Third Quarter 2012 Investor Call Terry Turner, President and CEO - - PowerPoint PPT Presentation

Third Quarter 2012 Investor Call

Terry Turner, President and CEO Harold Carpenter, EVP and CFO October 17, 2012

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 identify such forward‐looking

• bjective, intend, plan, believe, should, seek, estimate and similar expressions are intended to identify such forward looking

statements, but other statements not based on historical information may also be considered forward‐looking. All forward‐looking statements are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of Pinnacle Financial to differ materially from any results expressed or implied by such forward‐looking statements. Such risks include, without limitation, (i) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (ii) continuation of the historically low, short‐term interest rate environment; (iii) the inability of Pinnacle Financial to grow its loan portfolio in the Nashville Davidson Murfreesboro Franklin MSA (“the Nashville MSA”) and the Knoxville MSA; (iv) changes in loan portfolio in the Nashville‐Davidson‐Murfreesboro‐Franklin MSA ( the Nashville MSA ) and the Knoxville MSA; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) effectiveness of Pinnacle Financial’s asset management activities in improving, resolving or liquidating lower‐quality assets; (vi) increased competition with other financial institutions; (vii) greater than anticipated adverse conditions in the national or local economies including the Nashville MSA and the Knoxville MSA, particularly in commercial and residential real estate markets; (viii) rapid fluctuations or unanticipated changes in interest rates; (ix) the results of regulatory examinations; (x) the development of any new market th th N h ill K ill ( i) i iti ( ii) tt th t ld Pi l Fi i l t l d th t th

• ther than Nashville or Knoxville; (xi) a merger or acquisition; (xii) any matter that would cause Pinnacle Financial to conclude that there was

impairment of any asset, including intangible assets; (xiii) the ability to attract additional financial advisors or to attract customers from other financial institutions and conversely, the inability to realize the economic benefits of newly hired financial advisors; (xiv) further deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xv) inability to comply with regulatory capital requirements, including those resulting from recently proposed changes to capital calculation methodologies and required capital maintenance levels; and (xvi) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy, including implementation of the Dodd‐Frank Wall Street Reform and Consumer Protection Act (the “Dodd‐Frank Act”). A more detailed description of these and other risks is contained in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10‐K filed with the Securities and Exchange Commission on March 2, 2012. Many of such factors are beyond Pinnacle Financial’s ability to control or predict, and readers are cautioned not to put undue reliance on such forward‐looking statements. Pinnacle Financial disclaims any obligation to update or revise any forward‐looking statements contained in this quarterly report, whether as a result of new information, future events or otherwise.

2

Third Quarter 2012 Highlights

3Q results match previous guidance

• Continued improvement in asset quality metrics
• Increased lending opportunities
• Core funding growth and reduced funding costs
• Core funding growth and reduced funding costs
• Continued expansion of net interest income

p

3

Third Quarter 2012 Highlights

Li k d Qt Y C ti

Asset quality continued to improve

Linked Qtr Change Year over Year Change Consecutive

• Qtrs. of

Progress Credit losses (NCO’s + ORE expense) (21 3%) (59 9%) 9 Credit losses (NCO s + ORE expense) (21.3%) (59.9%) 9 NPLs (10.4%) (33.1%) 10 NPAs (11.9%) (41.7%) 9 Classified loans (9.7%) (21.8%) 9 Potential problem loans (8.3%) (16.9%) 9

4

Third Quarter 2012 Highlights

Nonperforming loans and reserve coverage continued to improve

200% $120

$132 4

$140.0 $70.0

188.9%

167% 200% $100 $120

millions)

$132.4

$100.0 $120.0 $ $50.0 $60.0 $

llions)

100% 133% $60 $80

• rming loans (in

wance to NPL’s

$33.5 $38.7 $29.5 $32.3 $25 3

$58.4

$60.0 $80.0 $30.0 $40.0

NPA Balances

• sitions (in mil

82.0%

33% 67% $20 $40

Total Nonperfo Allow

$25.3 $22.5 $12.5

$25.4 $18.4 17.5 $19.7 4.3 9

$20.0 $40.0 $10.0 $20.0

N nflows and Disp

0% $0 Nonperforming loans < 30 days past due

$1 $14 $11. $4.6

$0.0 $0.0 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12

NPA In

NPA Dispositions

5

Nonperforming Loans Allowance to NPLs NPA inflows NPA Balances

Third Quarter 2012 Highlights

Linked Qtr Change Quarterly Year

• ver Year

Core earnings capacity continued to expand

g Change Total loans 2.3% 8.8% & d i d l % % C&I and owner occupied CRE loans 2.9% 14.0%

