Exhibit 99.1

FOR IMMEDIATE RELEASE

 

MEDIA CONTACT:		Sue Atkinson, 615-320-7532
FINANCIAL CONTACT:		Harold Carpenter, 615-744-3742
WEBSITE:		www.pnfp.com

PINNACLE FINANCIAL SIGNIFICANTLY EXPANDS PROFITABILITY

Fully diluted earnings per share of $0.72, including $0.51 per share related to reversal of deferred tax valuation allowance

NASHVILLE, Tenn., Oct. 18, 2011 – Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today reported that its net income per fully diluted common share available to common stockholders was $0.72 for the quarter ended Sept. 30, 2011, compared to net income per fully diluted common share available to common stockholders of $0.02 for the quarter ended Sept. 30, 2010, and net income per fully diluted common share available to common stockholders of $0.14 for the quarter ended June 30, 2011.

Fully diluted earnings per share available to common stockholders were $0.21 excluding $0.51 per share related to the full reversal of a valuation allowance for net deferred tax assets which had been established in the second quarter of 2010.

Net income per fully diluted common share available to common stockholders was $0.92 for the nine months ended Sept. 30, 2011, compared to net loss per fully diluted common share available to common stockholders of $1.00 for the first nine months of 2010.

“Several positive events occurred during the third quarter of 2011,” said M. Terry Turner, Pinnacle’s president and chief executive officer. “We experienced meaningful growth in loans, demand deposits and revenues, continued reductions in problem loans and the reversal of a previously established deferred tax valuation allowance. These items clearly signal that our firm is well positioned to capitalize on future growth opportunities in two very strong banking markets.”

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Expanding the Core Earnings Capacity of the Firm

 

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Loans at Sept. 30, 2011, were $3.24 billion, an increase of $34.0 million from $3.21 billion at June 30, 2011, or an annualized growth rate of 4.2 percent. Commercial and industrial loans combined with owner-occupied commercial real estate loans were $1.65 billion at Sept. 30, 2011, an increase of $50.0 million from $1.60 billion at June 30, 2011, an annualized growth rate of 12.4 percent and the fourth consecutive quarter of net growth.

 

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Average balances of noninterest bearing deposit accounts were $672 million in the third quarter of 2011, the sixth consecutive quarterly increase. Average balances increased 6.8 percent over second quarter 2011 and 25.8 percent over the same quarter last year.

 

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Revenue for the quarter ended Sept. 30, 2011, amounted to $48.44 million, compared to $47.60 million for the second quarter of 2011 and $44.65 million for the same quarter of last year, an annualized increase of 7.2 percent. The net interest margin increased to 3.60 percent for the quarter ended Sept. 30, 2011, from 3.23 percent for the quarter ended Sept. 30, 2010. Net interest margin for the quarter ended June 30, 2011, was 3.55 percent.

 

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Income before income taxes and TARP expenses increased from $6.66 million for the quarter ended June 30, 2011, to $9.13 million for the quarter ended Sept. 30, 2011, a 37.1 percent linked-quarter increase.

 

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Four years after expanding to the Knoxville market, Pinnacle’s operation in Knoxville reached over $531.2 million in loans at the end of the third quarter 2011. Pinnacle also moved up to the sixth-largest among 44 financial institutions in the Knoxville metropolitan statistical area (MSA), according to deposit market share data recently released by the Federal Deposit Insurance Corporation (FDIC).

Aggressively Dealing with Credit Issues

 

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Nonperforming assets declined by $12.0 million, a linked-quarter reduction of 10.7 percent and the fifth consecutive quarterly reduction. Pinnacle resolved $29.5 million in nonperforming assets during the third quarter of 2011, compared to resolutions of $38.7 million during the second quarter of 2011.

 

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Nonperforming loans declined by $5.1 million during the third quarter of 2011, a linked-quarter reduction of 8.5 percent and the sixth consecutive quarterly reduction. Nonperforming loans are down 47.0 percent from a year ago. Additionally, nonperforming loan inflows decreased from $18.4 million during the second quarter of 2011 to $17.5 million in the third quarter of 2011.

 

o

Other real estate also declined by $6.9 million during the third quarter of 2011, while the firm foreclosed on $8.1 million in property during the third quarter of 2011.

 

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Potential problem loans, which are classified loans that continue to accrue interest, also decreased from $148.5 million at June 30, 2011, to $131.0 million at Sept. 30, 2011, a linked-quarter decrease of 11.7 percent and the fifth consecutive quarter of net reductions. Potential problem loans are down by 58.8 percent from their peak in June 2010.

 

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Pinnacle’s classified asset ratio declined from 46.62 percent at June 30, 2011, to 40.83 percent at Sept. 30, 2011. The classified asset ratio was 74.55 percent at Sept. 30, 2010. The classified asset ratio is composed primarily of nonperforming assets and potential problem loans expressed as a percentage of the firm’s Tier 1 risk-based capital and allowance for loan losses.

 

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Construction and land development loans were $278.7 million, down 1.2 percent from $282.1 million at June 30, 2011, and 22.5 percent from $359.7 million at Sept. 30, 2010. Residential land development loans declined from $125.2 million at Sept. 30, 2010, to $77.1 million at Sept. 30, 2011. Residential land development loans were $84.8 million at June 30, 2011, a decrease of 9.1 percent.

“We are particularly pleased with our growth in C&I lending during the third quarter of 2011,” Turner said. “Our relationship managers are actively pursuing established businesses in our market, as evidenced by the growth in demand deposits and C&I loans. Additionally, we have been successful in recently hiring additional experienced commercial lenders for our franchise, which should further bolster our ability to grow organically and move market share, a longstanding core strategy of our firm. We also experienced net decreases in nonperforming assets of $12.0 million during the third quarter of 2011, marking our fifth consecutive quarter of decreases since our peak in nonperformers in second quarter of 2010.”

