8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 21, 2008

PINNACLE FINANCIAL PARTNERS, INC.

(Exact name of registrant as specified in charter)

Tennessee	000-31225	62-1812853
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)

211 Commerce Street, Suite 300, Nashville, Tennessee	37201
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (615) 744-3700

N/A

(Former name or former address, if changed since last report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

     This Current Report on Form 8-K is being furnished to disclose the press release issued by Pinnacle Financial Partners, Inc., a Tennessee corporation (the “Company”), on October 21, 2008. The press release, which is furnished as Exhibit 99.1 hereto pursuant to Item 2.02 of
Form 8-K, announced the Company’s results of operations for the three and nine months ended September 30, 2008.

     The press release furnished herewith as Exhibit 99.1 contains certain non-GAAP financial measures as defined by Regulation G of the rules and regulations of the Securities and Exchange Commission. To supplement the Company’s consolidated financial statements prepared on a GAAP basis, the Company is disclosing non-GAAP earnings per share diluted, or EPS, and certain non-GAAP performance measures and ratios for the three and nine months ended September 30, 2008, in each case excluding merger related expenses associated with its merger with Mid-America Bancshares, Inc., a Tennessee corporation (“Mid-America”), on November 30, 2007. In addition, the press release contains non-GAAP projected EPS for the quarter ending December 31, 2008 and the fiscal year ending December 31, 2008, which excludes the impact of merger related expenses on the Company’s projected 2008 fourth quarter and full year EPS. The non-GAAP performance measures and ratios also are presented excluding the impact of goodwill and core deposit intangibles associated with the Company’s acquisition of Mid-America and Cavalry Bancorp, Inc., which the Company acquired on March 15, 2006.

     The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Because non-GAAP financial measures presented in the press release are not measurements determined in accordance with GAAP and are susceptible to varying calculations, these non-GAAP financial measures, as presented, may not be comparable to other similarly titled measures presented by other companies.

     The Company believes that these non-GAAP financial measures facilitate making period-to-period comparisons and are meaningful indications of its operating performance. In addition, because intangible assets such as goodwill and the core deposit intangible vary extensively from company to company, the Company believes that the presentation of this information allows investors to more easily compare the Company’s results to the results of other companies. The Company also included non-GAAP EPS and non-GAAP performance measures and ratios because it believes that these measures more accurately reflect the Company’s operating performance for the three and nine months ended September 30, 2008 when compared to the same period in 2007 and because it believes that the information provides investors with additional information to evaluate the Company’s past financial results and ongoing operational performance. The Company is presenting its projected fourth quarter and full year 2008 EPS exclusive of expected merger related expenses because it will allow investors to compare the Company’s fourth quarter and full year 2007 earnings per share diluted to its currently estimated earnings per share diluted for the fourth quarter and full year 2008 by excluding costs that are not expected to be recurring and that are not related to the Company’s core business operations.

     The Company’s management utilizes this non-GAAP financial information to compare the Company’s operating performance versus the comparable periods in 2007 and utilizes non-GAAP earnings per share diluted for the 2008 fiscal year excluding the anticipated merger related expenses in establishing the performance targets of its 2008 Annual Cash Incentive Plan and determining whether the Company has achieved those targets.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Press release issued by Pinnacle Financial Partners, Inc. dated October 21, 2008.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PINNACLE FINANCIAL PARTNERS, INC.
By:	/s/ Harold R. Carpenter
Name: Harold R. Carpenter
Title: Executive Vice President and
Chief Financial Officer

Date: October 22, 2008

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release issued by Pinnacle Financial Partners, Inc. dated October 21, 2008

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

MEDIA CONTACT:	Jenny Barker, 615-963-1317
FINANCIAL CONTACT:	Harold Carpenter, 615-744-3742
WEBSITE:	www.pnfp.com

PINNACLE FINANCIAL REPORTS RECORD LOAN GROWTH,
STRONG ASSET QUALITY AND EARNINGS OF $0.36
PER FULLY DILUTED SHARE FOR THIRD QUARTER OF 2008
Fully diluted earnings per share of $0.39, excluding merger-related expense

     NASHVILLE, Tenn., Oct. 21, 2008 – Pinnacle Financial Partners Inc. (Nasdaq/NGS: PNFP) today reported strong earnings and record loan growth for the quarter ended Sept. 30, 2008. Fully diluted earnings per share were $0.36 for the quarter ended Sept. 30, 2008, compared to $0.35 per fully diluted share for the quarter ended Sept. 30, 2007. Excluding merger-related expense associated with its Nov. 30, 2007, acquisition of Mid-America Bancshares Inc., fully diluted earnings per share were $0.39 for the quarter ended Sept. 30, 2008, compared to $0.35 for the same period last year, an increase of 11.4 percent.

     Fully diluted earnings per share were $0.96 for the nine months ended Sept. 30, 2008, compared to $1.01 per fully diluted share for the nine months ended Sept. 30, 2007. Excluding merger-related expense associated with the Mid-America acquisition, fully diluted earnings per share were $1.10 for the nine months ended Sept. 30, 2008, compared to $1.01 for the same period last year, an increase of 8.9 percent.

     Pinnacle also reported a record $171 million in organic loan growth in the third quarter of 2008, a 150 percent increase over the $68 million reported in the same quarter of 2007. The growth in loans contributed to a significantly higher provision for loan loss expense for the third quarter of 2008 when compared to the same quarter last year. Also contributing to a higher provision for loan losses during the third quarter of 2008 was an increased allowance for loan losses. At Sept. 30, 2008, Pinnacle increased its allowance for loan losses to 1.09 percent of total loans compared to 1.04 percent at June 30, 2007.

     “At a time when many banks have lost their ability to continue the growth of their balance sheet, we are proud that we were not only able to report record earnings and record loan growth, but were also able to augment capital which should enable us to continue to seize the dramatic market share movement opportunities that we believe exist in our markets,” said M. Terry Turner, Pinnacle president and CEO.

