INC.
|
(Exact name of registrant as specified in charter)
|
Tennessee
|
62-1812853
|
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(State or other jurisdiction
of incorporation)
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(I.R.S. Employer
Identification No.)
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150 Third Avenue South, Suite 900, Nashville, Tennessee
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37201
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Exchange on which Registered
|
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Common Stock, par value $1.00
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Nasdaq Global Select Market
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Securities registered to Section 12(g) of the Act:
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None
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Page No.
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PART I
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|||
ITEM 1.
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4 | ||
ITEM 1A.
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17 | ||
ITEM 1B.
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24 | ||
ITEM 2.
|
24 | ||
ITEM 3.
|
25 | ||
ITEM 4.
|
25 | ||
PART II
|
|||
ITEM 5.
|
26 | ||
ITEM 6.
|
27 | ||
ITEM 7.
|
28 | ||
ITEM 7A.
|
52 | ||
ITEM 8.
|
53 | ||
ITEM 9.
|
101 | ||
ITEM 9A.
|
101 | ||
ITEM 9B.
|
101 | ||
PART III
|
|||
ITEM 10.
|
102 | ||
ITEM 11.
|
102 | ||
ITEM 12.
|
102 | ||
ITEM 13.
|
102 | ||
ITEM 14.
|
103 | ||
ITEM 15.
|
104 | ||
106 |
ITEM 1.
|
BUSIN
E
SS
|
●
Mutual Funds;
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●
Fixed Annuities;
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●
Variable Annuities;
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●
Stocks;
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●
Money Market Instruments;
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●
Financial Planning;
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●
U.S. Treasury Securities;
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●
Asset Management Accounts; and
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●
Bonds;
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●
Listed Options.
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|
·
|
Changing the assessment base for federal deposit insurance from the amount of insured deposits to consolidated assets less tangible capital, eliminating the ceiling and increasing the size of the floor of the Deposit Insurance Fund, and offsetting the impact of the increase in the minimum floor on institutions with less than $10 billion in assets.
|
|
·
|
Making permanent the $250,000 limit for federal deposit insurance, increasing the cash limit of Securities Investor Protection Corporation protection to $250,000 and providing that unlimited federal deposit insurance for non-interest-bearing demand transaction accounts at all insured depository institutions would continue until December 31, 2012 and then terminate thereafter.
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|
·
|
Repealing the federal prohibition on payment of interest on demand deposits, thereby permitting depository institutions to pay interest on business transaction and other accounts.
|
|
·
|
Centralizing responsibility for consumer financial protection by creating a new agency, the Consumer Financial Protection Bureau, responsible for implementing federal consumer protection laws, although banks below $10 billion in assets will continue to be examined and supervised for compliance with these laws by their federal bank regulator.
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|
·
|
Restricting the scope of the preemption of state law by the National Bank Act and disallowing national bank subsidiaries from availing themselves of such preemption.
|
|
·
|
Limiting the debit interchange fees that certain financial institutions are permitted to charge.
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|
·
|
Imposing new requirements for mortgage lending, including new minimum underwriting standards, prohibitions on certain yield-spread compensation to mortgage originators, special consumer protections for mortgage loans that do not meet certain provision qualifications, prohibitions and limitations on certain mortgage terms and various new mandated disclosures to mortgage borrowers.
|
|
·
|
Applying the same leverage and risk based capital requirements that apply to insured depository institutions to holding companies, although Pinnacle Financial’s currently outstanding trust preferred securities (but not new issuances) would continue to qualify as Tier 1 capital unless otherwise restricted by federal regulators.
|
|
·
|
Permitting national and state banks to establish de novo interstate branches at any location where a bank based in that state could establish a branch, and requiring that bank holding companies and banks be well-capitalized and well managed in order to acquire banks located outside their home state.
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|
·
|
Imposing new limits on affiliated transactions and causing derivative transactions to be subject to lending limits.
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|
·
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Implementing certain corporate governance revisions that apply to all public companies.
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·
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Acquiring direct or indirect ownership or control of any voting shares of any bank if, after the acquisition, the bank holding company will directly or indirectly own or control more than 5% of the bank’s voting shares;
|
|
·
|
Acquiring all or substantially all of the assets of any bank; or
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|
·
|
Merging or consolidating with any other bank holding company.
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|
·
|
The bank holding company has registered securities under Section 12 of the Securities Exchange Act of 1934; or
|
|
·
|
No other person owns a greater percentage of that class of voting securities immediately after the transaction.
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|
·
|
Financial in nature;
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|
·
|
Incidental to a financial activity (as determined by the Federal Reserve in consultation with the Secretary of the U.S. Treasury); or
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·
|
Complementary to a financial activity and do not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally (as determined by the Federal Reserve).
|
|
·
|
Insuring, guaranteeing, or indemnifying against loss or harm, or providing and issuing annuities, and acting as principal, agent, or broker for these purposes, in any state;
|
|
·
|
Providing financial, investment, or advisory services;
|
|
·
|
Issuing or selling instruments representing interests in pools of assets permissible for a bank to hold directly;
|
|
·
|
Underwriting, dealing in or making a market in securities;
|
|
·
|
Activities that the Federal Reserve has determined to be so closely related to banking or managing or controlling banks as to be a proper incident to banking or managing or controlling banks;
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|
·
|
Activities permitted outside of the United States that the Federal Reserve has determined to be usual in connection with banking or other financial operations abroad;
|
|
·
|
Merchant banking through securities or insurance affiliates; and
|
|
·
|
Insurance company portfolio investments.
|
|
·
|
Factoring accounts receivable;
|
|
·
|
Acquiring or servicing loans;
|
|
·
|
Leasing personal property;
|
|
·
|
Conducting discount securities brokerage activities;
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|
·
|
Performing selected data processing services;
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|
·
|
Acting as agent or broker in selling credit life insurance and other types of insurance in connection with credit transactions; and
|
|
·
|
Underwriting certain insurance risks of the holding company and its subsidiaries.
|
|
·
|
A bank’s loans or extensions of credit, including purchases of assets subject to an agreement to repurchase, to affiliates;
|
|
·
|
A bank’s investment in affiliates;
|
|
·
|
Assets a bank may purchase from affiliates, except for real and personal property exempted by the Federal Reserve;
|
|
·
|
The amount of loans or extensions of credit to third parties collateralized by the securities or obligations of affiliates;
|
|
·
|
Transactions involving the borrowing or lending of securities and any derivative transaction that results in credit exposure to an affiliate; and
|
|
·
|
A bank’s guarantee, acceptance or letter of credit issued on behalf of an affiliate.
|
|
·
|
Federal Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers;
|
|
·
|
Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;
|
|
·
|
Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit;
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|
·
|
Fair Credit Reporting Act of 1978, governing the use and provision of information to credit reporting agencies;
|
|
·
|
Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies;
|
|
·
|
Bank Secrecy Act, governing how banks and other firms report certain currency transactions and maintain appropriate safeguards against “money laundering” activities;
|
|
·
|
Soldiers’ and Sailors’ Civil Relief Act of 1940, governing the repayment terms of, and property rights underlying, secured obligations of persons in active military service; and
|
|
·
|
Rules and regulations of the various federal agencies charged with the responsibility of implementing the federal laws.
|
|
·
|
Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and
|
|
·
|
Electronic Funds Transfer Act and Regulation E issued by the Federal Reserve to implement that act, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities (including with respect to the permissibility of overdraft charges) arising from the use of automated teller machines and other electronic banking services.
|
ITEM 1A.
|
RISK
FA
CTORS
|
ITEM 1B.
|
UNRESOLVED
STA
FF COMMENTS
|
ITEM 2.
|
PROPE
R
TIES
|
ITEM 3.
|
LEG
AL
PROCEEDINGS
|
ITEM 4.
|
MINE S
AFE
TY DISCLOSURES
|
ITEM 5.
|
MARKET FOR
REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Price Per Share
|
||||||||
High
|
Low
|
|||||||
2012:
|
||||||||
First quarter
|
$ | 18.44 | $ | 15.25 | ||||
Second quarter
|
19.51 | 16.64 | ||||||
Third quarter
|
20.38 | 18.88 | ||||||
Fourth quarter
|
20.45 | 18.09 | ||||||
2011:
|
||||||||
First quarter
|
$ | 16.60 | $ | 13.55 | ||||
Second quarter
|
16.82 | 14.15 | ||||||
Third quarter
|
16.21 | 10.52 | ||||||
Fourth quarter
|
16.65 | 10.28 |
Period
|
Total Number
of
Shares
Repurchased
|
Average
Price
Paid Per Share
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
Maximum Number
(or Approximate
Dollar Value) of
Shares That May
Yet Be Purchased
Under the Plans or
Programs
|
||||||||||||
October 1, 2012 to October 31, 2012
|
435 | $ | 19.72 | - | - | |||||||||||
November 1, 2012 to November 30, 2012
|
1,211 | 18.36 | - | - | ||||||||||||
December 1, 2012 to December 31, 2012
|
14,156 | (1) | 18.72 | - | - | |||||||||||
Total
|
15,802 | $ | 18.72 | - | - |
(1)
|
On December 31, 2012, we issued 57,508 shares of our common stock to certain of our executive officers in settlement of salary stock units that had been issued to these individuals throughout 2012. We withheld 13,375 of these shares to satisfy tax withholding requirements related to this issuance.
|
ITEM 6.
|
SELEC
TE
D FINANCIAL DATA
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
($ in 000s except per share data)
|
||||||||||||||||||||
Statement of Financial Condition Data (as of December 31):
|
||||||||||||||||||||
Total assets
|
$ | 5,040,549 | $ | 4,863,951 | $ | 4,909,004 | $ | 5,128,811 | $ | 4,754,075 | ||||||||||
Loans, net of unearned income
|
3,712,162 | 3,291,351 | 3,212,440 | 3,563,382 | 3,354,907 | |||||||||||||||
Allowance for loan losses
|
69,417 | 73,975 | 82,575 | 91,959 | 36,484 | |||||||||||||||
Total securities
|
707,153 | 897,292 | 1,018,637 | 937,555 | 849,781 | |||||||||||||||
Goodwill, core deposit and other intangible assets
|
249,144 | 251,919 | 254,795 | 257,793 | 261,032 | |||||||||||||||
Deposits and securities sold under agreements to repurchase
|
4,129,855 | 3,785,931 | 3,979,352 | 4,099,064 | 3,717,544 | |||||||||||||||
Advances from FHLB
|
75,850 | 226,069 | 121,393 | 212,655 | 273,609 | |||||||||||||||
Subordinated debt and other borrowings
|
106,158 | 97,476 | 97,476 | 97,476 | 97,476 | |||||||||||||||
Stockholders’ equity
|
679,071 | 710,145 | 677,457 | 701,020 | 627,298 | |||||||||||||||
Statement of Operations Data:
|
||||||||||||||||||||
Interest income
|
$ | 185,422 | $ | 188,346 | $ | 203,348 | $ | 205,716 | $ | 206,082 | ||||||||||
Interest expense
|
22,558 | 36,882 | 58,975 | 74,925 | 91,867 | |||||||||||||||
Net interest income
|
162,864 | 151,464 | 144,373 | 130,791 | 114,215 | |||||||||||||||
Provision for loan losses
|
5,569 | 21,798 | 53,695 | 116,758 | 11,214 | |||||||||||||||
Net interest income after provision for loan losses
|
157,296 | 129,666 | 90,678 | 14,033 | 103,001 | |||||||||||||||
Noninterest income
|
43,397 | 37,940 | 36,315 | 39,651 | 34,718 | |||||||||||||||
Noninterest expense
|
138,165 | 139,107 | 146,883 | 118,577 | 94,478 | |||||||||||||||
Income (loss) before income taxes
|
62,527 | 28,499 | (19,890 | ) | (64,893 | ) | 43,241 | |||||||||||||
Income tax expense(benefit)
|
20,643 | (15,238 | ) | 4,410 | (29,393 | ) | 12,367 | |||||||||||||
Net income (loss)
|
41,884 | 43,737 | (24,300 | ) | (35,500 | ) | 30,874 | |||||||||||||
Preferred dividends and accretion on common stock warrants
|
3,814 | 6,665 | 6,142 | 5,930 | 309 | |||||||||||||||
Net income (loss) available to common stockholders
|
$ | 38,070 | $ | 37,072 | $ | (30,442 | ) | $ | (41,430 | ) | $ | 30,565 | ||||||||
Per Share Data:
|
||||||||||||||||||||
Earnings (loss) per share available to common stockholders – basic
|
$ | 1.12 | $ | 1.11 | $ | (0.93 | ) | $ | (1.46 | ) | $ | 1.34 | ||||||||
Weighted average common shares outstanding – basic
|
33,899,667 | 33,420,015 | 32,789,871 | 28,395,618 | 22,793,699 | |||||||||||||||
Earnings (loss) per common share available to common stockholders – diluted
|
$ | 1.10 | $ | 1.09 | $ | (0.93 | ) | $ | (1.46 | ) | $ | 1.27 | ||||||||
Weighted average common shares outstanding – diluted
|
34,487,808 | 34,060,228 | 32,789,871 | 28,395,618 | 24,053,972 | |||||||||||||||
Book value per common share
|
$ | 19.57 | $ | 18.56 | $ | 17.22 | $ | 18.41 | $ | 22.40 | ||||||||||
Common shares outstanding at end of period
|
34,696,597 | 34,354,960 | 33,870,380 | 33,029,719 | 23,762,124 | |||||||||||||||
Performance Ratios and Other Data:
|
||||||||||||||||||||
Return on average assets
|
0.78 | % | 0.77 | % | (0.61 | %) | (0.82 | %) | 0.74 | % | ||||||||||
Return on average stockholders’ equity
|
5.46 | % | 5.27 | % | (4.37 | %) | (6.10 | %) | 6.13 | % | ||||||||||
Net interest margin
(1)
|
3.77 | % | 3.55 | % | 3.25 | % | 2.93 | % | 3.17 | % | ||||||||||
Net interest spread
(2)
|
3.61 | % | 3.33 | % | 2.99 | % | 2.64 | % | 2.78 | % | ||||||||||
Noninterest income to average assets
|
0.89 | % | 0.78 | % | 0.72 | % | 0.79 | % | 0.84 | % | ||||||||||
Noninterest expense to average assets
|
2.83 | % | 2.88 | % | 2.93 | % | 2.34 | % | 2.30 | % | ||||||||||
Efficiency ratio
(3)
|
66.99 | % | 73.45 | % | 81.29 | % | 69.57 | % | 63.43 | % | ||||||||||
Average loan to average deposit ratio
|
92.78 | % | 86.76 | % | 87.64 | % | 94.51 | % | 97.70 | % | ||||||||||
Average interest-earning assets to average interest-bearing liabilities
|
131.44 | % | 125.84 | % | 120.27 | % | 117.52 | % | 115.27 | % | ||||||||||
Average equity to average total assets ratio
|
14.30 | % | 14.55 | % | 13.90 | % | 13.55 | % | 12.15 | % | ||||||||||
Asset Quality Ratios:
|
||||||||||||||||||||
Allowance for loan losses to nonaccrual loans
|
304.2 | % | 154.6 | % | 102.1 | % | 73.7 | % | 335.95 | % | ||||||||||
Allowance for loan losses to total loans
|
1.87 | % | 2.25 | % | 2.57 | % | 2.58 | % | 1.09 | % | ||||||||||
Nonperforming assets to total assets
|
0.82 | % | 1.80 | % | 2.86 | % | 3.01 | % | 0.61 | % | ||||||||||
Nonperforming assets to total loans and other real estate
|
1.11 | % | 2.66 | % | 4.29 | % | 4.29 | % | 0.86 | % | ||||||||||
Net loan charge-offs to average loans
|
0.29 | % | 0.94 | % | 1.96 | % | 1.71 | % | 0.11 | % | ||||||||||
Capital Ratios (Pinnacle Financial):
|
||||||||||||||||||||
Leverage
(4)
|
10.6 | % | 11.4 | % | 10.7 | % | 10.7 | % | 10.5 | % | ||||||||||
Tier 1 risk-based capital
|
11.8 | % | 13.8 | % | 13.8 | % | 13.1 | % | 12.1 | % | ||||||||||
Total risk-based capital
|
13.0 | % | 15.3 | % | 15.4 | % | 14.8 | % | 13.5 | % |
(1)
|
Net interest margin is the result of net interest income for the period divided by average interest earning assets.
|
(2)
|
Net interest spread is the result of the difference between the interest earned on interest earning assets less the interest paid on interest bearing liabilities.
|
(3)
|
Efficiency ratio is the result of noninterest expense divided by the sum of net interest income and noninterest income.
|
(4)
|
Leverage ratio is computed by dividing Tier 1 capital by average total assets for the fourth quarter of each year.
|
ITEM 7.
