Fourth Quarter 2015 Investor Call

Transcription

1 Fourth Quarter 2015 Investor Call M. Terry Turner, President and CEO Harold R. Carpenter, EVP and CFO January 20, 2016

2 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," "hope," pursue, "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 maintain the historical growth of 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, the Knoxville MSA, the Chattanooga, TN-GA MSA and the Memphis, TN-MS-AR 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 the Nashville, Knoxville, Chattanooga or Memphis MSAs; (xii) a merger or acquisition; (xiii) risks of expansion into new geographic or product markets, like the expansion into the Chattanooga and Memphis MSAs; (xiv) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including intangible assets; (xv) reduced ability to attract additional financial advisors (or failure of such advisors to cause their clients to switch to Pinnacle Financial), to retain financial advisors (including those at CapitalMark Bank & Trust and Magna Bank) or otherwise to attract customers from other financial institutions; (xvi) further deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xvii) inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies and required capital maintenance levels; (xviii) risks associated with litigation, including the applicability of insurance coverage; (xix) the risk that the cost savings and any revenue synergies from the mergers with CapitalMark and Magna may not be realized or take longer than anticipated to be realized; (xx) disruption from the CapitalMark and Magna mergers with customers, suppliers or employee relationships; (xxi) the risk of successful integration of CapitalMark's and Magna's business with ours; (xxii) the amount of the costs, fees, expenses and charges related to the CapitalMark and Magna mergers; (xxiii) reputational risk and the reaction of Pinnacle Financial's, CapitalMark's and Magna's customers to the CapitalMark and Magna mergers; (xxiv) the risk that the integration of CapitalMark's and Magna's operations with Pinnacle Financial's will be materially delayed or will be more costly or difficult than expected; (xxv) approval of the declaration of any dividend by Pinnacle Financial's board of directors; (xxvi) the vulnerability of our network and online banking portals to unauthorized access, computer viruses, phishing schemes, spam attacks, human error, natural disasters, power loss and other security breaches; (xxvii) the possibility of increased compliance costs as a result of increased regulatory oversight, including oversight of companies in which Pinnacle Financial has significant investments, and the development of additional banking products for our corporate and consumer clients; (xxviii) the risks associated with our being a minority investor in Bankers Healthcare Group, LLC, including the risk that the owners of a majority of the equity interests in Bankers Healthcare Group decide to sell the company if not prohibited from doing so by the terms of our agreement with them; and (xxix) 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 herein and in Pinnacle Financial's most recent annual report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2015 and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission on May 8, 2015, August 7, 2015 and November 9, 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 report, whether as a result of new information, future events or otherwise.

3 4Q15 Summary Results Execution of fundamentals fueled exceptional growth in key valuation drivers Balance Sheet Growth Earnings Growth Up 51.6% yr/yr $57,456 $4,144 $64,697 Total Loans (millions) $4,590 $98,083 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Up 42.6% yr/yr Total Revenues $6,543 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Up 51.4% yr/yr Net Income* $18,737 $15,321 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Total Core Deposits $28,367 $6,333 (millions) Up 44.6% yr/yr $4,381 $4,102 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 FD EPS* $0.69 $0.53 $0.44 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Tangible Book Value per Share $17.46 Up 11.9% yr/yr $15.60 $ Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 NPA % Classified Asset Ratio ALL % Asset Quality 0.80% 0.62% 0.55% 18.5% 18.1% 18.7% 1.64% 1.47% 1.00% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 *: excluding tax effected merger related charges 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

4 4Q15 Summary Results Previously outlined growth initiatives are moving forward 1. CapitalMark and Magna mergers Legal mergers Accomplished in 3Q15 Financial case Results for 2015 better than planned ($0.06- $0.08 FDEPS) Technology conversions Magna conversion completed in November 2015; CapitalMark conversion set for March Cultural integration Ongoing, with all key associates retained 2. CRE initiative is producing ahead of schedule with almost $100mm in balances at EOP 2015 and $253mm in unfunded commercial construction loans 3. Obtained regulatory approvals for a broker/dealer and PNFP Capital Markets working through its first engagement 4. Aggressive hiring ahead of schedule 36 revenue producers in 2015, roughly three times prior year pace 4

5 Loan, Deposit and Fee Growth Yield Operating Leverage Organic growth and acquisitions fuel significant growth in net interest income $ % $70 $ % Net Interest Income (millions) $65 $60 $55 $50 $45 $40 $35 $30 $ % $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 $49.5 $50.3 $51.3 $51.8 $ % 3.73% 3.75% 3.50% 3.25% 3.00% 2.75% 2.50% 2.25% 2.00% Net Interest Margin 5

6 Loan, Deposit and Fee Growth Yield Operating Leverage Linked quarter loan volumes and yields rose dramatically in 4Q15 $7, % $6, % $6, % Average Loans (millions) $5,000 $4,000 $3,000 $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 $4,358 $4,436 $4,625 $4,737 $5, % 4.46% 4.00% 3.00% 2.00% Loan Yields $2, % Avg. Loans Loan Yields 6