THIRD QUARTER 2008 HIGHLIGHTS:

• Strong earnings

• Net income for the third quarter of 2008 was $8.80 million, up 52.4 percent from the prior year’s third quarter net income of $5.77 million. Excluding after-tax merger-related expense of $708,000, net income was $9.50 million in the third quarter of 2008, up 64.6 percent over the same period last year.

• Revenue (the sum of net interest income and noninterest income) for the quarter ended Sept. 30, 2008, amounted to $38.53 million, compared to $24.29 million for the same quarter of last year, an increase of 58.6 percent.

• Continued balance sheet growth

• Loans at Sept. 30, 2008, were $3.20 billion, up $1.47 billion from $1.73 billion at Sept. 30, 2007. This 12-month increase in loans includes $864 million in loans acquired in conjunction with the Mid-America merger and organic growth of $608 million, representing an organic growth rate of 35.1 percent.

• Total deposits at Sept. 30, 2008, were $3.30 billion, up $1.47 billion from $1.83 billion at Sept. 30, 2007. This 12-month increase includes $957 million in deposits acquired in conjunction with the Mid-America merger and organic growth of $511 million, representing an organic growth rate of 28.0 percent.

• Superior credit quality

• Annualized net charge-offs as a percentage of average loan balances were only 0.01 percent and 0.05 percent for the three and nine months ended Sept. 30, 2008, respectively, compared to 0.04 percent and 0.05 percent for the three and nine months ended Sept. 30, 2007, respectively.

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o Nonperforming assets were 0.93 percent of total loans and other real estate at Sept. 30, 2008, compared to 0.73 percent at June 30, 2008, 0.78 percent at Dec. 31, 2007 and 0.19 percent at Sept. 30, 2007. Approximately $13.03 million of the $29.89 million of nonperforming assets at Sept. 30, 2008, were acquired in connection with the Mid-America acquisition.

o Past due loans over 30 days, excluding nonperforming loans, were 0.61 percent of total loans and other real estate at Sept. 30, 2008. Past due loans over 30 days excluding nonperforming loans, as a percentage of total loans and other real estate owned were 0.34 percent at June 30, 2008, 0.45 percent at Dec. 31, 2007, and 0.38 percent at Sept. 30, 2007.

• Strong Capital Position

o During the third quarter of 2008, Pinnacle issued $21.5 million in common stock that will qualify as Tier 1 capital and $15.0 million in subordinated indebtedness that will qualify as Tier 2 capital, subject to certain limitations. These issuances strengthened Pinnacle’s capital position thus positioning it for continued rapid growth in Nashville and Knoxville.

o At Sept. 30, 2008, Pinnacle’s ratio of tangible stockholders’ equity to tangible assets was 6.2 percent compared to 5.8 percent at Dec. 31, 2007. Pinnacle’s tangible book value per common share was $10.62 at Sept. 30, 2008, compared to $9.24 at Dec. 31, 2007.

o At Sept. 30, 2008, Pinnacle’s total risk based capital ratio was 11.2 percent compared to 10.4 percent at Dec. 31, 2007.

     “We are pleased with another quarter of solid performance, particularly during what is proving to be an extended period of economic stress for our country,” Turner said. “What sets Pinnacle apart is that our associates are not only doing an exceptional job of managing the credit risk of our firm, but they are being very successful in seizing the opportunity to attract more quality client relationships to Pinnacle. Our strategy of hiring the best financial services professionals in the markets we serve has helped us further solidify our position as the most preferred financial services provider in both the Nashville and Knoxville MSAs, as evidenced by the latest FDIC market share data for both markets.”

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FINANCIAL PERFORMANCE AND BALANCE SHEET GROWTH

• Return on average assets for third quarter 2008 was 0.83 percent compared to 0.96 percent for the third quarter of 2007. Excluding the impact of the Mid-America merger-related expense, return on average assets for the third quarter of 2008 approximated 0.90 percent.

• Return on average stockholders’ equity for the quarter ended Sept. 30, 2008, was 6.96 percent, compared to 8.43 percent for the third quarter of 2007. Excluding the impact of the Mid-America merger-related expense, return on average stockholders’ equity for the third quarter of 2008 approximated 7.52 percent.

• Return on average tangible stockholders’ equity (average stockholders’ equity less goodwill and core deposit intangibles) for the quarter ended Sept. 30, 2008, was 14.52 percent, compared to 15.57 percent for the third quarter of 2007. Excluding the impact of the Mid-America merger-related expense, return on average tangible stockholders’ equity for the third quarter of 2008 approximated 15.69 percent.

     Total assets grew to $4.34 billion as of Sept. 30, 2008, up $1.97 billion from the $2.37 billion reported at the same time last year. The 12-month increase in assets includes $1.25 billion in assets acquired in conjunction with the Mid-America merger in November of last year and organic growth of $720 million, representing an organic growth rate of 30.4 percent.

CREDIT QUALITY

• Allowance for loan losses represented 1.09 percent of total loans at Sept. 30, 2008, compared to 1.05 percent as of June 30, 2008 and 1.04 percent a year ago.

o The ratio of the allowance for loan losses to nonperforming loans was 196 percent at Sept. 30, 2008, compared to 145 percent at Dec. 31, 2007, and 761 percent at Sept. 30, 2007.

• Provision for loan losses was $3.12 million for the third quarter of 2008, compared to $772,000 in the third quarter of 2007, a 305 percent increase.

o During the third quarter of 2008, the firm recorded net charge-offs of only $73,000, compared to net charge-offs of $169,000 during the same period in 2007. Annualized net charge-offs to total average loans were 0.05 percent for the nine months ended Sept. 30, 2008 and the nine months ended Sept.

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30, 2007. Gross charge-offs were $656,000 during the third quarter of 2008, compared to $258,000 for the same period last year. Recoveries for the third quarter of 2008 were $583,000, compared to $89,000 during the third quarter of 2007.

o

The increase in provision for loan loss expense between the third quarter of 2008 and the third quarter of 2007 was primarily due to the significant increase in loan balances recorded through the third quarter of 2008 over the amount recorded through the third quarter of 2007. Also contributing to a higher provision for loan losses during the third quarter of 2008 was an increased allowance for loan losses. The annualized provision for loan losses expressed as a percentage of average loans was 0.40 percent for the third quarter of 2008, compared to 0.18 percent for the same quarter last year.

