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): July 17, 2007

PINNACLE FINANCIAL PARTNERS, INC.
(Exact name of registrant as specified in charter)
Tennessee	000-31225	62-1812853
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer  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):

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

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

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

oPre-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 July 17, 2007. 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 six-months ended June 30, 2007.

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 certain non-GAAP performance ratios for the three months ended June 30, 2007. With respect to its merger with Cavalry Bancorp, Inc., a Tennessee corporation (“Cavalry”), on March 15, 2006, the Company is presenting certain non-GAAP performance ratios which consider the impact of goodwill and the core deposit intangible associated with the Cavalry merger.

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 included non-GAAP performance ratios because it believes that these measures more accurately reflect the Company’s operating performance for the 2007 second quarter when compared to the same period in 2006 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’s management utilizes this non-GAAP financial information to compare the Company’s operating performance versus the comparable periods in 2006.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Press release issued by Pinnacle Financial Partners, Inc. dated July 17, 2007

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: July 17, 2007

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release issued by Pinnacle Financial Partners, Inc. dated July 17, 2007

EX-99.1

 

FOR IMMEDIATE RELEASE

MEDIA CONTACT:	Vicki Kessler  615-320-7532
FINANCIAL CONTACT:	Harold Carpenter  615-744-3742
WEBSITE:	www.pnfp.com

PINNACLE FINANCIAL’S FULLY DILUTED EARNINGS PER SHARE

INCREASES 26.9% FROM SAME QUARTER LAST YEAR

Annualized loan growth during quarter of 28%

NASHVILLE, Tenn., July 17, 2007 – Pinnacle Financial Partners Inc. (Nasdaq/NGS:  PNFP) today reported strong performance, increased loan growth and continued improvement in asset quality for the quarter ended June 30, 2007.  Fully diluted earnings per share were $0.33 for the quarter ended June 30, 2007, compared to $0.26 per fully diluted share for the quarter ended June 30, 2006, which included the impact of $0.04 of merger related expenses associated with the Cavalry Bancorp Inc. acquisition consummated on March 15, 2006.

SECOND QUARTER 2007 HIGHLIGHTS:

· Earnings:

o Net income for the second quarter of 2007 was $5.43 million, up 25.5 percent from the prior year’s second quarter net income of $4.32 million.

o Diluted earnings per share for the second quarter of 2007 were $0.33, up 26.9 percent from the same quarter last year.

o Revenue (the sum of net interest income and noninterest income) for the quarter ended June 30, 2007, amounted to $23.21 million, compared to $21.28 million for the same quarter of last year, an increase of 9.1 percent.

· Superior credit quality:

o Annualized net charge-offs as a percentage of average loan volumes were 0.05 percent for the six months ended June 30, 2007.

o Nonperforming assets were only 0.19 percent of total loans and other real estate at June 30, 2007, down from 0.54 percent at Dec. 31, 2006.

o Past due loans over 30 days, excluding nonperforming loans, were only 0.31 percent of total loans and other real estate at June 30, 2007, compared to 0.74 percent of total loans and other real estate at Dec. 31, 2006.

· Strong balance sheet growth:

o Loans at June 30, 2007, were $1.663 billion, up 22.5 percent from the same period last year, reflecting strong organic growth over the last year.  Loans increased by $109 million during the second quarter of 2007, compared to $123 million in organic growth during the same quarter in 2006.  Provision for loan losses for the quarter ended June 30, 2007, was $900,000, a decrease of $807,000 from the same quarter in 2006.

o Total deposits at June 30, 2007, were $1.798 billion, up 15.2 percent from the same period last year.

· Investments in future growth:

o Pinnacle has already hired 11 associates for the denovo expansion to Knoxville that was announced on April 9, 2007.  Pinnacle opened a limited service facility in June and expects to open its full-service location in Knoxville during the third quarter.

o The total increase in the associate base during the quarter, including the Knoxville expansion, was 21.5 FTEs (full-time equivalents), or 5.1 percent.  Pinnacle plans to add another 33 associates before the end of 2007.