7 Loan, Deposit and Fee Growth Yield Operating Leverage Deposits grew rapidly and deposit rated moved more slower than loan yields $7, % $6, % $6, % $3,772 $3,723 $3,700 $3,642 $3,597 $3,636 $3,706 $3,883 $5,898 Avg. Deposits (millions) $5,000 $4,000 $3,000 $3,950 $3,963 $4,199 $4,408 $4,509 $4,519 $4,655 $4,758 $4,792 $4, % 0.75% 0.50% 0.25% $2, % Avg. Deposits Cost of Deposits 7

8 Loan, Deposit and Fee Growth Yield Operating Leverage Balance sheet positioned for rising rates 8.00% 6.00% 4.00% 2.00% 0.00% -2.00% IRR Sensitivity (Immediate shock) Up 100 Up % 1.43% 3.03% 6.22% EOP 2011 EOP 2015 (billions of dollars) $1.50 $1.00 $0.50 $- Loans w/ Floors $1.25 $ % - As a % of loans - 9.8% EOP 2011 EOP 2015 $0.90 Fixed Rate Bond Book $2.00 Noninterest Deposits (billions of dollars) $0.80 $0.70 $0.60 $0.86 $ % - As a % of assets 9.6% EOP 2011 EOP 2015 (billions of dollars) $1.50 $1.00 $0.50 $- $1.89 $ % - As a % of deposits 27.1% EOP 2011 EOP

9 Loan, Deposit and Fee Growth Yield Operating Leverage Expansion of fee businesses produced record fee revenues in 4Q15 4Q15 3Q15 2Q15 1Q15 4Q14 Service charges $3,500 $3,258 $3,076 $2,913 $3,038 Investment services 2,787 2,526 2,399 2,259 2,737 Insurance commissions 1,103 1,103 1,106 1,513 1,046 Gain on mortgage loans sold, net 2,181 1,895 1,652 1,941 1,374 Trust fees 1,482 1,437 1,230 1,312 1,274 Income from equity method investment 7,839 5,285 4,266 3,201 - Other: Securities gains (losses) (10) Interchange and other consumer fees 5,558 4,964 3,893 3,799 3,591 Bank-owned life insurance Loan swap fees Other 850 (117) Total noninterest income $26,608 $21,410 $20,019 $18,494 $14,384 Total Assets (Quarterly Average) $8,565,341 $7,514,633 $6,319,712 $6,102,523 $5,855,421 Noninterest income/average Assets 1.23% 1.13% 1.27% 1.23% 0.97% Core Noninterest Income**/ Average Assets 1.23% 1.13% 1.24% 1.23% 0.97% ** Excludes the impact of securities gains (losses) 9

10 Loan, Deposit and Fee Growth Yield Operating Leverage Operating leverage led to an all time best core efficiency ratio 4Q15 3Q15 2Q15 1Q15 4Q14 Salaries and benefits $30,878 $27,746 $23,775 $23,531 $23,075 Equipment and occupancy 8,385 6,933 5,878 6,046 5,984 Other real estate owned 99 (686) (115) 395 (630) Marketing and business development 1,465 1,252 1, ,208 Supplies and postage 1, Intangible amortization Merger related expense 2,489 2, Other expenses 6,906 6,216 5,006 5,023 3,801 Total noninterest expense $52,191 $45,107 $36,747 $36,831 $34,391 Efficiency ratio 53.2% 54.0% 51.1% 52.8% 53.2% Expense/Total Average Assets 2.42% 2.38% 2.33% 2.45% 2.33% Core noninterest expense ** $49,603 $43,544 $36,324 $36,436 $35,021 Core efficiency ratio 50.6% 52.2% 50.9% 52.2% 54.1% Core Noninterest Expense**/Total Average Assets 2.30% 2.30% 2.31% 2.42% 2.37% ** Excludes the impact of OREO expense, FHLB prepayment charges and merger related expenses 10

11 Pinnacle Building for the Future Changes to long-term targets reflect PNFP operating leverage 3.95% 3.90% 3.85% 3.80% 3.75% 3.70% 3.65% 3.60% 3.55% 3.50% 3.80% Net Interest Margin 3.70% 3.76% 3.73% 1.30% 1.20% 1.10% 1.00% 0.90% 0.80% 0.70% Noninterest Income / Average Assets (1) 1.23% 0.97% 0.89% 0.92% 1.60% 1.40% 1.20% 1.00% 0.94% ROA (2) 1.13% 1.27% 1.31% 0.80% 2.70% 2.60% 2.50% 2.40% 2.30% 2.20% 2.10% 2.00% Noninterest Expense / Average Assets (2) 2.52% 2.38% 2.37% 2.30% 0.50% 0.45% 0.40% 0.35% 0.30% 0.25% 0.20% 0.15% 0.10% 0.05% 0.00% Net Chargeoff Ratio 0.29% 0.15% 0.10% 0.21% 0.60% 0.40% 0.20% 0.00% (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, FHLB prepayment charges and merger related expenses. Noninterest expense for 2Q13 includes the impact of the reversal of a $2.0 million allowance for off-balance sheet commitments --- : Reflects targets resulting from the annual corporate strategic planning process for the then current period. 11

