Continued Rapid Growth for Tennessee s Premier Financial Services Franchise. Terry Turner, President and CEO Harold Carpenter, CFO March 2009

Transcription

1 Continued Rapid Growth for Tennessee s Premier Financial Services Franchise Terry Turner, President and CEO Harold Carpenter, CFO March 2009

2 Safe Harbor Statements Forward-looking statements Pinnacle Financial Partners, Inc. ( Pinnacle Financial ) may from time to time make written or oral statements, including statements contained in this presentation which 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," "intend," "plan," "believe," "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 facts 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 factors 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 continue to grow its loan portfolio at historic rates in the Nashville-Davidson- Murfreesboro-Franklin MSA and the Knoxville MSA, (iv) increased competition with other financial institutions, (v) deterioration or lack of sustained growth in the national or local economies including the Nashville-Davidson- Murfreesboro-Franklin MSA and the Knoxville MSA, (vi) rapid fluctuations or unanticipated changes in interest rates, (vii) the development of any new market other than Nashville or Knoxville, (viii) a merger or acquisition, (ix) any activity in the capital markets that would cause Pinnacle Financial to conclude that there was impairment of any asset including intangible assets and (x) changes in state and Federal legislation, regulations or policies applicable to Banks and other financial services providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy. Many of such factors are beyond Pinnacle Financial's ability to control or predict, and readers are cautioned not to put undue reliance on such forward-looking statements. Pinnacle Financial disclaims any obligation to update or revise any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise. A more detailed description of these and other risks is contained in Pinnacle Financial's most recent annual report on Form 10-K and quarterly reports on Form 10-Q. Many of such factors are beyond Pinnacle Financial's ability to control or predict, and users 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.

3 PNFP - Pinnacle Financial Partners Today s Agenda 1. Company profile and track record 2. Balance sheet strength 3. Case for continued growth

4 Company profile and track record

5 Pinnacle Profile High growth, one-bank holding company Headquartered in Nashville, Tennessee 8+ years old Denovo operation in Knoxville October 2007 Total assets at Dec. 31, 2008 $4.75 billion Market cap $19.10 per share (2/25/09) = $450 million Institutional ownership 39% Insider ownership approximately 13% Source: Nasdaq, finance. yahoo.com

6 Pinnacle Profile Five simple strategies 1. Focus on businesses and affluent consumers 2. Provide distinctive service and effective advice 3. Hire and retain a large cadre of experienced advisors 4. Offer a full line of financial services 5. Offer extraordinary convenience

7 Pinnacle Profile Philosophy of sustainable high performance Associates Nashville s Best Place to Work six consecutive years (NBJ) Best Employer in Tennessee (Business TN) Clients 97% agreement Pinnacle is the best Fortune 100 s fastest growing bank in the United States (2007) Shareholders Second Best 5-year total return for publicly traded banks 12/31/08 Nashville Business Journal, Business TN, Fortune, SNL

8 Reliable Track Record for Growth Loans $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4, /07 2/07 3/07 4/07 1/08 2/08 3/08 4/08 Deposits $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4, /07 2/07 3/07 4/07 1/08 2/08 3/08 4/08

9 Reliable Track Record for Growth Continued EPS growth in 2008 (*) $1.50 $1.45 $1.25 $1.00 FD EPS FD EPS without merger expenses $0.75 $0.50 $0.25 $

10 Balance Sheet Strength

11 Balance Sheet Strength Conservative bond portfolio Municipals 17.5% Corporates 0.2% PNFP avoided the following investment traps: A. Private label MBS B. FNMA / Freddie preferred C. Tax driven leveraged leases As of Dec. 31, 2008 Agency Notes 7.9% Agency CMOs 2.8% MBS pass thrus 71.6% FNMA, FHLMC and GNMA

12 Balance Sheet Strength Diversified loan portfolio PNFP avoided: Sub prime Indirect auto Credit card Student lending SBA loans only 0.2% of book CRE Investment 16.5% CRE Owner Occupied 11.1% C & I 28.7% Other 4.3% 1-4 Family Mortgages 20.1% Land Dev 11.8% Constr Comm 2.3% Constr Res 5.2%

13 Balance Sheet Strength $10.9 MM nonaccruing loans % of loan balances Comm & Indust 10.1% Const Res 2.5% Other 0.5% Comm Real Estate 14.4% Const & Land Dev 43.6% As of Dec 31, Family Mortgages 28.9%