 

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OTHER THIRD QUARTER 2011 HIGHLIGHTS:

 

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Core Deposits

 

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Core deposits amounted to $3.39 billion at Sept. 30, 2011, an increase of 5.1 percent from the $3.22 billion at Sept. 30, 2010. Core deposits at June 30, 2011, were $3.44 billion.

 

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Over the last year the firm has successfully repositioned its deposit base so that average balances for noninterest-bearing demand, interest checking and money market accounts for the third quarter of 2011 increased by 15.6 percent over the average balances for the third quarter of 2010, while average balances for higher-cost time deposits decreased from $1.39 billion to $841.48 million, or 39.3 percent, during the same time period.

 

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Operating results

 

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Net income available to common stockholders for the third quarter of 2011 was $24.54 million, compared to the prior year’s third quarter net income available to common stockholders of $549,000. Included in third quarter 2011 net income available to common stockholders was an income tax benefit of $16.97 million which was composed primarily of the reversal of the valuation allowance of net deferred tax assets of approximately $22.48 million, reduced by estimated 2011 income tax expense. Second quarter 2011 net income available to common stockholders totaled $4.84 million.

 

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Net interest income for the third quarter of 2011 was $38.4 million, compared to $37.8 million for the second quarter of 2011 and $36.1 million for the same quarter last year.

 

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Noninterest income for the quarter ended Sept. 30, 2011, was $10.1 million, compared to $9.8 million in the second quarter of 2011 and $8.6 million for the same quarter last year. Excluding the impact of net securities gains and losses, noninterest income was up 5.5 percent on a linked-quarter basis and 12.9 percent over the same quarter last year.

 

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Wealth management revenues, which include investment services, trust services and insurance, were $3.45 million during the third quarter of 2011, an increase of 18.5 percent over the same period last year due primarily to additional emphasis on internal referral programs and the addition of several new associates over the past two years.

 

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Gains on the sale of loans, net, (i.e., mortgage loan production) increased to $1.30 million during the third quarter of 2011 compared to $789,000 during the second quarter of 2011 due primarily to a significant increase in refinance activity consistent with nationwide trends.

“In addition to our third quarter 2011 net interest margin increasing to 3.60 percent, our net interest income increased by $2.3 million over last year’s third quarter net interest income despite a slightly smaller balance sheet,” said Harold R. Carpenter, Pinnacle’s chief financial officer. “Our fourth consecutive quarter of net interest margin expansion is largely attributable to the outstanding work our relationship managers have done communicating our deposit pricing strategies and relative value to their clients in order to lower our cost of funds.

“We believe we will continue to expand our margins in the fourth quarter of 2011 based primarily on continued reductions in our funding costs and increased loan production. Margin expansion into 2012 will be challenging due to increased pricing competition for quality loan opportunities, an anticipated flattening of the yield curve and substantial increases in mortgage refinancing, which is resulting in increased ‘mortgage-backed’ security prepayments and corresponding reduction in investment portfolio yield. We are experiencing strong consumer deposit growth as a result of recently announced charges for debit cards and other fee increases by several of our large-bank competitors. Also, as the official bank of the Tennessee Titans, we are partnering with the NFL team on a campaign aimed at attracting customers who are considering a no-fee debit card.”

 

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Capital

 

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At Sept. 30, 2011, Pinnacle’s ratio of tangible common stockholders’ equity to tangible assets was 8.2 percent, compared to 7.2 percent at Sept. 30, 2010, and 7.7 percent at June 30, 2011. At Sept. 30, 2011, Pinnacle’s total risk-based capital ratio was 15.9 percent, compared to 15.1 percent at Sept. 30, 2010, and 15.5 percent at June 30, 2011.

 

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“We continue to believe we have a solid business case to redeem our TARP preferred shares over the next year or two with minimal common share dilution to our shareholders,” Turner said. “We believe regulators have worked with financial institutions experiencing sustained improvement in earnings capacity and credit quality to allow TARP redemption on a non-dilutive basis.”

 

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Credit quality

 

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Net charge-offs were $5.73 million for the quarter ended Sept. 30, 2011, down from $7.35 million for the quarter ended Sept. 30, 2010, and $8.61 million for the second quarter of 2011.

 

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Provision for loan losses expense decreased from $4.8 million for the third quarter of 2010 to $3.6 million for the third quarter of 2011. For the nine months ended Sept. 30, 2011, provision expense was $16.4 million compared to $48.5 million for the same period last year.

 

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The allowance for loan losses represented 2.31 percent of total loans at Sept. 30, 2011, compared to 2.40 percent at June 30, 2011, and 2.60 percent at Sept. 30, 2010.

 

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Nonperforming assets were 3.05 percent of total loans plus other real estate at Sept. 30, 2011, compared to 3.44 percent at June 30, 2011, and 4.60 percent at Sept. 30, 2010. The ratio of the allowance for loan losses to nonperforming loans increased to 137.0 percent at Sept. 30, 2011, from 128.9 percent at June 30, 2011 and 82.0 percent at Sept. 30, 2010.

 

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Past due loans over 30 days, excluding nonperforming loans, were 0.28 percent of total loans at Sept. 30, 2011, compared to 0.40 percent at June 30, 2011, and 0.67 percent at Sept. 30, 2010.

“Our third quarter 2011 provision expense was impacted by a 0.09 percent reduction in the ‘allowance for loan losses to total loans’ ratio, which was due to continued improvement in the credit quality of our loan portfolio,” Carpenter said. “Based on our current loan pipeline, we anticipate provision expense will increase due to anticipated loan growth in the fourth quarter 2011 as compared to the third quarter of 2011.”