12 Pinnacle Building for the Future Expanded BHG Partnership Will Provide Opportunities to Both Firms Feb 2015 investment Feb 2016 investment (1) Consideration $75mm for 30% interest $114mm for 19% interest, aggregate 49% interest Financing Debt and on-balance sheet cash 912,000 shares of PNFP common with residual in cash. Anticipate a bank level subdebt offering in 1Q16 to support cash payout Accounting Equity investment in unconsolidated subsidiary Board seats One board seat (25% of board vote) One additional board seat (40% of board vote) Accretion Other key contract terms (1) Assumes a February 20, 2016 closing 2015 FDEPS impact to PNFP FDEPS approximated $ rd percentile Anticipate that 19% BHG interest will approximate an additional 2% FDEPS accretion in 2016 and 4% in TBV earn back < 1 year. a. Non-competes for BHG principals for longer of 5 years or 24-months post-resignation b. Four year period during which BHG cannot be acquired without approval of both PNFP and founders c. Five year period during which neither BHG principals nor PNFP can transfer units without consent of other party 12

13 Pinnacle Building for the Future (millions of dollars) BHG posts accelerating and impressive growth $450 $400 $350 $300 $250 $200 $150 $100 $ Growth % 2015 Growth 57.9% 2015 Growth 71.4% Loans by healthcare specialty 2015 originations Physicians & Surgeons $248.9 Dentists $ 83.0 Physical Therapists $ 22.3 Veterinarians $ 18.3 Other $ 52.4 Totals $424.9 $0 Originations Revenues Net income B4 tax Source: Company information 13

14 Pinnacle Building for the Future BHG specialized focus results in significant returns Rates Original balances 2015 Growth % # of loans Avg. term (months) Avg. Rate Avg. FICO Current Balance % of portfolio < 12% $ , % 756 $ % 12% to < 15% , % % 15% to < 17% , % % 17% to < 18% , % % > 18% % % $1, , % 713 $ % Source: Company information 14

15 Pinnacle Building for the Future 2015 Goals and Objectives 2015 Results 5-Year Horizon Dogged execution that produces and sustains increased results Continue to grow loans and core deposits to achieve earnings targets and increase operating leverage FDEPS growth, excluding merger related charges, of 29.9% Growth accelerating post-mergers, linked quarter loan growth of 13.1% Core deposits at highest levels in firm s history Develop market leadership in four Tennessee markets Pursue merger candidates within current markets Achieve elevated profitability targets Operate a modestly asset sensitive balance sheet Increase operating leverage further advances in ER Maintain top quartile performance Operating within all of our established profitability target ranges Modestly asset sensitive through expansion of floating rate assets Core efficiency ratio of 50.6% in 4 th quarter Maintained top quartile ROA, ROTE and soundness metrics through 3Q15. Expand CRE asset class Increase assets beyond $10B Increase capital allocation to fee businesses that can drive shareholder value Continued focus on bottom line results 15

16 Pinnacle Building for the Future 4Q15 Bank Industry Trends 4Q15 Pinnacle Trends Lower, longer rate forecast Credit leverage slows Margin compression continues Cost cutting jeopardizes future earnings and core deposits Mortgage revenues slow Energy lending concerns Robust banking markets Organic growth creates operating leverage despite aggressive hiring to sustain growth capacity Continued investment for future growth: - M&A: CapitalMark, Magna, BHG - Organic: Accelerating hiring, CRE, Capital Markets Intense focus on building a valuable Tennessee franchise 16

17 Q&A Fourth Quarter 2015 Investor Call

18 Supplemental Information Fourth Quarter 2015 Investor Call

19 Supplemental Information Chart Balance Sheet 20 Asset Quality 30 Income Statement 34 Pinnacle Financial Partners profile 40 Economic and Market Conditions 46 19

20 Supplemental Information Balance Sheet 20

21 Balance Sheet Loan portfolio well diversified Amts. 4Q15 % s(*) 4Q15 Amts. 3Q15 % s(*) 3Q15 Amts. 4Q14 % s 4Q14 Amts. 4Q13 % s 4Q13 C&D and Land $ % $ % $ % $ % Consumer RE 1, % 1, % % % CRE Owner Occ. 1, % 1, % % % CRE Investment % % % % Other RE loans % % % % Total real estate 4, % 3, % 2, % 2, % C&I 2, % 2, % 1, % 1, % Other loans % % % % Total loans $6, % $6, % $4, % $4, % (*) as a percentage of total loans 21

22 Balance Sheet Construction portfolio reflects quality growth Amts. 4Q15 % s(*) 4Q15 Amts. 3Q15 % s(*) 3Q15 Amts. 4Q14 % s(*) 4Q14 Amts. 4Q13 % s(*) 4Q13 Residential Spec $ % $ % $ % $ % Residential Custom % % % % Residential Condo % % % % Commercial Construct % % % % Land Dev Residential % % % % Land Dev Commercial % % % % Land Unimproved % % % % Total C&D $ % $ % $ % $ % (*) as a percentage of total loans 22