|
MANAGE
ME
NT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Years ended
|
2012-2011 |
Year ended
|
2011-2010 | |||||||||||||||||
December 31,
|
Percent
|
December 31,
|
Percent
|
|||||||||||||||||
2012
|
2011
|
Increase (Decrease)
|
2010 |
Increase (Decrease)
|
||||||||||||||||
Interest income
|
$ | 185,422 | $ | 188,346 | (1.6 | %) | $ | 203,348 | (1.2 | %) | ||||||||||
Interest expense
|
22,558 | 36,882 | (38.8 | %) | 58,975 | (21.3 | %) | |||||||||||||
Net interest income
|
162,864 | 151,464 | 7.5 | % | 144,373 | 10.4 | % | |||||||||||||
Provision for loan losses
|
5,569 | 21,798 | (74.5 | %) | 53,695 | (54.0 | % | |||||||||||||
Net interest income after provision for loan losses
|
157,295 | 129,666 | 21.3 | % | 90,678 | 546.2 | % | |||||||||||||
Noninterest income
|
43,397 | 37,940 | 14.4 | % | 36,315 | (8.4 | %) | |||||||||||||
Noninterest expense
|
138,165 | 139,107 | (0.7 | %) | 146,883 | 23.9 | % | |||||||||||||
Net income (loss) before income taxes
|
62,527 | 28,499 | 119.4 | % | (19,890 | ) | (69.3 | %) | ||||||||||||
Income tax expense (benefit)
|
20,643 | (15,238 | ) | (235.5 | %) | 4,410 | (115.0 | %) | ||||||||||||
Net income (loss)
|
41,884 | 43,737 | (4.2 | %) | (24,300 | ) | (31.5 | %) | ||||||||||||
Preferred dividends and preferred stock discount accretion
|
3,814 | 6,665 | (42.8 | %) | 6,142 | 3.6 | % | |||||||||||||
Net income (loss) available to common stockholders
|
$ | 38,070 | $ | 37,072 | 2.7 | % | $ | (30,442 | ) | (26.5 | %) | |||||||||
Basic net income (loss) per common share available to common stockholders
|
$ | 1.12 | $ | 1.11 | 0.9 | % | $ | (0.93 | ) | (36.4 | %) | |||||||||
Diluted net income (loss) per common share available to common stockholders
|
$ | 1.10 | $ | 1.09 | 0.9 | % | $ | (0.93 | ) | (36.4 | %) |
2012
|
2011
|
2010
|
||||||||||||||||||||||||||||||||||
|
Average Balances
|
Interest
|
Rates/
Yields
|
Average Balances
|
Interest
|
Rates/ Yields
|
Average Balances
|
Interest
|
Rates/ Yields
|
|||||||||||||||||||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Loans
(1)
|
$ | 3,438,401 | $ | 160,037 | 4.66 | % | $ | 3,218,123 | $ | 154,750 | 4.82 | % | $ | 3,362,024 | $ | 162,902 | 4.85 | % | ||||||||||||||||||
Securities:
|
||||||||||||||||||||||||||||||||||||
Taxable
|
612,677 | 16,931 | 2.76 | % | 768,063 | 23,972 | 3.12 | % | 780,643 | 30,306 | 3.88 | % | ||||||||||||||||||||||||
Tax-exempt
(2)
|
182,217 | 6,577 | 4.82 | % | 193,397 | 7,394 | 5.10 | % | 205,029 | 7,917 | 5.09 | % | ||||||||||||||||||||||||
Federal funds sold and other
|
155,876 | 1,877 | 1.33 | % | 167,932 | 2,232 | 1.43 | % | 188,091 | 2,223 | 1.27 | % | ||||||||||||||||||||||||
Total interest-earning assets
|
4,389,171 | 185,422 | 4.29 | % | 4,347,515 | 188,348 | 4.40 | % | 4,535,787 | 203,348 | 4.55 | % | ||||||||||||||||||||||||
Nonearning assets:
|
||||||||||||||||||||||||||||||||||||
Intangible assets
|
250,619 | 253,443 | 256,379 | |||||||||||||||||||||||||||||||||
Other nonearning assets
|
233,764 | 232,477 | 221,730 | |||||||||||||||||||||||||||||||||
$ | 4,873,554 | $ | 4,833,435 | $ | 5,013,896 | |||||||||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||||||
Interest-bearing deposits:
|
||||||||||||||||||||||||||||||||||||
Interest checking
|
$ | 677,632 | $ | 2,800 | 0.41 | % | $ | 583,212 | $ | 3,522 | 0.60 | % | $ | 520,351 | $ | 3,491 | 0.67 | % | ||||||||||||||||||
Savings and money market
|
1,575,174 | 7,884 | 0.50 | % | 1,597,965 | 13,773 | 0.86 | % | 1,368,659 | 18,310 | 1.34 | % | ||||||||||||||||||||||||
Certificates of deposit
|
644,039 | 6,158 | 0.96 | % | 876,864 | 13,293 | 1.52 | % | 1,419,358 | 28,056 | 1.98 | % | ||||||||||||||||||||||||
Total deposits
|
2,896,845 | 16,842 | 0.58 | % | 3,058,041 | 30,588 | 1.00 | % | 3,308,368 | 49,857 | 1.51 | % | ||||||||||||||||||||||||
Securities sold under agreements to repurchase
|
134,989 | 455 | 0.34 | % | 161,845 | 1,110 | 0.69 | % | 222,179 | 1,750 | 0.79 | % | ||||||||||||||||||||||||
Federal Home Loan Bank advances
|
202,338 | 2,237 | 1.11 | % | 137,466 | 2,519 | 1.83 | % | 143,372 | 4,044 | 2.82 | % | ||||||||||||||||||||||||
Subordinated debt and other borrowing
|
105,131 | 3,024 | 2.87 | % | 97,476 | 2,665 | 2.73 | % | 97,476 | 3,324 | 3.41 | % | ||||||||||||||||||||||||
Total interest-bearing liabilities
|
3,339,303 | 22,558 | 0.68 | % | 3,454,828 | 36,882 | 1.07 | % | 3,771,395 | 58,975 | 1.56 | % | ||||||||||||||||||||||||
Noninterest-bearing deposits
|
809,268 | - | - | 650,602 | - | - | 527,673 | - | - | |||||||||||||||||||||||||||
Total deposits and interest- bearing liabilities
|
4,148,571 | 22,558 | 0.54 | % | 4,105,430 | 36,882 | 0.90 | % | 4,299,068 | 58,975 | 1.37 | % | ||||||||||||||||||||||||
Other liabilities
|
27,933 | 24,752 | 17,842 | |||||||||||||||||||||||||||||||||
Stockholders' equity
|
697,050 | 703,253 | 696,986 | |||||||||||||||||||||||||||||||||
$ | 4,873,554 | $ | 4,833,435 | $ | 5,013,896 | |||||||||||||||||||||||||||||||
Net interest income
|
$ | 162,864 | $ | 151,464 | $ | 144,373 | ||||||||||||||||||||||||||||||
Net interest spread
(3)
|
3.61 | % | 3.33 | % | 2.99 | % | ||||||||||||||||||||||||||||||
Net interest margin
(4)
|
3.77 | % | 3.55 | % | 3.25 | % |
|
(1)
|
Average balances of nonperforming loans are included in average loan balances.
|
|
(2)
|
Yields based on the carrying value of those tax exempt instruments are shown on a fully tax equivalent basis.
|
|
(3)
|
Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the year ended December 31, 2012 would have been 3.74% compared to a net interest spread for the years ended December 31, 2011 and 2010 of 3.50% and 3.18%, respectively.
|
|
(4)
|
Net interest margin is the result of net interest income calculated on a tax-equivalent basis divided by average interest earning assets for the period.
|
|
2012 Compared to 2011
|
2011 Compared to 2010
|
||||||||||||||||||||||
|
Increase (decrease) due to
|
Increase (decrease) due to
|
||||||||||||||||||||||
|
Rate
|
Volume
|
Net
|
Rate
|
Volume
|
Net
|
||||||||||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
||||||||||||||||||
Loans
|
$ | (5,149 | ) | $ | 10,437 | $ | 5,288 | $ | (1,153 | ) | $ | (7,012 | ) | $ | (8,165 | ) | ||||||||
Securities:
|
||||||||||||||||||||||||
Taxable
|
(2,765 | ) | (4,276 | ) | (7,041 | ) | (5,925 | ) | (409 | ) | (6,334 | ) | ||||||||||||
Tax-exempt
|
(542 | ) | (275 | ) | (817 | ) | 27 | (549 | ) | (522 | ) | |||||||||||||
Federal funds sold
|
(168 | ) | (187 | ) | (355 | ) | 310 | (301 | ) | 9 | ||||||||||||||
Total interest-earning assets
|
(8,623 | ) | 5,698 | (2,925 | ) | (6,741 | ) | (8,271 | ) | (15,012 | ) | |||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Interest-bearing deposits:
|
||||||||||||||||||||||||
Interest checking
|
(1,108 | ) | 386 | (722 | ) | (369 | ) | 400 | 31 | |||||||||||||||
Savings and money market
|
(5,753 | ) | (136 | ) | (5,889 | ) | (6,513 | ) | 1,975 | (4,538 | ) | |||||||||||||
Certificates of deposit
|
(4,910 | ) | (2,225 | ) | (7,135 | ) | (6,538 | ) | (8,224 | ) | (14,762 | ) | ||||||||||||
Total deposits
|
(11,771 | ) | (1,975 | ) | (13,746 | ) | (13,420 | ) | (5,849 | ) | (19,269 | ) | ||||||||||||
Securities sold under agreements to repurchase
|
(566 | ) | (89 | ) | (655 | ) | (217 | ) | (423 | ) | (640 | ) | ||||||||||||
Federal Home Loan Bank advances
|
(998 | ) | 723 | (275 | ) | (1,409 | ) | (123 | ) | (1,532 | ) | |||||||||||||
Subordinated debt and other borrowings
|
137 | 215 | 352 | (664 | ) | 2 | (662 | ) | ||||||||||||||||
Total interest-bearing liabilities
|
(13,198 | ) | (1,126 | ) | (14,324 | ) | (15,710 | ) | (6,393 | ) | (22,103 | ) | ||||||||||||
Net interest income
|
$ | 4,575 | $ | 6,824 | $ | 11,399 | $ | 8,969 | $ | (1,878 | ) | $ | 7,091 |
|
Years ended
|
2012-2011 |
Year ended
|
2011-2010 | ||||||||||||||||
|
December 31,
|
Percent
|
December 31,
|
Percent
|
||||||||||||||||
|
2012
|
2011
|
Increase (Decrease)
|
2010 |
Increase (Decrease)
|
|||||||||||||||
Noninterest income:
|
|
|||||||||||||||||||
Service charges on deposit accounts
|
$ | 9,918 | $ | 9,244 | 7.3 | % | $ | 9,592 | (3.6 | %) | ||||||||||
Investment services
|
6,985 | 6,246 | 11.8 | % | 5,050 | 23.7 | % | |||||||||||||
Insurance sales commissions
|
4,461 | 3,999 | 11.6 | % | 3,864 | 3.5 | % | |||||||||||||
Trust fees
|
3,195 | 3,000 | 6.5 | % | 2,872 | 4.5 | % | |||||||||||||
Gains on mortgage loans sold, net
|
6,699 | 4,155 | 61.2 | % | 4,086 | 1.7 | % | |||||||||||||
Net gains on sale of investment securities
|
2,151 | 961 | 123.8 | % | 2,624 | (63.4 | %) | |||||||||||||
Other noninterest income:
|
||||||||||||||||||||
ATM and other consumer fees
|
6,264 | 6,381 | (1.8 | %) | 5,373 | 18.8 | % | |||||||||||||
Bank-owned life insurance
|
919 | 1,159 | (20.7 | %) | 913 | 27.1 | % | |||||||||||||
Other noninterest income
|
2,804 | 2,795 | 0.3 | % | 1,941 | 44.0 | % | |||||||||||||
Total other noninterest income
|
9,987 | 10,335 | (3.4 | %) | 8,227 | 25.6 | % | |||||||||||||
Total noninterest income
|
$ | 43,396 | $ | 37,940 | 14.4 | % | $ | 36,315 | 4.5 | % |
|
Years ended
|
2012-2011 |
Year ended
|
2011-2010 | ||||||||||||||||
|
December 31,
|
Percent
|
December 31,
|
Percent
|
||||||||||||||||
|
2012
|
2011
|
Increase (Decrease)
|
2010 |
Increase (Decrease)
|
|||||||||||||||
Noninterest expense:
|
|
|
||||||||||||||||||
Salaries and employee benefits:
|
|
|
||||||||||||||||||
Salaries
|
$ | 44,829 | $ | 43,450 | 3.2 | % | $ | 44,994 | (3.4 | %) | ||||||||||
Commissions
|
4,283 | 3,992 | 7.3 | % | 2,834 | 40.9 | % | |||||||||||||
Annual cash incentives
|
10,314 | 9,389 | 9.9 | % | - | 100.0 | % | |||||||||||||
Employee benefits and other
|
18,631 | 17,594 | 5.9 | % | 16,801 | 4.7 | % | |||||||||||||
Total salaries and employee benefits
|
78,057 | 74,425 | 4.9 | % | 64,629 | 15.2 | % | |||||||||||||
Equipment and occupancy
|
20,420 | 19,987 | 2.2 | % | 21,077 | (5.2 | %) | |||||||||||||
Other real estate expense
|
11,544 | 17,432 | (33.8 | %) | 29,210 | (40.3 | %) | |||||||||||||
Marketing and business development
|
3,636 | 3,303 | 10.1 | % | 3,233 | 2.2 | % | |||||||||||||
Postage and supplies
|
2,380 | 2,121 | 12.2 | % | 2,538 | (16.4 | %) | |||||||||||||
Amortization of intangibles
|
2,739 | 2,863 | (4.3 | %) | 2,981 | (4.0 | %) | |||||||||||||
Other noninterest expense:
|
||||||||||||||||||||
Deposit related expenses
|
4,856 | 9,330 | (48.0 | %) | 12,507 | (25.4 | %) | |||||||||||||
Lending related expenses
|
3,768 | 1,707 | 120.7 | % | 2,175 | (21.5 | %) | |||||||||||||
Investment sales expense
|
240 | 272 | (11.8 | %) | 316 | (13.9 | %) | |||||||||||||
Trust expenses
|
376 | 376 | 0.0 | % | 343 | 9.6 | % | |||||||||||||
FHLB restructuring
|
2,093 | - | 100.0 | % | - | 0.0 | % | |||||||||||||
Administrative and other expenses
|
8,056 | 7,291 | 10.5 | % | 7,874 | (7.4 | %) | |||||||||||||
Total other noninterest expense
|
19,389 | 18,976 | 2.2 | % | 23,215 | (18.3 | %) | |||||||||||||
Total noninterest expense
|
$ | 138,165 | $ | 139,107 | (0.7 | %) | $ | 146,883 | (5.3 | %) |
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||||||||||||||
Commercial real estate - Mortgage
|
$ | 1,178,196 | 31.7 | % | $ | 1,110,962 | 33.8 | % | $ | 1,094,615 | 34.1 | % | $ | 1,118,068 | 31.4 | % | $ | 963,530 | 28.7 | % | ||||||||||||||||||||
Consumer real estate - Mortgage
|
679,926 | 18.3 | % | 695,745 | 21.1 | % | 705,487 | 22.0 | % | 756,015 | 21.2 | % | 675,606 | 20.1 | % | |||||||||||||||||||||||||
Construction and land development
|
313,552 | 8.4 | % | 274,248 | 8.3 | % | 331,261 | 10.3 | % | 525,271 | 14.7 | % | 658,799 | 19.6 | % | |||||||||||||||||||||||||
Commercial and industrial
|
1,446,578 | 39.0 | % | 1,145,735 | 34.8 | % | 1,012,091 | 31.5 | % | 1,071,444 | 30.0 | % | 966,563 | 28.8 | % | |||||||||||||||||||||||||
Consumer and other
|
93,910 | 2.5 | % | 64,661 | 2.0 | % | 68,986 | 2.1 | % | 92,584 | 2.7 | % | 90,409 | 2.8 | % | |||||||||||||||||||||||||
Total loans
|
$ | 3,712,162 | 100.0 | % | $ | 3,291,351 | 100.0 | % | $ | 3,212,440 | 100.0 | % | $ | 3,563,382 | 100.0 | % | $ | 3,354,907 | 100.0 | % |
|
Amounts at December 31, 2012
|
|
|
|||||||||||||||||
|
Fixed
|
Variable
|
|
At December 31,
|
At December 31,
|
|||||||||||||||
|
Rates
|
Rates
|
Totals
|
2012
|
2011
|
|||||||||||||||
Based on contractual maturity:
|
|
|
|
|||||||||||||||||
Due within one year
|
$ | 253,261 | $ | 805,600 | $ | 1,058,861 | 28.5 | % | 29.0 | % | ||||||||||
Due in one year to five years
|
772,093 | 793,960 | 1,566,053 | 42.2 | % | 44.4 | % | |||||||||||||
Due after five years
|
467,050 | 620,198 | 1,087,248 | 29.3 | % | 26.6 | % | |||||||||||||
Totals
|
$ | 1,492,404 | $ | 2,219,758 | $ | 3,712,162 | 100.0 | % | 100.0 | % | ||||||||||
Based on contractual repricing dates:
|
||||||||||||||||||||
Daily floating rate
(*)
|
$ | - | $ | 1,126,819 | $ | 1,126,819 | 30.4 | % | 32.4 | % | ||||||||||
Due within one year
|
253,261 | 754,644 | 1,007,905 | 27.2 | % | 32.0 | % | |||||||||||||
Due in one year to five years
|
772,093 | 317,198 | 1,089,291 | 29.3 | % | 26.4 | % | |||||||||||||
Due after five years
|
467,050 | 21,097 | 488,147 | 13.1 | % | 9.3 | % | |||||||||||||
Totals
|
$ | 1,492,404 | $ | 2,219,758 | $ | 3,712,162 | 100.0 | % | 100.0 | % |
At December 31, 2012
|
||||||||||||||||
Outstanding Principal Balances
|
Unfunded Commitments
|
Total exposure
|
Total Exposure at
December 31, 2011
|
|||||||||||||
Lessors of nonresidential buildings
|
$ | 382,238 | $ | 57,999 | $ | 440,237 | $ | 509,003 | ||||||||
Lessors of residential buildings
|
191,693 | 24,206 | 215,899 | 177,414 | ||||||||||||
Land subdividers
|
92,613 | 15,670 | 108,283 | 119,106 |
December 31,
|
December 31,
|
|||||||
Accruing loans past due 30 to 90 days:
|
2012
|
2011
|
||||||
Commercial real estate – mortgage
|
$ | 503 | $ | 5,749 | ||||
Consumer real estate – mortgage
|
3,870 | 2,589 | ||||||
Construction and land development
|
3,511 | 1,572 | ||||||
Commercial and industrial
|
2,549 | 648 | ||||||
Consumer and other
|
444 | 526 | ||||||
Total accruing loans past due 30 to 90 days
|
$ | 10,877 | $ | 11,084 | ||||
Accruing loans past due 90 days or more:
|
||||||||
Commercial real estate – mortgage
|
$ | - | $ | - | ||||
Consumer real estate – mortgage
|
- | 254 | ||||||
Construction and land development
|
- | - | ||||||
Commercial and industrial
|
- | 604 | ||||||
Consumer and other
|