• Avg. noninterest‐bearing deposits

5.7% 18.6% Net interest income 1.9% 6.7% Net interest margin 0.5% 5.0% Cost of funds (5.4%) (36.9%) Noninterest income excl. securities gains 7.2% 7.9% Total revenue excl. securities gains 2.9% 7.0%

6

Expanding the Core Earnings Capacity

Net interest income and margin continued to expand

Net Interest Margin Trend

Key Revenue Drivers:

3.76% 3.78%

3.80% 3.90%

Net Interest Margin Trend

• Reduced funding costs
• Improving deposit mix
• Higher loan volumes

$42

Net Interest Income

(in millions)

3.60% 3.65% 3.74%

3 60% 3.70% 3.80%

• NPA resolutions

$37.8 $38.4 $39.3 $39.5 $40.2 $40.9

$38 $40 $42

3 40% 3.55%

3.50% 3.60%

$36.0

$34 $36 $38

3.40%

3.30% 3.40%

7

$

Expanding the Core Earnings Capacity

Reduction in cost of deposits drove margin expansion

1.10% $3,600

8 2 $3,524 $3,575 1.01%

0.95% $3,500

%) ions)

$3,383 $3,438 $3,389 $3,442 $3,406

0.65% 0.80% $3,300 $3,400

• sit costs (%

posits (milli

0.43%

0.35% 0.50% $3,100 $3,200

Depo Core Dep

0.20% 0.35% $3,000 $3,100

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 8

Core Deposits Cost of funds

Expanding the Core Earnings Capacity

Cost of deposits is enhanced by DDA growth

50,000 $1,000 36,781 46,036 40,000 , $800 $ ,

unts millions)

20,000 30,000 $400 $600

er of Accou ances (in m

10,000 0,000 $200 $ 00

Numbe DDA Bala

‐ $0

9

Business Consumer Total Accounts

Expanding the Core Earnings Capacity

Loans grew meaningfully with only 3 basis points in yield compression

$3,489

5.60% $3,500

$3,403

5.20% $3,400

$3 191 $3,212 $3,207 $3,262 $3,280

4.88% 4.87% 4.78% 4.74% 4.74% 4.65% 4.62%

4.80% $3,300

n Yields age Loans

(millions) $3,191

4.00% 4.40% $3,100 $3,200

Loa Avera

(

3.60% $3,000

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 10

Avg Loans Loan Yields

Expanding the Core Earnings Capacity

Cash flows from bonds are being reinvested in loan growth

3.67%

3.70% $1,050

$1,010 973

3.58% 3.54% 3.26% 3.31% 3.27%

3 30% 3.50% 3.70% $950 $1,000 $1,050

$9 $940 $924 76

3.26% 3.19%

3.10% 3.30% $ $900 $950

elds (%) ecurities

$87 $819

2.70% 2.90% $800 $850

Bond Yie Average S

$767

2.30% 2.50% $700 $750

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 11

Avg Investments Bond Yields

Expanding the Core Earnings Capacity

Credit costs continued to decline in concert with NPA reductions

$16 0

$4 3

$12 0 $14.0 $16.0

$4.3 $3.8 $5.1 $4.2

$8 0 $10.0 $12.0

(in millions) $9.7 $8.6 $5. $4.7 $3 1

$4 0 $6.0 $8.0

Credit Losses $ $5.7 $6.3 $3.6 $2.4 $1.9 $3.1 $2.4

$‐ $2.0 $4.0 12 $‐ 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Net Charge‐Offs ORE Expense

Expanding the Core Earnings Capacity

Deposit accounts and mortgage sales success leads to rapid fee growth

3Q12 2Q12 1Q12 4Q11 3Q11 Service charges $ 2,532 $ 2,439 $ 2,324 $ 2,291 $ 2,362 Investment services 1 677 1 611 1 581 1 402 1 699 Investment services 1,677 1,611 1,581 1,402 1,699 Insurance commissions 987 1,141 1,288 944 1,002 Gain on mortgage loans sold, net 1,979 1,457 1,494 1,461 1,295 Trust fees 767 770 767 746 754 Trust fees 767 770 767 746 754 Other: Securities gains (50) 99 114 133 377 Other 2,538 2,392 2,323 2,750 2,591 Total noninterest income $ 10,430 $ 9,909 $ 9,890 $ 9,727 $10,080

Less: Securities gains

50 (99) (113) (133) (377) Core noninterest income $ 10,480 $ 9,810 $ 9,777 $ 9,594 $ 9,703

13

Expanding the Core Earnings Capacity

Operating leverage continues to expand

3Q12 2Q12 1Q12 4Q11 3Q11 Salaries and benefits $19,470 $19,237 $19,793 $18,963 $19,016 Salaries and benefits $19,470 $19,237 $19,793 $18,963 $19,016 Equipment and occupancy 5,156 5,053 4,374 4,977 4,943 Other real estate owned 2,399 3,104 4,676 4,193 5,079 Marketing and Bus. Dev. 835 740 785 1,032 751 Supplies and postage 638 616 563 576 509 Intangible amortization 683 686 686 716 715 Other expenses 4,397 4,479 4,943 3,917 4,663 Total noninterest expense $33,578 $33,915 $35,820 $34,374 $35,675 Efficiency ratio 65.4% 67.7% 72.4% 70.1% 73.7%