23 Balance Sheet The C&I loan portfolio is highly diversified NAICS Sector Description 4Q15 4Q14 Health Care and Social Assistance 4.53% 3.42% Finance and Insurance 2.45% 2.94% Real Estate and Rental and Leasing 0.15% 0.02% Manufacturing 1.50% 1.02% Consumer 5.37% 6.20% Transportation and Warehousing 8.18% 7.64% Wholesale Trade 1.59% 2.28% Retail Trade 10.28% 8.83% Construction 14.27% 16.13% Accommodation and Food Services 2.34% 2.87% Professional, Scientific, and Technical Services 0.40% 0.54% Public Administration 7.64% 6.65% Admin. & Support and Waste Mgt. and Remediation 0.02% 0.22% Information 2.20% 2.89% Other Services (except Public Administration) 3.91% 4.68% Educational Services 3.62% 3.95% Arts, Entertainment, and Recreation 11.10% 9.51% Management of Companies and Enterprises 5.64% 6.20% Agriculture, Forestry, Fishing and Hunting 8.14% 6.97% Utilities 0.07% 0.10% Mining, Quarrying, and Oil and Gas Extraction 6.58% 6.95% Total C&I Portfolio % % 23

24 Balance Sheet PNFP maintains limited dependence on non-relationship funding 12/31/2015 Percent 12/31/2014 Percent Core Funding: Non-interest bearing deposits 1,889, % 1,321, % Interest-bearing deposits 1,355, % 989,915 Money Market accounts 2,683, % 1,751, % Time deposits less than $250, , % 318, % Total Core Funding 6,332, % 4,381, % Relationship based non-core funding: Reciprocal NOW deposits 34, % 15, % Reciprocal MMDA deposits 318, % 273, % Time deposits Reciprocal time deposits 50, % 43, % Other time deposits 228, % 69,278 Securities sold under agreements to repurchase 79, % 93, % Total relationship based non-core funding 710, % 495, % Wholesale funding: Time deposits greater than $250,000 Public funds % % Brokered deposits 7, % % FHLB advances 300, % 195, % Federal funds purchased % % Other borrowings % 13, % Subordinated debt 142, % 82, % Total wholesale funding 450, % 291, % Total non-core funding 1,160, % 787, % Totals 7,493, % 5,168, %

25 Balance Sheet Unfunded line commitments hold potential for significant loan growth $5,000 70% Total Commitments (millions) $4,000 $3,000 $2,000 $1, % $747 $715 $957 $959 $685 $1,000 $779 $975 $808 $1,009 $787 $1,054 $815 $1,055 $865 $1,138 $941 $1,105 $926 $1,166 $989 $1,190 $1,024 $1,216 $1,028 $1,247 $1,046 $1,349 $1,131 $1,375 $1,177 $1,376 $1,221 $1,440 $1,372 $1,538 $2,407 $2,087 $2,015 50% 50.83% $2,084 60% 40% 30% Funded % $0 20% Net active balance Unfunded Commitments Funded % Note: Excludes HELOCS and credit cards 25

26 Balance Sheet The securities book is maintained at a minimal level 4.00% 3.58% 3.50% 3.00% 40.00% 35.00% 30.00% 2.50% 2.00% 20.75% 2.45% 25.00% 20.00% 1.50% 15.00% 1.00% 11.70% 10.00% 0.50% 5.00% 0.00% 0.00% Bond Yields % of Avg. Assets 26

27 Balance Sheet Conservative bond portfolio 6.1% 18.3% 7.6% 11.6% 1.0% 54.1% Agency Corporates MBS Asset Backed CMOs Municipals As of 12/31/2015 Book Yield Avg Life (yrs) Agency 2.41% 8.6 Asset Backed 1.64% 4.7 Corporates 3.73% 3.1 CMOs 1.73% 3.5 MBS 2.34% 4.9 Municipals 4.69% 3.5 Total 2.45% 4.9 Portfolio: December 31, 2015 Total Investments Unrealized Gain (Loss) QTD Purchases QTD Sales $ 967 million $ 4.6 million $ 78.2 million $ 64.0 million Duration Avg Yield TE 4Q15 3.0% 2.5% 3Q15 2.8% 2.6% 2Q15 2.9% 2.6% 1Q15 2.9% 2.8% 4Q14 2.8% 2.8% 3Q14 3.0% 2.9% Investment portfolio at $967 million, up $138 million vs Dec 2014 Increase due to Magna/CMBT purchase MBS sector at 54% of portfolio Duration stable at low levels Investments to Total Assets of 11.1% as of 12/31 27

28 Balance Sheet The municipal portfolio contains minimal risk Municipal Bond Portfolio Statistics 4Q15 4Q14 Weighted Average Life 3.5 years 3.6 years Muni Allocation % Tax equivalent yield 4.69% 4.57% FMV as % of Cost 103.9% 104.7% 23% 77% As of September 30, 2015 Location # of Issuances Market Value % Tennessee 72 $40, % Michigan 6 3, % Illinois 20 14, % Other 30 states , % Totals 292 $196, % General Obligation Bonds Revenue Bonds All municipals are A rated or better. 28