     As noted above, Pinnacle reported that nonperforming loans and other real estate as a percentage of total loans and other real estate increased from 0.78 percent at Dec. 31, 2007 to 0.93 percent at Sept. 30, 2008. The following is a summary of the activity in various nonperforming asset categories for the quarter ended Sept. 30, 2008:

	Balances		Payments, Sales				Balances
(in thousands)	June 30, 2008		and Reductions		Increases		Sept 30, 2008
Nonperforming loans:
Residential construction & development	$	5,176	$	824	$	7,613	$	11,965
Other		7,891		3,501		1,388		5,778
Totals		13,067		4,325		9,001		17,743
Other real estate:
Residential construction & development		7,899		1,084		3,711		10,526
Other		1,282		271		605		1,616
Totals		9,181		1,355		4,316		12,142
Total nonperforming assets	$	22,248	$	5,680	$	13,317	$	29,885

     “Thus far this year, our net charge-off ratio has amounted to only 0.05 percent of average loans,” Turner said. “Despite this very low charge-off ratio, we increased the ratio of our allowance for loan losses to 1.09 percent of total loans based on our usual quarterly evaluation of the inherent risks in our loan portfolio and the ongoing stress in the economy. At June 30, 2008, this ratio was 1.05 percent, and the 0.04 percent increase represented approximately $1.25 million of increased provisioning for loan losses during the third quarter.

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Our relationship managers and credit officers have been keenly focused on resolution of our nonperforming assets as well as improving the underlying credit support of all potential problem loans. As a result, I believe we are weathering the downturn in the overall economy and, in particular, residential construction very well. However, we anticipate that the local housing market and the economy in general will continue to under perform, and, as a result, our nonperforming levels will likely remain elevated over the next several quarters.”

REVENUE

• Net interest income for third quarter 2008 was $29.28 million compared to $18.96 million for the same quarter last year, an increase of 54.4 percent.

o Net interest margin for the third quarter of 2008 was 3.14 percent, compared to a net interest margin of 3.54 percent for the same period last year and 3.24 percent for the second quarter of 2008.

• Noninterest income for third quarter 2008 was $9.25 million, a 73.5 percent increase over the $5.33 million recorded during the same quarter in 2007.

     “Our local deposit markets remain extremely competitive, and several competitors continue to post special deposit rates at levels higher than what would typically be required given this rate environment,” said Harold Carpenter, chief financial officer of Pinnacle Financial Partners. “We have intensified our focus on pricing on both sides of our balance sheet; doing so should produce positive results for us over the longer term. Our core revenue growth continues to be very strong and, given the current volumes in our sales pipelines as well as our current capital position, we believe we are well-positioned to continue to increase market share in both Nashville and Knoxville.”

     “On Oct. 8, 2008, the Federal Reserve reduced the federal funds rate by 50 basis points. Coupled with the likelihood of future rate decreases, these actions will cause additional compression of our net interest margin, particularly in the near term. Based on our internal modeling, we remain optimistic that further compression in our margins will be modest for the next few quarters.”

     The 73.5 percent increase in noninterest income between the third quarter of 2007 and the third quarter of 2008 was due to several factors, including increased fee revenue as a result of the Mid-America merger; record investment sales commissions from Pinnacle Asset

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Management; a $695,000 gain from the sale of commercial loans; and record gains on the sales of mortgage loans from the firm’s mortgage origination unit. During the third quarter of 2008, Pinnacle’s mortgage origination unit sold $71.90 million of mortgage loans compared to $42.9 million in 2007, an increase of 67.6 percent.

     Noninterest income during the third quarter of 2008 represented approximately 24.01 percent of total revenues, compared to 21.95 percent for the same quarter in 2007.

     “It is a testament to the incredible competitive opportunities that exist in our market as well as the quality of our investment and mortgage advisors that we are able to accelerate the volume of investment sales and mortgage originations in this economic environment,” Turner said.

NONINTEREST EXPENSE

• Noninterest expense for the quarter ended Sept. 30, 2008, was $23.33 million ($22.16 million, excluding merger expense), compared to $23.07 million ($21.73 million, excluding merger expense) in the second quarter of 2008 and $15.11 million in the third quarter of 2007.

• Compensation expense was $13.01 million during the third quarter of 2008, compared to $12.5 million during the second quarter of 2008 and $9.11 million during the third quarter of 2007. Total full-time equivalent employees were 723.0 at Sept. 30, 2008, compared to 702.0 at Dec. 31, 2007 and 450.5 at Sept. 30, 2007.

• Merger-related expense was $1.17 million during the quarter ended Sept. 30, 2008, and was composed primarily of $1.02 million in retention bonus accruals for former Mid-America associates.

• The efficiency ratio (noninterest expense divided by net interest income and noninterest income) was 60.5 percent during the third quarter of 2008, compared to 62.8 percent for the second quarter of 2008 and 62.2 percent in the third quarter of 2007. Excluding merger-related expenses, the efficiency ratio was 57.6 percent in the third quarter of 2008.

     Carpenter noted that the firm will continue to make investments in future growth and, consequently, anticipates increased noninterest expense for the last quarter of 2008 over the amount the firm has experienced during the first three quarters of 2008. The expense is

Page 7

primarily attributable to increasing headcount and other variable costs associated with the growth of the firm.

INVESTMENTS IN FUTURE GROWTH

• During the third quarter of 2008, Pinnacle sold one million shares of its authorized but unissued common stock via a private placement to mutual funds and certain other institutional accounts managed by T. Rowe Price Associates Inc., at $21.50 per share. Pinnacle also entered into a $15 million subordinated term loan with a regional bank. Proceeds from this sale of common stock and the subordinated term loan will be used for general corporate purposes, including supporting the continued anticipated growth of Pinnacle National Bank.