T t l i t t $31 179 $30 811 $31 144 $30 181 $30 597 Total noninterest expense – excluding other real estate $31,179 $30,811 $31,144 $30,181 $30,597 Efficiency ratio, excl. ORE and securities gains 60.7% 61.5% 63.0% 61.6% 63.2% 14

Expanding the Core Earnings Capacity

Adjusted PTPP expands 15.9% in 3Q12 over the same period prior year

(000’ ) 3Q12 2Q12 1Q12 4Q11 3Q11 (000’s) 3Q12 2Q12 1Q12 4Q11 3Q11 Net interest income $40,932 $40,185 $39,504 $39,293 $38,356 Total noninterest income 10,430 9,910 9,949 9,727 10,080 Total revenue 51 362 50 095 49 453 49 020 48 436 Total revenue 51,362 50,095 49,453 49,020 48,436 Total noninterest expense 33,578 33,915 35,820 34,374 35,676 Pre-tax, pre-provision income 17,784 16,180 13,633 14,646 12,761 Adjustments to PTPP: (Gains) losses on sale of securities 50 (99) (114) (133) (377) Other real estate expenses 2,399 3,104 4,676 4,193 5,079 Other real estate expenses 2,399 3,104 4,676 4,193 5,079 Adjusted PTPP $20,233 $19,185 $18,195 $18,706 $17,462 PTPP/Average Assets 1.67% 1.59% 1.53% 1.53% 1.45% PTPP/Average Assets 1.67% 1.59% 1.53% 1.53% 1.45%

15

Future Outlook

Ratio PNFP PNFP PNFP PNFP

Pinnacle is progressing toward its long‐term profitability targets

1Q12 2Q12 3Q12 Long‐term Targets

NIM 3.74% 3.76% 3.78% 3.70%‐3.90% Net Charge‐offs 0.44% 0.28% 0.22% 0.20%‐0.35% Net Charge offs 0.44% 0.28% 0.22% 0.20% 0.35% Noninterest Fees/Total Average Assets 0.83% 0.82% 0.85% 0.70%‐0.90% Expense/Total Average Assets 2.60%* 2.56%* 2.56%* 2.10%‐2.30% ROAA 0.60% 0.65% 0.93% 1.10%‐1.30%

16

* ‐ Calculation excludes OREO expense

Future Outlook

Existing lenders have incremental capacity to take share and grow loans

2012 ‐ 2014 Anticipated Net Loan Growth

Previously

YTD 2012

Previously Reported Growth Current Quarter Growth $234 Million YTD

$1 27 Billi T t

FA Capacity $1.27 Billion Capacity

$1.27 Billion Target

17

Future Outlook

Margin outlook contains opportunities and threats

3Q 2012 Net Interest Margin 3.78% Opportunities:

• 1. Loan growth

0.01% to 0.03%

• 2. Continued reduction in COF

0.02 to 0.05%

• 3. NPA resolution

0.00% to 0.02% Threats:

• 4. Market pressures on earnings asset yields

(0.10% ) to (0.11%) Potential Margin Range 3.70% to 3.78%

Notes: 1. Projects expansion of loan volumes $200M ‐ $300M. 2. Considers a COF to a range of 0.45% to 0.50%. 3. Excluding impact of reversed interest, considers reduction in NPA levels to 1.50% of loans and ORE at spread of 2.50% to 4.00% on performing assets. 4. Market competition driving down loan yields on high quality credits while declining bond yields are a result of high MBS

18

4. Market competition driving down loan yields on high quality credits while declining bond yields are a result of high MBS pre‐payments

Future Outlook

Management’s Focus for 4Q12

• Continued progress on asset quality metrics
• Continued loan growth

19

Q&A Q&A –

Third Quarter 2012 Investor Call

Terry Turner, President and CEO Harold Carpenter, EVP and CFO October 17, 2012

20

Supplemental Information

Third Quarter 2012 Investor Call Third Quarter 2012 Investor Call

Terry Turner, President and CEO Harold Carpenter, EVP and CFO October 17, 2012

21

Supplemental Information Chart

• Asset Quality

23

• Balance Sheet

31

• Income Statement

41

• Economic Conditions & Other 45
• Pinnacle Financial Partners profile 52

22

Supplemental Information

Asset Quality

23

Aggressively Dealing with Credit Issues

Past due loans remain very low

March 31 As a % December 31 As a % (000’s) March 31, 2012 As a %

• f total

loans December 31, 2011 As a %

• f total

loans Past Due Loans (*) Managed by special assets: Nonaccrual loans $23,448 0.67% $22,339 0.68% Accruing loans 8,592 0.24% 7,437 0.23% Accruing loans 8,592 0.24% 7,437 0.23% Managed by relationship managers: Accruing loans 3,705 0.11% 4,505 0.14% Total past due $35 745 1 02% $34 281 1 05% Total past due $35,745 1.02% $34,281 1.05%

