 $3,800 $4,000 $4,200

Loan Yields Average Loans

(millions)

Avg Loans Loan Yields

Loan, Deposit and Fee Growth Yield Operating Leverage

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SLIDE 8

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% $1,200 $1,220 $1,240 $1,260 $1,280 $1,300 $1,320 $1,340 $1,360 Dec 2010 Dec 2011 Dec 2012 Dec 2013 Mar 2014 June 2014 Loan Volumes ($ millions) Floor volumes Weighted Average Rate Weighted Average Contract Rate 1.33% 0.96% 0.93% 0.81% 0.84% 0.72%

Loan, Deposit and Fee Growth Yield Operating Leverage

8

Floors have provided meaningful earnings and are manageable going forward

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SLIDE 9

9

Deposits continued to grow while cost of funds declined in 2Q14

$3,772 $3,723 $3,700 $3,642 $3,597 $3,636 $3,706 $3,883 $3,950 $3,963 $4,199 $4,408 $4,509 $4,519 1.01% 0.22%

0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% 1.10% 1.20% $3,300 $3,400 $3,500 $3,600 $3,700 $3,800 $3,900 $4,000 $4,100 $4,200 $4,300 $4,400 $4,500 $4,600

Deposit Costs (%)

  • Avg. Deposits

(millions)

Avg Deposits Cost of Deposits

Loan, Deposit and Fee Growth Yield Operating Leverage

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10

The ‘noninterest income to asset’ ratio remains in the high end of the target range

2Q14 1Q14 4Q13 3Q13 2Q13 Service charges $2,966 $2,791 $2,739 $2,797 $2,541 Investment services 2,164 2,128 2,394 1,956 1,895 Insurance commissions 1,145 1,385 1,015 1,021 1,108 Gain on mortgage loans sold, net 1,668 1,235 1,113 1,326 1,949 Trust fees 1,072 1,146 991 932 880 Other: Securities (losses)

  • (1,441)

(25) Other 3,582 4,048 4,236 4,796 2,978 Total noninterest income $12,597 $12,732 $12,488 $11,387 $11,326 Less: Securities losses

  • 1,441

25 Noncredit related loan losses

  • 771

Core noninterest income $12,597 $12,732 $12,488 $12,828 $12,122 Total Assets (Quarterly Average) $5,673,615 $5,514,031 $5,388,371 $5,313,003 $5,210,600 Noninterest income/Average Assets 0.89% 0.94% 0.92% 0.85% 0.87% Noninterest income/Average Assets* 0.89% 0.94% 0.92% 0.96% 0.93%

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

Loan, Deposit and Fee Growth Yield Operating Leverage

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11

The core ‘noninterest expense to average assets’ ratio is declining toward target

2Q14 1Q14 4Q13 3Q13 2Q13 Salaries and benefits $21,772 $21,750 $21,494 $21,010 $20,570 Equipment and occupancy 5,823 5,709 5,543 5,413 5,204 Other real estate owned 226 651 302 699 1,390 Marketing and business development 1,065 909 1,140 721 987 Supplies and postage 544 561 559 581 518 Intangible amortization 238 238 247 247 248 Other expenses 4,234 3,828 3,352 4,652 1,944(1) Total noninterest expense $33,902 $33,646 $32,637 $33,323 $30,862 Efficiency ratio 56.7% 57.4% 56.8% 59.5% 56.2% Core noninterest expense ** $33,676 $32,995 $32,335 $32,624 $29,471 Core efficiency ratio * 56.3% 56.3% 56.3% 56.8% 52.9% Total Assets (Quarterly Average) $5,673,615 $5,514,031 $5,388,371 $5,313,003 $5,210,600 Expense/Total Average Assets 2.40% 2.47% 2.40% 2.49% 2.38% Core Noninterest Expense**/Total Average Assets 2.38% 2.43% 2.38% 2.44% 2.27%

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

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

Loan, Deposit and Fee Growth Yield Operating Leverage

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SLIDE 12

The adjusted PTPP expanded at a 7.9% annualized rate in 2Q14

(000’s) 2Q14 1Q14 4Q13 3Q13 2Q13 Net interest income $47,226 $45,908 $44,969 $44,573 $43,599 Total noninterest income 12,597 12,732 12,488 11,387 11,326 Total revenue 59,823 58,644 57,457 55,960 54,925 Total noninterest expense 33,902 33,646 32,637 33,323 30,862 (*) Pre-tax, pre-provision income $25,925 $24,994 $24,820 22,637 24,063 (Gains) losses on sale of securities