• According to the Federal Deposit Insurance Corporation Summary of Deposit data for the period from June 30, 2007, through June 30, 2008, Pinnacle continues to be the fastest-growing financial institution in the Nashville-Davidson-Murfreesboro-Franklin MSA. As of June 30, 2008, Pinnacle overtook First Tennessee as the fourth-largest financial institution in the Nashville MSA. Of the top four institutions, Pinnacle was the only bank to post a gain in market share. The three largest regional bank holding companies (Regions, Bank of America and SunTrust) collectively lost in excess of 3 percent in market share.

• Pinnacle has hired 27 highly experienced associates for its denovo expansion to Knoxville that was announced on April 9, 2007. Loans outstanding in Knoxville at Sept. 30, 2008, were $287 million, which is $57 million ahead of the original target disclosed at the time the Knoxville expansion was announced. Pinnacle has negotiated a site for construction of another full service location in the Fountain City area of Knoxville and currently expects to begin construction during the first quarter of 2009.

• Pinnacle also has initiated construction of a new Dickson County location in the Nashville MSA to replace the current temporary location. The new facility is scheduled to open in the fourth quarter of 2008. Additionally, Pinnacle has entered into an agreement to construct a new facility in Brentwood, Tenn. This facility is currently scheduled to open in the first quarter of 2010.

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• On July 2, Pinnacle announced the acquisition of Murfreesboro, Tenn.-based Beach and Gentry Insurance LLC. Beach and Gentry has 18 associates and 4,000 clients. Miller & Loughry, Pinnacle’s wholly-owned insurance agency, also located in Murfreesboro, has 22 associates and 6,300 clients. The combined company, Miller Loughry Beach, is the largest independent insurance agency headquartered in Rutherford County.

• Pinnacle’s total associate base at Sept. 30, 2008, was 723.0 full-time equivalents (FTEs), compared to 450.5 at Sept. 30, 2007. Approximately 220 FTEs were added to Pinnacle’s associate base in conjunction with the Mid-America merger. Pinnacle also anticipates hiring 21 associates during the remainder of 2008.

NASHVILLE HOUSING MARKET UPDATE

     The Greater Nashville Realtors Association reported residential closings were down 22.8 percent in the third quarter of 2008 in comparison to the same quarter in 2007. For the nine months ended Sept. 30, 2008, compared to the previous year, residential closings are down approximately 20.6 percent. At Sept. 30, 2008, the inventory of residential homes was approximately 8.5 months based on September 2008 closings. The average median residential home sales price for the three months ended Sept. 30, 2008, averaged $175,800, which was down 4.7 percent from the three months ended June 30, 2008. 

TREASURY DEPARTMENT’S TROUBLED ASSET RELIEF PROGRAM

     On Oct. 14, the U.S. Treasury Department announced a program for direct investment in United States banks, bank holding companies and other entities referred to as the “Troubled Asset Relief Program (TARP).” Turner said that Pinnacle is currently reviewing the details of the program and will be considering the specifics of the program over the next few weeks.

INVESTMENT OUTLOOK

     Management has developed several financial forecast scenarios for the next several quarters. Based on anticipated growth trends and future investments in the franchise, including the impact of the Knoxville expansion, Pinnacle estimates its fourth quarter 2008 diluted earnings per share will approximate $0.33 to $0.37 including merger-related expense or $0.37 to $0.40, excluding merger-related expense. Pinnacle lowered its previous guidance

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for 2008 estimated diluted earnings per share to approximately $1.29 to $1.33 including merger-related expense or $1.47 to $1.50, excluding merger-related expense. The reduction in the guidance range for 2008 estimated fully diluted earnings per share reflects our expectation that loan growth, and our allowance for loan losses will exceed our earlier estimates for 2008 and that we will experience reduced net interest income for the remainder of 2008 as a result of anticipated future Federal funds rate decreases and increased deposit pricing competition.

     Merger-related expense should approximate $1.2 million to $1.5 million in the fourth quarter, with substantially the entire amount being attributable to retention awards for former Mid-America associates. Pinnacle anticipates no additional Mid-America merger-related expense after 2008.

     As noted previously, management has developed several scenarios under which these estimates can be achieved and believes these estimates to be reasonable based on these scenarios. However, unanticipated events or developments may cause the actual results of Pinnacle to differ materially from these estimates. Such unanticipated events or developments may include, but are not limited to; increased volatility in interest rates; deterioration in national or local economic conditions in excess of expectation; materially adverse developments in our borrowers’ ability to repay their loans; regulatory or legislative developments arising out of current unsettled conditions in the economy; the development of any markets other than metropolitan Nashville or Knoxville; any merger or acquisition; the opportunity to hire more seasoned professionals than anticipated; any activity in the capital markets that would cause Pinnacle to conclude that there was impairment of any asset including intangible assets; or the ability to grow loans significantly in excess of the levels contemplated.

     “We have provided quarterly and annual earnings guidance for the past several years as we believed such information was beneficial to the investment community in their efforts to better understand our company. We now have exceptional coverage by several research analysts whose estimates are readily available thru various public media. Additionally, Pinnacle has been one of the few small cap banks that has elected to continue to provide such guidance during this time of unprecedented economic uncertainty in which all financial institutions now operate. Given these factors, we currently anticipate that we will discontinue

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quarterly and annual earnings per share guidance with respect to periods ending after December 31, 2008,” Turner said.

     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, real estate professionals 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 also has a well-established expertise in commercial real estate.

     The firm began operations in a single downtown Nashville location in October 2000 and has since grown to $4.34 billion in assets. In 2007, Pinnacle launched an expansion into Knoxville, another high growth MSA. The addition of Mid-America has made Pinnacle the second-largest bank holding company headquartered in Tennessee, with 31 offices in eight Middle Tennessee counties and two in Knoxville.