24 (*) > 30 days past due

Aggressively Dealing with Credit Issues

9.30%

9 0% 10.0%

• ans

Potential problem loans continue to decline

7.24% 7.18% 8.63% 8.23% 6.95%

6 0% 7.0% 8.0% 9.0%

• ans/Total lo

5.31% 4.62% 4.04%3.96%3.78% 3.21% 2.86%

3 0% 4.0% 5.0% 6.0%

al Problem lo

2.86%

0 0% 1.0% 2.0% 3.0%

Potentia

0.0%

25

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

Aggressively Dealing with Credit Issues

Classified assets decreased in 3Q12

(in thousands) Balances

• Sept. 30, 2012

Balances

• Dec. 31, 2011

Balances

• Sept. 30, 2011

Balances

• Sept. 30, 2010

Classified loans and ORE: ‐ Substandard commercial loans $ 157,483 $ 197,581 $ 199,053 $ 367,280 ‐ Doubtful commercial loans 384 1,193 2,826 12,584 Other impaired loans 3 579 2 875 1 972 4 360 ‐ Other impaired loans 3,579 2,875 1,972 4,360 ‐ 90 days past due and accruing (*) 162 858 1,066 941 ‐ Other real estate 21,817 39,714 45,500 48,710 ‐ Other repossessed assets 50 26 481 26 Total $ 183,475 $ 242,247 $ 250,898 $ 433,901

26

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

Nonperforming Loan Trends

NPLs continue to decline ahead of peers

NPLs Expressed as a % of Total Loans within each Category

PNFP NPLs PNFP NPLs PNFP NPLs Peer NPLs and PNFP NPLs and > 90 days 3Q12 and > 90 days 2Q12 and > 90 days 1Q12 and > 90 days 4Q11 > 90 days (*) 2Q12

• Const. and land development

1.92% 2.09% 2.48% 4.73% 9.97%

CRE – Owner Occupied

1.80% 1.84% 2.02% 1.16% 2.49%

CRE – Investment

0.75% 0.75% 1.04% 0.55% 2.78%

Total real estate

1 46% 1 63% 1 72% 1 71% 3 73%

Total real estate

1.46% 1.63% 1.72% 1.71% 3.73%

C&I

0.38% 0.44% 0.61% 1.09% 1.50%

Total loans

1.04% 1.19% 1.31% 1.48% 2.76%

(*) Uniform Bank Performance Report (Insured Commercial Banks with assets above $3 billion) 27

Aggressively Dealing with Credit Issues

ORE is 37.4% of NPAs with resolution in bank’s control

Balances Fair value as a % Average

• Sept. 30, 2012

(dollars in thousands)

• f book value*

Appraisal Age in Months

ORE categories: Developed lots $ 3,139 159.0% 5.92 Undeveloped land 14,026 145.0% 4.71 Other 4 651 140 0% 5 79

• Average age of ORE remains low at 16.3 months

Other 4,651 140.0% 5.79 Total ORE $ 21,816 145.8% 5.63

• Largest ORE balance ‐ $4.1M

* Excludes costs to sell 28

Aggressively Dealing with Credit Issues

ORE Dispositions (*) thru ORE Balance at

OREO valuations remain below actual results

thru September 30, 2012 ORE Balance at September 30, 2012 Loan balances prior to charge offs 100 0% 100 0% Loan balances prior to charge offs 100.0% 100.0% Charge off’s prior to foreclosure 21.1% 22.3% Balance @ foreclosure 78.9% 77.7% Valuation losses while in ORE 15.8% 27.3% Balance in ORE 63.1% 50.4% Loss on disposition 1.1% Net realized 62.0%

(*) ORE dispositions > $250,000 from 10/1/11 thru 9/30/12 excluding partial sales 29

Aggressively Dealing with Credit Issues

OREO disposition plans suggest limited unresolved issues

(dollars in thousands) Balances Near‐term Active Other

• Sept. 30, 2012

liquidation (1) Projects (2) Properties (3)

ORE categories: Developed lots 3,139 376 2,763 ‐ Undeveloped land 14,026 726 11,055 2,245 Other 4 651 2 562 1 337 752