“We are extremely pleased with our performance in the second quarter of 2007, particularly with respect to loan growth which was one of the strongest growth quarters in our history.  During the same time, we continued to improve our credit quality measurements,” said M. Terry Turner, Pinnacle’s president and CEO. “We continue to be challenged by the current yield curve, and it is fairly evident that 2007 will be a formidable year for all financial institutions.  However, we are confident that we can expand our client base and sustain our record of dramatic growth throughout 2007 due to our ability to increase market share in the Nashville-Davidson-Murfreesboro MSA and our recent entry into the Knoxville MSA.”

Page 2

Turner said the firm’s recent entry into Knoxville is progressing well.  He estimated that the Knoxville expansion impacted the second quarter earnings negatively by approximately $0.02 per fully diluted share.

FINANCIAL PERFORMANCE AND BALANCE SHEET GROWTH

· Return on average assets for second quarter 2007 was 0.98 percent compared to 0.92 percent for the second quarter of 2006.  Excluding the impact of the Knoxville expansion, return on average assets for the second quarter of 2007 would have approximated 1.05 percent.  Return on average tangible assets (average assets less goodwill and core deposit intangibles) for second quarter 2007 was 1.03 percent, compared to 0.99 percent for the same quarter last year.

· Return on average stockholders’ equity for the quarter ended June 30, 2007, was 8.24 percent compared to 7.40 percent for the second quarter of 2006. Excluding the impact of the Knoxville expansion, return on average stockholders’ equity for the second quarter of 2007 would have approximated 8.85 percent.   Return on average tangible stockholders’ equity (average stockholders’ equity less goodwill and core deposit intangibles) for the quarter ended June 30, 2007, was 15.65 percent, compared to 16.37 percent for the same quarter last year.

Total assets grew to $2.314 billion as of June 30, 2007, up $329 million or 16.6 percent from the $1.986 billion reported at the same time last year.  The securities to total assets ratio decreased from 15.40 percent at June 30, 2006, to 14.68 percent at June 30, 2007.

CREDIT QUALITY

· Provision for loan losses was $900,000 for the second quarter of 2007, compared to $1,707,000 in the second quarter of 2006.

o During the second quarter of 2007, the firm recorded net charge-offs of only $317,000, compared to net charge-offs of $441,000 during the same period in 2006.  Annualized net charge-offs to total average loans were 0.05 percent for the six months ended June 30, 2007.

· Allowance for loan losses represented 1.04 percent of total loans at June 30, 2007, compared to 1.08 percent a year ago.

Page 3

o Nonperforming assets as a percentage of total loans and other real estate decreased to 0.19 percent at June 30, 2007, from 0.36 percent at Mar. 31, 2007 and 0.54 percent at Dec. 31, 2006.

o Loan balances, excluding nonperforming loans, with payments past due more than 30 days as a percentage of total loans and other real estate decreased to 0.31 percent at June 30, 2007, from 0.33 percent at Mar. 31, 2007 and 0.74 percent at Dec. 31, 2006.

o The ratio of the allowance for loan losses to nonperforming loans was 726 percent at June 30, 2007 compared to 357 percent at Mar. 31, 2007 and 228 percent at Dec. 31, 2006.

“We believe our record of excellent asset quality since our founding in 2000 is a key predictor of our ability to create long-term shareholder value,” said Turner.  “At the end of last year, several of our credit quality measurements, such as the percentage of nonperforming loans, had increased.  Our continued improvement and success in this area is attributed to the special attention our lending and credit associates have put on maintaining excellent asset quality.”

REVENUE

· Net interest income for second quarter 2007 was $17.66 million, compared to $16.90 million for the same quarter last year, an increase of 4.53 percent.

o Net interest margin for the second quarter of 2007 was 3.58 percent, compared to a net interest margin of 4.17 percent for the same period last year and 3.64 percent reported for the first quarter of 2007.

· Noninterest income for the second quarter 2007 was $5.55 million, a 26.8 percent increase over the $4.38 million recorded during the same quarter in 2006.

“We, like substantially all other commercial banks, continue to see pricing pressure in our market which has led to a six basis point reduction in our net interest margin between the first and second quarters of 2007,” said Harold Carpenter, chief financial officer of Pinnacle Financial Partners.  “However, we are particularly pleased with the growth in loan fundings and the high-quality client relationships our financial advisors are bringing to our firm.  Unlike many other firms, this growth has allowed us to continue to grow our revenue streams.  Our loan pipelines remain strong and, due to our expected loan growth in both Nashville and Knoxville, we believe that we will experience continued growth in our revenue streams for the next few quarters.”