- | - | ||||||
Total accruing loans past due 90 days or more
|
$ | - | $ | 858 | ||||
Ratios:
|
||||||||
Accruing loans past due 30 to 90 days as a percentage of total loans
|
0.29 | % | 0.34 | % | ||||
Accruing loans past due 90 days or more as a percentage of total loans
|
0.00 | % | 0.03 | % | ||||
Total accruing loans in past due status as a percentage of total loans
|
0.29 | % | 0.36 | % |
December 31,
|
||||||||
2012
|
2011
|
|||||||
New home construction
|
$ | - | $ | 2,733 | ||||
Developed lots
|
1,835 | 7,091 | ||||||
Undeveloped land
|
13,285 | 22,455 | ||||||
Other
|
3,460 | 7,435 | ||||||
$ | 18,580 | $ | 39,714 |
At
December 31, 2011
|
Payments, Sales and Reductions
(2)
|
Foreclosures
(3)
|
Inflows
(4)
|
At
December 31, 2012
|
||||||||||||||||
Nonperforming assets:
|
||||||||||||||||||||
Nonperforming loans
(1)
:
|
||||||||||||||||||||
Commercial real estate – mortgage
|
$ | 9,962 | $ | (12,721 | ) | $ | (1,756 | ) | $ | 13,805 | $ | 9,291 | ||||||||
Consumer real estate – mortgage
|
12,487 | (16,315 | ) | (3,850 | ) | 13,584 | 5,906 | |||||||||||||
Construction and land development
|
12,965 | (7,837 | ) | (2,892 | ) | 2,273 | 4,509 | |||||||||||||
Commercial and industrial
|
11,890 | (14,987 | ) | (46 | ) | 6,181 | 3,038 | |||||||||||||
Consumer and other
|
551 | (1,127 | ) | (161 | ) | 817 | 79 | |||||||||||||
Total nonperforming loans
(1)
|
47,855 | (52,987 | ) | (8,705 | ) | 36,660 | 22,823 | |||||||||||||
Other real estate owned
|
39,714 | (30,187 | ) | 9,053 | - | 18,580 | ||||||||||||||
Total nonperforming assets
|
87,569 | (83,174 | ) | 348 | 36,660 | 41,403 | ||||||||||||||
Troubled debt restructurings:
|
||||||||||||||||||||
Commercial real estate – mortgage
|
15,378 | (9,114 | ) | - | 14,000 | 20,264 | ||||||||||||||
Consumer real estate – mortgage
|
5,874 | (745 | ) | - | 1,182 | 6,311 | ||||||||||||||
Construction and land development
|
77 | (366 | ) | - | 360 | 71 | ||||||||||||||
Commercial and industrial
|
1,845 | (1,023 | ) | (194 | ) | 59 | 687 | |||||||||||||
Consumer and other
|
242 | (10 | ) | (154 | ) | 41 | 119 | |||||||||||||
Total troubled debt restructurings
|
23,416 | (11,258 | ) | (348 | ) | 15,642 | 27,452 | |||||||||||||
Total nonperforming assets and troubled debt restructurings
|
$ | 110,985 | $ | (94,432 | ) | $ | - | $ | 52,302 | $ | 68,855 | |||||||||
Ratios:
|
||||||||||||||||||||
Nonperforming loans to total loans
|
1.45 | % | 0.61 | % | ||||||||||||||||
Nonperforming assets to total loans plus other real estate owned
|
2.66 | % | 1.11 | % | ||||||||||||||||
Nonperforming loans plus troubled debt restructurings to total loans and other real estate owned
|
2.14 | % | 1.35 | % | ||||||||||||||||
Nonperforming assets, potential problem loans and troubled debt restructurings to Pinnacle Bank Tier I capital and allowance for loan losses
|
45.15 | % | 31.04 | % |
|
(1)
|
Approximately $9.4 million and $25.5 million as of December 31, 2012 and 2011, respectively, of nonperforming loans included above are currently paying pursuant to their contractual terms.
|
|
(2)
|
Payments, sales and reductions in nonperforming loans are primarily attributable to payments we have collected from borrowers, charge-offs of recorded balances and nonaccrual loans that have been returned to accruing status during the year ended December 31, 2012. Payments, sales and reductions in other real estate owned represent either the sale, disposition or valuation adjustment on properties which had previously been foreclosed upon or acquired by deed in lieu of foreclosure. Payments, sales and reductions in troubled debt restructurings are those loans which were previously restructured whereby the borrower has reduced the outstanding balance of the loan or re-defaulted on the terms of the loan and therefore been charged-off.
|
|
(3)
|
Foreclosures in nonperforming loans and troubled debt restructurings are representative of transfers of balances to OREO during the year ended December 31, 2012.
|
|
(4)
|
Inflows in nonperforming loans are attributable to loans where we have discontinued the accrual of interest at some point during the year ended December 31, 2012. Increases in OREO represent the value of properties that have been foreclosed upon or acquired by deed in lieu of foreclosure during 2012. Increases in troubled debt restructurings are those loans where we have granted the borrower a concession due to the deteriorating financial condition of the borrower during 2012. These concessions can be in the form of a reduced interest rate, extended maturity date or other matters.
|
At December 31,
|
||||||||||||||||||||||||||||||||||||||||
|
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||||||||||||||||||||||||
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||||||||||||||||||
Commercial real estate – Mortgage
|
$ | 19,634 | 31.7 | % | $ | 23,397 | 33.8 | % | $ | 19,252 | 34.1 | % | $ | 22,505 | 31.4 | % | $ | 11,523 | 28.7 | % | ||||||||||||||||||||
Consumer real estate – Mortgage
|
8,762 | 18.3 | % | 10,302 | 21.1 | % | 9,898 | 22.0 | % | 10,725 | 21.2 | % | 5,149 | 20.1 | % | |||||||||||||||||||||||||
Construction and land development
|
9,164 | 8.5 | % | 12,040 | 8.3 | % | 19,122 | 10.3 | % | 23,027 | 14.7 | % | 7,899 | 19.6 | % | |||||||||||||||||||||||||
Commercial and industrial
|
24,738 | 39.0 | % | 20,789 | 34.8 | % | 21,426 | 31.5 | % | 26,332 | 30.0 | % | 9,966 | 28.8 | % | |||||||||||||||||||||||||
Consumer and other
|
1,094 | 2.5 | % | 1,125 | 2.0 | % | 1,874 | 2.1 | % | 2,456 | 2.7 | % | 1,372 | 2.8 | % | |||||||||||||||||||||||||
Unallocated
|
6,025 |
NA
|
6,322 |
NA
|
11,003 |
NA
|
6,914 |
NA
|
575 |
NA
|
||||||||||||||||||||||||||||||
Total allowance for loan losses
|
$ | 69,417 | 100.0 | % | $ | 73,975 | 100.0 | % | $ | 82,575 | 100.0 | % | $ | 91,959 | 100.0 | % | $ | 36,484 | 100.0 | % |
|
For the year ended December 31,
|
|||||||||||||||||||
|
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||||
Balance at beginning of period
|
$ | 73,975 | $ | 82,575 | $ | 91,959 | $ | 36,484 | $ | 28,470 | ||||||||||
Provision for loan losses
|
5,569 | 21,798 | 53,695 | 116,758 | 11,214 | |||||||||||||||
Charged-off loans:
|
||||||||||||||||||||
Commercial real estate - Mortgage
|
(4,667 | ) | (3,044 | ) | (9,041 | ) | (986 | ) | (62 | ) | ||||||||||
Consumer real estate - Mortgage
|
(6,731 | ) | (5,076 | ) | (6,769 | ) | (4,881 | ) | (1,144 | ) | ||||||||||
Construction and land development
|
(2,530 | ) | (10,157 | ) | (27,526 | ) | (23,952 | ) | (2,172 | ) | ||||||||||
Commercial and industrial
|
(4,612 | ) | (15,360 | ) | (23,555 | ) | (31,134 | ) | (773 | ) | ||||||||||
Consumer and other
|
(1,117 | ) | (1,213 | ) | (652 | ) | (1,646 | ) | (982 | ) | ||||||||||
Total charged-off loans
|
(19,657 | ) | (34,850 | ) | (67,543 | ) | (62,599 | ) | (5,133 | ) | ||||||||||
Recoveries of previously charged-off loans:
|
||||||||||||||||||||
Commercial real estate - Mortgage
|
285 | 116 | 343 | - | 731 | |||||||||||||||
Consumer real estate - Mortgage
|
818 | 495 | 377 | 622 | 3 | |||||||||||||||
Construction and land development
|
1,155 | 1,530 | 2,618 | 139 | 55 | |||||||||||||||
Commercial and industrial
(1)
|
7,175 | 2,167 | 874 | 258 | 844 | |||||||||||||||
Consumer and other loans
|
97 | 144 | 252 | 297 | 300 | |||||||||||||||
Total recoveries of previously charged-off loans
|
9,530 | 4,452 | 4,464 | 1,316 | 1,933 | |||||||||||||||
Net charge-offs
|
(10,127 | ) | (30,397 | ) | (63,079 | ) | (61,283 | ) | (3,200 | ) | ||||||||||
Balance at end of period
|
69,417 | $ | 73,975 | $ | 82,575 | $ | 91,959 | $ | 36,484 | |||||||||||
Ratio of allowance for loan losses to total loans outstanding at end of period
|
1.87 | % | 2.25 | % | 2.57 | % | 2.58 | % | 1.09 | % | ||||||||||
Ratio of net charge-offs to average loans outstanding for the period
|
0.29 | % | 0.92 | % | 1.96 | % | 1.71 | % | 0.11 | % |
|
(1)
|
Includes the 2012 $5.6 million recovery of a loan previously charged off in 2009.
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
Weighted average life
|
4.77 years
|
4.25 years
|
||||||
Effective duration
|
3.16 | % | 2.45 | % | ||||
Weighted average coupon
|
3.88 | % | 4.26 | % | ||||
Tax equivalent yield
|
3.26 | % | 3.60 | % |
|
||||||||||||||||||||||||||||||||||||||||
|
U.S. Treasury securities
|
U.S. government agency securities
|
State and Municipal
securities
|
Corporate securities
|
Totals
|
|||||||||||||||||||||||||||||||||||
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
||||||||||||||||||||||||||||||
At December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Due in one year or less
|
$ | - | 0.0 | % | $ | - | 0.0 | % | $ | 3,348 | 3.6 | % | $ | 1,176 | 3.0 | % | $ | 4,524 | 3.4 | % | ||||||||||||||||||||
Due in one year to five years
|
- | 0.0 | % | 6,057 | 0.6 | % | 29,468 | 3.5 | % | 615 | 1.5 | % | 36,140 | 3.0 | % | |||||||||||||||||||||||||
Due in five years to ten years
|
- | 0.0 | % | 45,329 | 1.9 | % | 79,010 | 4.1 | % | 9,605 | 5.0 | % | 133,944 | 3.4 | % | |||||||||||||||||||||||||
Due after ten years
|
- | 0.0 | % | 59,066 | 2.7 | % | 79,901 | 4.0 | % | - | 0.0 | % | 138,967 | 3.4 | % | |||||||||||||||||||||||||
$ | - | 0.0 | % | $ | 110,452 | 2.3 | % | $ | 191,727 | 4.0 | % | $ | 11,396 | 4.6 | % | 313,575 | 3.4 | % | ||||||||||||||||||||||
Mortgage-backed securities
|
375,651 | 3.3 | % | |||||||||||||||||||||||||||||||||||||
Asset-backed securities
|
17,352 | 1.4 | % | |||||||||||||||||||||||||||||||||||||
$ | 706,578 | 3.3 | % | |||||||||||||||||||||||||||||||||||||
Securities held-to-maturity:
|
||||||||||||||||||||||||||||||||||||||||
Due in one year or less
|
$ | - | 0.0 | % | $ | - | 0.0 | % | $ | 200 | 3.0 | % | $ | - | 0.0 | % | $ | 200 | 3.0 | % | ||||||||||||||||||||
Due in one year to five years
|
- | 0.0 | % | - | 0.0 | % | 375 | 3.5 | % | - | 0.0 | % | 375 | 3.5 | % | |||||||||||||||||||||||||
Due in five years to ten years
|
- | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | |||||||||||||||||||||||||
Due after ten years
|
- | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | |||||||||||||||||||||||||
$ | - | 0.0 | % | $ | - | 0.0 | % | $ | 575 | 3.3 | % | $ | - | 0.0 | % | $ | 575 | 3.3 | % | |||||||||||||||||||||
Mortgage-backed securities
|
- | 0.0 | % | |||||||||||||||||||||||||||||||||||||
Asset-backed securities
|
- | 0.0 | % | |||||||||||||||||||||||||||||||||||||
Total held-for-sale securities
|
$ | 575 | 3.3 | % |
U.S. Treasury
securities
|
U.S. government agency securities
|
State and Municipal
securities
|
Corporate securities
|
Totals
|
||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||||||||
At December 31, 2011:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Due in one year or less
|
$ | - | 0.0 | % | $ | 516 | 0.6 | % | $ | 2,483 | 5.1 | % | $ | 306 | 2.2 | % | $ | 3,304 | 4.1 | % | ||||||||||||||||||||
Due in one year to five years
|
- | 0.0 | % | 30,411 | 1.0 | % | 28,834 | 4.9 | % | 1,313 | 3.1 | % | 60,558 | 2.9 | % | |||||||||||||||||||||||||
Due in five years to ten years
|
- | 0.0 | % | 7,024 | 3.1 | % | 67,441 | 5.7 | % | 9,511 | 5.0 | % | 83,976 | 5.4 | % | |||||||||||||||||||||||||
Due after ten years
|
- | 0.0 | % | 4,362 | 3.3 | % | 97,194 | 5.9 | % | - | 0.0 | % | 101,556 | 5.8 | % | |||||||||||||||||||||||||
$ | - | 0.0 | % | $ | 42,313 | 1.6 | % | $ | 195,952 | 5.7 | % | $ | 11,130 | 4.7 | % | 249,394 | 4.9 | % | ||||||||||||||||||||||
Mortgage-backed securities
|
645,567 | 3.1 | % | |||||||||||||||||||||||||||||||||||||
$ | 894,961 | 3.6 | % | |||||||||||||||||||||||||||||||||||||
Securities held-to-maturity:
|
||||||||||||||||||||||||||||||||||||||||
Due in one year or less
|
$ | - | 0.0 | % | $ | - | 0.0 | % | $ | 1,705 | 4.9 | % | $ | - | 0.0 | % | $ | 1,705 | 4.9 | % | ||||||||||||||||||||
Due in one year to five years
|
- | 0.0 | % | - | 0.0 | % | 625 | 4.9 | % | - | 0.0 | % | 625 | 4.9 | % | |||||||||||||||||||||||||
Due in five years to ten years
|
- | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | |||||||||||||||||||||||||
Due after ten years
|
- | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | |||||||||||||||||||||||||
$ | - | 0.0 | % | $ | - | 0.0 | % | $ | 2,330 | 4.9 | % | $ | - | 0.0 | % | 2,330 | 4.9 | % | ||||||||||||||||||||||
Mortgage-backed securities
|
- | 0.0 | % | |||||||||||||||||||||||||||||||||||||
Total held-for-sale securities
|
$ | 2,330 | 4.9 | % |
December 31,
|
December 31,
|
|||||||||||||||
|
2012
|
Percent
|
2011
|
Percent
|
||||||||||||
Core funding:
|
|
|
||||||||||||||
Noninterest-bearing deposit accounts
|
$ | 985,689 | 22.9 | % | $ | 717,379 | 17.5 | % | ||||||||
Interest-bearing demand accounts
|
760,787 | 17.6 | % | 637,203 | 15.5 | % | ||||||||||
Savings and money market accounts
|
1,662,256 | 38.6 | % | 1,585,260 | 38.6 | % | ||||||||||
Time deposit accounts less than $250,000
|
467,013 | 10.8 | % | 501,705 | 12.2 | % | ||||||||||
Total core funding
|
3,875,745 | 89.9 | % | 3,441,547 | 83.8 | % | ||||||||||
Non-core funding:
|
||||||||||||||||
Relationship based non-core funding:
|
||||||||||||||||
Reciprocating time deposits (1)
|
52,239 | 1.2 | % | 108,507 | 2.6 | % | ||||||||||
Other time deposits
|
87,204 | 2.0 | % | 104,284 | 2.5 | % | ||||||||||
Securities sold under agreements to repurchase
|
114,667 | 2.7 | % | 131,591 | 3.2 | % | ||||||||||
Total relationship based non-core funding
|
254,110 | 5.9 | % | 344,382 | 8.4 | % | ||||||||||
Wholesale funding:
|
||||||||||||||||
Public funds
|
- | 0.0 | % | - | 0.0 | % | ||||||||||
Brokered deposits
|
- | 0.0 | % | - | 0.0 | % | ||||||||||
Federal Home Loan Bank advances
|
75,850 | 1.8 | % | 226,069 | 5.5 | % | ||||||||||
Holding Company loan
|
23,682 | 0.6 | % | - | 0.0 | % | ||||||||||
Subordinated debt – Pinnacle Bank
|
- | 0.0 | % | 15,000 | 0.3 | % | ||||||||||
Subordinated debt – Pinnacle Financial
|
82,476 | 1.8 | % | 82,476 | 2.0 | % | ||||||||||
Total wholesale funding
|
182,008 | 4.2 | % | 323,545 | 7.8 | % | ||||||||||
Total non-core funding
|
436,118 | 10.1 | % | 667,927 | 16.2 | % | ||||||||||
Totals
|
$ | 4,311,863 | 100.0 | % | $ | 4,109,474 | 100.0 | % |
|
(1)
|
The reciprocating time deposit category consists of deposits we receive from a bank network (the CDARS network) in connection with deposits of our customers in excess of our FDIC coverage limit that we place with the CDARS network.