(1) Market indications are that property will liquidate within 6 months

Other 4,651 2,562 1,337 752 Total ORE $ 21,816 $ 3,664 $ 15,155 $ 2,997

(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

30

Supplemental Information Balance Sheet

31

Expanding the Core Earnings Capacity

$3 500 000

Knoxville provides disproportionate percentage loan growth

$2,930,987

$2 500 000 $3,000,000 $3,500,000 $1 500 000 $2,000,000 $2,500,000

millions)

Nashville loans up 8.2% in last twelve months

$594,177

$ $1,000,000 $1,500,000

(in m

Knoxville loans up 11.8% in last twelve months $0 $500,000

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

32

Expanding the Core Earnings Capacity

60.00% $2,000

Reduced working capital utilization represents $70 million in outstandings

$747 $715 $685 $779 $808 $787 $815

57.3% 59.4% 57 3% 58.00% $1 400 $1,600 $1,800 $ ,

s

56.2% 57.3% 55.6% 55.5% 57.3% 56.4%56.00% $1,000 $1,200 $1,400

mmitments

illions) $957 $959 $1,000 $975 $1,009 $1,054 $1,055

52.00% 54.00% $400 $600 $800

Total Com

(mi

50.00% $0 $200

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

Net active balance Unfunded Commitments Funded %

33

Loan Categories

Portfolio components are within targeted ranges

Amts. 3Q12 %’s 3Q12 Amts. 2Q12 %’s 2Q12 Amts. 4Q11 %’s 4Q11 Amts. 4Q10 %’s 4Q10 C&D and Land $312.8 8.9% $289.1 8.4% $274.2 8.3% $331.3 10.3% Consumer RE 680.9 19.3% 687.0 19.9% 695.8 21.1% 705.5 22.0% CRE – Owner Occ. 602.7 17.1% 601.5 17.5% 582.0 17.7% 531.9 16.6% CRE Investment 522 7 14 8% 525 4 15 2% 481 2 14 6% 519 8 16 2% CRE – Investment 522.7 14.8% 525.4 15.2% 481.2 14.6% 519.8 16.2% Other RE loans 41.7 1.2% 40.1 1.2% 47.8 1.5% 42.9 1.3% Total real estate 2,160.8 61.3% 2,143.1 62.2% 2,081.0 63.2% 2,131.4 66.4% C&I 1,279.1 36.3% 1,227.3 35.6% 1,145.7 34.8% 1,012.1 31.5% Other loans 85.3 2.4% 74.3 2.2% 64.7 2.0% 68.9 2.1% Total loans $3,525.2 100.0% $3,444.7 100.0% $3,291.4 100.0% $3,212.4 100.0% 34 $ , $ , $ , $ ,

Construction and Land Categories

Commercial C&D is growing

Amts. 3Q12 %’s(*) 3Q12 Amts. 2Q12 %’s(*) 2Q12 Amts. 4Q11 %’s(*) 4Q11 Amts. 4Q10 %’s(*) 4Q10 Residential Spec $ 13 6 0 4% $ 12 4 0 4% $ 12 4 0 4% $ 19 9 0 6% Residential – Spec $ 13.6 0.4% $ 12.4 0.4% $ 12.4 0.4% $ 19.9 0.6% Residential – Custom 14.5 0.4% 11.8 0.3% 8.5 0.3% 9.9 0.3% Residential – Condo 4.5 0.1% 5.2 0.1% 5.8 0.2% 20.7 0.6% Commercial Constr ct 115 1 3 3% 98 6 2 9% 74 6 2 3% 50 2 1 6% Commercial Construct. 115.1 3.3% 98.6 2.9% 74.6 2.3% 50.2 1.6% Land Dev– Residential 62.9 1.8% 58.6 1.7% 71.1 2.1% 111.6 3.5% Land Dev – Commercial 92.1 2.6% 78.5 2.3% 83.5 2.5% 105.3 3.3% L d U i d 10 3 0 3% 24 0 0 7% 18 3 0 5% 13 7 0 4% Land – Unimproved 10.3 0.3% 24.0 0.7% 18.3 0.5% 13.7 0.4% Total C&D $ 313.1 9.0% $ 289.1 8.4% $ 274.2 8.3% $ 331.3 10.3%

(*) as a percentage of total loans

35

C&I and Owner‐occupied CRE portfolio

Accommodation and Food Services, 4.83% Administrative and Support and Waste Management and Remediation Services, Wholesale Trade, 10.77%

The C&I Portfolio is highly diversified

4.00% Arts, Entertainment, and Recreation 4.00% Construction, 4.94% Transportation & Warehousing 5.90% Consumer, 4.77% Educational Services, 0.32% Retail Trade, 6.73% Finance and Insurance, 9.75% Healthcare and Social Public Administration 0 88% Real Estate and Rental and Leasing, 7.99% Healthcare and Social Assistance, 10.12% Information, Manufacturing, 8.31% Other Services (except Public Ad i i i ) 7 69% Professional, Scientific, and Technical Services, 5.33% Public Administration, 0.88%