  • 1,441

25 Other real estate expenses 226 651 302 699 1,391 Noncredit related loan losses

  • 771

Adjusted PTPP $26,151 $25,645 $25,123 $24,778 $26,250

12

Growth in Core Earnings Capacity

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

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Future Outlook

13

  • 1. Aspirations remain high – top quartile performance
  • 2. Nashville and Knoxville are advantaged markets
  • 3. PNFP is uniquely positioned to capitalize on businesses’ “willingness to switch”
  • 4. Client retention supports outsized share growth
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SLIDE 14

Future Outlook

PNFP targets and has consistently delivered top quartile performance

Note: Return calculated as of June 30, 2014. Peer group listed on slide 48. 14

0.0% 50.0% 100.0% 150.0% 200.0% 250.0%

Total Shareholder Return - 1 yr.

100th

percentile

0.0% 50.0% 100.0% 150.0% 200.0% 250.0%

Total Shareholder Return - 3 yr.

89th

percentile

0.0% 50.0% 100.0% 150.0% 200.0% 250.0%

Total Shareholder Return - 5 yr.

84th

percentile

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15

(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

  • -- : Target established in 2011-2013 strategic plan
  • -- : Target established in 2014- 2016 strategic plan

PNFP has increased the long-term return targets in the 2014-2016 plan

Future Outlook

3.74% 3.76% 3.78% 3.80% 3.90% 3.77% 3.72% 3.70% 3.76% 3.71% 3.60% 3.65% 3.70% 3.75% 3.80% 3.85% 3.90% 3.95%

Net Interest Margin

0.44% 0.28% 0.22% 0.24% 0.24% 0.36% 0.21% 0.15% 0.09% 0.09% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 0.40% 0.45% 0.50%

Net Chargeoff Ratio

2.60% 2.56% 2.55% 2.52% 2.51% 2.27% 2.44% 2.38% 2.43% 2.38% 1.90% 2.00% 2.10% 2.20% 2.30% 2.40% 2.50% 2.60% 2.70%

Noninterest Expense/ Average Assets (2)

0.60% 0.65% 0.93% 0.94% 1.09% 1.10% 1.09% 1.13% 1.20% 1.21% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% 1.10% 1.20% 1.30% 1.40% 1.50%

Return on Average Assets

0.83% 0.81% 0.86% 0.89% 0.97% 0.93% 0.96% 0.92% 0.94% 0.89% 0.60% 0.65% 0.70% 0.75% 0.80% 0.85% 0.90% 0.95% 1.00% 1.05% Noninterest Income/ Average Assets (1)

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Nashville and Knoxville are healthy business markets

Future Outlook

16 TENNESSEE

  • Tennessee ranks No. 2 in the annual list of the most competitive states for economic development success

Site Selection magazine

  • Tennessee ranks No. 6 in the “Top 10” nationwide for small business friendliness

Thumbtack.com

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 second quarter of 2014:

  • Nashville Metro Government approved a record $1.87 billion in new building permits during the most recent fiscal year. Nashville Business Journal
  • Nashville’s GMP growth of 4.2% ties for second highest out of 100 largest metro areas.

HIS Global Insights

  • Nashville ranks No. 2 on list of big cities leading a manufacturing revival nationwide.

FORBES

  • Nashville MSA includes two cities in the top 40 fastest growing cities with at least 50,000 residents.