Page 4

The increase in noninterest income between 2007 and 2006 was due primarily to the extension of the former Cavalry fee businesses across the entire Pinnacle franchise and record investment sales commissions from Pinnacle Asset Management and record gains on the sales of mortgage loans from the firm’s mortgage origination unit.  Noninterest income during the second quarter of 2007 represented approximately 23.92 percent of total revenues, compared to 20.60 percent for the same quarter in 2006.

NONINTEREST EXPENSE

· Noninterest expense for the quarter ended June 30, 2007, was $14.48 million compared to $13.12 million in the first quarter of 2007 and $13.11 million in the second quarter of 2006.  The firm noted that approximately $466,000 of noninterest expense was directly associated with the Knoxville expansion during the quarter.

· Compensation expense increased to $8.79 million during the second quarter of 2007, compared to $8.27 million in the first quarter of 2007 and $7.29 million during the second quarter of 2006.  At June 30, 2007, the firm employed 441 associates (full-time equivalent), an increase of 37 associates, or 9.2 percent since the end of 2006.

· During the second quarter 2007 Pinnacle recognized compensation expense related to the expensing of stock options in accordance with Statement of Financial Accounting Standards No. 123R (“SFAS No. 123R”) of approximately $305,000 on an after-tax basis.

· The efficiency ratio (noninterest expense divided by net interest income and noninterest income) was 62.4 percent during the second quarter of 2007, compared to 61.6 percent during the second quarter of 2006.

The firm noted that linked quarter expense growth between the first and second quarters of 2007 was primarily attributable to the Knoxville expansion, the increased number of associates, increasing variable costs associated with the dramatic growth of the firm and the opening of the Donelson office in March of 2007.

Page 5

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 third quarter 2007 diluted earnings per share will approximate $0.33 to $0.36, which includes approximately $0.04 dilution attributable to the Knoxville expansion.  Additionally, based on anticipated growth trends and future investments in the franchise, Pinnacle estimates that its earnings will approximate $1.39 to $1.45 per fully diluted share for the year ended Dec. 31, 2007, which includes approximately $0.08 dilution attributable to the Knoxville expansion.

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 including the execution of any initiative which could include the development of any markets other than metropolitan Nashville or Knoxville, any merger or acquisition, the opportunity to hire more seasoned professionals than anticipated or the ability to grow loans significantly in excess of the levels contemplated may cause the actual results of Pinnacle to differ materially from these estimates.

Pinnacle Financial Partners provides a full range of banking, investment and insurance products and services designed for small- to mid-sized businesses and their owners, real estate professionals and individuals interested in a deep relationship with their financial institution.  Pinnacle provides financial planning services and comprehensive wealth management services to help clients increase, protect and distribute their assets.  The firm also has a well-established expertise in commercial real estate.

Pinnacle opened its first office in October 2000.  Since then the firm has added eight other offices on a denovo basis and acquired Cavalry Bancorp with its nine offices, bringing the total number of offices to 18 in the most attractive trade areas in the Nashville-Davidson-Murfreesboro MSA.  The firm plans to open two offices in Knoxville this year, with another three by the end of 2010.  Last week construction began on a premier new office building in downtown Nashville named “The Pinnacle at Symphony Place.”  When completed in 2010, Pinnacle will move its corporate functions and a full-service office to this new building.

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

###

Page 6

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 MSA or projected rates in the Knoxville MSA, (iii) increased competition with other financial institutions, (iv) lack of sustained growth in the economy in the Nashville-Davidson-Murfreesboro MSA and the Knoxville MSA, (v) rapid fluctuations or unanticipated changes in interest rates, (vi) the inability of Pinnacle to satisfy regulatory requirements for its expansion plans, (vii) the inability of Pinnacle to execute its expansion plans and (viii) changes in the legislative and regulatory environment. A more detailed description of these and other risks is contained in Pinnacle's most recent annual report on Form 10-K. 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.