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

###

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,” “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 to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, without limitation, (i) unanticipated deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses, (ii) the inability of Pinnacle to continue to grow its loan portfolio at historic rates in the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA, (iii) increased competition with other financial institutions, (iv) lack of sustained growth in the economy in the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA, (v) rapid fluctuations or unanticipated changes in interest rates, and (vi) changes in state and Federal legislation or regulations 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’s ability to control or predict, and readers are cautioned not to put undue reliance on such forward-looking statements. Pinnacle 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, 2008			December 31, 2007
ASSETS
Cash and noninterest-bearing due from banks	$	58,670,045		$	76,941,931
Interest-bearing due from banks		3,688,622			24,706,966
Federal funds sold and other		29,039,938			20,854,966
Cash and cash equivalents		91,398,605			122,503,863
Securities available-for-sale, at fair value		617,909,350			495,651,939
Securities held-to-maturity (fair value of $10,816,946 and $26,883,473 at September 30, 2008 and December 31, 2007, respectively)		10,897,923			27,033,356
Mortgage loans held-for-sale		15,161,830			11,251,652
Loans		3,202,909,472			2,749,640,689
Less allowance for loan losses		(34,840,853	)		(28,470,207	)
Loans, net		3,168,068,619			2,721,170,482
Premises and equipment, net		67,296,594			68,385,946
Other investments		25,660,787			22,636,029
Accrued interest receivable		17,125,958			18,383,004
Goodwill		243,250,854			243,573,636
Core deposit and other intangible assets		17,659,468			17,325,988
Other assets		63,122,391			46,254,566
Total assets	$	4,337,552,379		$	3,794,170,461
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	457,542,942		$	400,120,147
Interest-bearing		331,706,748			410,661,187
Savings and money market accounts		677,367,407			742,354,465
Time		1,828,546,046			1,372,183,317
Total deposits		3,295,163,143			2,925,319,116
Securities sold under agreements to repurchase		198,806,912			156,070,830
Federal Home Loan Bank advances and other borrowings		207,239,268			141,666,133
Subordinated debt		97,476,000			82,476,000
Accrued interest payable		8,419,326			10,374,538
Other liabilities		17,879,022			11,653,550
Total liabilities		3,824,983,671			3,327,560,167
Stockholders’ equity:
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, par value $1.00; 90,000,000 shares authorized; 23,699,790 issued and outstanding at September 30, 2008 and 22,264,817 issued and outstanding at December 31, 2007		23,699,790			22,264,817
Additional paid-in capital		416,105,723			390,977,308
Retained earnings		76,373,045			54,150,679
Accumulated other comprehensive loss, net of taxes		(3,609,850	)		(782,510	)
Stockholders’ equity		512,568,708			466,610,294
Total liabilities and stockholders’ equity	$	4,337,552,379		$	3,794,170,461

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME — UNAUDITED

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2008		2007		2008		2007
Interest income:
Loans, including fees	$	44,075,167	$	32,750,403	$	131,694,867	$	92,283,516
Securities:
Taxable		6,005,024		3,387,464		15,434,782		10,127,943
Tax-exempt		1,339,930		743,921		4,030,699		2,106,857
Federal funds sold and other		452,690		1,464,795		1,647,725		3,075,372
Total interest income		51,872,811		38,346,583		152,808,073		107,593,688
Interest expense:
Deposits		18,778,955		16,043,425		57,583,697		44,037,317
Securities sold under agreements to repurchase		681,912		2,061,333		2,081,055		5,664,167
Federal Home Loan Bank advances and other borrowings		3,130,448		1,282,159		8,820,575		4,189,055
Total interest expense		22,591,315		19,386,917		68,485,327		53,890,539
Net interest income		29,281,496		18,959,666		84,322,746		53,703,149
Provision for loan losses		3,124,819		772,064		7,503,412		2,460,028
Net interest income after provision for loan losses		26,156,677		18,187,602		76,819,334		51,243,121
Noninterest income:
Service charges on deposit accounts		2,778,097		1,965,965		8,036,320		5,683,199
Investment services		1,271,284		868,738		3,759,779		2,453,505
Insurance sales commissions		959,104		563,367		2,612,255		1,829,282
Gain on loans and loan participations sold, net		1,460,478		378,682		2,996,390		1,380,883
Net gain on sale of premises		—		—		1,010,881		56,078
Trust fees		584,927		466,581		1,621,385		1,312,076
Other noninterest income		2,199,051		1,088,430		6,641,819		3,193,840
Total noninterest income		9,252,941		5,331,763		26,678,829		15,908,863
Noninterest expense:
Salaries and employee benefits		13,013,116		9,106,256		39,382,393		26,167,610
Equipment and occupancy		3,731,932		2,632,747		11,235,137		7,209,977
Marketing and other business development		380,555		375,066		1,234,933		1,057,092
Postage and supplies		761,744		474,083		2,253,371		1,453,197
Amortization of intangibles		788,267		515,754		2,312,333		1,547,262
Other noninterest expense		3,485,581		2,005,752		9,854,795		5,282,516
Merger related expense		1,165,177		—		5,620,216		—
Total noninterest expense		23,326,372		15,109,658		71,893,178		42,717,654
Income before income taxes		12,083,246		8,409,707		31,604,985		24,434,330
Income tax expense		3,288,104		2,637,897		8,783,920		7,634,815
Net income	$	8,795,142	$	5,771,810	$	22,821,065	$	16,799,515
Per share information:
Basic net income per common share	$	0.38	$	0.37	$	1.01	$	1.09
Diluted net income per common share	$	0.36	$	0.35	$	0.96	$	1.01
Weighted average shares outstanding:
Basic		23,174,998		15,503,284		22,559,449		15,477,339
Diluted		24,439,642		16,609,328		23,826,368		16,630,311