|
Balances
|
Weighted Avg. Rate
|
|||||||
Denominations less than $250,000
|
||||||||
Three months or less
|
$ | 136,903 | 0.80 | % | ||||
Over three but less than six months
|
132,630 | 0.53 | % | |||||
Over six but less than twelve months
|
106,578 | 0.72 | % | |||||
Over twelve months
|
143,141 | 1.14 | % | |||||
$ | 519,252 | 0.81 | % | |||||
Denomination $250,000 and greater
|
||||||||
Three months or less
|
$ | 16,553 | 0.73 | % | ||||
Over three but less than six months
|
25,175 | 0.59 | % | |||||
Over six but less than twelve months
|
21,817 | 0.79 | % | |||||
Over twelve months
|
23,659 | 1.41 | % | |||||
$ | 87,204 | 0.89 | % | |||||
Totals
|
$ | 606,456 | 0.82 | % |
Scheduled Maturities
|
Weighted Average
Interest
Rates
(1)
|
|||||||
2013
|
$ | 25,000 | 0.21 | % | ||||
2014
|
35,000 | 1.79 | % | |||||
2015
|
- | 0.00 | % | |||||
2016
|
15,000 | 2.87 | % | |||||
2017
|
- | 0.00 | % | |||||
Thereafter
|
609 | 2.48 | % | |||||
$ | 75,609 | |||||||
Weighted average interest rate
|
1.49 | % |
|
(1)
|
Some FHLB advances include variable interest rates and could increase in the future. The table reflects rates in effect as of December 31, 2012.
|
Date
Established
|
Maturity
|
Common Securities
|
Subordinated Debentures
|
Floating Interest
Rate
|
Interest Rate at
December 31, 2012
|
||||||||||
Trust I
|
December 29, 2003
|
December 30, 2033
|
$ | 310,000 | $ | 10,000,000 |
Libor + 2.80%
|
3.11 | % | ||||||
Trust II
|
September 15, 2005
|
September 30, 2035
|
619,000 | 20,000,000 |
Libor + 1.40%
|
1.71 | % | ||||||||
Trust III
|
September 7, 2006
|
September 30, 2036
|
619,000 | 20,000,000 |
Libor + 1.65%
|
1.96 | % | ||||||||
Trust IV
|
October 31, 2007
|
September 30, 2037
|
928,000 | 30,000,000 |
Libor + 2.85%
|
3.16 | % |
|
●
|
A base rate generally defined as the sum of (i) the highest of (x) the lender’s “base” or “prime” rate, (y) the average overnight federal funds effective rate plus one-half percent (0.50%) per annum or (z) one-month LIBOR plus one percent (1%) per annum and (ii) an applicable margin as noted below; or
|
|
●
|
A LIBOR rate generally defined as the sum of (i) the average of the offered rates of interest quoted in the London Inter-Bank Eurodollar Market for U.S. Dollar deposits with prime banks (as published by Reuters or other commercially available source) for one, two or three months (all as selected by the Company), and (ii) an applicable margin.
|
|
·
|
Earnings simulation model
.
We believe that interest rate risk is best measured by our earnings simulation modeling. Earning assets, interest-bearing liabilities, and off-balance sheet financial instruments are combined with ALCO forecasts of interest rates for the next 12 months and are combined with other factors in order to produce various earnings simulations. To limit interest rate risk, we have guidelines for our earnings at risk which seek to limit the variance of net interest income in both gradual and instantaneous changes to interest rates. For changes up or down in rates from management’s flat interest rate forecast over the next twelve months, limits in the decline in net interest income are as follows:
|
|
·
|
-10.0% for a gradual change of 400 basis points; -20.0% for an instantaneous change of 400 basis points
|
|
·
|
-7.5% for a gradual change of 300 basis points; -15.0% for an instantaneous change of 300 basis points
|
|
·
|
-5.0% for a gradual change of 200 basis points; -10.0% for an instantaneous change of 200 basis points
|
|
·
|
-2.5% for a gradual change of 100 basis points; -5.0% for an instantaneous change of 100 basis points
|
|
·
|
Economic value of equity
. Our economic value of equity model measures the extent that estimated economic values of our assets, liabilities and off-balance sheet items will change as a result of interest rate changes. Economic values are determined by discounting expected cash flows from assets, liabilities and off-balance sheet items, which establishes a base case economic value of equity. To help limit interest rate risk, we have a guideline stating that for an instantaneous 400 basis point change in interest rates up or down, the economic value of equity should not decrease by more than 40 percent from the base case; for a 300 basis point instantaneous change in interest rates up or down, the economic value of equity should not decrease by more than 30 percent; for a 200 basis point instantaneous change in interest rates up or down, the economic value of equity should not decrease by more than 20 percent; and for a 100 basis point instantaneous change in interest rates up or down, the economic value of equity should not decrease by more than 10 percent.
|
At December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
Amounts outstanding at year-end:
|
||||||||||||
Securities sold under agreements to repurchase
|
$ | 114,667 | $ | 131,591 | $ | 146,294 | ||||||
Federal funds purchased
|
- | - | - | |||||||||
Federal Home Loan Bank short-term advances
|
25,000 | 115,000 | 10,000 | |||||||||
Weighted average interest rates at year-end:
|
||||||||||||
Securities sold under agreements to repurchase
|
0.21 | % | 0.44 | % | 0.75 | % | ||||||
Federal funds purchased
|
- | - | - | |||||||||
Federal Home Loan Bank short-term advances
|
0.21 | % | 0.12 | % | 1.90 | % | ||||||
Maximum amount of borrowings at any month-end:
|
||||||||||||
Securities sold under agreements to repurchase
|
$ | 153,327 | $ | 244,233 | $ | 284,323 | ||||||
Federal funds purchased
|
- | - | - | |||||||||
Federal Home Loan Bank short-term advances
|
160,000 | 115,000 | 75,980 | |||||||||
Average balances for the year:
|
||||||||||||
Securities sold under agreements to repurchase
|
$ | 134,989 | $ | 161,845 | $ | 222,179 | ||||||
Federal funds purchased
|
1,325 | - | 260 | |||||||||
Federal Home Loan Bank short-term advances
|
96,250 | 31,250 | 30,288 | |||||||||
Weighted average interest rates for the year:
|
||||||||||||
Securities sold under agreements to repurchase
|
0.34 | % | 0.69 | % | 0.79 | % | ||||||
Federal funds purchased
|
0.49 | % | 0.94 | % | 1.04 | % | ||||||
Federal Home Loan Bank short-term advances
|
0.18 | % | 0.12 | % | 2.66 | % |
At December 31, 2012
|
||||||||||||||||||||
Next 12 months
|
13-36
months
|
37-60
months
|
More than
60 months
|
Totals
|
||||||||||||||||
Contractual obligations:
|
||||||||||||||||||||
Certificates of deposit
|
$ | 439,470 | $ | 119,861 | $ | 47,125 | $ | - | $ | 606,456 | ||||||||||
Securities sold under agreements to repurchase
|
114,667 | - | - | - | 114,667 | |||||||||||||||
Federal Home Loan Bank advances
|
25,000 | 35,000 | 15,000 | 609 | 75,609 | |||||||||||||||
Subordinated debt
|
- | - | - | 82,476 | 82,476 | |||||||||||||||
Minimum operating lease commitments
|
3,665 | 7,149 | 7,071 | 30,191 | 48,076 | |||||||||||||||
Totals
|
$ | 582,802 | $ | 162,010 | $ | 69,196 | $ | 113,276 | $ | 927,284 |
At December 31, 2012
|
||||||||||||||||||||
Next 12
months
|
13-36 months
|
37-60
months
|
More than 60 months
|
Totals
|
||||||||||||||||
Unfunded commitments:
|
||||||||||||||||||||
Lines of credit
|
$ | 535,472 | $ | 183,630 | $ | 127,364 | $ | 184,258 | $ | 1,030,724 | ||||||||||
Letters of credit
|
69,754 | 4,856 | 69 | - | 74,679 | |||||||||||||||
Totals
|
$ | 605,226 | $ | 188,486 | $ | 127,433 | $ | 184,258 | $ | 1,105,403 |
ITEM 7A.
|
QUANTITA
TIV
E AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINA
NCIAL
STATEMENTS
|
Management Report on Internal Control Over Financial Reporting
|
54
|
Report of Independent Registered Public Accounting Firm – Financial statements
|
55
|
Report of Independent Registered Public Accounting Firm – Internal Control over Financial Reporting
|
56
|
Consolidated Financial Statements:
|
|
Consolidated balance sheets
|
57
|
Consolidated statements of operations
|
58
|
Consolidated statements of comprehensive income (loss)
|
59
|
Consolidated statements of stockholders' equity
|
60
|
Consolidated statements of cash flows
|
61
|
Notes to consolidated financial statements
|
62
|
December 31,
|
||||||||
ASSETS
|
2012
|
2011
|
||||||
Cash and noninterest-bearing due from banks
|
$ | 51,946,542 | $ | 63,015,997 | ||||
Interest-bearing due from banks
|
111,535,083 | 108,422,470 | ||||||
Federal funds sold and other
|
1,807,044 | 724,573 | ||||||
Cash and cash equivalents
|
165,288,669 | 172,163,040 | ||||||
Securities available-for-sale, at fair value
|
706,577,806 | 894,962,246 | ||||||
Securities held-to-maturity (fair value of $583,212 and $2,369,118 at December 31, 2012 and December 31, 2011, respectively)
|
574,863 | 2,329,917 | ||||||
Mortgage loans held-for-sale
|
41,194,639 | 35,363,038 | ||||||
Loans
|
3,712,162,430 | 3,291,350,857 | ||||||
Less allowance for loan losses
|
(69,417,437 | ) | (73,974,675 | ) | ||||
Loans, net
|
3,642,744,993 | 3,217,376,182 | ||||||
Premises and equipment, net
|
75,804,895 | 77,127,361 | ||||||
Other investments
|
26,962,890 | 44,653,840 | ||||||
Accrued interest receivable
|
14,856,615 | 15,243,366 | ||||||
Goodwill
|
244,040,421 | 244,076,492 | ||||||
Core deposits and other intangible assets
|
5,103,273 | 7,842,267 | ||||||
Other real estate owned
|
18,580,097 | 39,714,415 | ||||||
Other assets
|
98,819,455 | 113,098,540 | ||||||
Total assets
|
$ | 5,040,548,616 | $ | 4,863,950,704 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Deposits:
|
||||||||
Non-interest-bearing
|
$ | 985,689,460 | $ | 717,378,933 | ||||
Interest-bearing
|
760,786,247 | 637,203,420 | ||||||
Savings and money market accounts
|
1,662,256,403 | 1,585,260,139 | ||||||
Time
|
606,455,873 | 714,496,974 | ||||||
Total deposits
|
4,015,187,983 | 3,654,339,466 | ||||||
Securities sold under agreements to repurchase
|
114,667,475 | 131,591,412 | ||||||
Federal Home Loan Bank advances
|
75,850,390 | 226,068,796 | ||||||
Subordinated debt and other borrowings
|
106,158,292 | 97,476,000 | ||||||
Accrued interest payable
|
1,360,598 | 2,233,330 | ||||||
Other liabilities
|
48,252,519 | 42,097,132 | ||||||
Total liabilities
|
4,361,477,257 | 4,153,806,136 | ||||||
Stockholders’ equity:
|
||||||||
Preferred stock, no par value; 10,000,000 shares authorized; 71,250 shares issued and outstanding at December 31, 2011
|
- | 69,096,828 | ||||||
Common stock, par value $1.00; 90,000,000 shares authorized; 34,696,597 and 34,354,960 issued and outstanding at December 31, 2012 and 2011
|
34,696,597 | 34,354,960 | ||||||
Common stock warrants
|
- | 3,348,402 | ||||||
Additional paid-in capital
|
543,760,439 | 536,227,537 | ||||||
Retained earnings
|
87,386,689 | 49,783,584 | ||||||
Accumulated other comprehensive income, net of taxes
|
13,227,634 | 17,333,257 | ||||||
Total stockholders’ equity
|
679,071,359 | 710,144,568 | ||||||
Total liabilities and stockholders’ equity
|
$ | 5,040,548,616 | $ | 4,863,950,704 |
For the years ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
Interest income:
|
||||||||||||
Loans, including fees
|
$ | 160,036,709 | $ | 154,748,491 | $ | 162,901,763 | ||||||
Securities:
|
||||||||||||
Taxable
|
16,931,417 | 23,971,787 | 30,306,189 | |||||||||
Tax-exempt
|
6,576,701 | 7,394,134 | 7,916,596 | |||||||||
Federal funds sold and other
|
1,876,731 | 2,232,423 | 2,223,816 | |||||||||
Total interest income
|
185,421,558 | 188,346,835 | 203,348,364 | |||||||||
Interest expense:
|
||||||||||||
Deposits
|
16,842,852 | 30,588,033 | 49,856,815 | |||||||||
Securities sold under agreements to repurchase
|
455,499 | 1,110,078 | 1,749,905 | |||||||||
Federal Home Loan Bank advances and other borrowings
|
5,258,749 | 5,184,313 | 7,368,258 | |||||||||
Total interest expense
|
22,557,100 | 36,882,424 | 58,974,978 | |||||||||
Net interest income
|
162,864,458 | 151,464,411 | 144,373,386 | |||||||||
Provision for loan losses
|
5,568,830 | 21,797,613 | 53,695,454 | |||||||||
Net interest income after provision for loan losses
|
157,295,628 | 129,666,798 | 90,677,932 | |||||||||
Noninterest income:
|
||||||||||||
Service charges on deposit accounts
|
9,917,754 | 9,244,165 | 9,591,543 | |||||||||
Investment services
|
6,984,970 | 6,246,414 | 5,050,105 | |||||||||
Insurance sales commissions
|
4,461,404 | 3,999,153 | 3,864,340 | |||||||||
Gains on mortgage loans sold, net
|
6,698,618 | 4,155,137 | 4,085,657 | |||||||||
Gain on sale of investment securities, net
|
2,150,605 | 960,763 | 2,623,674 | |||||||||
Trust fees
|
3,195,950 | 2,999,731 | 2,872,490 | |||||||||
Other noninterest income
|
9,987,335 | 10,334,847 | 8,227,237 | |||||||||
Total noninterest income
|
43,396,636 | 37,940,210 | 36,315,046 | |||||||||