Page 7

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS – UNAUDITED
	June 30, 2007			December 31, 2006
ASSETS
Cash and noninterest-bearing due from banks	$	51,816,558		$	43,611,533
Interest-bearing deposits due from banks		10,375,896			1,041,174
Federal funds sold and other		43,808,801			47,866,143
Cash and cash equivalents		106,001,255			92,518,850
Securities available-for-sale, at fair value		312,712,769			319,237,428
Securities held-to-maturity (fair value of $26,211,163 and $26,594,235 at June 30, 2007and December 31, 2006, respectively)		27,068,467			27,256,876
Mortgage loans held-for-sale		4,972,689			5,654,381
Loans		1,663,029,941			1,497,734,824
Less allowance for loan losses		(17,375,408	)		(16,117,978	)
Loans, net		1,645,654,533			1,481,616,846
Premises and equipment, net		37,854,546			36,285,796
Investments in unconsolidated subsidiaries and other entities		17,000,500			16,200,684
Accrued interest receivable		11,434,826			11,019,173
Goodwill		114,287,640			114,287,640
Core deposit intangible		10,353,498			11,385,006
Other assets		27,986,475			26,724,183
Total assets	$	2,315,327,198		$	2,142,186,863
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand	$	294,630,589		$	300,977,814
Interest-bearing demand		284,080,394			236,674,425
Savings and money market accounts		530,081,179			485,935,897
Time		688,744,094			598,823,167
Total deposits		1,797,536,256			1,622,411,303
Securities sold under agreements to repurchase		140,442,583			141,015,761
Federal Home Loan Bank advances and other borrowings		46,698,614			53,725,833
Subordinated debt		51,548,000			51,548,000
Accrued interest payable		5,960,627			4,952,422
Other liabilities		7,946,624			12,516,523
Total liabilities		2,050,132,704			1,886,169,842
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; 15,545,581 issued and outstanding at June 30, 2007 and 15,446,074 issued and outstanding at December 31, 2006		15,545,581			15,446,074
Additional paid-in capital		212,922,658			211,502,516
Retained earnings		42,137,029			31,109,324
Accumulated other comprehensive loss, net		(5,410,774	)		(2,040,893	)
Stockholders’ equity		265,194,494			256,017,021
Total liabilities and stockholders’ equity	$	2,315,327,198		$	2,142,186,863

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2007		2006		2007		2006
Interest income:
Loans, including fees	$	30,555,889	$	24,245,895	$	59,533,113	$	37,424,725
Securities:
Taxable		3,394,359		3,148,459		6,740,479		6,009,577
Tax-exempt		693,417		494,849		1,362,936		895,622
Federal funds sold and other		864,198		415,437		1,610,577		785,112
Total interest income		35,507,863		28,304,640		69,247,105		45,115,036
Interest expense:
Deposits		14,456,629		9,563,035		27,993,892		15,413,344
Securities sold under agreements to repurchase		1,890,743		678,177		3,602,834		1,186,965
Federal Home Loan Bank advances and other borrowings		1,499,436		1,168,265		2,906,896		2,112,761
Total interest expense		17,846,808		11,409,477		34,503,622		18,713,070
Net interest income		17,661,055		16,895,163		34,743,483		26,401,966
Provision for loan losses		899,998		1,706,865		1,687,964		2,094,049
Net interest income after provision for loan losses		16,761,057		15,188,298		33,055,519		24,307,917
Noninterest income:
Service charges on deposit accounts		1,920,085		1,356,114		3,717,234		1,794,384
Investment sales commissions		850,207		652,900		1,584,767		1,166,497
Insurance sales commissions		628,953		748,534		1,265,915		1,013,362
Gain on loans and loan participations sold, net		638,895		470,809		1,002,201		795,355
Trust fees		425,205		311,997		845,495		363,997
Other noninterest income		1,088,172		839,771		2,161,488		1,294,781
Total noninterest income		5,551,517		4,380,125		10,577,100		6,428,376
Noninterest expense:
Compensation and employee benefits		8,794,853		7,289,996		17,061,354		11,738,354
Equipment and occupancy		2,412,528		1,911,804		4,577,230		2,991,059
Marketing and other business development		430,291		357,904		682,026		548,375
Postage and supplies		524,197		445,211		979,114		630,619
Amortization of core deposit intangible		515,755		515,755		1,031,508		647,437
Other noninterest expense		1,806,680		1,663,155		3,276,764		2,513,865
Merger related expense		-		921,237		-		1,364,567
Total noninterest expense		14,484,304		13,105,062		27,607,996		20,434,276
Income before income taxes		7,828,270		6,463,361		16,024,623		10,302,017
Income tax expense		2,402,405		2,140,887		4,996,918		3,367,647
Net income	$	5,425,865	$	4,322,474	$	11,027,705	$	6,934,370
Per share information:
Basic net income per common share	$	0.35	$	0.28	$	0.71	$	0.56
Diluted net income per common share	$	0.33	$	0.26	$	0.66	$	0.51
Weighted average shares outstanding:
Basic		15,494,522		15,335,754		15,464,151		12,473,187
Diluted		16,664,213		16,503,692		16,640,977		13,640,565