 

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The following is a summary of the activity in various nonperforming asset and restructured accruing loan categories for the quarter ended Sept. 30, 2011:

 

(in thousands)		Balances June 30,  2011				Payments, Sales and Reductions				Foreclosures				Inflows				Balances Sept 30,  2011
Restructured accruing loans:
Residential construction and development		$	—			$	—			$	—			$	—			$	—
Commercial construction and development			—				—				—				—				—
Other			12,990				(23	)			—				5,220				18,187
Totals			12,990				(23	)			—				5,220				18,187
Nonperforming loans:
Residential construction and development			11,376				(3,748	)			(919	)			2,942				9,651
Commercial construction and development			20,276				(3,436	)			(5,099	)			2,149				13,890
Other			28,075				(7,388	)			(2,032	)			12,444				31,099
Totals			59,727				(14,572	)			(8,050	)			17,535				54,640
Other real estate:
Residential construction and development			15,764				(3,082	)			919				—				13,601
Commercial construction and development			27,337				(7,493	)			5,099				—				24,943
Other			9,294				(4,370	)			2,032				—				6,956
Totals			52,395				(14,945	)			8,050				—				45,500
Total nonperforming assets and restructured accruing loans		$	125,112			$	(29,540	)		$	—			$	22,755			$	118,327

 

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Noninterest expenses and taxes

 

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Noninterest expense for the quarter ended Sept. 30, 2011, was $35.68 million, compared to $37.77 million in the third quarter of 2010 and $34.36 million in the second quarter of 2011.

 

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Included in noninterest expense for the third quarter of 2011 was $5.08 million in other real estate expenses, compared to $8.52 million in the third quarter of 2010 and $3.83 million in the second quarter of 2011.

 

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Pursuant to generally accepted accounting principles and as a result of the reversal of the net deferred tax asset valuation allowance, Pinnacle anticipates that its fourth quarter 2011 effective income tax expense rate will be nominal. The firm anticipates that its effective tax rate will range between 29 percent and 32 percent during 2012.

Carpenter said that compensation costs for the third quarter of 2011 increased by 2.65 percent over the second quarter of 2011, driven primarily by increased incentive accruals.

 

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Incentive payouts for all associates other than the “named executive officers” during 2011 are based on achievement of predetermined targets for the classified asset ratio and pre-tax earnings.

Included in the other real estate expense for the quarter was $3.67 million of additional write downs of existing balances based on updated appraisals. The firm also recorded $635,000 in losses related to the disposition of $14.95 million of other real estate properties. Carpenter noted that the firm currently anticipates foreclosures of approximately $10 million in the fourth quarter of 2011 but that the timing of resolution of several larger ORE properties will affect ORE balances at year end.

Excluding the impact of ORE expenses in each quarterly period, the third quarter of 2011 noninterest expense was approximately $30.60 million, compared to $30.53 million in the second quarter of 2011 and $29.25 million in the third quarter of 2010. Excluding the impact of other real estate expenses, the firm currently anticipates that fourth quarter 2011 noninterest expense will approximate third quarter noninterest expenses.

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. (CDT) on Wednesday, Oct. 19, 2011, to discuss third quarter 2011 results and other matters. To access the call for audio only, please call 1-877-602-7944. For the presentation and streaming audio, please access the webcast on the investor relations page of Pinnacle’s website at www.pnfp.com.

For those unable to participate in the webcast, it will be archived on the investor relations page of Pinnacle’s website at www.pnfp.com for 90 days following the presentation.

Pinnacle Financial Partners provides a full range of banking, investment, mortgage and insurance products and services designed for small- to mid-sized businesses and their owners and individuals interested in a comprehensive relationship with their financial institution. Comprehensive wealth management services, such as financial planning and trust, help clients increase, protect and distribute their assets.

The firm began operations in a single downtown Nashville location in Oct. 2000 and has since grown to over $4.87 billion in assets at Sept. 30, 2011. At Sept. 30, 2011, Pinnacle is the second-largest bank holding company headquartered in Tennessee, with 30 offices in eight Middle Tennessee counties and three offices in Knoxville. The firm was also added to Standard & Poor’s SmallCap 600 index in 2009.

 

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Additional information concerning Pinnacle can be accessed at www.pnfp.com.

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Certain of the statements in this release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “expect,” “anticipate,” “goal,” “objective,” “intend,” “plan,” “believe,” “should,” “seek,” “estimate” and similar expressions are intended to identify such forward-looking statements, but 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 and the Knoxville MSA; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) effectiveness of Pinnacle Financial’s asset management activities in improving, resolving or liquidating lower-quality assets; (vi) increased competition with other financial institutions; (vii) greater than anticipated adverse conditions in the national or local economies including the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA, particularly in commercial and residential real estate markets; (viii) rapid fluctuations or unanticipated changes in interest rates; (ix) the results of regulatory examinations; (x) the development of any new market other 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 impact of governmental restrictions on and discretionary regulatory authority over entities participating in the Capital Purchase Program, of the U.S. Department of the Treasury (the “Treasury”); (xiv) further deterioration in the valuation of other real estate owned; (xv) inability to comply with regulatory capital requirements or to secure any required regulatory approvals for capital actions; 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. 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 23, 2011 and most recent quarterly reports on Form 10-Q filed with the Securities and Exchange commission on May 5, 2011 and July 29, 2011. 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.