Noninterest expense:
|
||||||||||||
Salaries and employee benefits
|
78,056,564 | 74,424,851 | 64,628,991 | |||||||||
Equipment and occupancy
|
20,420,333 | 19,986,976 | 21,077,223 | |||||||||
Other real estate expense
|
11,544,067 | 17,431,926 | 29,210,197 | |||||||||
Marketing and other business development
|
3,635,810 | 3,303,151 | 3,233,224 | |||||||||
Postage and supplies
|
2,379,730 | 2,120,722 | 2,538,021 | |||||||||
Amortization of intangibles
|
2,738,994 | 2,862,837 | 2,980,986 | |||||||||
Other noninterest expense
|
19,389,368 | 18,976,865 | 23,214,670 | |||||||||
Total noninterest expense
|
138,164,866 | 139,107,328 | 146,883,312 | |||||||||
Income (loss) before income taxes
|
62,527,398 | 28,499,680 | (19,890,334 | ) | ||||||||
Income tax expense (benefit)
|
20,643,517 | (15,237,687 | ) | 4,410,158 | ||||||||
Net income (loss)
|
41,883,881 | 43,737,367 | (24,300,492 | ) | ||||||||
Preferred stock dividends
|
1,660,868 | 4,606,493 | 4,815,973 | |||||||||
Accretion on preferred stock discount
|
2,153,172 | 2,058,146 | 1,326,049 | |||||||||
Net income (loss) available to common stockholders
|
$ | 38,069,841 | $ | 37,072,728 | $ | (30,442,514 | ) | |||||
Per share information:
|
||||||||||||
Basic net income (loss) per common share available to common stockholders
|
$ | 1.12 | $ | 1.11 | $ | (0.93 | ) | |||||
Diluted net income (loss) per common share available to common stockholders
|
$ | 1.10 | $ | 1.09 | $ | (0.93 | ) | |||||
Weighted average common shares outstanding:
|
||||||||||||
Basic
|
33,899,667 | 33,420,015 | 32,789,871 | |||||||||
Diluted
|
34,487,808 | 34,060,228 | 32,789,871 |
Year Ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
Net income (loss):
|
$ | 41,883,881 | $ | 43,737,367 | $ | (24,300,492 | ) | |||||
Other comprehensive income, net of tax:
|
||||||||||||
(Decrease) increase in net gains on securities available-for-sale, net of deferred tax expense (benefit)
|
(4,105,623 | ) | 11,708,657 | (1,815,481 | ) | |||||||
Total comprehensive income (loss)
|
$ | 37,778,258 | $ | 55,446,024 | $ | (26,115,973 | ) |
Preferred Stock
|
Common Stock
|
Common Stock
|
Additional
Paid-in
|
Retained
|
Accumulated
Other Comprehensive
|
Total Stockholders’
|
||||||||||||||||||||||||||
Amount
|
Shares
|
Amount
|
Warrants
|
Capital
|
Earnings
|
Income
|
Equity
|
|||||||||||||||||||||||||
Balances, December 31, 2009
|
$ | 89,462,633 | 33,029,719 | $ | 33,029,719 | $ | 3,348,402 | $ | 524,366,603 | $ | 43,372,743 | $ | 7,440,081 | $ | 701,020,181 | |||||||||||||||||
Exercise of employee common stock options, stock appreciation rights, common stock warrants and related tax benefits
|
- | 601,023 | 601,023 | - | 2,884,789 | - | - | 3,485,812 | ||||||||||||||||||||||||
Issuance of restricted common shares, net of forfeitures
|
- | 252,053 | 252,053 | - | (252,053 | ) | - | - | - | |||||||||||||||||||||||
Restricted shares withheld for taxes
|
- | (12,415 | ) | (12,415 | ) | - | (151,333 | ) | - | - | (163,748 | ) | ||||||||||||||||||||
Compensation expense for restricted shares
|
- | - | - | - | 2,303,720 | - | - | 2,303,720 | ||||||||||||||||||||||||
Compensation expense for stock options
|
- | - | - | - | 1,677,293 | - | - | 1,677,293 | ||||||||||||||||||||||||
Accretion on preferred stock discount
|
1,326,049 | - | - | - | - | (1,326,049 | ) | - | - | |||||||||||||||||||||||
Preferred dividends paid
|
- | - | - | - | - | (4,750,000 | ) | - | (4,750,000 | ) | ||||||||||||||||||||||
Net loss
|
- | - | - | - | - | (24,300,492 | ) | - | (24,300,492 | ) | ||||||||||||||||||||||
Other comprehensive loss
|
- | - | - | - | - | - | (1,815,481 | ) | (1,815,481 | ) | ||||||||||||||||||||||
Balances, December 31, 2010
|
$ | 90,788,682 | 33,870,380 | $ | 33,870,380 | $ | 3,348,402 | $ | 530,829,019 | $ | 12,996,202 | $ | 5,624,600 | $ | 677,457,285 | |||||||||||||||||
Exercise of employee common stock options, stock appreciation rights, common stock warrants and related tax benefits
|
- | 163,829 | 163,829 | - | 1,014,653 | - | - | 1,178,482 | ||||||||||||||||||||||||
Repurchase of preferred stock
|
(23,750,000 | ) | - | - | - | - | - | - | (23,750,000 | ) | ||||||||||||||||||||||
Issuance of restricted common shares, net of forfeitures
|
- | 299,715 | 299,715 | - | (299,715 | ) | - | - | - | |||||||||||||||||||||||
Issuance of salary stock units
|
- | 54,526 | 54,526 | 722,292 | 776,818 | |||||||||||||||||||||||||||
Restricted shares withheld for taxes
|
- | (33,490 | ) | (33,490 | ) | - | (474,448 | ) | - | - | (507,938 | ) | ||||||||||||||||||||
Compensation expense for restricted shares
|
- | - | - | - | 3,239,677 | - | - | 3,239,677 | ||||||||||||||||||||||||
Compensation expense for stock options
|
- | - | - | - | 1,196,059 | - | - | 1,196,059 | ||||||||||||||||||||||||
Accretion on preferred stock discount
|
2,058,146 | - | - | - | - | (2,058,146 | ) | - | - | |||||||||||||||||||||||
Preferred dividends paid
|
- | - | - | - | - | (4,891,839 | ) | - | (4,891,839 | ) | ||||||||||||||||||||||
Net income
|
- | - | - | - | - | 43,737,367 | - | 43,737,367 | ||||||||||||||||||||||||
Other comprehensive income
|
- | - | - | - | - | - | 11,708,657 | 11,708,657 | ||||||||||||||||||||||||
Balances, December 31, 2011
|
$ | 69,096,828 | 34,354,960 | $ | 34,354,960 | $ | 3,348,402 | $ | 536,227,537 | $ | 49,783,584 | $ | 17,333,257 | $ | 710,144,568 | |||||||||||||||||
Exercise of employee common stock options, stock appreciation rights, common stock warrants and related tax benefits
|
- | 245,229 | 245,229 | - | 1,455,969 | - | - | 1,701,198 | ||||||||||||||||||||||||
Repurchase of preferred stock
|
(71,250,000 | ) | - | - | - | - | - | - | (71,250,000 | ) | ||||||||||||||||||||||
Issuance of restricted common shares, net of forfeitures
|
- | 102,119 | 102,119 | - | (102,119 | ) | - | - | - | |||||||||||||||||||||||
Issuance of salary stock units
|
- | 57,508 | 57,508 | - | 942,565 | - | - | 1,000,073 | ||||||||||||||||||||||||
Restricted shares withheld for taxes
|
- | (63,219 | ) | (63,219 | ) | - | (1,021,409 | ) | - | - | (1,084,628 | ) | ||||||||||||||||||||
Compensation expense for restricted shares
|
- | - | - | - | 3,270,028 | - | - | 3,270,028 | ||||||||||||||||||||||||
Compensation expense for stock options
|
- | - | - | - | 394,466 | - | - | 394,466 | ||||||||||||||||||||||||
Cancellation of outstanding warrants
|
- | - | - | (3,348,402 | ) | 2,593,402 | - | - | (755,000 | ) | ||||||||||||||||||||||
Accretion on preferred stock discount
|
2,153,172 | - | - | - | - | (2,153,172 | ) | - | - | |||||||||||||||||||||||
Preferred dividends paid
|
- | - | - | - | - | (2,127,604 | ) | - | (2,127,604 | ) | ||||||||||||||||||||||
Net income
|
- | - | - | - | - | 41,883,881 | - | 41,883,881 | ||||||||||||||||||||||||
Other comprehensive loss
|
- | - | - | - | - | - | (4,105,623 | ) | (4,105,623 | ) | ||||||||||||||||||||||
Balances, December 31, 2012
|
$ | - | 34,696,597 | $ | 34,696,597 | $ | - | $ | 543,760,439 | $ | 87,386,689 | $ | 13,227,634 | 679,071,359 | ||||||||||||||||||
For the years ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
Operating activities:
|
||||||||||||
Net income (loss)
|
$ | 41,883,881 | $ | 43,737,367 | $ | (24,300,492 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||||||
Net amortization/accretion of premium/discount on securities
|
7,291,775 | 7,702,123 | 5,667,069 | |||||||||
Depreciation and amortization
|
10,207,638 | 10,950,434 | 11,500,075 | |||||||||
Provision for loan losses
|
5,568,830 | 21,797,613 | 53,695,454 | |||||||||
Gains on sales of investment securities, net
|
(2,150,605 | ) | (960,763 | ) | (2,623,674 | ) | ||||||
Gain on mortgage loans sold, net
|
(6,698,618 | ) | (4,155,137 | ) | (4,085,657 | ) | ||||||
Stock-based compensation expense
|
4,414,452 | 5,018,294 | 3,981,013 | |||||||||
Deferred tax expense (benefit)
|
1,547,626 | (23,395,052 | ) | 17,822,071 | ||||||||
Losses on disposition of other real estate and other investments
|
9,608,358 | 14,081,857 | 25,459,851 | |||||||||
Excess tax benefit from stock compensation
|
(36,071 | ) | (13,819 | ) | (16,776 | ) | ||||||
Mortgage loans held for sale:
|
||||||||||||
Loans originated
|
(486,930,709 | ) | (394,020,876 | ) | (444,833,043 | ) | ||||||
Loans sold
|
487,798,601 | 378,996,474 | 445,227,014 | |||||||||
Decrease in other assets
|
36,400,237 | 42,346,579 | 27,366,049 | |||||||||
Increase in other liabilities
|
5,372,270 | 11,004,661 | 14,730,158 | |||||||||
Net cash provided by operating activities
|
114,277,665 | 113,089,755 | 129,589,112 | |||||||||
Investing activities:
|
||||||||||||
Activities in securities available-for-sale:
|
||||||||||||
Purchases
|
(222,831,813 | ) | (268,141,975 | ) | (548,916,132 | ) | ||||||
Sales
|
188,586,154 | 166,415,738 | 146,082,535 | |||||||||
Maturities, prepayments and calls
|
210,732,980 | 233,622,196 | 322,414,157 | |||||||||
Activities in securities held-to-maturity:
|
||||||||||||
Sales
|
- | - | 954,388 | |||||||||
Maturities, prepayments and calls
|
1,755,000 | 1,975,000 | 1,235,612 | |||||||||
(Increase) decrease in loans, net
|
(440,508,548 | ) | (144,581,478 | ) | 194,133,354 | |||||||
Purchases of premises and equipment and software
|
(5,864,452 | ) | (2,031,265 | ) | (9,587,707 | ) | ||||||
Decrease (increase) in other investments
|
17,743,227 | (407,504 | ) | (1,878,676 | ) | |||||||
Net cash (used in) provided by investing activities
|
(250,387,452 | ) | (13,149,288 | ) | 104,437,531 | |||||||
Financing activities:
|
||||||||||||
Net increase (decrease) in deposits
|
360,848,517 | (178,660,721 | ) | 9,688,996 | ||||||||
Net (decrease) increase in repurchase agreements
|
(16,923,937 | ) | (14,702,967 | ) | (129,170,717 | ) | ||||||
Advances from Federal Home Loan Bank:
|
||||||||||||
Issuances
|
520,000,000 | 215,000,000 | 90,000,000 | |||||||||
Payments
|
(670,141,606 | ) | (110,236,705 | ) | (181,149,655 | ) | ||||||
Net increase in other borrowings
|
8,682,292 | - | - | |||||||||
(Repurchase) exercise of common stock warrants
|
(755,000 | ) | - | 285,000 | ||||||||
Exercise of common stock options and stock appreciation rights
|
866,683 | 864,805 | 3,037,064 | |||||||||
Excess tax benefit from stock compensation
|
36,071 | 13,819 | 16,776 | |||||||||
Preferred dividends paid
|
(2,127,604 | ) | (4,891,839 | ) | (4,750,000 | ) | ||||||
Repurchase of preferred shares outstanding
|
(71,250,000 | ) | (23,750,000 | ) | - | |||||||
Net cash provided by (used in)
financing activities
|
129,235,416 | (116,363,608 | ) | (212,042,536 | ) | |||||||
Net (decrease) increase in cash and cash equivalents
|
(6,874,371 | ) | (16,423,141 | ) | 21,984,107 | |||||||
Cash and cash equivalents, beginning of year
|
172,163,040 | 188,586,181 | 166,602,074 | |||||||||
Cash and cash equivalents, end of year
|
$ | 165,288,669 | $ | 172,163,040 | $ | 188,586,181 |
Note 1.
|
Summary of Significant Accounting Policies
|
For the years ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
Cash Payments:
|
||||||||||||
Interest
|
$ | 23,506,632 | $ | 39,991,746 | $ | 60,675,865 | ||||||
Income taxes paid (refunded)
|
10,249,106 | 3,988,414 | (4,722,776 | ) | ||||||||
Noncash Transactions:
|
||||||||||||
Loans charged-off to the allowance for loan losses
|
19,657,061 | 34,849,910 | 67,543,395 | |||||||||
Loans foreclosed upon with repossessions transferred to other real estate
|
9,052,792 | 34,580,351 | 92,873,551 |
2012
|
2011
|
2010
|
||||||||||
Basic earnings per share calculation:
|
||||||||||||
Numerator
- Net income (loss) available to common stockholders
|
$ | 38,069,841 | $ | 37,072,728 | $ | (30,442,514 | ) | |||||
Denominator
– Weighted average common shares outstanding
|
33,899,667 | 33,420,015 | 32,789,871 | |||||||||
Basic net income (loss) per common share available to common stockholders
|
$ | 1.12 | $ | 1.11 | $ | (0.93 | ) | |||||
Diluted earnings per share calculation:
|
||||||||||||
Numerator
- Net income (loss) available to common stockholders
|
$ | 38,069,841 | $ | 37,072,728 | $ | (30,442,514 | ) | |||||
Denominator
– Weighted average common shares outstanding
|
33,899,667 | 33,420,015 | 32,789,871 | |||||||||
Dilutive shares contingently issuable
|
588,141 | 640,213 | - | |||||||||
Weighted average diluted common shares outstanding
|
34,487,808 | 34,060,228 | 32,789,871 | |||||||||
Diluted net income (loss) per common share available to common stockholders
|
$ | 1.10 | $ | 1.09 | $ | (0.93 | ) |
Note 2.
|
Acquisitions and Intangibles
|
Note 3.
|
Participation in U.S. Treasury Capital Purchase Program
|
Note 4.
|
Restricted Cash Balances
|
Note 5.