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
	Three months ended							Three months ended
(dollars in thousands)	June 30, 2007							June 30, 2006
	Average Balances		Interest		Rates/ Yields			Average Balances		Interest		Rates/ Yields
Interest-earning assets:
Loans	$	1,598,967	$	30,556		7.66	%	$	1,328,121	$	24,246		7.32	%
Securities:
Taxable		272,024		3,394		5.00	%		248,682		3,148		5.08	%
Tax-exempt (1)		75,057		693		4.89	%		50,227		495		5.21	%
Federal funds sold and other		58,836		865		6.08	%		24,932		416		7.19	%
Total interest-earning assets		2,004,884	$	35,508		7.15	%		1,651,962	$	28,305		6.92	%
Nonearning assets		224,343							226,950
Total assets	$	2,229,227						$	1,878,912
Interest-bearing liabilities:
Interest-bearing deposits
Interest checking	$	254,171	$	2,147		3.39	%	$	190,055	$	848		1.79	%
Savings and money market		501,373		4,239		3.39	%		434,094		3,234		2.99	%
Certificates of deposit		646,251		8,071		5.01	%		546,715		5,481		4.02	%
Total interest-bearing deposits		1,401,795		14,457		4.14	%		1,170,864		9,563		3.28	%
Securities sold under agreements to repurchase		172,872		1,891		4.39	%		68,079		678		4.00	%
Federal Home Loan Bank advances and other borrowings		47,998		621		5.19	%		48,113		653		5.44	%
Subordinated debt		51,548		878		6.84	%		30,929		516		6.69	%
Total interest-bearing liabilities		1,674,213		17,847		4.28	%		1,317,985		11,410		3.47	%
Noninterest-bearing deposits		276,241		-		-			311,286		-		-
Total deposits and interest-bearing liabilities		1,950,454	$	17,847		3.67	%		1,629,271	$	11,410		2.81	%
Other liabilities		14,718							15,241
Stockholders' equity		264,055							234,400
	$	2,229,227						$	1,878,912
Netinterestincome			$	17,661						$	16,895
Net interest spread (2)						2.88	%						3.45	%
Net interest margin (3)						3.58	%						4.17	%

(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
	Six months ended							Six months ended
(dollars in thousands)	June 30, 2007							June 30, 2006
	Average Balances		Interest		Rates/ Yields			Average Balances		Interest		Rates/ Yields
Interest-earning assets:
Loans	$	1,564,869	$	59,533		7.67	%	$	1,044,724	$	37,425		7.22	%
Securities:
Taxable		272,346		6,740		4.99	%		245,216		6,009		4.94	%
Tax-exempt (1)		74,009		1,363		4.90	%		47,399		896		5.04	%
Federal funds sold and other		57,367		1,611		5.66	%		26,085		785		6.45	%
Total interest-earning assets		1,968,591	$	69,247		7.14	%		1,363,424	$	45,115		6.72	%
Nonearning assets		220,987							152,944
Total assets	$	2,189,578						$	1,516,368
Interest-bearing liabilities:
Interest-bearing deposits
Interest checking	$	249,425	$	4,104		3.32	%	$	147,089	$	1,330		1.82	%
Savings and money market		498,625		8,364		3.38	%		389,473		5,574		2.89	%
Certificates of deposit		635,172		15,526		4.93	%		430,854		8,509		3.98	%
Total interest-bearing deposits		1,383,222		27,994		3.41	%		967,416		15,413		3.21	%
Securities sold under agreements to repurchase		165,026		3,603		4.40	%		63,901		1,187		3.75	%
Federal Home Loan Bank advances and    other borrowings		44,120		1,152		5.04	%		47,412		1,112		4.73	%
Subordinated debt		51,548		1,755		6.86	%		30,929		1,001		6.53	%
Total interest-bearing liabilities		1,643,916		34,504		4.23	%		1,109,658		18,713		3.40	%
Noninterest-bearing deposits		273,052		-		-			231,767		-		-
Total deposits and interest-bearing liabilities		1,916,968	$	34,504		3.63	%		1,341,425	$	18,713		2.81	%
Other liabilities		10,849							9,976
Stockholders' equity		261,761							164,967
	$	2,189,578						$	1,516,368
Netinterestincome			$	34,743						$	26,402
Net interest spread (2)						2.91	%						3.32	%
Net interest margin (3)						3.61	%						3.97	%