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED

	Three months ended							Three months ended
	September 30, 2008							September 30, 2007
	Average							Average
(dollars in thousands)	Balances		Interest		Rates/ Yields			Balances		Interest		Rates/ Yields
Interest-earning assets:
Loans	$	3,129,549	$	44,075		5.60	%	$	1,697,862	$	32,750		7.65	%
Securities:
Taxable		455,945		6,005		5.24	%		268,358		3,387		5.01	%
Tax-exempt (1)		134,198		1,340		5.24	%		79,065		744		4.92	%
Federal funds sold and other		45,890		453		4.37	%		106,298		1,466		5.62	%
Total interest-earning assets		3,765,582	$	51,873		5.53	%		2,151,583	$	38,347		7.12	%
Nonearning assets
Intangible assets		261,584							124,465
Other nonearning assets		175,426							102,453
Total assets	$	4,202,592						$	2,378,501
Interest-bearing liabilities:
Interest-bearing deposits
Interest checking	$	373,567	$	1,109		1.18	%	$	261,384	$	2,123		3.24	%
Savings and money market		706,225		2,856		1.61	%		544,990		4,757		3.46	%
Certificates of deposit		1,689,221		14,814		3.49	%		714,060		9,164		5.09	%
Total interest-bearing deposits		2,769,013		18,779		2.70	%		1,520,434		16,044		4.19	%
Securities sold under agreements to repurchase		204,101		682		1.33	%		194,774		2,061		4.20	%
Federal Home Loan Bank advances and other borrowings		215,739		1,845		3.40	%		29,946		385		5.10	%
Subordinated debt		90,465		1,285		5.65	%		51,548		897		6.90	%
Total interest-bearing liabilities		3,279,318		22,591		2.74	%		1,796,702		19,387		4.28	%
Noninterest-bearing deposits		409,850		—		—			293,701		—		—
Total deposits and interest-bearing liabilities		3,689,168	$	22,591		2.44	%		2,090,403	$	19,387		3.68	%
Other liabilities		10,849							16,445
Stockholders’ equity		502,575							271,653
	$	4,202,592						$	2,378,501
Net interest income			$	29,281						$	18,960
Net interest spread (2)						2.79	%						2.84	%
Net interest margin (3)						3.14	%						3.54	%

(1)	Yields computed on tax-exempt instruments on a tax equivalent basis.
(2)	Yields realized on interest-earning assets less the rates paid on interest-bearing liabilities.
(3)	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.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED

	Nine months ended							Nine months ended
	September 30, 2008							September 30, 2007
	Average							Average
(dollars in thousands)	Balances		Interest		Rates/ Yields			Balances		Interest		Rates/ Yields
Interest-earning assets:
Loans	$	2,944,422	$	131,695		5.98	%	$	1,609,200	$	92,283		7.67	%
Securities:
Taxable		401,268		15,435		5.14	%		271,017		10,128		5.00	%
Tax-exempt (1)		135,702		4,031		5.23	%		75,694		2,107		4.91	%
Federal funds sold and other		48,904		1,648		4.86	%		73,677		3,076		5.60	%
Total interest-earning assets		3,530,296	$	152,808		5.84	%		2,029,588	$	107,594		7.14	%
Nonearning assets
Intangible assets		259,869							124,989
Other nonearning assets		173,219							97,975
Total assets	$	3,963,384						$	2,252,552
Interest-bearing liabilities:
Interest-bearing deposits
Interest checking	$	385,863	$	4,577		1.58	%	$	253,411	$	6,226		3.29	%
Savings and money market		715,019		9,676		1.81	%		514,080		13,121		3.41	%
Certificates of deposit		1,509,602		43,331		3.83	%		661,468		24,690		4.99	%
Total interest-bearing deposits		2,610,484		57,584		2.95	%		1,428,959		44,037		4.12	%
Securities sold under agreements to repurchase		182,698		2,081		1.52	%		174,942		5,664		4.33	%
Federal Home Loan Bank advances and other borrowings		189,438		4,958		3.50	%		39,395		1,539		5.22	%
Subordinated debt		85,139		3,862		6.06	%		51,548		2,651		6.88	%
Total interest-bearing liabilities		3,067,759		68,485		2.98	%		1,694,844		53,891		4.25	%
Noninterest-bearing deposits		392,200		—		—			279,935		—		—
Total deposits and interest-bearing liabilities		3,459,959	$	68,485		2.64	%		1,974,779	$	53,891		3.65	%
Other liabilities		18,587							12,714
Stockholders’ equity		484,839							265,059
	$	3,963,385						$	2,252,552
Net interest income			$	84,323						$	53,703
Net interest spread (2)						2.86	%						2.89	%
Net interest margin (3)						3.24	%						3.59	%

(1)	Yields computed on tax-exempt instruments on a tax equivalent basis.
(2)	Yields realized on interest-earning assets less the rates paid on interest-bearing liabilities.
(3)	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.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA — UNAUDITED