Tennessean

  • Nashville is the sixth-best large city in the nation for job growth

NewGeography.com

  • Nashville ranks No. 10 of the best cities in the country for growth in information jobs

FORBES

  • Nashville ranks No. 14 in “Leading Locations for 2014” for economic and job growth

Area Development

KNOXVILLE

Knoxville also enjoys a very healthy and diverse economy with an excellent transportation and technology infrastructure. The Knoxville metropolitan area was the third fastest MSA in the country to fully recover from jobs lost in the 2007-2010 recession and currently enjoys the lowest unemployment rate of Tennessee’s metro areas. Good news in the second quarter of 2014 includes:

  • Tied in the Let’s Move! Cities, Towns and Counties No. 1 national ranking with four other cities

National League of Cities

  • Knoxville ranked No. 12 among cities with the fastest-decreasing gender pay gaps

NerdWallet

  • Named a “millennial magnet” for attracting large numbers of young adults

USA TODAY

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30% 20% 15% 15% 10% 5% 5% 0% 0% 0%

Pricing of loans or products Unsatisfied with representitive or … Lack of knowledge of your business Other Better product capabilities Turned down for a loan Desire to consolidate business with fewer … Line of credit was reduced Location of branch Service errors

Competitor Ranking Relationship Manager Overall Capability of Relationship Manager 1 Provides Advice to Help my Business Grow 1 Understanding of Your Industry 1 Effectively Coordinating Product Specialists 1 Knowledge of Cash Management Services 1 Cash Management Product Capabilities 1 Accuracy of Operations 1 Customer Service 1 Functionality and Range of Online Services 1 Credit Process Low Credit Pricing 2 Willingness to Extend Credit 1 Speed of Response 1 Flexible Terms and Conditions 1 25% 19% 13% 13% 6% 6% 6% 6% 6% 0%

Unsatisfied with representitive or Relationship Manager Better product capabilities Turned down for a loan Lack of knowledge of your business Pricing of loans or banking products Line of credit was reduced Service errors Desire to consolidate business with fewer providers Other Location of branch

17

PNFP is uniquely positioned to capitalize on “willingness to switch”

Future Outlook

Primary Reasons for Small Business Switching Pinnacle’s Ability to Harvest Dissatisfaction

Note: Small Business defined as companies with sales $1-10 million. Mid-size business defined as companies with sales $10-500 million. Competitor ranking based on responses received from businesses surveyed in the Nashville market from 4/1/2013 to 3/31/2014.

Source: Greenwich Associates Pinnacle Financial – Nashville - $1-500 MM as of 3/31/14

Primary Reasons for Mid-Size Business Switching

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SLIDE 18

Future Outlook

18

Client retention supports outsized share growth

Competitor Ranking Overall Client Satisfaction 1 Ease of Doing Business 1 Values Long-Term Relationships 1 Loyalty – Likelihood to Recommend 1

Source: Greenwich Associates Pinnacle Financial – Nashville - $1-500 MM as of 3/31/14

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2Q14 Conclusion

19

  • 1. Operating leverage strategy is working
  • 2. Double-digit growth in EPS, loans, DDAs and tangible book value per share
  • 3. On track to hit long-term growth and profitability targets by 4Q14
  • 4. Continue to target and deliver top quartile performance
  • Advantaged markets
  • Ability to capitalize on businesses’ willingness to switch
  • Existing client loyalty
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Q&A –

Second Quarter 2014 Investor Call

20

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Supplemental Information

Second Quarter 2014 Investor Call

21

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SLIDE 22

Supplemental Information

22

Chart

  • Balance Sheet

23

  • Asset Quality

35

  • Income Statement

41

  • Pinnacle Financial Partners profile 46
  • Economic and Market Conditions 51
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Balance Sheet Supplemental Information

23

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SLIDE 24

Loan portfolio components are within targeted ranges

Balance Sheet

24 Amts. 2Q14 %’s 2Q14 Amts. 1Q14 %’s 1Q14 Amts. 2Q13 %’s 2Q13 Amts. 2Q12 %’s 2Q12 C&D and Land $292.9 6.8% $294.1 7.0% $298.5 7.6% $289.1 8.4% Consumer RE 698.5 16.2% 703.6 16.8% 697.5 17.7% 687.0 19.9% CRE – Owner Occ. 702.9 16.3% 701.3 16.8% 647.1 16.5% 601.5 17.5% CRE – Investment 583.9 13.5% 598.0 14.3% 567.7 14.5% 525.4 15.2% Other RE loans 170.6 4.0% 156.9 3.8% 94.1 2.4% 40.1 1.2% Total real estate 2,448.7 56.8% 2,453.8 58.7% 2,304.9 58.7% 2,143.1 62.2% C&I 1,697.6 39.3% 1,568.9 37.5% 1,504.1 38.3% 1,227.3 35.6% Other loans 169.2 3.9% 158.9 3.8% 116.4 3.0% 74.3 2.2% Total loans $4,315.6 100.0% $4,181.7 100.0% $3,925.4 100.0% $3,444.7 100.0%