29 Balance Sheet Mergers on Track to Hit Targets As of announcement date April 7, 2015 CapitalMark Updated as of Dec. 31, 2015 Magna As of announcement date April 28, 2015 Updated as of Dec. 31, 2015 Aggregate Amounts Closing Late 3Q/Early 4Q Jul-15 Late 3Q Sep-15 Consideration 90% Stock, 10% Cash 75% Stock, 25% Cash PNFP share price $ $ $46.66 $46.32 PNFP shares 3,305,000 3,306,184 1,325,000 1,371,717 4,677,901 Stock option value $ 23,179,000 $ 30,429,000 $ 1,957,000 $ 847,000 Cash consideration $ 16,380,000 $ 19,675,000 $ 18,774,000 $ 19,453,000 Total transaction value $ 187,000,000 $ 225,629,000 $ 82,556,000 $ 83,838,000 $ 309,467,000 SBLF redemption $ 18,212,000 $ 18,212,000 $ 18,350,000 $ 18,350,000 $ 36,562,000 Purchase Accounting Loan mark 2.50% $ (20,500,000) 2.15% $ (17,614,000) 2.00% $ (9,700,000) 2.01% $ (9,737,000) $ (27,351,000) ORE mark 30% $ (1,100,000) 0% $ - 25% $ (800,000) 0% $ - $ - Core deposit intangible 1.50% $ 8,622, % $ 5,484, % $ 5,400, % $ 2,828,000 $ 8,312,000 Cost Savings Aggregate cost saves 30% No change anticipated 25% No change anticipated EPS Accretion % 0.0% % 3.4% % 4.4% $0.06 to $0.08 Tangible Book Value Dilution 2.5% Neutral Less than 1% 29

30 Supplemental Information Asset Quality 30

31 Asset Quality Past due loans remain very low (000 s) Dec. 31, 2015 As a % of total loans Sept. 30, 2015 As a % of total loans Dec. 31, 2014 As a % of total loans Past Due Loans (*) Nonaccrual loans** $10, % $8, % $7, % Accruing loans 19, % 21, % $18, % Total past due $30, % $30, % $25, % (*) > 30 days past due (**) includes purchase credit impaired loans 31

32 Asset Quality NPLs and loans >90 days past due & accruing remain very low (000 s) NPLs Expressed as a % of Total Loans within each Category Dec. 31, 2015 As a % of total loans PNFP NPLs and >90 days Sept. 30, 2015 As a % of total loans Dec. 31, 2014 As a % of total loans Const. and land development $7, % $8, % $5, % CRE Owner Occupied 5, % 4, % 4, % CRE Investment % 2, % - - Total real estate 24, % 28, % 14, % C&I 1, % 1, % 1, % Total loans $31, % $35, % $17, % 32

33 Asset Quality Classified assets remain low Balances Dec. 31, 2015 (in thousands) Balances Sept. 30, 2015 Balances Dec. 31, 2014 Classified loans and ORE: - Substandard commercial loans $116,088 $94,801 $102,077 - Doubtful commercial loans Other impaired loans 19,402 22,490 5, days past due and accruing (*) 1,768 5, Other real estate 5,083 4,773 11,186 - Other repossessed assets 1,906 1, Total $144,265 $128,450 $119,433 Pinnacle Bank classified asset ratio 18.7% 17.1% 18.1% (*) Includes loans 90 days past due and accruing not included elsewhere 33

34 Supplemental Information Income Statement 34

35 Income Statement Diversified fee structure Noninterest Income by Source 2015 Growth % Other 29% Service charges 15% Investment services 12% Insurance 5% BHG income 24% Trust fees 6% Gains on mortgage loan sales 9% Source: Company information 35

36 Income Statement Mortgage volumes experience growth in purchase money transactions 180, % 160, , , % 100, % 2.00% 80,000 60, % 40,000 20, % Purchase Money Refinance Gross fees as a % of loans originated 36

37 Income Statement Reconciliation of Non-GAAP measures 4Q15 3Q15 2Q15 1Q15 4Q14 Net interest income $71,475 $62,059 $51,831 $51,269 $50,313 Total non-interest income $26,608 $21,410 $20,019 $18,493 $14,384 Less: Securities (gains) losses 10 - (556) (6) - Non-interest income, excluding the impact of net gains (losses) on sale of investment securities $26,618 $21,410 $19,463 $18,487 $14,384 Total non-interest expense $52,191 $45,107 $36,747 $36,831 $34,391 Less: ORE expenses 99 (686) (115) 395 (630) FHLB prepayment charges Merger related expenses 2,489 2, Non-Interest expense, excluding ORE expense, FHLB prepayment charged and merger related expenses $49,603 $43,544 $36,324 $36,436 $35,021 Adjusted pre-tax pre-provision income $48,490 $39,925 $34,970 $33,320 $29,676 Efficiency ratio** 50.6% 52.2% 50.9% 52.2% 54.1% **: Excluding ORE expense, FHLB prepayment charges, merger related expenses and securities gains and losses 37