	Sept			June			March			Dec			Sept			June
(dollars in thousands)	2008			2008			2008			2007			2007			2007
Balance sheet data, at quarter end:
Total assets	$	4,337,552			4,106,055			3,888,900			3,794,170			2,368,079			2,315,327
Total loans		3,202,909			3,032,272			2,866,536			2,749,641			1,731,245			1,663,030
Allowance for loan losses		(34,841	)		(31,789	)		(29,871	)		(28,470	)		(17,978	)		(17,375	)
Securities		628,807			521,214			505,377			522,685			352,222			339,781
Noninterest-bearing deposits		457,543			438,458			429,289			400,120			316,542			294,631
Total deposits		3,295,163			3,152,514			2,967,025			2,925,319			1,826,884			1,797,536
Securities sold under agreements to repurchase		198,807			183,188			171,186			156,071			145,332			140,443
Advances from FHLB and other borrowings		207,239			187,315			168,606			141,666			55,671			46,699
Subordinated debt		97,476			82,476			82,476			82,476			51,548			51,548
Total stockholders’ equity		512,569			481,709			476,772			466,610			274,636			265,194
Balance sheet data, quarterly averages:
Total assets	$	4,202,592			3,913,519			3,774,042			2,791,669			2,378,501			2,229,227
Total loans		3,129,549			2,941,973			2,761,745			2,063,442			1,697,862			1,598,967
Securities		590,143			516,949			503,815			410,142			347,423			347,081
Total earning assets		3,765,582			3,500,853			3,324,452			2,541,799			2,151,583			2,004,884
Noninterest-bearing deposits		409,850			398,337			368,413			327,866			293,701			276,241
Total deposits		3,178,863			2,947,669			2,881,518			2,135,973			1,814,135			1,678,036
Securities sold under agreements to repurchase		204,101			174,847			169,146			201,605			194,774			172,872
Advances from FHLB and other borrowings		215,739			208,773			143,802			57,970			29,946			29,946
Subordinated debt		90,465			82,476			82,476			72,391			51,548			51,548
Total stockholders’ equity		502,575			477,502			474,439			309,431			271,653			264,055
Statement of operations data, for the three months ended:
Interest income	$	51,873			48,774			52,161			43,338			38,347			35,508
Interest expense		22,591			21,092			24,802			21,329			19,387			17,847
Net interest income		29,281			27,682			27,359			22,009			18,960			17,661
Provision for loan losses		3,125			2,787			1,591			2,260			772			900
Net interest income after provision for loan losses		26,157			24,895			25,768			19,749			18,188			16,761
Noninterest income		9,253			9,058			8,367			6,612			5,332			5,552
Noninterest expense		23,326			23,075			25,492			17,762			15,110			14,484
Income before taxes		12,083			10,878			8,644			8,599			8,410			7,828
Income tax expense		3,288			2,917			2,579			2,357			2,638			2,402
Net income	$	8,795			7,961			6,065			6,242			5,772			5,426
Profitability and other ratios:
Return on avg. assets (1)		0.83	%		0.82	%		0.65	%		0.89	%		0.96	%		0.98	%
Return on avg. equity (1)		6.96	%		6.71	%		5.14	%		8.00	%		8.43	%		8.24	%
Net interest margin (2)		3.14	%		3.24	%		3.37	%		3.49	%		3.54	%		3.58	%
Noninterest income to total revenue (3)		24.01	%		24.66	%		23.42	%		23.10	%		21.95	%		23.92	%
Noninterest income to avg. assets (1)		0.88	%		0.93	%		0.89	%		0.94	%		0.89	%		1.00	%
Noninterest exp. to avg. assets (1)		2.21	%		2.36	%		2.71	%		2.52	%		2.52	%		2.61	%
Efficiency ratio (4)		60.53	%		62.81	%		71.35	%		62.06	%		62.20	%		62.40	%
Avg. loans to average deposits		98.45	%		99.81	%		95.84	%		96.60	%		93.59	%		95.29	%
Securities to total assets		14.50	%		12.69	%		13.00	%		13.75	%		14.87	%		14.68	%
Average interest-earning assets to average interest-bearing liabilities		114.83	%		116.10	%		114.30	%		118.77	%		119.75	%		119.75	%
Brokered time deposits to total deposits (16)		13.95	%		12.53	%		7.78	%		9.48	%		8.04	%		8.17	%

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA — UNAUDITED

	Sept			June			March			Dec			Sept			June
(dollars in thousands)	2008			2008			2008			2007			2007			2007
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans	$	17,743			13,067			17,124			19,677			2,364			2,392
Other real estate	$	12,142			9,181			3,567			1,673			878			687
Past due loans over 90 days and still accruing interest	$	3,241			2,272			2,002			1,613			633			606
Net loan charge-offs	$	73			870			190			462			169			317
Allowance for loan losses to total loans		1.09	%		1.05	%		1.04	%		1.04	%		1.04	%		1.04	%
Allowance for loan losses to nonaccrual loans		196.4	%		243.3	%		174.4	%		144.7	%		760.5	%		726.4	%
As a percentage of total loans and ORE:
Past due accruing loans over 30 days		0.61	%		0.34	%		0.77	%		0.45	%		0.38	%		0.31	%
Nonperforming assets		0.93	%		0.73	%		0.72	%		0.78	%		0.19	%		0.19	%
Potential problem loans (5)		0.30	%		0.40	%		0.64	%		0.56	%		0.40	%		0.16	%
Annualized net loan charge-offs year-to-date to avg. loans (6)		0.05	%		0.07	%		0.03	%		0.07	%		0.05	%		0.06	%
Avg. commercial loan internal risk ratings (5)		4.2			4.0			4.1			4.1			4.1			4.1
Avg. loan account balances (7)	$	170			163			170			160			169			164
Interest rates and yields:
Loans		5.60	%		5.77	%		6.61	%		7.23	%		7.65	%		7.66	%
Securities		5.24	%		5.10	%		5.11	%		4.92	%		4.99	%		4.98	%
Total earning assets		5.53	%		5.66	%		6.37	%		6.82	%		7.12	%		7.15	%
Total deposits, including non-interest bearing		2.35	%		2.42	%		2.94	%		3.28	%		3.51	%		3.46	%
Securities sold under agreements to repurchase		1.33	%		1.30	%		1.98	%		3.36	%		4.20	%		4.39	%
FHLB advances and other borrowings		3.40	%		3.20	%		3.99	%		4.61	%		5.10	%		5.19	%
Subordinated debt		5.65	%		5.46	%		7.11	%		7.20	%		6.90	%		6.84	%
Total deposits and interest-bearing liabilities		2.44	%		2.48	%		3.04	%		3.43	%		3.68	%		3.67	%
Capital ratios (8):
Stockholders’ equity to total assets		11.8	%		11.7	%		12.3	%		12.3	%		11.6	%		11.5	%
Leverage		8.7	%		8.5	%		8.5	%		11.6	%		9.2	%		9.5	%
Tier one risk-based		9.8	%		9.3	%		9.5	%		9.5	%		10.4	%		10.4	%
Total risk-based		11.2	%		10.3	%		10.4	%		10.4	%		11.3	%		11.3	%