Basis: Classification based on NAIC sector as of September 30, 2012

3.00% Management of Companies and Enterprises 0.12% Mining, Quarrying, and Oil and Gas Extraction, 0.56% Administration), 7.69%

36

Investment Portfolio

The bond portfolio is considered conservative

Corporates

1.5%

Treasuries

0.0%

QTD Bond Activity

MBS pass Agency

Notes 1.6%

Municipals

24.2%

(millions)

QTD AVG rate Purchases $ 6.5 1.63% Sales ($ 2.9) 0.14% Mat/Calls ($ 11.4) 2.98% Pre‐pays ($ 44 7) 2 68%

thrus 61.8% Agency

CMOs 9.4%

Pre pays ($ 44.7) 2.68%

6.21 5.56

25,000 30,000 5 50 6.00 6.50

Average yield on bond portfolio = 3.19% (TEY)

4.96 4.58 5.37 5 56 5.29 4.19 4.25

15,000 20,000 4.00 4.50 5.00 5.50 OCI ($ millions)

• vg. Life (years)

As of September 30, 2012

p ( ) Average life = 3.21 years Effective Duration = 2.08%

3.76 3.44 3.21

‐ 5,000 10,000 2.50 3.00 3.50 4.00 AO Av

AOCI (000's) Weighted Average Life

37

Investment Portfolio

Muni Allocation %

Municipal portfolio

Municipal Bond Portfolio Statistics 3Q12 3Q11

82% 18%

3Q12 3Q11 Weighted Average Life 4.3 years 6.4 years % State Agency Holdings 5.18% 4.51% Tax equivalent yield 5.60% 5.53%

82%

L ti # f I B l % FMV as % of Cost 108.8% 106.7%

All municipals are “A” rated or better.

General Obligation Bonds Revenue Bonds

Location # of Issuances Balances % Tennessee 75 $ 42,848 22.3% Florida ‐ ‐ 0.0% California 2 802 0.4% 30, 2012 Nevada ‐ ‐ 0.0% Michigan 11 5,537 2.9% Illinois 18 14,740 7.7% Other – 30 states 192 129 753 66 7% As of September 38 Other – 30 states 192 129,753 66.7% Totals 298 $ 192,000 100.0% A

Core Deposits vs Non‐Core Deposits

PNFP has limited dependence on non‐relationship funding

9/30/2012 Percent 12/31/2011 Percent d Core Funding: Transaction accounts 1,517,563 36.55% 1,354,582 32.96% Money Market accounts 1,606,698 38.70% 1,585,260 38.58% Time deposits less than $250,000 452,164 10.89% 501,705 12.21% Total Core Funding 3,576,425 86.14% 3,441,547 83.75% Non‐core funding: Relationship based non‐core funding: Time deposits greater than $250,000 Reciprocating time deposits 50,347 1.21% 108,507 2.64% Other time deposits 92,515 2.23% 104,284 2.54% Securities sold under agreements to repurchase 134,787 3.25% 131,591 3.20% Total relationship based non‐core funding 277,649 6.69% 344,382 8.38% Wholesale funding: Time deposits greater than $250,000 Public funds ‐ 0.00% ‐ 0.00% Brokered deposits ‐ 0.00% ‐ 0.00% FHLB advances 190,887 4.60% 226,069 5.50% Federal funds purchased ‐ 0.00% ‐ 0.00% Holding Company Loan 24,307 0.59% ‐ 0.00% Subordinated debt 82,476 1.99% 97,476 2.37%

39

Total wholesale funding 297,670 7.17% 323,545 7.87% Total non‐core funding 575,319 13.86% 667,927 16.25% Totals 4,151,744 100.00% 4,109,474 100.00%

Capital Ratios

Total Risk Based Capital Ratio Leverage Ratio

PNFP has strong capital ratios

15.88% 15.34% 15.44% 13.50% 13.36%

p

11.89% 11.37% 11.68% 10.46% 10.53% 3Q11 4Q11 1Q12 2Q12 3Q12 3Q11 4Q11 1Q12 2Q12 3Q12 9.80% 9.90% 10.05% 10.09% 10.11%

Tier 1 Common Ratio

10.20% 9.94% 10.30% 8.70% 9.20%

Tangible Common Ratio

40

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

Supplemental Information Income Statement

41

Mortgage Lending

$150,000 $2,500,000

Mortgage originations and yield spread premium are growing

$90 000 $120,000 $1 500 000 $2,000,000

Sold es sold, net )

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

Gross Loans S n on mortgage (dollars)

$‐ $30,000 $‐ $500,000

Gain

$‐ $‐ Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012*

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

h h f l ld

42

• New home purchases approximate 33% of gross loans sold.