(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
(dollars in thousands, except per share data)	June 2007			Mar 2007			Dec 2006			Sept 2006			Jun 2006			Mar 2006
Balance sheet data, at quarter end:
Total assets	$	2,315,327			2,193,132			2,142,187			2,052,252			1,985,625			1,828,212
Total loans		1,663,030			1,553,980			1,497,735			1,405,401			1,358,273			1,235,170
Allowance for loan losses		(17,375	)		(16,792	)		(16,118	)		(15,172	)		(14,686	)		(13,354	)
Securities		339,781			340,255			346,494			330,759			305,642			315,473
Noninterest-bearing deposits		294,631			306,885			300,978			306,296			312,709			263,701
Total deposits		1,797,536			1,700,132			1,622,411			1,585,238			1,559,885			1,415,778
Securities sold under agreements to repurchase		140,443			116,952			141,016			122,354			104,380			63,912
Advances from FHLB		46,699			46,619			53,726			28,739			33,749			67,267
Subordinated debt		51,548			51,548			51,548			51,548			30,929			30,929
Total stockholders’ equity		265,194			262,917			256,017			249,059			238,739			236,327
Balance sheet data, quarterly averages:
Total assets	$	2,229,227			2,149,928			2,096,893			1,987,236			1,878,912			1,153,823
Total loans		1,598,967			1,530,771			1,442,730			1,375,036			1,328,121			761,326
Securities		347,081			345,630			334,426			317,332			298,909			286,321
Total earning assets		2,004,884			1,932,298			1,879,759			1,751,559			1,651,962			1,074,885
Noninterest-bearing deposits		276,241			269,864			292,996			281,812			311,286			152,247
Total deposits		1,678,036			1,634,513			1,596,765			1,535,667			1,482,150			763,967
Securities sold under agreements to repurchase		172,872			157,180			154,483			122,292			68,079			59,723
Advances from FHLB		38,516			37,828			29,817			33,299			44,417			46,336
Subordinated debt		51,548			51,548			51,548			36,084			30,929			30,929
Total stockholders’ equity		264,055			259,466			253,761			244,980			234,400			95,535
Statement of operations data, for the three months ended:
Interest income	$	35,508			33,739			33,241			31,340			28,305			16,811
Interest expense		17,847			16,657			15,850			14,181			11,410			7,304
Net interest income		17,661			17,082			17,391			17,159			16,895			9,507
Provision for loan losses		900			788			1,051			587			1,707			387
Net interest income after provision for loan losses		16,761			16,294			16,340			16,572			15,188			9,120
Noninterest income		5,552			5,026			4,934			4,424			4,380			2,048
Noninterest expense		14,484			13,124			13,135			13,054			13,105			7,329
Income before taxes		7,828			8,196			8,139			7,942			6,463			3,839
Income tax expense		2,402			2,594			2,493			2,595			2,141			1,227
Net income	$	5,426			5,602			5,646			5,347			4,322			2,612
Profitability and other ratios:
Return on avg. assets (1)		0.98	%		1.06	%		1.07	%		1.07	%		0.92	%		0.92	%
Return on avg. equity (1)		8.24	%		8.76	%		8.83	%		8.66	%		7.40	%		11.09	%
Net interest margin (2)		3.58	%		3.64	%		3.74	%		3.95	%		4.17	%		3.65	%
Noninterest income to total revenue (3)		23.92	%		22.73	%		22.10	%		20.50	%		20.60	%		17.73	%
Noninterest income to avg. assets (1)		1.00	%		0.95	%		0.93	%		0.89	%		0.94	%		0.72	%
Noninterest exp. to avg. assets (1)		2.61	%		2.48	%		2.49	%		2.63	%		2.80	%		2.58	%
Efficiency ratio (4)		62.40	%		59.36	%		58.80	%		60.50	%		61.60	%		63.40	%
Avg. loans to average deposits		95.29	%		93.65	%		90.40	%		89.50	%		89.60	%		83.10	%
Securities to total assets		14.68	%		15.51	%		16.20	%		16.10	%		15.40	%		17.30	%
Average interest-earning assets to average     interest-bearing liabilities		119.75	%		119.75	%		122.00	%		121.20	%		125.30	%		119.30	%
Brokered time deposits to total deposits		8.17	%		5.83	%		3.71	%		4.50	%		5.00	%		3.30	%