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED

	Sept			June			March			Dec			Sept			June
(dollars in thousands, except per share data)	2008			2008			2008			2007			2007			2007
Per share data:
Earnings – basic	$	0.38			0.36			0.27			0.35			0.37			0.35
Earnings – diluted	$	0.36			0.34			0.26			0.33			0.35			0.33
Book value at quarter end (9)	$	21.63			21.33			21.22			20.95			17.66			17.06
Weighted avg. shares – basic		23,174,998			22,356,667			22,331,398			17,753,661			15,503,284			15,494,522
Weighted avg. shares – diluted		24,439,642			23,629,234			23,484,754			19,110,851			16,609,328			16,664,213
Common shares outstanding		23,699,790			22,587,564			22,467,263			22,264,817			15,553,037			15,545,581
Investor information:
Closing sales price	$	30.80			20.09			25.60			25.42			28.82			29.36
High sales price during quarter	$	36.57			29.29			26.75			30.93			31.31			31.48
Low sales price during quarter	$	19.30			20.05			20.82			24.85			21.62			28.27
Other information:
Gains on sale of loans and loan participations sold:
Mortgage loan sales:
Gross loans sold	$	71,903			79,693			59,757			40,273			42,895			52,197
Gross fees (10)	$	1,293			1,364			1,114			750			659			846
Gross fees as a percentage of mortgage loans originated		1.80	%		1.71	%		1.86	%		1.86	%		1.54	%		1.62	%
Commercial loans sold	$	695			8			4			8			19			167
Gains on sales of investment securities, net	$	—			—			1			16			—			—
Brokerage account assets, at quarter-end (11)	$	848,000			826,000			859,000			878,000			590,000			643,000
Trust account assets, at quarter-end	$	537,000			527,000			493,000			464,000			512,000			475,000
Floating rate loans as a percentage of loans (12)		41.4	%		44.0	%		41.4	%		41.8	%		44.6	%		45.5	%
Balance of commercial loan participations sold to other banks and serviced by Pinnacle, at quarter end	$	136,069			125,308			113,701			110,352			125,370			115,913
Core deposits to total funding (13)		64.6	%		52.3	%		57.6	%		58.2	%		61.4	%		62.3	%
Risk-weighted assets	$	3,493,361			3,353,142			3,181,612			3,103,293			1,998,401			1,921,648
Total assets per full-time equivalent employee	$	5,999			5,828			5,669			5,415			5,257			5,250
Annualized revenues per full-time equivalent employee	$	214			209.8			209.5			161.8			213.9			211.1
Number of employees (full-time equivalent)		723.0			704.5			686.0			702.0			450.5			441.0
Associate retention rate (14)		90.8	%		90.9	%		92.0	%		89.7	%		89.4	%		88.1	%
Selected economic information (in thousands) (15):
Nashville MSA nonfarm employment		769.1			767.1			759.2			795.2			763.6			759.5
Knoxville MSA nonfarm employment		338.9			339.3			335.3			358.7			337.2			335.9
Nashville MSA unemployment		5.7	%		4.3	%		4.8	%		4.2	%		3.5	%		3.7	%
Knoxville MSA unemployment		5.4	%		4.1	%		4.7	%		3.9	%		3.2	%		3.4	%
Nashville residential median home price	$	169.9			183.6			178.4			187.9			182.3			196.0
Nashville inventory of residential homes for sale		15.1			15.8			15.1			13.4			15.4			14.6

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY AND YEAR-TO-DATE FINANCIAL DATA — UNAUDITED

	As of September 30,			As of December 31,
(dollars in thousands, except per share data)	2008			2007
Reconciliation of certain financial measures:
Tangible assets:
Total assets	$	4,337,552		$	3,794,170
Less: Goodwill		(243,251	)		(243,574	)
Core deposit and other intangibles		(17,659	)		(17,326	)
Net tangible assets	$	4,076,642		$	3,533,271
Tangible equity:
Total stockholders’ equity	$	512,569		$	466,610
Less: Goodwill		(243,251	)		(243,574	)
Core deposit and other intangibles		(17,659	)		(17,326	)
Net tangible equity	$	251,658		$	205,711
Tangible equity divided by tangible assets		6.17	%		5.82	%
Tangible equity per common share	$	10.62		$	9.24

	For the three months ended September 30,						For the nine months ended September 30,
(dollars in thousands)	2008			2007			2008			2007
Average tangible assets:
Total average assets	$	4,202,592		$	2,378,501		$	3,963,384		$	2,252,552
Less: Average intangible assets		(261,584	)		(124,577	)		(259,869	)		(124,899	)
Net average tangible assets	$	3,941,008		$	2,253,924		$	3,703,515		$	2,127,653
Average tangible equity:
Total average stockholders’ equity	$	502,575		$	271,653		$	484,839		$	271,653
Less: Average intangible assets		(261,584	)		(124,577	)		(259,869	)		(124,899	)
Net average tangible stockholders’ equity	$	240,991		$	147,076		$	224,970		$	146,754
Net income	$	8,795		$	5,772		$	22,821		$	16,800
Return on average tangible assets (annualized)		0.89	%		1.02	%		0.82	%		1.06	%
Return on average tangible stockholders’ equity (annualized)		14.52	%		15.57	%		13.55	%		15.31	%
Net income	$	8,795		$	5,772		$	22,821		$	16,800
Impact of merger related expense, net of tax		708			—			3,415			—
Net income before impact of merger related expense	$	9,503		$	5,772		$	26,236		$	16,800
Fully-diluted earnings per share before impact of merger related expense	$	0.39		$	0.35		$	1.10		$	1.01
Return on average assets before impact of merger expenses		0.90	%		0.96	%		0.88	%		1.00	%
Return on average equity before impact of merger expenses		7.52	%		8.43	%		7.23	%		8.27	%
Return on average tangible equity before impact of merger expenses		15.69	%		15.57	%		15.58	%		15.31	%
Total expenses	$	23,326		$	15,110		$	71,893		$	42,718
Less: merger expense		(1,165	)		—			(5,620	)		—
Total expenses before impact of merger related expense	$	22,161		$	15,110		$	66,273		$	42,718
Efficiency ratio before impact of merger related expense		57.51	%		62.20	%		59.70	%		61.37	%

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.	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 are considered potential problem loans. Potential problem loans do not include nonperforming loans. Generally, consumer loans are not subjected to internal risk ratings.
6.	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.
7.	Computed by dividing the balance of all loans by the number of loan accounts as of the end of each quarter.
8.	Book value per share computed by dividing total stockholders’ equity by common shares outstanding
9.	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.
10.	Amounts are included in the statement of income 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 $100,000. 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 balances under the Certificate of Deposit Account Registry Service (CDARS).