14 Balance Sheet Strength Asset Quality Expressed as a % of Category (*) At 12/31/08 PNFP days past due Peer days past due PNFP NPLs and > 90 days Peer NPLs and > 90 days Const. and land dev. 0.95% 2.42% 0.81% 7.16% CRE 0.36% 0.82% 0.20% 1.20% Total real estate 0.66% 1.58% 0.45% 2.88% C&I 0.27% 0.86% 0.18% 1.23% Total loans 0.55% 1.45% 0.37% 2.28% (*) Uniform Bank Performance Report 12/08

15 Balance Sheet Strength Activity in NPA s throughout 2008 Nonperforming loans: Balances Dec. 31, 2007 Payments, Sales, Reductions Increases Balances Dec. 31, 2008 Res. Construction $ 10,204 $ 23,242 $ 18,090 $ 5,052 Other 9,473 12,522 8,857 5,808 Totals $ 19,677 $ 35,764 $ 26,947 $ 10,860 Other Real Estate: Res. Construction ,498 26,739 17,222 Other 692 1,997 2,389 1,084 Totals $ 1,673 $ 12,495 $ 29,128 $ 18,306 Total NPAs $ 21,350 $ 48,259 $ 56,075 $ 29,166 (dollars in thousands)

16 Balance Sheet Strength Reliable track record for market best asset quality 1.00% Net Charge-offs / Average Loans 0.80% 0.60% PNFP Peer data (*) 0.40% 0.20% 0.00% (*) Uniform Bank Performance Report 12/08

17 Balance Sheet Strength Allowance for Loan Losses 2.00% PNFP 1.60% Peer data (*) 1.20% Allowance to Total Loans 0.80% 0.40% 0.00% Allowance to NPL s 1800% 1500% 1200% 900% 600% PNFP Peer data (*) 300% (*) Uniform Bank Performance Report 12/08 0%

18 Balance Sheet Strength Strong capital base supports growth opportunity Private placement in 3Q and TARP funding in 4Q provide significant growth capital. December 31, 2008 Tangible equity ratio 6.1% Tier 1 Leverage 10.5% Tier 1 risk based capital 12.1% Total risk based capital 13.5% Tangible Book Value per Share $11.62

19 Balance Sheet Strength 2009 Expectations A. Bonds Likely restructuring to take place B. Loans Assume continued weakness in 2009 Client selection has been good Credit quality deterioration likely in 1H09 Land acquisition and construction book receiving significant attention NCO s and NPL s higher than historical performance Should continue to outperform peers C. Capital Appears sufficient Continued monitoring TARP alternatives

20 The Health of the Markets

21 The Health of the Markets Projected Population Growth ( ) for Major Southeast Metropolitan Markets (%) Projected Population Growth Rate (%) Atlanta Nashville Knoxville Memphis Chattanooga Jacksonville Orlando Miami Tampa Richmond va Beach Charlotte United States: 6.3% Louisville Birmingham

22 The Health of the Markets Dec 2007 March 2008 June 2008 Sep 2008 Dec 2008 (prelim) Nonfarm Employment: Nashville Knoxville Tennessee 2, , , , ,764.9 Unemployment Rate: Nashville 4.2% 4.9% 5.8% 6.0% 6.5% Knoxville 4.0% 4.7% 5.6% 5.6% 6.4% Tennessee 5.0% 5.8% 6.8% 6.9% 7.6% United States 4.8% 5.2% 5.7% 6.0% 7.1% (Nonfarm employment in thousands)

23 The Health of the Markets Nashville residential housing $250, Median Home Prices $200,000 $150,000 $100,000 $50,000 Median home price Months of inventory Months of inventory 2 $0 0

24 The Case for Growth

25 Significant Growth Opportunity Persists Enter Tennessee s 3 metropolitan markets on a de novo basis 1. Nashville 2. Knoxville 3. Memphis Pinnacle has de novoed in Nashville and Knoxville Pinnacle s bias for market extensions continues to be de novo versus acquisition Criteria for market extensions include: 1. Only launch when PNFP can recruit FAs to build a $750 million bank in five years 2. Cross breakeven in 12 months Support with additional common stock, as necessary