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands, except per share data)	June 2007			Mar 2007			Dec 2006			Sept 2006			Jun 2006			Mar 2006
Loan portfolio balances, end of period:
Commercial real estate - mortgage	$	307,757			287,498			284,302			265,174			260,168			246,391
Commercial real estate - construction		177,426			160,222			161,903			152,627			164,049			162,867
Other commercial loans		738,866			665,857			608,530			554,617			503,797			410,059
Consumer real estate - mortgage		288,325			301,525			299,627			292,206			294,119			283,590
Consumer real estate - construction		102,998			92,162			91,194			87,890			86,978			84,381
Other consumer loans		47,657			46,716			52,179			52,887			49,162			47,882
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans	$	2,392			4,705			7,070			3,477			2,800			1,201
Other real estate		687			927			995			-			67			-
Past due loans over 90 days and still accruing interest		606			98			737			1,123			492			-
Net loan charge-offs (recoveries) (6)		317			114			105			101			441			(73	)
Allowance for loan losses to total loans		1.04	%		1.08	%		1.08	%		1.08	%		1.08	%		1.08	%
As a percentage of total loans and ORE:
Past due loans over 30 days		0.31	%		0.33	%		0.74	%		0.69	%		0.25	%		0.52	%
Nonperforming assets		0.19	%		0.36	%		0.54	%		0.25	%		0.21	%		0.10	%
Potential problem loans (5)		0.16	%		0.21	%		0.24	%		0.77	%		0.31	%		0.63	%
Annualized net loan charge-offs (recoveries) year-to-date to avg. loans (6)		0.05	%		0.03	%		0.05	%		0.05	%		0.07	%		(0.04	)%
Avg. commercial loan internal risk ratings (5)		4.1			4.1			4.1			4.1			4.1			4.1
Avg. loan account balances (7)	$	164			156			140			132			115			105
Interest rates and yields:
Loans		7.66	%		7.68	%		7.65	%		7.72	%		7.32	%		7.02	%
Securities		4.98	%		4.96	%		4.97	%		4.91	%		5.10	%		4.80	%
Total earning assets		7.15	%		7.13	%		7.06	%		7.14	%		6.92	%		6.39	%
Total deposits, including non-interest bearing		3.46	%		3.36	%		3.18	%		3.05	%		2.59	%		2.59	%
Securities sold under agreements to repurchase		4.39	%		4.42	%		4.52	%		4.49	%		4.00	%		3.46	%
FHLB advances and other borrowings		5.19	%		5.36	%		4.93	%		4.57	%		5.46	%		3.99	%
Subordinated debt		6.84	%		6.89	%		6.84	%		6.75	%		6.69	%		6.36	%
Total deposits and interest-bearing liabilities		3.67	%		3.59	%		3.43	%		3.26	%		2.81	%		2.81	%
Capital ratios (9):
Stockholders’ equity to total assets		11.5	%		12.0	%		11.9	%		12.1	%		12.0	%		12.9	%
Leverage		9.5	%		9.5	%		9.5	%		9.2	%		8.6	%		11.5	%
Tier one risk-based		10.4	%		10.9	%		10.9	%		10.6	%		9.5	%		10.2	%
Total risk-based		11.3	%		11.8	%		11.8	%		12.0	%		10.4	%		11.1	%