|
Securities
|
December 31, 2012:
|
Amortized Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized Losses
|
Fair
Value
|
||||||||||||
Securities available-for-sale:
|
||||||||||||||||
U.S. Government agency securities
|
$ | 110,817 | $ | 49 | $ | 414 | $ | 110,452 | ||||||||
Mortgage-backed securities
|
360,504 | 15,770 | 623 | 375,651 | ||||||||||||
State and municipal securities
|
177,364 | 14,489 | 126 | 191,727 | ||||||||||||
Agency-backed securities
|
17,361 | - | 9 | 17,352 | ||||||||||||
Corporate notes
|
9,881 | 1,519 | 4 | 11,396 | ||||||||||||
$ | 675,927 | $ | 31,827 | $ | 1,176 | $ | 706,578 | |||||||||
Securities held-to-maturity:
|
||||||||||||||||
State and municipal securities
|
575 | 8 | - | 583 | ||||||||||||
$ | 575 | $ | 8 | $ | - | $ | 583 | |||||||||
December 31, 2011:
|
||||||||||||||||
Securities available-for-sale:
|
||||||||||||||||
U.S. Government agency securities
|
$ | 41,978 | $ | 344 | $ | 9 | $ | 42,313 | ||||||||
Mortgage-backed securities
|
623,684 | 22,254 | 371 | 645,567 | ||||||||||||
State and municipal securities
|
182,206 | 13,768 | 22 | 195,952 | ||||||||||||
Corporate notes
|
9,687 | 1,443 | - | 11,130 | ||||||||||||
$ | 857,555 | $ | 37,809 | $ | 402 | $ | 894,962 | |||||||||
Securities held-to-maturity:
|
||||||||||||||||
State and municipal securities
|
2,330 | 39 | - | 2,369 | ||||||||||||
$ | 2,330 | $ | 39 | $ | - | $ | 2,369 |
Available-for-sale
|
Held-to-maturity
|
|||||||||||||||
Amortized
Cost
|
Fair
Value
|
Amortized Cost
|
Fair
Value
|
|||||||||||||
Due in one year or less
|
$ | 4,480 | $ | 4,524 | $ | 200 | $ | 201 | ||||||||
Due in one year to five years
|
34,791 | 36,140 | 375 | 382 | ||||||||||||
Due in five years to ten years
|
125,863 | 133,944 | - | - | ||||||||||||
Due after ten years
|
132,928 | 138,967 | - | - | ||||||||||||
Mortgage-backed securities
|
360,504 | 375,651 | - | - | ||||||||||||
Asset-backed securities
|
17,361 | 17,352 | - | - | ||||||||||||
$ | 675,927 | $ | 706,578 | $ | 575 | $ | 583 |
Investments with an
Unrealized Loss of
less than 12 months
|
Investments with an
Unrealized Loss of
12 months or longer
|
Total Investments
with an
Unrealized Loss
|
||||||||||||||||||||||
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized
Losses
|
|||||||||||||||||||
At December 31, 2012:
|
||||||||||||||||||||||||
U.S. government agency securities
|
$ | 78,899 | $ | 414 | $ | - | $ | - | $ | 78,899 | $ | 414 | ||||||||||||
Mortgage-backed securities
|
40,988 | 623 | - | - | 40,988 | 623 | ||||||||||||||||||
State and municipal securities
|
5,179 | 126 | - | - | 5,179 | 126 | ||||||||||||||||||
Agency-backed securities
|
17,353 | 9 | 17,353 | 9 | ||||||||||||||||||||
Corporate notes
|
162 | 4 | - | - | 162 | 4 | ||||||||||||||||||
Total temporarily-impaired securities
|
$ | 142,581 | $ | 1,176 | $ | - | $ | - | $ | 142,581 | $ | 1,176 | ||||||||||||
At December 31, 2011:
|
||||||||||||||||||||||||
U.S. government agency securities
|
$ | 5,452 | $ | 9 | $ | - | $ | - | $ | 5,452 | $ | 9 | ||||||||||||
Mortgage-backed securities
|
41,598 | 341 | 17,826 | 30 | 59,424 | 371 | ||||||||||||||||||
State and municipal securities
|
1,967 | 17 | 1,205 | 5 | 3,172 | 22 | ||||||||||||||||||
Corporate notes
|
- | - | - | - | - | - | ||||||||||||||||||
Total temporarily-impaired securities
|
$ | 49,017 | $ | 367 | $ | 19,031 | $ | 35 | $ | 68,048 | $ | 402 |
For the quarter ended,
|
Fair Value of securities sold
|
Gain
recognized
|
Loss
recognized
|
Net
|
Other-than-
temporary
impairment
(OTTI)
|
Gain(loss)
on the sale
of securities,
net of OTTI
|
||||||||||||||||||
March 31, 2012
|
$ | 14,360 | (1) | $ | 148 | $ | - | $ | 148 | $ | 34 | (2) | $ | 114 | ||||||||||
June 30, 2012
|
18,273 | (3) | 99 | - | 99 | - | 99 | |||||||||||||||||
September 30, 2012
|
2,791 | (4) | 7 | - | 7 | 57 | (4) | (50 | ) | |||||||||||||||
December 31, 2012
|
153,166 | (5) | 2,068 | - | 2,068 | 80 | (6) | 1,988 |
|
(1)
|
During the first quarter of 2012, Pinnacle Financial sold these securities due to their relatively short terms until maturity and a weighted average coupon of 0.50%.
|
|
(2)
|
During the first quarter of 2012, Pinnacle Financial determined four mortgage-backed securities were OTTI because of management’s intent to sell them in the second quarter of 2012. The decision to sell was based on their relative underperformance compared to expectations.
|
|
(3)
|
During the second quarter of 2012, Pinnacle Financial sold the four securities previously identified as OTTI in the first quarter. Additionally, two securities issued by municipalities in the state of California, which management believed could be adversely affected by state budgetary issues, were also sold during the second quarter.
|
|
(4)
|
During the third quarter of 2012, Pinnacle Financial determined one security was OTTI due to its distinct underperformance relative to the interest rate environment. Pinnacle Financial recognized approximately $57,000 in OTTI and the bond was subsequently sold for a gain of approximately $7,000.
|
|
(5)
|
During the fourth quarter of 2012, Pinnacle Financial decided to sell thirty bonds based on their relative underperformance compared to expectations.
|
|
(6)
|
During the fourth quarter, Pinnacle Financial determined four mortgage-backed securities were OTTI because of management’s intent to sell them in the fourth quarter. The decision to sell was based on their relative underperformance compared to expectations.
|
Note 6.
|
Loans and Allowance for Loan Losses
|
|
·
|
Special mention loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in Pinnacle Financial’s credit position at some future date.
|
|
·
|
Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize collection of the debt. Substandard loans are characterized by the distinct possibility that Pinnacle Financial will sustain some loss if the deficiencies are not corrected.
|
|
·
|
Substandard-nonaccrual loans are substandard loans that have been placed on nonaccrual status.
|
|
·
|
Doubtful-nonaccrual loans have all the characteristics of substandard-nonaccrual loans with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.
|
December 31, 2012
|
Commercial
real estate - mortgage
|
Consumer
real estate - mortgage
|
Construction
and land development
|
Commercial
and industrial
|
Consumer
and other
|
Total
|
||||||||||||||||||
Accruing loans:
|
||||||||||||||||||||||||
Pass
|
$ | 1,093,628 | $ | 649,571 | $ | 259,878 | $ | 1,390,207 | $ | 93,712 | $ | 3,486,996 | ||||||||||||
Special Mention
|
12,670 | 4,242 | 29,472 | 23,133 | - | 69,517 | ||||||||||||||||||
Substandard
(1)
|
42,343 | 13,896 | 19,622 | 29,513 | - | 105,374 | ||||||||||||||||||
Total
|
1,148,641 | 667,709 | 308,972 | 1,442,853 | 93,712 | 3,661,887 | ||||||||||||||||||
Impaired loans:
|
||||||||||||||||||||||||
Nonperforming loans
|
||||||||||||||||||||||||
Substandard-nonaccrual
|
9,290 | 5,877 | 4,509 | 3,035 | 79 | 22,790 | ||||||||||||||||||
Doubtful-nonaccrual
|
1 | 29 | - | 3 | - | 33 | ||||||||||||||||||
Total nonperforming loans
|
9,291 | 5,906 | 4,509 | 3,038 | 79 | 22,823 | ||||||||||||||||||
Troubled debt restructurings
(2)
|
||||||||||||||||||||||||
Pass
|
4,705 | 3,623 | 71 | 502 | 119 | 9,020 | ||||||||||||||||||
Special Mention
|
- | - | - | - | - | - | ||||||||||||||||||
Substandard
|
15,559 | 2,688 | - | 185 | - | 18,432 | ||||||||||||||||||
Total troubled debt restructurings
|
20,264 | 6,311 | 71 | 687 | 119 | 27,452 | ||||||||||||||||||
Total impaired loans
|
29,555 | 12,217 | 4,580 | 3,725 | 198 | 50,275 | ||||||||||||||||||
Total loans
|
$ | 1,178,196 | $ | 679,926 | $ | 313,552 | $ | 1,446,578 | $ | 93,910 | $ | 3,712,162 |
December 31, 2011
|
Commercial real estate -
mortgage
|
Consumer real estate -
mortgage
|
Construction
and land
development
|
Commercial
and industrial
|
Consumer
and other
|
Total
|
||||||||||||||||||
Accruing loans:
|
||||||||||||||||||||||||
Pass
|
$ | 994,059 | $ | 643,924 | $ | 204,696 | $ | 1,098,898 | $ | 63,218 | $ | 3,004,795 | ||||||||||||
Special Mention
|
19,403 | 15,225 | 27,553 | 17,029 | 649 | 79,859 | ||||||||||||||||||
Substandard
(1)
|
72,160 | 18,235 | 28,957 | 16,073 | 1 | 135,426 | ||||||||||||||||||
Total
|
1,085,622 | 677,384 | 261,206 | 1,132,000 | 63,868 | 3,220,080 | ||||||||||||||||||
Impaired loans:
|
||||||||||||||||||||||||
Nonperforming loans
|
||||||||||||||||||||||||
Substandard-nonaccrual
|
9,962 | 11,990 | 12,965 | 11,194 | 551 | 46,662 | ||||||||||||||||||
Doubtful-nonaccrual
|
- | 497 | - | 696 | - | 1,193 | ||||||||||||||||||
Total nonperforming loans
|
9,962 | 12,487 | 12,965 | 11,890 | 551 | 47,855 | ||||||||||||||||||
Troubled debt restructurings
(2)
|
||||||||||||||||||||||||
Pass
|
193 | 3,631 | 77 | 949 | 242 | 5,092 | ||||||||||||||||||
Special Mention
|
- | - | - | - | - | - | ||||||||||||||||||
Substandard
|
15,185 | 2,243 | - | 896 | - | 18,324 | ||||||||||||||||||
Total troubled debt restructurings
|
15,378 | 5,874 | 77 | 1,845 | 242 | 23,416 | ||||||||||||||||||
Total impaired loans
|
25,340 | 18,361 | 13,042 | 13,735 | 793 | 71,271 | ||||||||||||||||||
Total loans
|
$ | 1,110,962 | $ | 695,745 | $ | 274,248 | $ | 1,145,735 | $ | 64,661 | $ | 3,291,351 |
|
(1)
|
Potential problem loans represent those loans with a well-defined weakness and where information about possible credit problems of borrowers has caused management to have doubts about the borrower’s ability to comply with present repayment terms. This definition is believed to be substantially consistent with the standards established by Pinnacle Bank’s primary regulators for loans classified as substandard, excluding the impact of substandard nonperforming loans and substandard troubled debt restructurings. Potential problem loans, which are not included in nonperforming assets, amounted to approximately $105.4 million at December 31, 2012, compared to $135.4 million at December 31, 2011.
|
|
(2)
|
Troubled debt restructurings are presented as an impaired loan; however, they continue to accrue interest at contractual rates.
|
At December 31, 2012
|
For the year ended
December 31, 2012
|
|||||||||||||||||||
Recorded investment
|
Unpaid
principal
balance
|
Related allowance
(1)
|
Average recorded investment
|
Interest
income recognized
|
||||||||||||||||
Collateral dependent nonaccrual loans:
|
||||||||||||||||||||
Commercial real estate – mortgage
|
$ | 8,740 | $ | 11,187 | $ | - | $ | 11,194 | $ | - | ||||||||||
Consumer real estate – mortgage
|
3,641 | 6,394 | - | 6,394 | - | |||||||||||||||
Construction and land development
|
1,546 | 2,062 | - | 2,063 | - | |||||||||||||||
Commercial and industrial
|
1,547 | 1,761 | - | 1,896 | - | |||||||||||||||
Consumer and other
|
- | - | - | - | - | |||||||||||||||
Total
|
$ | 15,474 | $ | 21,404 | $ | - | $ | 21,547 | $ | - | ||||||||||
Cash flow dependent nonaccrual loans:
|
||||||||||||||||||||
Commercial real estate – mortgage
|
$ | 551 | $ | 1,841 | $ | 154 | $ | 3,228 | $ | - | ||||||||||
Consumer real estate – mortgage
|
2,265 | 4,473 | 573 | 5,828 | - | |||||||||||||||
Construction and land development
|
2,963 | 4,701 | 201 | 5,102 | - | |||||||||||||||
Commercial and industrial
|
1,491 | 2,459 | 814 | 2,528 | - | |||||||||||||||
Consumer and other
|
79 | 179 | 22 | 180 | - | |||||||||||||||
Total
|
$ | 7,349 | $ | 13,653 | $ | 1,764 | $ | 16,866 | $ | - | ||||||||||
Total Nonaccrual Loans
|
$ | 22,823 | $ | 35,057 | $ | 1,764 | $ | 38,413 | $ | - |
At December 31, 2011
|
For the year ended
December 31, 2011
|
|||||||||||||||||||
Recorded investment
|
Unpaid
principal
balance
|
Related allowance
(1)
|
Average recorded investment
|
Interest
income recognized
|
||||||||||||||||
Collateral dependent nonaccrual loans:
|
||||||||||||||||||||
Commercial real estate – mortgage
|
$ | 9,345 | $ | 12,099 | $ | - | $ | 12,450 | $ | 5 | ||||||||||
Consumer real estate – mortgage
|
9,248 | 9,961 | - | 10,140 | - | |||||||||||||||
Construction and land development
|
6,917 | 9,093 | - | 9,288 | 37 | |||||||||||||||
Commercial and industrial
|
3,036 | 3,546 | - | 3,689 | - | |||||||||||||||
Consumer and other
|
- | - | - | - | - | |||||||||||||||
Total
|
$ | 28,546 | $ | 34,699 | $ | - | $ | 35,567 | $ | 42 | ||||||||||
Cash flow dependent nonaccrual loans:
|
||||||||||||||||||||
Commercial real estate – mortgage
|
$ | 617 | $ | 661 | $ | 57 | $ | 792 | $ | - | ||||||||||
Consumer real estate – mortgage
|
3,239 | 4,902 | 301 | 5,005 | - | |||||||||||||||
Construction and land development
|
6,048 | 6,822 | 1,264 | 7,074 | - | |||||||||||||||
Commercial and industrial
|
8,854 | 11,041 | 2,767 | 11,497 | - | |||||||||||||||
Consumer and other
|
551 | 856 | 51 | 857 | - | |||||||||||||||
Total
|
$ | 19,309 | $ | 24,282 | $ | 4,440 | $ | 25,225 | $ | - | ||||||||||
Total Nonaccrual Loans
|
$ | 47,855 | $ | 58,981 | $ | 4,440 | $ | 60,792 | $ | 42 |
At December 31, 2010
|
For the year ended
December 31, 2010
|
|||||||||||||||||||
Recorded investment
|
Unpaid
principal
balance
|
Related allowance
(1)
|
Average recorded investment
|
Interest
income recognized
|
||||||||||||||||
Collateral dependent nonaccrual loans:
|
||||||||||||||||||||
Commercial real estate – mortgage
|
$ | 10,585 | $ | 12,468 | $ | - | $ | 12,478 | $ | 278 | ||||||||||
Consumer real estate – mortgage
|
4,063 | 5,041 | - | 5,041 | 83 | |||||||||||||||
Construction and land development
|
31,106 | 35,525 | - | 35,631 | 188 | |||||||||||||||
Commercial and industrial
|
2,865 | 5,501 | - | 5,501 | 9 | |||||||||||||||
Consumer and other
|
272 | 368 | - | 368 | - | |||||||||||||||
Total
|
$ | 48,891 | $ | 58,903 | $ | - | $ | 59,019 | $ | 558 | ||||||||||
Cash flow dependent nonaccrual loans:
|
||||||||||||||||||||
Commercial real estate – mortgage
|
$ | 1,957 | $ | 2,328 | $ | 176 | $ | 2,328 | $ | 55 | ||||||||||
Consumer real estate – mortgage
|
4,972 | 5,869 | 3,998 | 5,875 | 143 | |||||||||||||||
Construction and land development
|
12,408 | 12,619 | 568 | 12,623 | 234 | |||||||||||||||
Commercial and industrial
|
11,875 | 13,005 | 3,825 | 12,996 | 324 | |||||||||||||||
Consumer and other
|
760 | 846 | 390 | 846 | 17 | |||||||||||||||
Total
|
$ | 31,972 | $ | 34,667 | $ | 8,957 | $ | 34,668 | $ | 773 | ||||||||||
Total Nonaccrual Loans
|
$ | 80,863 | $ | 93,570 | $ | 8,957 | $ | 93,687 | $ | 1,331 |
|
(1)
|
Collateral dependent loans are typically charged-off to their net realizable value pursuant to requirements of our primary regulators and no specific allowance is carried related to those loans.
|
December 31, 2012
|
December 31, 2011
|
|||||||||||||||||||||||
Number
of contracts
|
Pre
Modification Outstanding Recorded Investment
|
Post
Modification Outstanding Recorded Investment,
net
of related allowance
|
Number
of
contracts
|
Pre
Modification Outstanding Recorded Investment
|
Post
Modification Outstanding Recorded Investment,
net of related allowance
|
|||||||||||||||||||
Commercial real estate – mortgage
|
4 | $ | 11,539 | $ | 10,022 | 9 | $ | 15,378 | $ | 12,619 | ||||||||||||||
Consumer real estate – mortgage
|
4 | 834 | 718 | 16 | 5,874 | 5,358 | ||||||||||||||||||
Construction and land development
|
- | - | - | 2 | 77 | 65 | ||||||||||||||||||
Commercial and industrial
|
- | - | - | 26 | 1,845 | 1,563 | ||||||||||||||||||
Consumer and other
|
1 | 36 | 31 | 4 | 242 | 205 | ||||||||||||||||||
9 | $ | 12,409 | $ | 10,771 | 57 | $ | 23,416 | $ | 19,810 |
At December 31, 2012
|
||||||||||||||||
Outstanding
Principal Balances
|
Unfunded Commitments
|
Total exposure
|
Total Exposure
at December 31,
2011
|
|||||||||||||
Lessors of nonresidential buildings
|
$ | 382,238 | $ | 57,999 | $ | 440,237 | $ | 509,003 | ||||||||
Lessors of residential buildings
|
191,693 | 24,206 | 215,899 | 177,414 | ||||||||||||
Land subdividers
|
92,613 | 15,670 | 108,283 | 119,106 |
December 31, 2012
|
30-89 days
past due and performing
|
90 days or
more past
due and performing
|
Total past
due and performing
|
Nonperforming
(1)
|
Current
and
performing
|
Total
Loans
|
||||||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||
Owner-occupied
|
$ | 462 | $ | - | $ | 462 | $ | 8,091 | $ | 585,848 | $ | 594,401 | ||||||||||||
All other
|
41 | - | 41 | 1,200 | 582,554 | 583,795 | ||||||||||||||||||
Consumer real estate – mortgage
|
3,870 | - | 3,870 | 5,906 | 670,150 | 679,926 | ||||||||||||||||||
Construction and land development
|
3,511 | - | 3,511 | 4,509 | 305,532 | 313,552 | ||||||||||||||||||
Commercial and industrial
|
2,549 | - | 2,549 | 3,038 | 1,440,991 | 1,446,578 | ||||||||||||||||||
Consumer and other
|
444 | - | 444 | 79 | 93,387 | 93,910 | ||||||||||||||||||
$ | 10,877 | $ | - | $ | 10,877 | $ | 22,823 | $ | 3,678,462 | $ | 3,712,162 | |||||||||||||
December 31, 2011
|
||||||||||||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||
Owner-occupied
|
$ | 2,489 | $ | - | $ | 2,489 | $ | 6,735 | $ | 572,746 | $ | 581,970 | ||||||||||||
All other
|
3,260 | - | 3,260 | 3,227 | 522,505 | 528,992 | ||||||||||||||||||
Consumer real estate – mortgage
|
2,589 | 254 | 2,843 | 12,487 | 680,415 | 695,745 | ||||||||||||||||||
Construction and land development
|
1,572 | - | 1,572 | 12,965 | 259,711 | 274,248 | ||||||||||||||||||
Commercial and industrial
|
648 | 604 | 1,252 | 11,890 | 1,132,593 | 1,145,735 | ||||||||||||||||||
Consumer and other
|
526 | - | 526 | 551 | 63,584 | 64,661 | ||||||||||||||||||
$ | 11,084 | $ | 858 | $ | 11,942 | $ | 47,855 | $ | 3,231,554 | $ | 3,291,351 |
|
(1)
|
Approximately $9.4 million and $25.5 million of nonaccrual loans as of December 31, 2012 and 2011, respectively, are currently performing pursuant to their contractual terms.