 

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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS – UNAUDITED

 

		September 30, 2011				December 31, 2010
ASSETS
Cash and noninterest-bearing due from banks		$	58,786,507			$	40,154,247
Interest-bearing due from banks			111,701,085				140,647,481
Federal funds sold and other			10,047,791				7,284,685
Short-term discount notes			—				499,768
Cash and cash equivalents			180,535,383				188,586,181
Securities available-for-sale, at fair value			940,162,454				1,014,316,831
Securities held-to-maturity (fair value of $2,641,006 and $4,411,856 at September 30, 2011 and December 31, 2010, respectively)			2,589,506				4,320,486
Mortgage loans held-for-sale			23,814,429				16,206,034
Loans			3,241,148,810				3,212,440,190
Less allowance for loan losses			(74,870,538	)			(82,575,235	)
Loans, net			3,166,278,272				3,129,864,955
Premises and equipment, net			78,534,670				82,374,228
Other investments			42,781,814				42,282,255
Accrued interest receivable			15,827,730				16,364,573
Goodwill			244,081,519				244,090,311
Core deposit and other intangible assets			8,557,782				10,705,105
Other real estate owned			45,499,852				59,608,224
Other assets			120,241,811				100,284,697
Total assets		$	4,868,905,222			$	4,909,003,880
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing		$	722,694,096			$	586,516,637
Interest-bearing			577,683,159				573,670,188
Savings and money market accounts			1,554,858,658				1,596,306,386
Time			857,413,879				1,076,564,179
Total deposits			3,712,649,792				3,833,057,390
Securities sold under agreements to repurchase			128,953,750				146,294,379
Federal Home Loan Bank advances			161,105,866				121,393,026
Subordinated debt			97,476,000				97,476,000
Accrued interest payable			2,681,791				5,197,925
Other liabilities			41,664,132				28,127,875
Total liabilities			4,144,531,331				4,231,546,595
Stockholders’ equity:
Preferred stock, no par value; 10,000,000 shares authorized; 95,000 shares issued and outstanding at September 30, 2011 and December 31, 2010			91,772,130				90,788,682
Common stock, par value $1.00; 90,000,000 shares authorized; 34,306,927 issued and outstanding at September 30, 2011 and 33,870,380 issued and outstanding at December 31, 2010			34,306,927				33,870,380
Common stock warrants			3,348,402				3,348,402
Additional paid-in capital			534,971,880				530,829,019
Retained earnings			44,427,826				12,996,202
Accumulated other comprehensive income, net of taxes			15,546,726				5,624,600
Stockholders’ equity			724,373,891				677,457,285
Total liabilities and stockholders’ equity		$	4,868,905,222			$	4,909,003,880

This information is preliminary and based on company data available at the time of the presentation.

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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS – UNAUDITED

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2011				2010				2011				2010
Interest income:
Loans, including fees		$	38,571,893			$	41,105,351			$	115,830,529			$	122,504,151
Securities:
Taxable			5,952,599				7,004,256				18,792,778				24,150,109
Tax-exempt			1,819,642				1,942,650				5,593,341				5,978,849
Federal funds sold and other			543,496				598,181				1,684,376				1,635,934
Total interest income			46,887,630				50,650,438				141,901,024				154,269,043
Interest expense:
Deposits			7,138,053				12,306,145				24,869,045				38,695,099
Securities sold under agreements to repurchase			204,107				435,054				931,120				1,352,015
Federal Home Loan Bank advances and other borrowings			1,189,742				1,849,300				3,929,119				5,904,792
Total interest expense			8,531,902				14,590,499				29,729,284				45,951,906
Net interest income			38,355,728				36,059,939				112,171,740				108,317,137
Provision for loan losses			3,632,440				4,789,322				16,358,767				48,523,927
Net interest income after provision for loan losses			34,723,288				31,270,617				95,812,973				59,793,210
Noninterest income:
Service charges on deposit accounts			2,361,803				2,444,077				6,953,466				7,238,588
Investment services			1,698,886				1,234,421				4,844,398				3,786,067
Insurance sales commissions			1,001,716				954,015				3,055,194				2,957,393
Gain on loans sold, net			1,295,278				1,310,169				2,693,913				2,733,977
Net gain on sale of investment securities			376,509				—				827,708				2,623,674
Trust fees			753,551				726,094				2,253,474				2,377,182
Other noninterest income			2,592,170				1,925,459				7,585,231				5,932,154
Total noninterest income			10,079,913				8,594,235				28,213,384				27,649,035
Noninterest expense:
Salaries and employee benefits			19,015,217				16,069,360				55,462,370				48,921,007
Equipment and occupancy			4,942,917				5,230,730				15,009,641				16,089,323
Other real estate owned			5,079,127				8,522,346				13,238,853				21,335,705
Marketing and other business development			751,094				748,206				2,271,267				2,295,820
Postage and supplies			509,279				636,492				1,544,253				2,070,536
Amortization of intangibles			715,514				744,492				2,147,323				2,236,494
Other noninterest expense			4,662,073				5,822,252				15,059,685				17,482,907
Total noninterest expense			35,675,221				37,773,878				104,733,392				110,431,792
Income (loss) before income taxes			9,127,980				2,090,974				19,292,965				(22,989,547	)
Income tax expense (benefit)			(16,973,019	)			—				(16,684,605	)			5,106,734
Net Income (loss)			26,100,999				2,090,974				35,977,570				(28,096,281	)
Preferred dividends			1,213,889				1,213,889				3,602,083				3,602,083
Accretion on preferred stock discount			349,817				328,037				983,448				992,496
Net income (loss) available to common stockholders		$	24,537,293			$	549,048			$	31,392,039			$	(32,690,860	)
Per share information:
Basic net income (loss) per common share available to common stockholders		$	0.74			$	0.02			$	0.94			$	(1.00	)
Diluted net income (loss) per common share available to common stockholders		$	0.72			$	0.02			$	0.92			$	(1.00	)
Weighted average shares outstanding:
Basic			33,372,980				32,857,428				33,398,029				32,697,985
Diluted			33,993,914				33,576,963				34,037,739				32,697,985

This information is preliminary and based on company data available at the time of the presentation.