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands, except per share data)	June 2007			Mar 2007			Dec 2006			Sept 2006			Jun 2006			Mar 2006
Per share data:
Earnings – basic	$	0.35			0.36			0.37			0.35			0.28			0.27
Earnings – diluted	$	0.33			0.34			0.34			0.32			0.26			0.24
Book value at quarter end (8)	$	17.06			16.93			16.57			16.16			15.53			15.45
Weighted avg. shares – basic		15,494,522			15,433,442			15,427,908			15,393,735			15,335,754			9,578,813
Weighted avg. shares – diluted		16,664,213			16,617,484			16,641,425			16,655,349			16,503,692			10,745,626
Common shares outstanding		15,545,581			15,530,975			15,446,074			15,409,341			15,370,116			15,300,629
Investor information:
Closing sales price	$	29.36			30.51			33.18			35.80			30.43			27.44
High sales price during quarter	$	31.48			33.85			36.17			37.41			30.92			28.84
Low sales price during quarter	$	28.27			29.40			31.23			28.93			27.09			24.87
Other information:
Gains on sale of loans and loan participations sold:
Mortgage loan sales:
Gross loans sold	$	52,197			31,044			36,551			37,371			37,585			21,346
Gross fees (10)	$	846			544			653			679			668			389
Gross fees as a percentage of mortgage     loans originated		1.62	%		1.75	%		1.79	%		1.82	%		1.78	%		1.82	%
Commercial loan participations sold	$	171			45			224			31			49			74
Gains on sales of investment securities, net	$	-			-			-			-			-			-
Brokerage account assets, at quarter-end (11)	$	643,000			617,000			597,000			553,000			501,000			470,000
Floating rate loans as a percentage of loans (12)		45.5	%		46.3	%		46.3	%		47.3	%		47.0	%		48.5	%
Balance of commercial loan participations sold to other     banks and serviced by Pinnacle, at quarter end	$	115,913			114,143			95,398			85,291			80,359			73,171
Core deposits to total funding (13)		62.3	%		63.7	%		63.3	%		63.7	%		63.8	%		68.1	%
Total assets per full-time equivalent employee	$	5,250			5,228			5,302			5,189			5,531			4,968
Annualized revenues per full-time equivalent employee	$	211.1			210.8			219.2			218.3			237.0			205.0
Number of employees (full-time equivalent)		441.0			419.5			404.0			395.5			359.0			368.0
Associate retention rate (14)		88.1	%		85.3	%		85.1	%		91.1	%		94.7	%		93.2	%

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

SELECTED QUARTERLY AND YEAR-TO-DATE FINANCIAL DATA – UNAUDITED

	As of June 30,			As of December 31,
(dollars in thousands, except per share data)	2007			2006
Reconciliation of Non-GAAP measures:
Tangible assets:
Total assets	$	2,315,327		$	2,142,187
Less:   Goodwill		(114,288	)		(114,288	)
Core deposit intangible		(10,353	)		(11,385	)
Net tangible assets	$	2,190,686		$	2,016,514
Tangible equity:
Total stockholders’ equity	$	265,194		$	256,017
Less:   Goodwill		(114,288	)		(114,288	)
Core deposit intangible		(10,353	)		(11,385	)
Net tangible equity	$	140,553		$	130,344
Tangible equity divided by tangible assets		6.42	%		6.46	%
Tangible equity per common share	$	9.04		$	8.44
	For the three months ended June 30,
(dollars in thousands)	2007			2006
Average tangible assets:
Total average assets	$	2,229,227		$	1,878,912
Less:   Average goodwill		(114,288	)		(115,727	)
Average core deposit intangible		(10,740	)		(12,779	)
Net average tangible assets	$	2,104,199		$	1,750,406
Average tangible equity:
Total average stockholders’ equity	$	264,055		$	234,400
Less:   Average goodwill		(114,288	)		(115,727	)
Average core deposit intangible		(10,740	)		(12,779	)
Net average tangible stockholders’ equity	$	139,027		$	105,894
Net income	$	5,426		$	4,322
Return on average tangible assets (annualized)		1.03	%		0.99	%
Return on average tangible stockholders’ equity (annualized)		15.65	%		16.37	%
Net income	$	5,426		$	4,322
Impact of merger related expense, net of tax		-			560
Net income before impact of merger related expense	$	5,426		$	4,882
Fully-diluted earnings per share before impact of merger related expense	$	0.33		$	0.30
Net income	$	5,426		$	4,322
Impact of Knoxville expansion, net of tax		402			-
Net income before impact of Knoxville expansion	$	5,828		$	4,322
Fully-diluted earnings per share before impact of Knoxville expansion	$	0.35		$	0.26

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.