42

Non‐GAAP Financial Measures – Efficiency Ratio

3Q12 2Q12 1Q12 4Q11 3Q11

PNFP continues to improve operating leverage

3Q12 2Q12 1Q12 4Q11 3Q11 Net interest income $40,932 $40,185 $39,504 $39,293 $38,356 Total non‐interest income $10,430 $9,909 $9,949 $9,727 $10,080 Less: Securities gains 50 (99) (113) (133) (377) Non‐interest income, excluding securities gains $10,480 $9,810 $9,836 $9,594 $9,703 Total non‐interest expense $33,578 $33,915 $35,820 $34,374 $35,676 Less: ORE expenses (2,399) (3,104) (4,676) (4,193) (5,079) Non‐Interest expense excluding ORE $31 179 $30 811 $31 144 $30 181 $30 597 Non Interest expense, excluding ORE $31,179 $30,811 $31,144 $30,181 $30,597 Adjusted pre‐tax pre‐provision income $20,233 $19,185 $18,197 $18,706 $17,462

43

Efficiency ratio, excl. ORE and securities gains 60.7% 61.5% 63.0% 61.6% 63.2%

Non‐GAAP Financial Measures – Expense/Total Average Assets

3Q12 2Q12 1Q12 FY 2011 4Q11 3Q11 Total non interest $33 578 $33 915 $35 820 $139 107 $34 374 $35 676 Total non‐interest expense $33,578 $33,915 $35,820 $139,107 $34,374 $35,676 Less: ORE expenses 2,399 3,104 4,676 17,432 4,193 5,079 Non‐Interest expense, l d $ $ $ $ $ $ excluding ORE $31,179 $30,811 $31,144 $121,675 $30,181 $30,597 Total Assets (Quarterly Average) $4,843,008 $4,847,583 $4,820,951 $4,833,435 $4,852,311 $4,786,485 (Quarterly Average) Expense*/Total Average Assets 2.56% 2.56% 2.60% 2.52% 2.50% 2.57% * Calculation excludes OREO expense

44

Supplemental Information E i C di i Economic Conditions & Other

45

Achieving Long Term Targets

Nashville’s and Knoxville’s job recovery outpaces the nation

• USA recovery of jobs lost since peak

employment in 2008 has amounted to employment in 2008 has amounted to 51.3%

• Nashville has replaced 78% while

Knoxville has replaced 98%

46

Source: BERC – MTSU & Bureau of Labor Statistics

Unemployment Trends

• Both Nashville and

Knoxville continue to f h i

• utperform the nation

at 7.1% and 6.8%,

• respectively. Down

from 2Q12. Q

• State of Tennessee

unemployment continues to continues to approximate USA unemployment

47

Source: BERC – Middle Tennessee State University & Bureau of Labor Statistics

Nashville Residential Real Estate Market

Nashville’s Real Estate Market Continues to Improve

3Q 2012 3Q 2011 % Change Q Q % g

• Avg. Qtrly.

Median Home Price $177,083 $171,600 3.2% Quarterly Closings 6,190 4,916 25.9% Quarter end 11 005 12 912 (14 8%) Inventory 11,005 12,912 (14.8%) Months of Inventory (*) 5.9 8.5 (30.6%)

48

Source: GNAR.org – Residential home activity through 9/12 (*) Months of Inventory calculated by dividing month end inventory by monthly closings

Market Data

Area

Total Population Projected Median HH Projected

PNFP serves large, high‐growth markets

Area

Total Population 2011 Actual Population Change 2000‐2011 (%) Projected Population Change 2011‐2016 (%) Median HH Income 2011 Actual ($) HH Income Change 2000‐2010 (%) Projected HH Income Change 2011‐2016 (%)

Davidson County 634,152 11.28% 4.79% 44,432 25.59% 16.65% Rutherford County 268,510 47.51% 10.42% 54,173 26.51% 10.19% Williamson County 187,699 48.22% 11.40% 79,084 28.61% 9.10% Nashville‐MSA 1,614,589 23.08% 7.13% 50,429 25.98% 11.58% Knoxville MSA 704,510 14.35% 5.15% 40,794 23.44% 22.18% T 6 401 643 12 52% 4 39% 41 080 23 12% 18 88% Tennessee 6,401,643 12.52% 4.39% 41,080 23.12% 18.88% United States 310,704,322 10.41% 3.42% 50,227 22.55% 14.55% Source: SNL Financial 49