38 Income Statement Reconciliation of Non-GAAP measures 4Q15 3Q15 2Q15 1Q15 4Q14 Total non-interest income $26,608 $21,410 $20,019 $18,493 $14,384 Less: Securities (gains) losses 10 - (556) (6) - Non-interest income, excluding the impact of net gains (losses) on sale of investment securities $26,618 $21,410 $19,463 $18,487 $14,384 Total non-interest expense $52,191 $45,107 $36,747 $36,831 $34,391 Less: ORE expenses 99 (686) (115) 395 (630) FHLB prepayment charges Merger related expenses 2,489 2, Non-Interest expense, excluding ORE expense, FHLB prepayment charges and merger related expenses $49,603 $43,544 $36,324 $36,436 $35,021 Adjusted pre-tax pre-provision income $48,490 $39,925 $34,970 $33,320 $29,676 Total Assets (Quarterly Average) $8,565,341 $7,514,633 $6,319,712 $6,102,523 $5,855,421 Noninterest income, excluding the impact of net gains (losses) on sale of investment securities/average Assets 1.23% 1.13% 1.24% 1.23% 0.97% Non-interest expense, excluding ORE expense, FHLB prepayment charges and merger related expenses 2.30% 2.30% 2.31% 2.42% %

39 Income Statement Reconciliation of Non-GAAP measures 4Q15 3Q15 2Q15 1Q15 4Q14 Net income $26,854 $24,149 $22,664 $21,843 $18,737 Merger related expenses 2,489 2, Tax effect on merger related expenses (977) (882) (23) - - Net income less merger related expenses $28,366 $25,516 $22,701 $21,843 $18,737 Basic earnings per share $0.67 $0.64 $0.65 $0.62 $0.54 Adjustment to basic earnings per share due to merger related expenses Basic earnings per share excluding merger related expenses $0.71 $0.67 $0.65 $0.62 $0.54 Diluted earnings per share excluding merger related expenses $0.65 $0.62 $0.64 $0.62 $0.53 Adjustment to diluted earnings per share due to merger related expenses Diluted earnings per share excluding merger related expenses $0.69 $0.66 $0.64 $0.62 $

40 Supplemental Information Pinnacle Financial Partners Profile 40

41 PNFP Profile Recently completed acquisitions will position firm in four great banking markets PNFP CapitalMark Magna Headquarters: Nashville, TN Founded: 2000 Total assets: $ Billion (12/31/15) Shareholders equity: $ Billion (12/31/15) **: 50 day average daily volume per NASDAQ.com Offices: 29 in 8 Middle-TN counties 10 in 5 East-TN counties 5 in West-TN Avg. daily trading volume **: 192,541 shares % Institutional ownership: 64.80% (9/30/15) 41

42 PNFP Profile PNFP has an extraordinarily experienced management team Name Title Age Years in Banking Industry Years at Pinnacle M. Terry Turner President and Chief Executive Officer Robert A. McCabe, Jr. Chairman of the Board Hugh M. Queener Chief Administrative Officer Harold R. Carpenter, Jr. Chief Financial Officer J. Harvey White Chief Credit Officer/ Knoxville Regional Executive Joanne B. Jackson Manager, Client Services Group Nashville D. Kim Jenny Risk Management Officer William S. Jones Rutherford County Area Executive * J. Edward White Manager, Client Advisory Group Nashville Craig Holley Chattanooga Chairman ** Kirk Bailey Memphis Chairman ** * - Mr. Jones was an executive with Cavalry Bancorp which was acquired by Pinnacle in ** - Mr. Holley and Mr. Bailey both joined Pinnacle in 2015 following the acquisitions of CapitalMark Bank & Trust and Magna Bank, respectively. 42

43 PNFP Profile PNFP compares favorably to high performing peers Pinnacle Financial Partners (PNFP) Bank of the Ozarks (OZRK) Brookline Bancorp, Inc. (BRKL) Columbia Banking System, Inc. (COLB) CVB Financial Corp. (CVBF) Eagle Bancorp, Inc. (EGBN) FCB Financial Holdings, Inc. (FCB) First Financial Bancorp. (FFBC) First Midwest Bancorp (FMBI) Hilltop Holdings Inc. (HTH) Independent Bank Corp. (INDB) Legacy Texas Financial Group, Inc. (LXTB) MB Financial (MBFI) National Penn Bancshares, Inc. (NPBC) Renasant Corporation (RNST) South State Bank (SSB) Sterling Bancorp (STL) Trustmark Corporation (TRMK) Union First Market Bkshs Co (UBSH) United Bankshares, Inc. (UBSI) United Community Banks, Inc. (UCBI) Western Alliance Bancorporation (WAL) 43