|
Impaired Loans
|
||||||||||||||||||||||||||||||||
Accruing Loans
|
Nonaccrual Loans |
Troubled Debt
Restructurings
(1)
|
Total Allowance
for Loan Losses
|
|||||||||||||||||||||||||||||
December 31,
2012
|
December 31,
2011
|
December 31,
2012
|
December 31,
2011
|
December 31,
2012
|
December 31,
2011
|
December 31,
2012
|
December 31,
2011
|
|||||||||||||||||||||||||
Commercial real estate –mortgage
|
$ | 16,642 | $ | 20,581 | $ | 154 | $ | 57 | $ | 2,838 | $ | 2,759 | $ | 19,634 | $ | 23,397 | ||||||||||||||||
Consumer real estate – mortgage
|
7,336 | 9,485 | 573 | 301 | 853 | 516 | 8,762 | 10,302 | ||||||||||||||||||||||||
Construction and land development
|
8,953 | 10,764 | 201 | 1,264 | 10 | 12 | 9,164 | 12,040 | ||||||||||||||||||||||||
Commercial and industrial
|
23,829 | 17,740 | 814 | 2,767 | 95 | 282 | 24,738 | 20,789 | ||||||||||||||||||||||||
Consumer and other
|
1,055 | 1,037 | 22 | 51 | 17 | 37 | 1,094 | 1,125 | ||||||||||||||||||||||||
Unallocated
|
- | - | - | - | - | - | 6,025 | 6,322 | ||||||||||||||||||||||||
$ | 57,815 | $ | 59,607 | $ | 1,764 | $ | 4,440 | $ | 3,813 | $ | 3,606 | $ | 69,417 | $ | 73,975 |
|
(1)
|
Troubled debt restructurings of $27.5 million and $23.4 million as of December 31, 2012 and 2011, respectively, are classified as impaired loans pursuant to U.S. GAAP; however, these loans continue to accrue interest at contractual rates.
|
Commercial
real estate –
mortgage
|
Consumer
real estate – mortgage
|
Construction
and land development
|
Commercial
and
industrial
|
Consumer
and
other
|
Unallocated
|
Total
|
||||||||||||||||||||||
Balances, December 31, 2009
|
$ | 22,505 | $ | 10,725 | $ | 23,027 | $ | 26,332 | $ | 2,456 | $ | 6,914 | $ | 91,959 | ||||||||||||||
Charged-off loans
|
(9,041 | ) | (6,769 | ) | (27,526 | ) | (23,555 | ) | (652 | ) | - | (67,543 | ) | |||||||||||||||
Recovery of previously charged-off loans
|
343 | 377 | 2,618 | 874 | 252 | - | 4,464 | |||||||||||||||||||||
Provision for loan losses
|
5,445 | 5,565 | 21,003 | 17,775 | (182 | ) | 4,089 | 53,695 | ||||||||||||||||||||
Balances, December 31, 2010
|
$ | 19,252 | $ | 9,898 | $ | 19,122 | $ | 21,426 | $ | 1,874 | $ | 11,003 | $ | 82,575 | ||||||||||||||
Charged-off loans
|
(3,044 | ) | (5,076 | ) | (10,157 | ) | (15,360 | ) | (1,213 | ) | - | (34,850 | ) | |||||||||||||||
Recovery of previously charged-off loans
|
116 | 495 | 1,530 | 2,167 | 144 | - | 4,452 | |||||||||||||||||||||
Provision for loan losses
|
7,073 | 4,985 | 1,545 | 12,556 | 320 | (4,681 | ) | 21,798 | ||||||||||||||||||||
Balances, December 31, 2011
|
$ | 23,397 | $ | 10,302 | $ | 12,040 | $ | 20,789 | $ | 1,125 | $ | 6,322 | $ | 73,975 | ||||||||||||||
Charged-off loans
|
(4,667 | ) | (6,731 | ) | (2,530 | ) | (4,612 | ) | (1,117 | ) | - | (19,657 | ) | |||||||||||||||
Recovery of previously charged-off loans
|
285 | 818 | 1,155 | 7,175 | (1) | 97 | - | 9,530 | ||||||||||||||||||||
Provision for loan losses
|
619 | 4,373 | (1,501 | ) | 1,386 | 989 | (297 | ) | 5,569 | |||||||||||||||||||
Balances, December 31, 2012
|
$ | 19,634 | $ | 8,762 | $ | 9,164 | $ | 24,738 | $ | 1,094 | $ | 6,025 | $ | 69,417 |
|
(1)
|
Includes the 2012 $5.6 million recovery of a loan previously charged off in 2009.
|
Note 7.
|
Premises and Equipment and Lease Commitments
|
Range of Useful Lives
|
2012
|
2011
|
|||||||
Land
|
Not applicable
|
$ | 19,256 | $ | 19,206 | ||||
Buildings
|
15 to 30 years
|
47,918 | 46,155 | ||||||
Leasehold improvements
|
15 to 20 years
|
19,031 | 18,820 | ||||||
Furniture and equipment
|
3 to 15 years
|
50,711 | 47,483 | ||||||
136,916 | 131,664 | ||||||||
Accumulated depreciation and amortization
|
(61,111 | ) | (54,537 | ) | |||||
$ | 75,805 | $ | 77,127 |
2013
|
$ | 3,665 | ||
2014
|
3,629 | |||
2015
|
3,520 | |||
2016
|
3,602 | |||
2017
|
3,469 | |||
Thereafter
|
30,191 | |||
$ | 48,076 |
Note 8.
|
Deposits
|
2013
|
$ | 439,470 | ||
2014
|
82,911 | |||
2015
|
36,950 | |||
2016
|
24,229 | |||
2017
|
22,896 | |||
Thereafter
|
- | |||
$ | 606,456 |
Note 9.
|
Federal Home Loan Bank Advances
|
Scheduled Maturities
|
Weighted average
interest rates
|
|||||||
2013
|
$ | 25,000 | 0.21 | % | ||||
2014
|
35,000 | 1.79 | % | |||||
2015
|
- | 0.00 | % | |||||
2016
|
15,000 | 2.87 | % | |||||
2017
|
- | 0.00 | % | |||||
Thereafter
|
609 | 2.48 | % | |||||
$ | 75,609 | |||||||
Weighted average interest rate
|
1.49 | % |
Note 10.
|
Investments in Affiliated Companies and Subordinated Debt
|
Combined Summary Balance Sheets
|
||||||||
December 31, 2012
|
December 31, 2011
|
|||||||
Asset
– Investment in subordinated debentures issued by Pinnacle Financial
|
$ | 82,476 | $ | 82,476 | ||||
Liabilities
|
$ | - | $ | - | ||||
Stockholder’s equity
– Trust preferred securities
|
80,000 | 80,000 | ||||||
Common securities (100% owned by Pinnacle Financial)
|
2,476 | 2,476 | ||||||
Total stockholder’s equity
|
82,476 | 82,476 | ||||||
Total liabilities and stockholder’s equity
|
$ | 82,476 | $ | 82,476 |
Combined Summary Income Statements
|
||||||||||||
Year ended December 31,
|
||||||||||||
2012
|
2011
|
2010
|
||||||||||
Income –
Interest income from subordinated debentures issued by Pinnacle Financial
|
$ | 2,218 | $ | 2,082 | $ | 2,749 | ||||||
Net Income
|
$ | 2,218 | $ | 2,082 | $ | 2,749 |
Combined Summary Statements of Stockholder’s Equity
|
||||||||||||||||
Trust
Preferred
Securities
|
Total
Common
Stock
|
Retained
Earnings
|
Stockholder’s
Equity
|
|||||||||||||
Balances, December 31, 2009
|
$ | 80,000 | $ | 2,476 | $ | - | $ | 82,476 | ||||||||
Net income
|
- | - | 2,749 | 2,749 | ||||||||||||
Issuance of trust preferred securities
|
- | - | - | - | ||||||||||||
Dividends:
|
||||||||||||||||
Trust preferred securities
|
- | - | (2,669 | ) | (2,669 | ) | ||||||||||
Common- paid to Pinnacle Financial
|
- | - | (80 | ) | (80 | ) | ||||||||||
Balances, December 31, 2010
|
$ | 80,000 | $ | 2,476 | $ | - | $ | 82,476 | ||||||||
Net income
|
- | - | 2,082 | 2,082 | ||||||||||||
Issuance of trust preferred securities
|
- | - | - | - | ||||||||||||
Dividends:
|
||||||||||||||||
Trust preferred securities
|
- | - | (2,017 | ) | (2,017 | ) | ||||||||||
Common- paid to Pinnacle Financial
|
- | - | (65 | ) | (65 | ) | ||||||||||
Balances, December 31, 2011
|
$ | 80,000 | $ | 2,476 | $ | - | $ | 82,476 | ||||||||
Net income
|
- | - | 2,218 | 2,218 | ||||||||||||
Issuance of trust preferred securities
|
- | - | - | - | ||||||||||||
Dividends:
|
||||||||||||||||
Trust preferred securities
|
- | - | (2,151 | ) | (2,151 | ) | ||||||||||
Common- paid to Pinnacle Financial
|
- | - | (67 | ) | (67 | ) | ||||||||||
Balances, December 31, 2012
|
$ | 80,000 | $ | 2,476 | $ | - | $ | 82,476 |
Note 11.
|
Income Taxes
|
2012
|
2011
|
2010
|
||||||||||
Current tax expense (benefit):
|
||||||||||||
Federal
|
$ | 19,096 | $ | 8,157 | $ | (13,412 | ) | |||||
State
|
- | - | - | |||||||||
Total current tax expense (benefit)
|
$ | 19,096 | 8,157 | (13,412 | ) | |||||||
Deferred tax expense (benefit):
|
||||||||||||
Federal
|
485 | (19,646 | ) | 13,482 | ||||||||
State
|
1,063 | (3,749 | ) | 4,340 | ||||||||
Total deferred tax expense (benefit)
|
1,548 | (23,395 | ) | 17,822 | ||||||||
Total income tax expense (benefit)
|
$ | 20,644 | $ | (15,238 | ) | $ | 4,410 |
2012
|
2011
|
2010
|
||||||||||
Income tax expense (benefit) at statutory rate
|
$ | 21,885 | $ | 9,975 | $ | (6,962 | ) | |||||
State excise tax expense (benefit), net of federal tax effect
|
1,063 | (255 | ) | (2,305 | ) | |||||||
Tax-exempt securities
|
(2,517 | ) | (2,655 | ) | (3,017 | ) | ||||||
Federal tax credits
|
- | - | (360 | ) | ||||||||
Bank owned life insurance
|
(322 | ) | (406 | ) | (320 | ) | ||||||
Insurance premiums
|
(243 | ) | (151 | ) | (301 | ) | ||||||
Other items
|
778 | 734 | 600 | |||||||||
Deferred tax valuation allowance
|
- | (22,480 | ) | 17,075 | ||||||||
Income tax expense (benefit)
|
$ | 20,644 | $ | (15,238 | ) | $ | 4,410 |
2012
|
2011
|
|||||||
Deferred tax assets:
|
||||||||
Loan loss allowance
|
$ | 26,777 | $ | 28,684 | ||||
Loans
|
423 | 783 | ||||||
Insurance
|
691 | 664 | ||||||
Accrued liability for supplemental retirement agreements
|
510 | 476 | ||||||
Restricted stock and stock options
|
3,777 | 3,525 | ||||||
Net operating loss carryforward
|
3,593 | 4,753 | ||||||
Alternative minimum tax carryforward
|
- | 3,341 | ||||||
Other real estate owned
|
3,222 | 2,076 | ||||||
Other deferred tax assets
|
1,430 | 1,152 | ||||||
Total deferred tax assets
|
40,423 | 45,454 | ||||||
Deferred tax liabilities:
|
||||||||
Depreciation and amortization
|
7,110 | 7,522 | ||||||
Core deposit intangible asset
|
1,700 | 2,735 | ||||||
Securities
|
12,024 | 14,675 | ||||||
REIT dividends
|
371 | 1,179 | ||||||
FHLB related liabilities
|
1,724 | 3,016 | ||||||
Other deferred tax liabilities
|
554 | 489 | ||||||
Total deferred tax liabilities
|
23,483 | 29,616 | ||||||
Net deferred tax assets
|
$ | 16,940 | $ | 15,838 |
Note 12.
|
Commitments and Contingent Liabilities
|
Note 13.
|
Salary Deferral Plans
|
Note 14.
|
Stock Options, Stock Appreciation Rights, Restricted Shares and Salary Stock Units
|
Number
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Contractual
Remaining Term
(in years)
|
Aggregate
Intrinsic
Value
(1)
(000’s)
|
|||||||
Outstanding at December 31, 2009
|
2,149,774 | $ | 17.54 | |||||||
Granted
|
- | - | ||||||||
Stock options exercised
|
(316,014 | ) | 6.45 | |||||||
Stock appreciation rights exercised
(2)
|
(13 | ) | 15.60 | |||||||
Forfeited
|
(37,962 | ) | 21.89 | |||||||
Outstanding at December 31, 2010
|
1,795,785 | $ | 19.49 | |||||||
Granted
|
- | - | ||||||||
Stock options exercised
|
(163,829 | ) | 6.20 | |||||||
Stock appreciation rights exercised
(2)
|
- | 15.60 | ||||||||
Forfeited
|
(50,918 | ) | 23.44 | |||||||
Outstanding at December 31, 2011
|
1,581,038 | $ | 20.81 | |||||||
Granted
|
- | - | ||||||||
Stock options exercised
|
(245,201 | ) | 6.78 | |||||||
Stock appreciation rights exercised
(2)
|
(28 | ) | 15.60 | |||||||
Forfeited
|
(17,108 | ) | 25.90 | |||||||
Outstanding at December 31, 2012
|
1,318,701 | $ | 23.36 |
3.14
|
$ 2,203
|
|||||
Outstanding and expected to vest at December 31, 2012
|
1,318,701 | $ | 23.36 |
3.14
|
$ 2,203
|
|||||
Options exercisable at December 31, 2012
|
1,286,030 | $ | 23.40 |
3.10
|
$ 2,203
|
|
(1)
|
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of Pinnacle Financial common stock of $18.84 per common share at December 31, 2012 for the 331,571 options and stock appreciation rights that were in-the-money at December 31, 2012.
|
|
(2)
|
The 232 stock appreciation rights exercised during 2010 settled in 13 shares of Pinnacle Financial common stock. There were no stock appreciation rights exercised during 2011. The 348 stock appreciation rights exercised during 2012 settled in 28 shares of Pinnacle Financial common stock.