Commercial Real Estate

Vacancy Rates

Nashville CRE Vacancy Rates National CRE Vacancy Rates Q3 2012(*) YE 2011 (*) YE 2010 (*) YE 2009 (**) YE 2008 (**) YE 2007 (**) Q3 2012 (*) Industrial / Warehouse 9.6% 10.1% 10.2% 10.6% 9.6% 8.9% 9.1% Multifamily** 6 9% 6 6% 6 7% 9 6% 7 6% 5 2% 6 4% *C Multifamily** 6.9% 6.6% 6.7% 9.6% 7.6% 5.2% 6.4% Retail 8.1% 7.3% 6.7% 8.1% 6.3% 7.0% 6.9% Office 8.7% 9.7% 10.6% 12.7% 10.5% 10.5% 12.1%

C f li

*Costar **REIS

Retail 15.8% Office Other 16.4%

PNFP CRE Portfolio

8.2%

Warehouse

8.0% Own/Occ

50

Own/Occ 51.6%

Achieving Long Term Targets

Nashville and Knoxville are healthy business markets

NASHVILLE NASHVILLE “Music City” is a city on the move with its diverse economy, thriving cultural base, entertainment offerings and strong business

• community. Nashville’s central location in the U.S. makes it an unmatched distribution location. Fifty percent of the U.S.

population and 24 states are located within a 600‐mile radius. Accolades in 2012 include:

• Tennessee 4th best state for business

Chief Executive Magazine Tennessee 4 best state for business Chief Executive Magazine

• Nashville one of top 8 cities for projected job growth

Kiplinger

• Nashville 10th best city for business and careers of 200 largest MSA’ s

Forbes

• Nashville ranked number nine on the list of cities that are getting smarter fastest

Forbes KNOXVILLE KNOXVILLE Knoxville enjoys a very healthy and diverse economy with an excellent transportation and technology infrastructure. Its population is projected to grow 4.5 percent in the next five years, faster than the nation’s. Knoxville was ranked 6th best mid‐sized city for jobs by Forbes. 51

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

52

Offering an engaging experience

Associate engagement drives customer satisfaction

100% 5 00 96% 98% 100% 4.00 4.50 5.00

ent Scores ion Scores

90% 92% 94% 2.50 3.00 3.50

e Engageme er Satisfacti

84% 86% 88% 1.00 1.50 2.00

Associate Custome

Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012

C t S ti f ti S A i t t iti

53

Customer Satisfaction Scores Associate engagement survey positive responses

Deposit Market Share

Nashville‐Davidson‐Rutherford MSA Knoxville MSA

PNFP has proven experience in market share take‐away

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 1 Regions 18.1% 30.5% ‐12.4% First Horizon 18.9% 20.8% ‐1.9% 2 Bank of America 17.2% 15.1% 2.1% SunTrust 17.5% 18.1% ‐0.6% 3 SunTrust 12.2% 19.7% ‐7.5% Regions 13.7% 17.8% ‐4.1% 4 Pinnacle Financial Partners 8.4% 1.7% 6.7% Home Federal Bank of TN 11.4% 12.4% ‐1.0% h k d 5 First Horizon 6.6% 4.8% 1.8% 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% 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% Citizens of Blount County 2.1% 2.2% ‐0.1% 10 CapStar Bank 1.8% 0.0% 1.8% Bank of America 1.7% 2.2% ‐0.5% Other 23.5% 20.8% 2.7% Other 16.2% 15.4% 0.80% T t l 100% 100% T t l 100% 100%

54

Total 100% 100% Total 100% 100%

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

Company Profile

Headquarters: Nashville, TN Founded: 2000 Offices: 29 in 8 Middle‐TN counties/3 in Knoxville

• Avg. daily trading vol.: 120,495 shares

Total assets: $ 4.870 Billion (9/30/12) Shareholders’ equity: $ 672.9 Million

• Avg. daily trading vol.: 120,495 shares

% Institutional ownership: 65.9%

55

(9/30/12)

Experienced Management Team

Name Title Age Years in Banking Years at Pinnacle Industry

• M. Terry Turner

President and Chief Executive Officer 58 33 12 Robert A. McCabe, Jr. Chairman of the Board 62 36 12 Hugh M Queener Chief Administrative Officer 57 25 12 Hugh M. Queener Chief Administrative Officer 57 25 12 Harold R. Carpenter, Jr. Chief Financial Officer 54 18 12

• J. Harvey White

Chief Credit Officer 64 38 3 Nathan A. Hunter President—Knoxville 59 37 5 Nathan A. Hunter President Knoxville 59 37 5 Joanne B. Jackson Manager, Client Services Group 55 43 12

• D. Kim Jenny

Risk Management Officer 58 38 6 William S. Jones Rutherford County Area Executive 53 22 6*

• J. Edward White

Manager, Client Advisory Group 60 38 12 Jason K. West Manager, Special Assets Group 45 25 5*

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

Third Quarter 2012 Investor Call Investor Call

Terry Turner, President and CEO Harold Carpenter, EVP and CFO October 17, 2012