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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED

 

(dollars in thousands)		Three months ended September 30, 2011												Three months ended September 30, 2010
		Average Balances				Interest				Rates/Yields				Average Balances				Interest				Rates/Yields
Interest-earning assets:
Loans (1)		$	3,207,213			$	38,572				4.78	%		$	3,295,531			$	41,105				4.96	%
Securities:
Taxable			747,784				5,953				3.16	%			750,427				7,004				3.70	%
Tax-exempt (2)			191,994				1,820				5.02	%			204,442				1,943				4.97	%
Federal funds sold and other			161,719				543				1.44	%			269,556				598				0.95	%
Total interest-earning assets			4,308,710			$	46,888				4.38	%			4,519,956			$	50,650				4.51	%
Nonearning assets
Intangible assets			253,102												256,011
Other nonearning assets			224,673												225,406
Total assets		$	4,786,485											$	5,001,373
Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking		$	564,077			$	821				0.58	%		$	540,387			$	890				0.65	%
Savings and money market			1,622,200				3,299				0.81	%			1,397,396				4,787				1.36	%
Time			841,480				3,018				1.42	%			1,387,170				6,629				1.90	%
Total interest-bearing deposits			3,027,757				7,138				0.94	%			3,324,953				12,306				1.47	%
Securities sold under agreements to repurchase			145,050				204				0.56	%			210,037				435				0.82	%
Federal Home Loan Bank advances and other borrowings			111,699				532				1.89	%			126,130				921				2.90	%
Subordinated debt			97,476				658				2.68	%			97,476				928				3.78	%
Total interest-bearing liabilities			3,381,982				8,532				1.00	%			3,758,596				14,590				1.54	%
Noninterest-bearing deposits			671,796				—				—				534,171				—				—
Total deposits and interest-bearing liabilities			4,053,778			$	8,532				0.84	%			4,292,767			$	14,590				1.35	%
Other liabilities			23,734												21,708
Stockholders’ equity			708,973												686,898
Total liabilities and stockholders’ equity		$	4,786,485											$	5,001,373
Net interest income						$	38,356											$	36,060
Net interest spread (3)											3.38	%											2.97	%
Net interest margin (4)											3.60	%											3.23	%

 

(1)	Average balances of nonperforming loans are included in the above amounts.

(2)	Yields computed on tax-exempt instruments on a tax equivalent basis.

(3)

Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the quarter ended September 30, 2011 would have been 3.54% compared to a net interest spread of 3.16% for the quarter ended September 30, 2010.

(4)	Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.

This information is preliminary and based on company data available at the time of the presentation.

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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED

 

(dollars in thousands)		Nine months ended												Nine months ended
		September 30, 2011												September 30, 2010
		Average Balances				Interest				Rates/Yields				Average Balances				Interest				Rates/Yields
Interest-earning assets:
Loans (1)		$	3,203,346			$	115,831				4.84	%		$	3,410,648			$	122,504				4.81	%
Securities:
Taxable			779,585				18,793				3.22	%			778,117				24,150				4.15	%
Tax-exempt (2)			194,447				5,593				5.13	%			205,006				5,979				5.14	%
Federal funds sold and other			170,192				1,684				1.43	%			173,732				1,636				1.36	%
Total interest-earning assets			4,347,570			$	141,901				4.43	%			4,567,503			$	154,269				4.58	%
Nonearning assets
Intangible assets			253,806												256,754
Other nonearning assets			225,640												215,492
Total assets		$	4,827,016											$	5,039,749
Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking		$	582,832			$	2,765				0.63	%		$	516,024			$	2,593				0.67	%
Savings and money market			1,599,737				11,149				0.93	%			1,312,209				13,623				1.39	%
Time			916,510				10,955				1.60	%			1,503,524				22,479				2.00	%
Total interest-bearing deposits			3,099,079				24,869				1.07	%			3,331,757				38,695				1.55	%
Securities sold under agreements to repurchase			168,594				931				0.74	%			231,580				1,352				0.78	%
Federal Home Loan Bank advances and other borrowings			113,151				1,952				2.31	%			150,772				3,249				2.88	%
Subordinated debt			97,476				1,977				2.71	%			97,476				2,656				3.64	%
Total interest-bearing liabilities			3,478,300				29,729				1.71	%			3,811,585				45,952				1.61	%
Noninterest-bearing deposits			632,075				—				—				511,519				—				—
Total deposits and interest-bearing liabilities			4,110,375			$	29,729				0.97	%			4,323,104			$	45,952				1.42	%
Other liabilities			22,332												17,297
Stockholders’ equity			694,309												699,348
Total liabilities and stockholders’ equity		$	4,827,016											$	5,039,749
Net interest income						$	112,172											$	108,317
Net interest spread (3)											2.72	%											2.97	%
Net interest margin (4)											3.52	%											3.24	%

 

 

(1)	Average balances of nonperforming loans are included in the above amounts.

(2)	Yields computed on tax-exempt instruments on a tax equivalent basis.

(3)

Yields realized on interest-earning assets less the rates paid on interest-bearing liabilities.The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the nine months ended September 30, 2011 would have been 3.46% compared to a net interest spread of 3.16% for the nine months ended September 30, 2010.

(4)	Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.

This information is preliminary and based on company data available at the time of the presentation.

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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