44 PNFP Profile PNFP has a track record for best-in-market share movement Nashville-Davidson-Rutherford MSA Knoxville MSA Top 10 Market Share Rank Holding Company Market Share 6/30/15 Market Share 6/30/00 (1) % Change in Share Top 10 Market Share Rank Holding Company Market Share 6/30/15 Market Share 6/30/07 (1) Change in Share 4 Pinnacle Financial Partners 9.19% 1.74% 7.45% 6 Pinnacle Financial Partners 4.86% 0.03% 4.83% 1 Bank of America Corp 17.29% 14.59% 2.70% 8 Bank of America Corp. 3.26% 2.00% 1.26% 5 First Horizon National Corp. 6.23% 5.13% 1.10% 9 Clayton HC Inc. 2.06% 1.10% 0.96% 7 Wilson Bank Holding Co. 3.27% 2.34% 0.93% 5 BB&T Corp. 6.37% 6.19% 0.18% 10 Wells Fargo & Co. 2.70% 2.05% 0.65% 2 SunTrust Banks Inc % 16.19% 0.09% 9 Fifth Third Bancorp 2.93% 2.29% 0.64% 10 Twin Cities Financial Services Inc. 1.76% 1.96% (0.20)% 8 Franklin Financial Network Inc. 3.11% Home Federal Bank of TN 10.31% 10.87% (0.56)% 6 U.S. Bancorp 3.41% 7.35% (3.94)% 1 First Horizon 17.44% 19.11% (1.67)% 3 SunTrust Banks Inc % 18.60% (6.29)% 7 United Community Banks Inc. 3.42% 5.30 (1.88)% 2 Regions Financial Corp % 29.06% (14.81)% 3 Regions 14.69% (3.56)% Other 25.31% 16.87% 8.44% Other 19.56% 19.03% 0.53% Total 100% 100% Total 100% 100% Source: FDIC Summary of Deposits 2015; 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

45 PNFP Profile PNFP has a track record for best-in-market share movement Chattanooga TN-GA MSA Memphis, TN-MS-AR MSA Top 10 Market Share Rank Holding Company Market Share 6/30/15 Market Share 6/30/14 % Change in Share Top 11 Market Share Rank Holding Company Market Share 6/30/15 Market Share 6/30/14 % Change in Share 6 Bank of America Corp. 3.75% 2.67% 40.45% 4 Bank of America Corp. 4.10% 3.45% 18.84% 4 Pinnacle Financial Partners 6.59% 6.01% 9.65% 3 SunTrust Banks Inc % 8.77% 16.31% 9 BankCap Equity Fund LLC 3.50% 3.23% 8.36% 1 First Horizon National Corp % 26.06% 14.62% 2 SunTrust Banks Inc % 18.74% 3.63% 8 Landmark Community Bank 2.04% 1.87% 9.09% 10 Sequatchie Valley Bancshares Inc. 3.27% 3.27% 0.0% 6 Trustmark Corp. 2.85% 2.90% (1.72%) 5 First Volunteer Corp. 4.74% 4.89% (3.07%) 9 Metropolitan BancGroup Inc. 1.98% 2.09% (5.26%) 1 First Horizon National Corp % 24.23% (3.18%) 11 Pinnacle Financial Partners 1.65% 1.77% (6.78%) 3 Regions Financial Corp % 13.58% (3.31%) 7 Independent Holdings Inc. 2.83% 3.09% (8.41%) 7 SmartFinancial Inc. 3.68% 3.90% (5.64%) 2 Regions Financial Corp % 18.36% (12.09%) 8 First South Bancorp Inc. 3.67% 4.32% (15.05%) 5 BancorpSouth Inc. 3.36% 3.90% (13.85%) Other 14.79% 15.15% (2.4%) 10 Wells Fargo & Co. 1.72% 2.01% (14.43%) Total 100% 100.% Other 23.25% 25.74% (9.67%) Total 100% Source: FDIC Summary of Deposits 2015; Amounts reflect aggregation of previously merged banks. (1): Market share at 6/30/14 for Chattanooga and Memphis reflects impact of the recently completed acquisitions of CapitalMark Bank & Trust and Magna Bank, respectively. 45

46 Supplemental Information Economic & Market Conditions 46

47 PNFP operates in advantaged markets Top 20 MSAs Total Deposits ($Ms) Tennessee Market Demographics E E Current Population Population Growth Current Median Median HHI Growth (000s) (%) HHI ($) (%) Nashville-Davidson-Murfreesboro-Franklin TN 48,022 1, % 55, % Memphis TN-MS-AR 27,064 1,347 2% 49, % Knoxville TN 13, % 47,037 7% Chattanooga TN-GA 8, % 48, % Kingsport-Bristol-Bristol TN-VA 4, % 41, % Clarksville TN-KY 3, % 50, % Johnson City TN 2, % 38, % Jackson TN 2, % 42, % Cookeville TN 2, % 34, % Sevierville TN 1, % 44, % Cleveland TN 1, % 44, % Tullahoma-Manchester TN 1, % 42, % Morristown TN 1, % 42, % Union City TN-KY 1, % 37, % Athens TN % 40, % Crossville TN % 39, % McMinnville TN % 37, % Greeneville TN % 36, % Dyersburg TN % 43, % Shelbyville TN % 43, % Tennessee 128,539 6, % 46, % United States 9,228, , % 55, % Source: SNL Financial Note: Deposit data is a 2016 ProForma 47