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SLIDE 25

(*) as a percentage of total loans

Balance Sheet

25

Exposure to residential land development is limited

Amts. 2Q14 %’s(*) 2Q14 Amts. 1Q14 %’s(*) 1Q14 Amts. 2Q13 %’s(*) 2Q13 Amts. 2Q12 %’s(*) 2Q12 Residential – Spec $35.6 0.8% $34.0 0.8% $21.1 0.5% $ 12.4 0.4% Residential – Custom 36.2 0.8% 31.7 0.8% 22.2 0.6% 11.8 0.3% Residential – Condo 1.0 0.0% 3.3 0.1% 3.8 0.1% 5.2 0.1% Commercial Construct. 98.3 2.3% 96.5 2.3% 118.5 3.0% 98.6 2.9% Land Dev– Residential 61.9 1.4% 61.2 1.5% 52.4 1.3% 58.6 1.7% Land Dev – Commercial 58.8 1.4% 66.4 1.6% 79.2 2.0% 78.5 2.3% Land – Unimproved 1.1 0.0% 1.1 0.0% 1.3 0.0% 24.0 0.7% Total C&D $292.9 6.8% $294.2 7.0% $298.5 7.6% $ 289.1 8.4%

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SLIDE 26

Balance Sheet

Basis: Classification based on NAIC sector as of June 30, 2014

The C&I loan portfolio is highly diversified

26

Accomodation and Food Services, 3.4% Administrative & Support & Waste Management & Remediation Services, 3.2% Arts, Entertainment & Recreation, 1.7% Construction, 4.9% Consumer, 7.7% Educational Services, 1.6% Finance & Insurance, 10.6% Healthcare & Social Assistance, 14.2% Information, 3.0% Manufacturing, 7.4% Mining, Quarrying, & Oil & Gas Extraction, 0.1% Other Services (except Public Administration), 2.7% Professional, Scientific & Technical Services, 6.1% Public Administration, 4.0% Real Estate & Rental & Leasing, 8.1% Retail Trade, 5.2% Transportation & Warehousing, 7.1% Utilities, 0.1%

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SLIDE 27

27

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 2014. 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, 36.2% Existing clients, 63.8%

New Loans YTD Q214

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SLIDE 28

Loan growth is primarily funded by growth in low cost deposits

28

Balance Sheet

% of Deposits by Type to Total Deposits

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

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Trans Accts MMDAs CDs 50.00% 55.00% 60.00% 65.00% 70.00% 75.00% 80.00% 85.00% 90.00% 95.00% 100.00%

  • 300
  • 200
  • 100

100 200 300 400 500 600 700 800 Net loan growth Trans, Savings, MMDA growth Average loans to average deposits

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SLIDE 29

Balance Sheet

29

PNFP has limited dependence on non-relationship funding

6/30/2014 Percent 6/30/2013 Percent Core Funding: Transaction accounts 2,211,677 44.40% 1,903,486 41.03% Money Market accounts 1,671,108 33.54% 1,424,910 30.71% Time deposits less than $250,000 362,960 7.29% 443,028 9.55% Total Core Funding 4,245,745 85.23% 3,771,424 81.29% Relationship based non-core funding: Reciprocal DDA deposits 13,257 0.27% 12,964 0.28% Reciprocal MMDA deposits 279,128 5.60% 182,779 3.94% Time deposits Reciprocal time deposits 38,141 0.77% 40,034 0.86% Other time deposits 75,242 1.51% 89,379 1.93% Securities sold under agreements to repurchase 62,273 1.25% 117,345 2.53% Total relationship based non-core funding 468,041 9.40% 442,501 9.54% Wholesale funding: Time deposits greater than $250,000 Public funds

  • 0.00%
  • 0.00%

Brokered deposits

  • 0.00%
  • 0.00%

FHLB advances 170,556 3.42% 325,762 7.02% Federal funds purchased

  • 0.00%
  • 0.00%

Holding Company Loan 14,932 0.30% 17,432 0.38% Subordinated debt 82,476 1.66% 82,476 1.78% Total wholesale funding 267,964 5.38% 425,670 9.17% Total non-core funding 736,005 14.77% 868,171 18.71% Totals 4,981,750 100.00% 4,639,595 100.00%