26 Significant Growth Opportunity Persists Nashville 80% 70% Aggregate Market Share 60% 50% 40% 30% 20% 10% 0% Aggregate market share for the top 3 in Nashville MSA has declined almost 25% in the last 9 years Source: FDIC 6/08 Top 3 banks in Nashville are Regions, SunTrust and Bank of America

27 Significant Growth Opportunity Persists Nashville At June 30, Jun-07 Rank Institution No of offices Total Deposits Market Share Market Share Note: Dollar values in millions. Source: SNL Financial; FDIC deposit data as of June 30, Regions 78 $ 5,888, % 19.9% 2 Bank of America 40 $ 4,325, % 14.8% 3 SunTrust 59 $ 4,073, % 14.2% 4 Pinnacle Financial Partners 30 $ 3,005, % 8.7% 5 First Tennessee 48 $ 1,623, % 6.1% 6 Fifth Third 29 $ 1,603, % 4.5% 7 Wilson Bank and Trust 19 $ 1,109, % 3.4% 8 Tennessee Commerce 1 $ 962, % 2.3% 9 US Bank 44 $ 894, % 3.0% 10 Synovus 10 $ 711, % 2.0% 11 Greene Bank 23 $ 707, % 2.8% 12 First Bank 8 $ 483, % 1.1% 13 Branch B&T 2 $ 455, % 1.3% 14 Farmer's Bank 9 $ 377, % 1.1% 15 Renasant Bank 7 $ 365, % 1.6% 16 Wachovia 10 $ 351, % 0.8% 17 First Federal 9 $ 304, % 1.0% 18 Citizens Bank 4 $ 258, % 0.8% 19 Macon Bank & Trust 6 $ 225, % 0.7% 20 Citizens Bank - Lafayette 7 $ 223, % 0.7% 59 Total MSA 553 $ 31,439,562

28 Significant Growth Opportunity Persists Knoxville 70% Aggregate Market Share 65% 60% 55% 50% 45% Aggregate market share for the top 3 in Knoxville MSA has declined almost 12% in the last 10 years. 40% Source: FDIC 6/08 Top 3 banks in Knoxville are First Horizon, Regions and SunTrust

29 Significant Growth Opportunity Persists Knoxville Original multi-year performance targets Associate hiring plan Facilities Loan growth targets (millions) Deposit growth targets (millions) $ 100 $ 225 $ 318 $ 62 $ 155 $147 $ 375 $ 490 $ 600 $ 280 $ 365 $ 450

30 Significant Growth Opportunity Persists Knoxville At June 30, Jun-07 Note: Dollar values in millions. Source: SNL Financial; FDIC deposit data as of June 30, 2008 Rank Institution No of Total Deposits Market Market 1 First Tennessee 33 $ 2,184, % 20.8% 2 3 SunTrust Regions $ $ 1,999,546 1,879, % 16.9% 18.1% 17.8% 4 Home Federal 20 $ 1,383, % 12.4% 5 Branch B&T 18 $ 855, % 8.7% 6 First National Bank 8 $ 313, % 3.2% 7 United Community 6 $ 247, % 2.4% 8 Bank of America 5 $ 238, % 2.2% 9 10 Citizens - Blount County Green Bank 10 9 $ $ 235, , % 2.1% 2.2% 2.2% 11 Bank East 8 $ 195, % 1.9% 12 TN Bank 5 $ 153, % 0.6% 13 FSG Bank 7 $ 145, % 1.5% 14 Pinnacle Financial Partners 1 $ 119, % 0.3% 15 Commercial Bank 6 $ 117, % 1.1% 16 Clayton Bank & Trust 2 $ 111, % 1.2% 17 American Trust Bank 4 $ 75, % 0.5% 18 Community Bank of East Tenn 3 $ 68, % 0.7% 19 Tennessee State Bank 2 $ 66, % 0.6% 20 Mountain National 2 $ 53, % 0.0% 43 Total MSA 255 $ 11,113,213

31 SUMMARY Why PNFP? Reliable track record for growth and asset quality Healthy balance sheet Securities portfolio Relatively strong loan portfolio Strong capital base Healthy markets Significant growth opportunity persists

32 Continued Rapid Growth for Tennessee s Premier Financial Services Franchise Terry Turner, President and CEO Harold Carpenter, CFO March 2009