(dollars in thousands)		September				June				March				December				September				June
		2011				2011				2011				2010				2010				2010
Balance sheet data, at quarter end:
Commercial real estate—mortgage loans		$	1,087,333				1,091,283				1,102,533				1,094,615				1,103,261				1,125,823
Consumer real estate —mortgage loans			711,994				708,280				698,693				705,487				720,140				709,121
Construction and land development loans			278,660				282,064				300,697				331,261				359,729				411,455
Commercial and industrial loans			1,095,037				1,058,263				1,047,754				1,012,091				995,743				1,009,991
Consumer and other			68,125				67,214				67,753				68,986				73,052				77,510
Total loans			3,241,149				3,207,104				3,217,430				3,212,440				3,251,923				3,333,900
Allowance for loan losses			(74,871	)			(76,971	)			(78,988	)			(82,575	)			(84,550	)			(87,107	)
Securities			942,752				925,508				984,200				1,018,637				968,532				907,296
Total assets			4,868,905				4,831,333				4,820,991				4,909,004				4,961,603				4,958,478
Noninterest-bearing deposits			722,694				662,018				608,428				586,517				581,181				529,867
Total deposits			3,712,650				3,761,520				3,731,883				3,833,057				3,825,634				3,853,400
Securities sold under agreements to repurchase			128,954				124,514				165,132				146,294				191,392				159,490
FHLB advances and other borrowings			161,106				111,191				111,351				121,393				121,435				131,477
Subordinated debt			97,476				97,476				97,476				97,476				97,476				97,476
Total stockholders’ equity			724,374				699,228				681,226				677,457				686,529				681,915
Balance sheet data, quarterly averages:
Total loans		$	3,207,213				3,211,591				3,191,076				3,217,738				3,295,531				3,418,928
Securities			939,778				972,750				1,010,344				993,236				954,869				962,401
Total earning assets			4,308,710				4,347,552				4,387,331				4,441,672				4,519,956				4,527,471
Total assets			4,786,485				4,826,731				4,868,745				4,937,181				5,001,373				4,996,448
Noninterest-bearing deposits			671,796				628,929				594,651				575,606				534,171				504,354
Total deposits			3,699,553				3,722,613				3,772,092				3,814,572				3,859,124				3,816,973
Securities sold under agreements to repurchase			145,050				175,705				185,471				194,283				210,037				210,798
FHLB advances and other borrowings			111,699				114,072				113,705				121,414				126,130				147,491
Subordinated debt			97,476				97,476				97,476				97,476				97,476				97,476
Total stockholders’ equity			708,973				691,020				682,638				689,976				686,898				704,186
Statement of operations data, for the three months ended:
Interest income		$	46,888				47,789				47,224				49,079				50,650				50,929
Interest expense			8,532				9,994				11,204				13,023				14,590				15,231
Net interest income			38,356				37,795				36,020				36,056				36,060				35,697
Provision for loan losses			3,632				6,587				6,139				5,172				4,789				30,509
Net interest income after provision for loan losses			34,724				31,208				29,881				30,884				31,271				5,189
Noninterest income			10,080				9,809				8,324				8,666				8,594				10,569
Noninterest expense			35,676				34,357				34,701				36,452				37,774				36,491
Income (loss) before taxes			9,128				6,660				3,504				3,098				2,091				(20,734	)
Income tax expense (benefit)			(16,973	)			288				—				(697	)			—				5,630
Preferred dividends and accretion			1,564				1,529				1,492				1,547				1,542				1,507
Net income (loss) available to common stockholders		$	24,537				4,843				2,011				2,248				549				(27,871	)
Profitability and other ratios:
Return on avg. assets (1)			2.06	%			0.40	%			0.17	%			0.18	%			0.04	%			(2.24	%)
Return on avg. equity (1)			13.88	%			2.81	%			1.19	%			1.29	%			0.32	%			(15.88	%)
Net interest margin (1) (2)			3.60	%			3.55	%			3.40	%			3.29	%			3.23	%			3.23	%
Noninterest income to total revenue (3)			20.81	%			20.61	%			18.77	%			19.38	%			19.25	%			22.84	%
Noninterest income to avg. assets (1)			0.84	%			0.82	%			0.69	%			0.70	%			0.68	%			0.85	%
Noninterest exp. to avg. assets (1)			2.99	%			2.86	%			2.89	%			2.93	%			3.00	%			2.93	%
Efficiency ratio (4)			73.66	%			72.17	%			78.25	%			81.51	%			84.59	%			78.87	%
Avg. loans to average deposits			86.69	%			86.27	%			84.60	%			84.35	%			85.40	%			89.57	%
Securities to total assets			19.36	%			19.16	%			20.41	%			20.75	%			19.52	%			18.30	%
Average interest-earning assets to average interest-bearing liabilities			127.40	%			124.90	%			122.75	%			121.62	%			120.26	%			120.14	%
Brokered time deposits to total deposits (16)			0.00	%			0.00	%			0.00	%			0.03	%			1.80	%			3.70	%

This information is preliminary and based on company data available at the time of the presentation.

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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

(dollars in thousands)		September				June				March				December				September				June
		2011				2011				2011				2010				2010				2010
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans		$	54,640				59,727				76,368				80,863				103,127				118,331
Other real estate (ORE)			45,500				52,395				56,000				59,608				48,710				42,616
Total nonperforming assets		$	100,140				112,122				132,368				140,471				151,837				160,947
Past due loans over 90 days and still accruing interest		$	1,911				481				1,151				138				3,639				3,116
Restructured accruing loans (5)			18,187				12,990				15,285				20,468				13,468				10,861
Net loan charge-offs		$	5,732				8,605				9,726				7,146				7,346				33,463
Allowance for loan losses to nonaccrual loans			137.0	%			128.9	%			103.4	%			102.1	%			82.0	%			73.6	%
As a percentage of total loans:
Past due accruing loans over 30 days			0.28	%			0.40	%			0.36	%			0.30	%			0.67	%			0.66	%
Potential problem loans (6)			4.04	%			4.62	%			5.31	%			6.95	%			8.23	%			9.30	%
Allowance for loan losses			2.31	%			2.40	%			2.46	%			2.57	%			2.60	%			2.61	%
Nonperforming assets to total loans and ORE			3.05	%			3.44	%			4.04	%			4.29	%			4.60	%			4.77	%
Nonperforming assets to total assets			2.06	%			2.32	%			2.75	%			2.86	%			3.06	%			3.25	%
Annualized net loan charge-offs year-to-date to avg. loans (7)			1.00	%			1.14	%			1.22	%			1.96	%			2.26	%			2.84	%
Avg. commercial loan internal risk ratings (6)			4.7				4.8				4.8				4.8				4.9				4.9
Interest rates and yields:
Loans			4.78	%			4.87	%			4.88	%			4.99	%			4.96	%			4.74	%
Securities			3.54	%			3.67	%			3.58	%			3.48	%			3.97	%			4.45	%
Total earning assets			4.38	%			4.47	%			4.43	%			4.45	%			4.51	%			4.58	%
Total deposits, including non-interest bearing			0.77	%			0.90	%			1.01	%			1.16	%			1.27	%			1.36	%
Securities sold under agreements to repurchase			0.56	%			0.79	%			0.83	%			0.81	%			0.82	%			0.69	%
FHLB advances and other borrowings			1.89	%			2.42	%			2.65	%			2.60	%			2.90	%			2.88	%
Subordinated debt			2.68	%			2.73	%			2.73	%			2.72	%			3.78	%			3.63	%
Total deposits and interest-bearing liabilities			0.84	%			0.98	%			1.09	%			1.22	%			1.35	%			1.43	%
Capital ratios (8):
Stockholders’ equity to total assets			14.9	%			14.5	%			14.1	%			13.8	%			13.8	%			13.8	%
Leverage			11.9	%			11.2	%			11.0	%			10.7	%			10.5	%			10.4	%
Tier one risk-based			14.4	%			13.9	%			13.6	%			13.8	%			13.5	%			13.1	%
Total risk-based			15.9	%			15.5	%			15.2	%			15.4	%			15.1	%			14.8	%
Tangible common equity to tangible assets			8.2	%			7.7	%			7.4	%			7.1	%			7.2	%			7.1	%
Tangible common equity to risk weighted assets			10.3	%			9.6	%			9.1	%			9.1	%			9.3	%			9.0	%