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SLIDE 30

$957 $959 $1,000 $975 $1,009 $1,054 $1,055 $1,138 $1,105 $1,166 $1,190 $1,216 $1,247 $1,349 $747 $715 $685 $779 $808 $787 $815 $865 $941 $926 $989 $1,024 $1,028 $1,046 56.15% 56.32%

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

Funded % Total Commitments

(millions)

Net active balance Unfunded Commitments Funded %

Line commitments are up 12.9% over 2Q13 but utilization remains low

30

Note: Excludes HELOCS and credit cards

Balance Sheet

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SLIDE 31

31

Balance Sheet

Bond volumes rise while yields contract; declining impact on overall margin

$1,010 $973 $940 $924 $876 $819 $767 $720 $714 $746 $739 $732 $749 $782

3.58% 2.93%

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

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

Avg Investments Bond Yields

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SLIDE 32

Portfolio: June 30, 2014

Total Investments $782 million Unrealized Gain (Loss) $ 9.7 million QTD Purchases $38.8 million QTD Sales $ 0.0 million Duration Avg Yield - TE June 2014 3.1 % 2.9%

Dec 2013 4.6 % 3.2%

Conservative bond portfolio

Balance Sheet

32

As of 6/30/2014 Book Yield Avg Life (yrs) Agency 2.31% 9.4 Asset Backed 1.59% 0.9 Corporates 4.16% 4.4 CMOs 1.62% 3.7 MBS 2.45% 3.9 Municipals 4.60% 3.8 Total 2.93% 4.6 15.5% 1.4% 50.7% 2.0% 7.6% 22.8%

Agency Corporates MBS Asset Backed CMOs Municipals

  • Investment portfolio at $782 million, up $50 million vs.

12/31/2013 – MBS sector at 51% of portfolio

  • Recent purchases targeting shorter durations
  • Investments to Total Assets of 13.5% as of 6/30
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SLIDE 33

76% 24% Muni Allocation % General Obligation Bonds Revenue Bonds

The municipal portfolio contains minimal risk

Balance Sheet

33 Location # of Issuances Market Value % Tennessee 65 $ 39,105 21.2% Florida

  • 0.0%

California 1 261 0.1% Nevada

  • 0.0%

Michigan 10 5,194 2.8% Illinois 19 15,150 8.2% Other – 30 states 164 124,700 68.2% Totals 259 $ 184,410 100.0% As of June 30, 2014 Municipal Bond Portfolio Statistics 2Q14 2Q13 Weighted Average Life 3.8 years 4.2 years % State Agency Holdings 5.14% 5.30% Tax equivalent yield 4.60% 4.69% FMV as % of Cost 104.6% 104.2%

All municipals are “A” rated or better.

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SLIDE 34

34

Balance Sheet

9.18% 8.75% 9.03% 8.96% 9.27% 9.31% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Tangible Common Ratio

Elevated tangible common is available for deployment

12.41% 12.72% 12.71% 12.80% 13.47% 12.72% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Return on Tangible Common Equity

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SLIDE 35

Supplemental Information

Asset Quality

35

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SLIDE 36

36

Past due loans remain very low

Asset Quality

(*) > 30 days past due

(000’s) June 30, 2014 As a %

  • f total

loans March 31, 2014 As a %

  • f total

loans June 30, 2013 As a % of total loans Past Due Loans (*) Managed by special assets: Nonaccrual loans $4,958 0.11% $4,847 0.12% $9,610 0.24% Accruing loans 17,372 0.40% 11,917 0.28% 11,617 0.30% Managed by relationship managers: Accruing loans 1,839 0.04% 6,362 0.15% 4,203 0.11% Total past due $24,169 0.56% $23,126 0.55% $25,430 0.65%

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SLIDE 37

37

Percentage of potential problem loans remain low

Asset Quality

(000’s) Potential Problem Loans June 30, 2014 As a %

  • f total

loans

  • Mar. 31,

2014 As a %

  • f total

loans June 30, 2013 As a % of total loans PNFP 77,066 1.79% 83,859 2.01% 82,473 2.11% Peer Median*

  • 81,558

2.12% 82,855 2.89%

*: Substandard Loans per SNL Financial. Peer data not yet available as of 6/30/2014.