48 PNFP operates in advantaged markets TENNESSEE Tennessee ranked No. 7 among the 50 states for the quality of its transportation and trade; stood out for high-tech job growth Tennessee recorded 8,289 new business filings in the third quarter, indicating gains in employment and tax revenue Tennessee came in sixth in top state business climate rankings U.S. Chamber of Commerce Foundation State of Tennessee s Quarterly Economic Report Site Selection Magazine 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 fourth quarter of 2015: Nashville named one of 13 hottest American cities for 2016 for booming growth and a focal point for auto and healthcare industries Nashville MSA ranks No. 18 on Best-Performing Cities list for creating and sustaining jobs and economic growth Nashville is the newly crowned winner of Travel + Leisure s readers choice for Destination of the Year KNOXVILLE Business Insider Milken Institute Travel + Leisure 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 recession and currently enjoys the lowest unemployment rate of Tennessee s metro areas. Good news in the fourth quarter of 2015 includes: Investment in the Knoxville area from new and expanding business nearly doubled the first 10 months of 2015 to a record $1.28 billion Knoxville named No. 7 Best City for Millennial Entrepreneurs Knoxville named to America s Best Cities for Global Trade No. 10 in Best Global Vibe Cities Knoxville Chamber of Commerce ThumbTack.com Global Trade Magazine 48

49 PNFP operates in advantaged markets MEMPHIS Memphis offers a diverse, metropolitan workforce. Over the past three decades, the presence of companies like FedEx and the region s superior distribution infrastructure have earned Memphis the title, America s Distribution Center. Memphis called the Edgiest Startup Hub in the U.S. Memphis claims No. 9 spot of Top 10 Cities with the lowest business startup costs CHATTANOOGA Inc. Magazine SmartAsset Chattanooga is Tennessee s fourth-largest MSA as measured by both population and deposits. National publications have declared Chattanooga a tech hub and manufacturing magnet. Economic drivers include: Chattanooga offers businesses and individuals the world s fastest internet at 10 gigabits per second Chattanooga named one of the best places to retire in 2015 for its relatively low taxes, affordable housing and thriving arts scene Wired Wall Street Journal 49

50 PNFP operates in advantaged markets Job growth occurring in all four markets 950,000 Nashville MSA Nonfarm Payrolls- SA (thru November 2015) 400,000 Knoxville MSA Nonfarm Payrolls- SA (thru November 2015) 900, , , , , , , , , , , , , ,000 Chattanooga MSA Nonfarm Payrolls- SA (thru November 2015) 650,000 Memphis MSA Nonfarm Payrolls- SA (thru November 2015) 250, , , , , , , , , , , , , , , , , ,000 Source: BERC Middle Tennessee State University & Bureau of Labor Statistics, Greater Nashville Area Realtors 50

51 PNFP operates in advantaged markets Rapid job growth leads to rapid real estate absorption Unemployment Rates Seasonally Adjusted (thru Nov 2015) Nashville Knoxville Chattanooga Memphis US Home Sales Nashville Knoxville Memphis Chattanooga 4Q15 % Change from PY 4Q15 % Change from PY 4Q15 % Change from PY 4Q15 % Change from PY Avg. Qtrly. Median Home Price $ % $ % $ % $ % Quarterly Closings 7, % 2,260 (24.5%) 3, % 2, % Quarter end Inventory 7,059 (7.4%) 8, % 6,291 (4.4%) 3,623 (23.3%) Months of Inventory* 2.78 (14.2%) % 4.7 (1.9%) 5.2 (31.1%) *: Calculated as quarter end inventory divided by monthly closings Source: BERC Middle Tennessee State University & Bureau of Labor Statistics, GNAR, GCAR, MAAR, and KAAR 51

52 PNFP Operates in Advantaged Markets Nashville s commercial vacancy rates indicate a healthy market Industrial / Warehouse 4Q15 CRE Vacancy Rates Nashville Knoxville Chattanooga Memphis National % Change from PY 4Q15 % Change from PY 4Q15 % Change from PY 4Q15 % Change from PY 4Q15 % Change from PY 5.90% (15.7%) 5.20% (42.2%) 12.10% (0.8%) 9.60% (18.6%) 6.10% 6.9% Multifamily 3.50% (10.7%) 4.50% (11.8%) 5.70% (9.5%) 8.00% (7.0%) 3.70% ** Retail 5.20% (18.8%) 6.00% (13.0%) 6.20% (15.1%) 8.40% (3.5%) 5.60% 6.1% Office 5.30% (20.9%) 7.90% (4.8%) 10.30% 13.2% 11.30% (5.0%) 10.40% 10.9% Source: Costar **: prior year comparable not available 52

53 Fourth Quarter 2015 Investor Call M. Terry Turner, President and CEO Harold R. Carpenter, EVP and CFO January 20, 2016