This information is preliminary and based on company data available at the time of the presentation.

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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

(dollars in thousands, except per share data)		September				June				March				December				September				June
		2011				2011				2011				2010				2010				2010
Per share data:
Earnings (loss) – basic		$	0.74				0.14				0.06				0.07				0.02				(0.85	)
Earnings (loss) – diluted		$	0.72				0.14				0.06				0.07				0.02				(0.85	)
Book value per common share at quarter end (9)		$	18.34				17.71				17.19				17.22				17.61				17.61
Tangible common equity per common share		$	11.08				10.38				9.85				9.80				10.12				10.04
Weighted avg. common shares – basic			33,372,980				33,454,229				33,366,053				33,062,533				32,857,428				32,675,221
Weighted avg. common shares – diluted			33,993,914				34,095,636				34,013,810				33,670,890				33,576,963				32,675,221
Common shares outstanding			34,306,927				34,136,163				34,132,256				33,870,380				33,660,462				33,421,741
Investor information:
Closing sales price		$	10.94				15.56				16.54				13.58				9.19				12.85
High closing sales price during quarter		$	16.21				16.82				16.60				13.74				14.33				18.93
Low closing sales price during quarter		$	10.52				14.15				13.55				9.27				8.51				11.81
Other information:
Gains on sale of loans and loan participations sold:
Mortgage loan sales:
Gross loans sold		$	104,716				68,506				70,981				143,793				137,094				92,144
Gross fees (10)		$	2,166				1,380				1,129				2,610				2,503				1,669
Gross fees as a percentage of mortgage loans originated			2.07	%			2.01	%			1.59	%			1.81	%			1.83	%			1.81	%
Gains (losses) on sales of investment securities, net		$	377				610				(159	)			—				—				2,259
Brokerage account assets, at quarter-end (11)		$	987,908				1,101,000				1,110,000				1,038,000				966,000				921,000
Trust account assets, at quarter-end		$	607,668				663,304				730,000				693,000				647,000				627,000
Floating rate loans as a percentage of total loans (12)			33.3	%			34.7	%			35.4	%			36.9	%			37.9	%			37.8	%
Balance of commercial loan participations sold to other banks and serviced by Pinnacle, at quarter end		$	57,045				50,797				60,784				55,632				57,964				66,503
Core deposits (13)		$	3,388,692				3,437,595				3,382,230				3,425,571				3,224,424				3,136,367
Core deposits to total funding (13)			82.6	%			84.0	%			82.4	%			81.6	%			76.1	%			73.9	%
Risk-weighted assets		$	3,751,479				3,693,390				3,711,179				3,639,095				3,679,436				3,748,498
Total assets per full-time equivalent employee		$	6,580				6,538				6,373				6,384				6,349				6,229
Annualized revenues per full-time equivalent employee		$	262.5				261.3				237.7				230.4				235.0				233.1
Number of employees (full-time equivalent)			740.0				739.0				756.5				769.0				781.0				796.0
Associate retention rate (14)			92.6	%			89.6	%			92.4	%			93.5	%			95.2	%			97.3	%
Selected economic information (in thousands) (15):
Nashville MSA nonfarm employment			735.5				738.3				735.5				748.1				741.3				728.8
Knoxville MSA nonfarm employment			327.7				325.1				325.2				326.6				326.7				321.7
Nashville MSA unemployment			8.5	%			8.9	%			8.3	%			8.1	%			8.4	%			9.0	%
Knoxville MSA unemployment			7.9	%			8.3	%			7.5	%			7.3	%			7.8	%			8.1	%
Nashville residential median home price		$	171.6				167.1				166.8				171.0				178.0				171.3
Nashville inventory of residential homes for sale			13.4				14.0				13.0				13.3				14.9				14.9

This information is preliminary and based on company data available at the time of the presentation.