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SLIDE 38

38

NPLs remain very low

Asset Quality

(000’s) PNFP NPLs and >90 days

June 30, 2014 As a % of total loans

  • Mar. 31,

2014 As a % of total loans June 30, 2013 As a % of total loans

  • Const. and land development

$978 0.33% $ 1,137 1.53% $1,319 0.61% CRE – Owner Occupied 7,033 1.00% 8,174 1.17% 8,232 0.45% CRE – Investment

  • 0.00%

7,736 1.29% 4,042 0.00% Total real estate 14,251 0.58% 22,965 1.07% 19,163 0.48% C&I 1,438 0.08% 1,615 0.10% 2,086 0.18% Total loans $16,326 0.38% $24,842 0.67% $21,309 0.37% NPLs Expressed as a % of Total Loans within each Category

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SLIDE 39

39

Asset Quality

Classified assets are contained

(in thousands) Balances June 30, 2014 Balances March 31, 2014 Balances June 30, 2013 Classified loans and ORE:

  • Substandard commercial loans

$95,007 $110,768 $118,046

  • Doubtful commercial loans
  • Other impaired loans

5,723 4,848 1,940

  • 90 days past due and accruing (*)

649 199 747

  • Other real estate

12,946 15,038 15,992

  • Other repossessed assets

234 223 95 Total $114,560 $131,076 $136,819 Pinnacle Bank classified asset ratio 18.1% 21.2% 23.3%

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

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SLIDE 40
  • Largest ORE balance - $4.1 M

* Excludes an estimate for costs to sell

40

Asset Quality

(dollars in thousands) Balances June 30, 2014 Fair value as a % of book value* Average Appraisal Age in Months ORE categories: Developed lots $ 508 299.3% 4.77 Undeveloped land 10,556 160.7% 3.64 Other 1,883 125.7% 5.01 Total ORE $ 12,947 161.0% 4.33 (dollars in thousands) Balances June 30, 2014 Near-term liquidation (1) Active Projects (2) Other Properties (3) ORE categories: Developed lots $ 508 $ 129 $ 379 $ - Undeveloped land 10,556 359 9,197 1,000 Other 1,883 1,497 386

  • Total ORE

$ 12,947 $ 1,985 $ 9,962 $ 1,000

(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

Current OREO valuations are reasonable

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SLIDE 41

Income Statement Supplemental Information

41

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SLIDE 42

42

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

Income Statement

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. 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% Treasury Margin Client Margin Net Interest Margin

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SLIDE 43

43

Income Statement

Mortgage volumes rise as yield spreads improve

43

46.7% 52.4% 33.4% 23.2% 23.4% 39.1% 25.9% 24.3% 29.8% 49.7% 64.7% 63.4% 66.2% 69.1%

0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 20,000 40,000 60,000 80,000 100,000 120,000 140,000 Purchase Money Refinance Gross fees as a % of loans originated

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SLIDE 44

Income Statement

44 2Q14 1Q14 4Q13 3Q13 2Q13 Net interest income $47,226 $45,908 $44,969 $44,573 $43,599 Total non-interest income $12,598 $12,732 $12,488 $11,387 $11,326 Less: Securities (gains) losses

  • 1,441

25 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 $12,598 $12,732 $12,488 $12,828 $12,122 Total non-interest expense $33,902 $33,646 $32,637 $33,323 $30,862 Less: ORE expenses (226) (651) (302) (699) (1,391) Non-Interest expense, excluding ORE expense and FHLB restructuring charges $33,672 $32,995 $32,334 $32,624 $29,471 Adjusted pre-tax pre-provision income $26,148 $25,645 $25,123 $24,778 $26,250 Efficiency ratio, excl. ORE, FHLB prepayment charges, noncredit related loan losses and securities gains and losses 56.3% 56.3% 56.3% 56.8% 52.9%

PNFP efficiency remains stable

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SLIDE 45

Pinnacle Financial Partners Profile Supplemental Information

45

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SLIDE 46

PNFP Profile

46

Headquarters: Nashville, TN Founded: 2000 Total assets: $ 5.788 Billion (6/30/14) Shareholders’ equity: $ 762.7 Million (6/30/14) Offices: 29 in 8 Middle-TN counties 4 in Knox County

  • Avg. daily trading volume **: 179,967 shares

% Institutional ownership: 71.9% (3/31/14)

PNFP operates in two great banking markets

**: 3 month volumes per finance.yahoo.com

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SLIDE 47

PNFP Profile

47

Name Title Age Years in Banking Industry Years at 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

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

PNFP has an extraordinarily experienced management team

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SLIDE 48

PNFP Profile

  • Pinnacle Financial Partners (PNFP)
  • 1st Source Corporation (SRCE)
  • Brookline Bancorp, Inc. (BRKL)
  • Columbia Banking System, Inc.

(COLB)

  • CVB Financial Corp. (CVBF)
  • Eagle Bancorp, Inc. (EGBN)
  • First Busey Corporation (BUSE)
  • First Financial Bancorp. (FFBC)
  • Flushing Financial Corp (FFIC)
  • Independent Bank Corp. (INDB)
  • National Penn Bancshares, Inc.

(NPBC)

  • Old National Bancorp (ONB)
  • Sandy Springs Bancorp, Inc. (SASR)
  • SCBT Financial Corp (SCBT)
  • Sterling Bancorp (STL)
  • TowneBank (TOWN)
  • Union First Market Bkshs Co (UBSH)
  • ViewPoint Financial Group, Inc.

(VPFG)

  • Westamerica Bancorporation

(WABC)

  • Western Alliance Bancorporation

(WAL)

48

PNFP compares favorably to high performing peers

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SLIDE 49

PNFP Profile

49 Nashville-Davidson-Rutherford MSA Knoxville MSA

Top 10 Market Share Rank Holding Company Market Share 6/30/13 Market Share 6/30/00 (1) Change 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% 5 Branch Banking and Trust 9.9% 6.7% 3.2% 6 US Bank 3.6% 0.3% 3.2% 6 Pinnacle Financial Partners 3.1% 0.0% 3.1% 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% 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%

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

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. Market share at 6/30/00 for Nashville reflects impact of Cavalry Bancorp, Inc. which was acquired by Pinnacle in March of 2006.

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SLIDE 50

Economic & Market Conditions Supplemental Information

50

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SLIDE 51

51

PNFP operates in advantaged markets

Rapid job growth leads to rapid real estate absorption

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

Nashville Home Sales

2Q2014 1Q2014 2Q2013 % Change

  • Avg. Qtrly.

Median Home Price $212,268 $193,000 $201,650 5.3% Quarterly Closings 7,541 4,992 7,402 1.9% Quarter end Inventory 10,553 9,439 10,555 0.0% Months of Inventory* 3.8 4.6 4.1 (7.5%)

*: Calculated as quarter end inventory divided by monthly closings

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SLIDE 52

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

Future Outlook-Nashville

*

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

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SLIDE 53

Retail office locations

Knoxville MSA

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

Future Outlook-Knoxville

*

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

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SLIDE 54

Nashville’s commercial vacancy rates indicate a healthy market

**Costar thru 2Q14 ***REIS thru 4Q09

PNFP Operates in Advantaged Markets

54 Nashville CRE Vacancy Rates National CRE Vacancy Rates 2Q 2014(**) YE 2013 (**) YE 2012 (**) YE 2011 (**) YE 2010 (**) YE 2009 (***) YE 2008 (***) 1Q 2014 (**) Industrial / Warehouse 7.8% 8.7% 9.1% 10.1% 10.2% 10.6% 9.6% 7.8% Multifamily** 8.1% 7.9% 7.0% 6.6% 6.7% 9.6% 7.6% 10.8% Retail 7.1% 7.3% 7.0% 7.3% 6.7% 8.1% 6.3% 6.5% Office 7.3% 7.9% 8.5% 9.7% 10.6% 12.7% 10.5% 11.5%

Retail 15.0% Office 7.0%

Warehouse

7.3% Own/Occ 48.2% Other 22.5%

PNFP CRE Portfolio*

*: As of 6/30/2014

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SLIDE 55

Second Quarter 2014 Investor Call

Terry Turner, President and CEO Harold Carpenter, EVP and CFO July 16, 2014