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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

		September				June				March				December				September				June
(dollars in thousands, except per share data)		2011				2011				2011				2010				2010				2010
Reconciliation of certain financial measures:
Tangible assets:
Total assets		$	4,868,905			$	4,831,333			$	4,820,991			$	4,909,004			$	4,961,603			$	4,958,478
Less: Goodwill			(244,082	)			(244,083	)			(244,083	)			(244,090	)			(244,097	)			(244,097	)
Core deposit and other intangibles			(8,558	)			(9,273	)			(9,989	)			(10,705	)			(11,450	)			(12,194	)
Net tangible assets		$	4,616,266			$	4,577,976			$	4,566,919			$	4,654,208			$	4,706,056			$	4,702,187
Tangible equity:
Total stockholders’ equity		$	724,374			$	699,228			$	681,226			$	677,457			$	686,529			$	681,915
Less: Goodwill			(244,082	)			(244,083	)			(244,083	)			(244,090	)			(244,097	)			(244,097	)
Core deposit and other intangibles			(8,558	)			(9,273	)			(9,989	)			(10,705	)			(11,450	)			(12,194	)
Net tangible equity			471,735				445,872				427,154				422,662				430,982				425,624
Less: Preferred stock			(91,772	)			(91,422	)			(91,094	)			(90,789	)			(90,455	)			(90,127	)
Net tangible common equity		$	379,962			$	354,449			$	336,060			$	331,873			$	340,527			$	335,497
Ratio of tangible common equity to tangible assets			8.23	%			7.74	%			7.36	%			7.13	%			7.24	%			7.13	%
		For the three months ended
		September				June				March				December				September				June
		2011				2011				2011				2010				2010				2010
Net interest income		$	38,356			$	37,795			$	36,020			$	36,056			$	36,060			$	35,697
Noninterest income			10,080				9,809				8,324				8,666				8,594				10,569
Net gains (losses) on sale of investment securities			377				610				(159	)			—				—				2,259
Noninterest income excluding the impact of other net gains (losses) on sale of investment securities		$	9,703			$	9,199			$	8,483			$	8,666			$	8,594			$	8,310
Noninterest expense			35,676				34,357				34,701				36,452				37,774				36,491
Other real estate owned expense			5,079				3,826				4,334				7,874				8,522				7,411
Noninterest expense excluding the impact of other real estate owned expense		$	30,597			$	30,532			$	30,367			$	28,578			$	29,252			$	29,080
Pre-tax pre-provision income (17)		$	17,462			$	16,463			$	14,136			$	16,145			$	15,402			$	14,927
Efficiency Ratio (4)			73.7	%			72.2	%			78.3	%			81.5	%			84.6	%			78.9	%
Efficiency Ratio excluding the impact of other real estate owned expense (4)			63.2	%			64.1	%			68.5	%			63.9	%			65.5	%			62.9	%

 

		For the three months ended, September 30,				For the year ended, September 30,
(dollars in thousands)		2011				2011
Net income available to common stockholders		$	24,537			$	31,392
Reversal of valuation allowance based on net deferred tax assets and liabilities			(22,480	)			(22,480	)
Anticipated 2011 current tax expense			5,211				5,211
		$	7,268			$	14,123
Diluted net income per common share available to common stockholders before impact of reversal of valuation reserve		$	0.21			$	0.41

This information is preliminary and based on company data available at the time of the presentation.

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PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

 

1.	Ratios are presented on an annualized basis.

2.	Net interest margin is the result of net interest income on a tax equivalent basis divided by average interest earning assets.

3.	Total revenue is equal to the sum of net interest income and noninterest income.

4.	Efficiency ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.

5.

Restructured Accruing Loans include loans where the company, as a result of the borrower’s financial difficulties, has granted a credit concession to the borrower (i.e., interest only payments for a period of time, extending the maturity of the loan, etc.). These loans continue to accrue interest at the contractual rate and are considered to be troubled debt restructurings.

6.

Average risk ratings are based on an internal loan review system which assigns a numeric value of 1 to 10 to all loans to commercial entities based on their underlying risk characteristics as of the end of each quarter. A “1” risk rating is assigned to credits that exhibit Excellent risk characteristics, “2” exhibit Very Good risk characteristics, “3” Good, “4” Satisfactory, “5” Acceptable or Average, “6” Watch List, “7” Criticized, “8” Classified or Substandard, “9” Doubtful and “10” Loss (which are charged-off immediately). Additionally, loans rated “8” or worse that are not nonperforming or restructured loans are considered potential problem loans. Generally, consumer loans are not subjected to internal risk ratings.

7.	Annualized net loan charge-offs to average loans ratios are computed by annualizing year-to-date net loan charge-offs and dividing the result by average loans for the year-to-date period.

8.	Capital ratios are for Pinnacle Financial Partners, Inc. and are defined as follows:

Equity to total assets – End of period total stockholders’ equity as a percentage of end of period assets.

Leverage – Tier one capital (pursuant to risk-based capital guidelines) as a percentage of adjusted average assets.

Tier one risk-based – Tier one capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.

Total risk-based – Total capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.

9.	Book value per share computed by dividing total stockholders’ equity less preferred stock and common stock warrants by common shares outstanding.

10.	Amounts are included in the statement of operations in “Gains on the sale of loans and loan participations sold”, net of commissions paid on such amounts.

11.	At fair value, based on information obtained from Pinnacle’s third party broker/dealer for non-FDIC insured financial products and services.

12.	Floating rate loans are those loans that are eligible for repricing on a daily basis subject to changes in Pinnacle’s prime lending rate or other factors.

13.

Core deposits include all transaction deposit accounts, money market and savings accounts and all certificates of deposit issued in a denomination of less than $250,000. The ratio noted above represents total core deposits divided by total funding, which includes total deposits, FHLB advances, securities sold under agreements to repurchase, subordinated indebtedness and all other interest-bearing liabilities.

14.	Associate retention rate is computed by dividing the number of associates employed at quarter-end less the number of associates that have resigned in the last 12 months by the number of associates employed at quarter-end.

15.

Employment and unemployment data is from the US Dept. of Labor Bureau of Labor Statistics. Labor force data is not seasonally adjusted. The most recent quarter data presented is as of the most recent month that data is available as of the release date. The Nashville home data is from the Greater Nashville Association of Realtors.

16.	Brokered deposits do not include reciprocal balances under the Certificate of Deposit Account Registry Service (CDARS).

17.	Pre-tax, pre-provision income excludes the impact of net gains (losses) on investment security sales as well as other real estate owned expenses.