|
Awards granted
with
the intention to be
classified
as incentive stock
options
|
Non-qualified stock
option awards
|
Totals
|
||||||||||
For the year ended December 31,2012:
|
||||||||||||
Stock-based compensation expense
|
$ | - | $ | 394,466 | $ | 394,466 | ||||||
Deferred income tax benefit
|
- | 154,749 | 154,749 | |||||||||
Stock-based compensation expense after deferred income tax benefit
|
$ | - | $ | 239,717 | $ | 239,717 | ||||||
Impact on per share results from stock-based compensation:
|
||||||||||||
Basic
|
$ | 0.00 | $ | 0.01 | $ | 0.01 | ||||||
Fully diluted
|
$ | 0.00 | $ | 0.01 | $ | 0.01 | ||||||
For the year ended December 31,2011:
|
||||||||||||
Stock-based compensation expense
|
$ | - | $ | 1,196,059 | $ | 1,196,059 | ||||||
Deferred income tax benefit
|
- | 469,214 | 469,214 | |||||||||
Stock-based compensation expense after deferred income tax benefit
|
$ | - | $ | 726,845 | $ | 726,845 | ||||||
Impact on per share results from stock-based compensation:
|
||||||||||||
Basic
|
$ | 0.00 | $ | 0.02 | $ | 0.02 | ||||||
Fully diluted
|
$ | 0.00 | $ | 0.02 | $ | 0.02 | ||||||
For the year ended December 31,2010:
|
||||||||||||
Stock-based compensation expense
|
$ | 46,058 | $ | 1,631,235 | $ | 1,677,293 | ||||||
Deferred income tax benefit
|
- | 639,933 | 639,933 | |||||||||
Stock-based compensation expense after deferred income tax benefit
|
$ | 46,058 | $ | 991,302 | $ | 1,037,360 | ||||||
Impact on per share results from stock-based compensation:
|
||||||||||||
Basic
|
$ | 0.00 | $ | 0.03 | $ | 0.03 | ||||||
Fully diluted
|
$ | 0.00 | $ | 0.03 | $ | 0.03 | ||||||
Number
|
Grant Date Weighted-
Average Cost
|
|||||||
Unvested at December 31, 2009
|
480,884 | $ | 21.03 | |||||
Shares awarded
|
315,069 | 14.35 | ||||||
Restrictions lapsed and shares released to associates/directors
|
(80,028 | ) | 18.60 | |||||
Shares forfeited
|
(75,431 | ) | 22.37 | |||||
Unvested at December 31, 2010
|
640,394 | $ | 17.63 | |||||
Shares awarded
|
361,966 | 13.38 | ||||||
Restrictions lapsed and shares released to associates/directors
|
(90,406 | ) | 17.62 | |||||
Shares forfeited
|
(62,251 | ) | 20.66 | |||||
Unvested at December 31, 2011
|
849,703 | $ | 15.61 | |||||
Shares awarded
|
156,645 | 16.48 | ||||||
Restrictions lapsed and shares released to associates/directors
|
(211,913 | ) | 16.28 | |||||
Shares forfeited
|
(54,526 | ) | 18.23 | |||||
Unvested at December 31, 2012
|
739,909 | $ | 15.45 |
Grant
Year
|
Group
(1)
|
Vesting
Period in
years
|
Shares
awarded
|
Restrictions
Lapsed and
shares released to
participants
(1)
|
Shares
Withheld
for taxes by participants
(1)
|
Shares
Forfeited by participants
|
Shares
Unvested
|
|||||||||||||||||||
Time Based Awards
(2)
|
||||||||||||||||||||||||||
2010
|
Associates
|
5 | 140,849 | 41,537 | 10,621 | 18,108 | 70,583 | |||||||||||||||||||
2011
|
Associates
|
5 | 144,145 | 21,463 | 6,246 | 12,297 | 104,139 | |||||||||||||||||||
2012
|
Associates
|
5 | 141,665 | - | - | 7,400 | 134,265 | |||||||||||||||||||
Performance Based Awards
(3)
|
||||||||||||||||||||||||||
2010
|
Leadership team
(4)
|
10 | 59,568 | 11,392 | 3,280 | - | 44,896 | |||||||||||||||||||
2010
|
Leadership team
(5)
|
3 | 39,250 | - | - | - | 39,250 | |||||||||||||||||||
2010
|
Leadership team
(6)
|
2 | 58,203 | 42,110 | 16,093 | - | - | |||||||||||||||||||
2011
|
Leadership team
(4)
|
10 | 152,093 | 7,005 | 2,103 | - | 142,985 | |||||||||||||||||||
2011
|
Leadership team
(5)
|
3 | 29,595 | - | - | - | 29,595 | |||||||||||||||||||
2011
|
Leadership team
(5)
|
3 | 21,097 | 5,581 | 1,465 | - | 14,051 | |||||||||||||||||||
Outside Director Awards
(7)
|
||||||||||||||||||||||||||
2010
|
Outside directors
|
1 | 17,199 | 14,882 | 2,317 | - | - | |||||||||||||||||||
2011
|
Outside directors
|
1 | 15,036 | 10,339 | 2,191 | 2,506 | - | |||||||||||||||||||
2012
|
Outside directors
|
1 | 14,980 | - | - | - | 14,980 |
|
(1)
|
Groups include our employees (referred to as associates above), our executive managers (referred to as our Leadership Team above) and our outside directors. Included in the Leadership Team awards noted above are awards to our named executive officers. When the restricted shares are awarded, a participant receives voting rights with respect to the shares, but is not able to transfer the shares other than to Pinnacle Financial in satisfaction of withholding tax obligations until the later of the date that the forfeiture restrictions have lapsed and the date we redeemed the remaining outstanding shares of Series A preferred stock. Once the forfeiture restrictions lapse, the participant is taxed on the value of the award and may elect to sell shares to pay the applicable income taxes associated with the award or have these shares remitted to Pinnacle Financial.
|
|
(2)
|
These shares vest in equal annual installments on the first five anniversary dates of the grant.
|
|
(3)
|
The forfeiture restrictions on these restricted share awards lapse in separate equal installments should Pinnacle Financial achieve certain earnings and soundness targets over each year of the subsequent vesting period (or alternatively, the cumulative vesting period), excluding the impact of any merger related expenses. For those grants with a 10 year vesting period, the vesting period for an individual award is equal to ten years or the number of years remaining before an associate reaches the age of 65, whichever is less.
|
|
(4)
|
These awards include a provision that the shares do not vest if Pinnacle Financial is not profitable for the fiscal year immediately preceding the vesting date.
|
|
(5)
|
The forfeiture restrictions on these restricted share awards lapse in installments as follows: 66.6% on the second anniversary date should Pinnacle Financial achieve certain earnings and soundness targets, and 33.4% on the third anniversary date should Pinnacle Financial achieve certain earnings and soundness targets in each of these periods (or, alternatively, the cumulative three-year period).
|
|
(6)
|
The forfeiture restrictions on these restricted share awards lapse in one lump sum on the second anniversary date of the grant so long as Pinnacle Financial is profitable for the fiscal year immediately preceding the vesting date.
|
|
(7)
|
Restricted share awards are issued to the outside members of the board of directors in accordance with their board compensation plan. Restrictions lapsed on the one year anniversary date of the award based on each individual board member meeting his/her attendance goals for the various board and board committee meetings to which each member was scheduled to attend. All board members who had been granted these restricted shares met their attendance goals with the exception of two board members during 2011 which resigned their board seats and forfeited their restricted share awards of 1,253 shares each.
|
2012
|
2011
|
2010
|
||||||||||
Restricted stock expense
(1)
|
$ | 3,270,028 | $ | 3,239,677 | $ | 2,303,720 | ||||||
Income tax benefit
|
1,282,832 | 1,270,925 | 903,749 | |||||||||
Restricted stock expense, net of income tax benefit
|
$ | 1,987,196 | $ | 1,968,752 | $ | 1,399,971 | ||||||
Impact on per share results from restricted stock expense:
|
||||||||||||
Basic
|
$ | 0.06 | $ | 0.06 | $ | 0.04 | ||||||
Fully diluted
|
$ | 0.06 | $ | 0.06 | $ | 0.04 |
|
(1)
|
During the years ended December 31, 2011 and 2010, $149,000 in previously expensed compensation associated with certain tranches of performance-based restricted share awards was reversed when Pinnacle Financial determined that the performance targets required to vest the awards, which were previously expected to be met, were unlikely to be achieved.
|
Note 15.
|
Derivative Instruments
|
At December 31, 2012
|
At December 31, 2011
|
|||||||||||||||
Notional
Amount
|
Estimated
Fair Value
|
Notional
Amount
|
Estimated
Fair Value
|
|||||||||||||
Interest rate swap agreements:
|
||||||||||||||||
Pay fixed / receive variable swaps
|
$ | 236,377 | $ | 16,132 | $ | 257,639 | $ | 17,937 | ||||||||
Pay variable / receive fixed swaps
|
236,377 | (16,366 | ) | 257,639 | (18,147 | ) | ||||||||||
Total
|
$ | 472,754 | $ | (234 | ) | $ | 515,278 | $ | (210 | ) |
Note 16.
|
Employment Contracts
|
Note 17.
|
Related Party Transactions
|
Note 18.
|
Fair Value of Financial Instruments
|
|
·
|
Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
|
·
|
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
|
·
|
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
December 31, 2012
|
Total carrying value
in the consolidated
balance sheet
|
Quoted market
prices in an
active market
(Level 1)
|
Models with significant
observable market
parameters
(Level 2)
|
Models with significant
unobservable market
parameters
(Level 3)
|
||||||||||||
Investment securities available-for-sale:
|
||||||||||||||||
U.S. government agency securities
|
$ | 110,452 | $ | - | $ | 110,452 | $ | - | ||||||||
Mortgage-backed securities
|
375,651 | - | 375,651 | - | ||||||||||||
State and municipal securities
|
191,727 | - | 191,727 | - | ||||||||||||
Agency- backed securities
|
17,352 | 17,352 | ||||||||||||||
Corporate notes and other
|
11,396 | - | 11,396 | - | ||||||||||||
Total investment securities available-for-sale
|
706,578 | - | 706,578 | $ | - | |||||||||||
Alternative investments
|
4,214 | - | - | 4,214 | ||||||||||||
Other assets
|
16,599 | - | 16,132 | 467 | ||||||||||||
Total assets at fair value
|
$ | 727,391 | $ | - | $ | 722,710 | $ | 4,681 | ||||||||
Other liabilities
|
$ | 16,366 | $ | - | $ | 16,366 | $ | - | ||||||||
Total liabilities at fair value
|
$ | 16,366 | $ | - | $ | 16,366 | $ | - | ||||||||
December 31, 2011
|
||||||||||||||||
Investment securities available-for-sale:
|
||||||||||||||||
U.S. government agency securities
|
$ | 42,313 | $ | - | $ | 42,313 | $ | - | ||||||||
Mortgage-backed securities
|
645,567 | - | 645,567 | - | ||||||||||||
State and municipal securities
|
195,952 | - | 195,952 | - | ||||||||||||
Corporate notes and other
|
11,130 | - | 11,130 | - | ||||||||||||
Total investment securities available-for-sale
|
894,962 | - | 894,962 | - | ||||||||||||
Alternative investments
|
3,400 | - | - | 3,400 | ||||||||||||
Other assets
|
18,436 | - | 17,937 | 499 | ||||||||||||
Total assets at fair value
|
$ | 916,798 | $ | - | $ | 912,899 | $ | 3,899 | ||||||||
Other liabilities
|
$ | 18,147 | $ | - | $ | 18,147 | $ | - | ||||||||
Total liabilities at fair value
|
$ | 18,147 | $ | - | $ | 18,147 | $ | - |
December 31, 2012
|
Total carrying value
in the consolidated
balance sheet
|
Quoted
market
prices in an
active
market
(Level 1)
|
Models with
significant
observable
market
parameters
(Level 2)
|
Models with
significant
unobservable
market
parameters
(Level 3)
|
Total losses
for the period
ended
|
|||||||||||||||
Other real estate owned
|
$ | 18,580 | $ | - | $ | - | $ | 18,580 | $ | (5,428 | ) | |||||||||
Nonperforming loans, net
(1)
|
21,059 | - | - | 21,059 | (4,745 | ) | ||||||||||||||
Total
|
$ | 39,639 | $ | - | $ | - | $ | 39,639 | $ | (10,173 | ) | |||||||||
December 31, 2011
|
||||||||||||||||||||
Other real estate owned
|
$ | 39,714 | $ | - | $ | - | $ | 39,714 | $ | (6,890 | ) | |||||||||
Nonperforming loans, net
(1)
|
43,415 | - | - | 43,415 | (8,661 | ) | ||||||||||||||
Total
|
$ | 83,129 | $ | - | $ | - | $ | 83,129 | $ | (15,551 | ) |
|
(1)
|
Amount is net of a valuation allowance of $1.8 million at December 31, 2012 and $4.4 million at December 31, 2011 as required by ASC 310-10, “Receivables.”
|
For the year ended December 31,
|
||||||||||||||||
2012
|
2011
|
|||||||||||||||
Other
assets
|
Other liabilities
|
Other
assets
|
Other liabilities
|
|||||||||||||
Fair value, January 1
|
$ | 3,899 | $ | - | $ | 3,238 | $ | - | ||||||||
Total net realized (losses) gains included in income
|
(101 | ) | - | 268 | - | |||||||||||
Change in unrealized gains/losses included in other comprehensive income for assets and liabilities still held at December 31
|
- | - | - | - | ||||||||||||
Purchases, issuances and settlements, net
|
883 | - | 393 | - | ||||||||||||
Transfers out of Level 3
|
- | - | - | - | ||||||||||||
Fair value, December 31
|
$ | 4,681 | $ | - | $ | 3,899 | $ | - | ||||||||
Total realized (losses) gains included in income related to financial assets and liabilities still on the consolidated balance sheet at December 31
|
$ | (101 | ) | $ | - | $ | 268 | $ | - |
(in thousands)
December 31, 2012
|
Carrying/
Notional
Amount
|
Estimated
Fair Value
(1)
|
Quoted
market
prices in
an active
market
(Level 1)
|
Models with significant observable market parameters
(Level 2)
|
Models with significant unobservable market
parameters
(Level 3)
|
|||||||||||||||
Financial assets:
|
||||||||||||||||||||
Securities held-to-maturity
|
$ | 575 | $ | 583 | $ | - | $ | 583 | $ | - | ||||||||||
Loans, net
|
3,642,744 | 3,358,435 | - | - | 3,358,435 | |||||||||||||||
Mortgage loans held-for-sale
|
41,195 | 42,425 | - | 42,425 | - | |||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits and securities sold under agreements to repurchase
|
4,129,855 | 4,084,314 | - | - | 4,084,314 | |||||||||||||||
Federal Home Loan Bank advances
|
75,850 | 76,350 | - | - | 76,350 | |||||||||||||||
Subordinated debt and other borrowings
|
106,158 | 83,862 | - | - | 83,862 | |||||||||||||||
Off-balance sheet instruments:
|
||||||||||||||||||||
Commitments to extend credit
(2)
|
1,030,723 | 1,594 | - | - | 1,594 | |||||||||||||||
Standby letters of credit
(3)
|
74,679 | 304 | - | - | 304 | |||||||||||||||
December 31, 2011
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Securities held-to-maturity
|
$ | 2,330 | $ | 2,369 | $ | - | $ | 2,369 | $ | - | ||||||||||
Loans, net
|
3,217,376 | 2,893,526 | - | - | 2,893,526 | |||||||||||||||
Mortgage loans held for sale
|
35,363 | 36,231 | - | 36,231 | - | |||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits and securities sold under agreements to repurchase
|
3,785,931 | 3,752,490 | - | 3,752,490 | - | |||||||||||||||
Federal Home Loan Bank advances
|
226,069 | 226,460 | - | - | 226,460 | |||||||||||||||
Subordinated debt and other borrowings
|
97,476 | 72,030 | - | 72,030 | - | |||||||||||||||
Off-balance sheet instruments:
|
||||||||||||||||||||
Commitments to extend credit
(2)
|
937,084 | 1,031 | - | - | 1,031 | |||||||||||||||
Standby letters of credit
(3)
|
76,176 | 259 | - | - | 259 | |||||||||||||||
|
(1)
|
Estimated fair values are consistent with an exit-price concept. The assumptions used to estimate the fair values are intended to approximate those that a market-participant would realize in a hypothetical orderly transaction.
|
|
(2)
|
At the end of each quarter, Pinnacle Financial evaluates the inherent risks of the outstanding off-balance sheet commitments. In making this evaluation, Pinnacle Financial evaluates the credit worthiness of the borrower, the collateral supporting the commitments and any other factors similar to those used to evaluate the inherent risks of our loan portfolio. Additionally, Pinnacle Financial evaluates the probability that the outstanding commitment will eventually become a funded loan. As a result, at December 31, 2012 and 2011, Pinnacle Financial included in other liabilities $1.6 million and $1.0 million, respectively, representing the inherent risks associated with these off-balance sheet commitments.
|
|
(3)
|
At December 31, 2012 and 2011, the fair value of Pinnacle Financial’s standby letters of credit was $304,000 and $259,000, respectively. This amount represents the unamortized fee associated with these standby letters of credit, which were priced at market when issued, and is included in the consolidated balance sheet of Pinnacle Financial and is believed to approximate fair value. This fair value will decrease over time as the existing standby letters of credit approach their expiration dates.
|
Note 19.
|
Other borrowings
|
|
●
|
A base rate generally defined as the sum of (i) the highest of (x) the lender’s “base” or “prime” rate, (y) the average overnight federal funds effective rate plus one-half percent (0.50%) per annum or (z) one-month LIBOR plus one percent (1%) per annum and (ii) an applicable margin as noted below; or
|
|
●
|
A LIBOR rate generally defined as the sum of (i) the average of the offered rates of interest quoted in the London Inter-Bank Eurodollar Market for U.S. Dollar deposits with prime banks (as published by Reuters or other commercially available source) for one, two or three months (all as selected by the Company), and (ii) an applicable margin.
|
Note 20.
|
Variable Interest Entities
|
December 31, 2012
|
December 31, 2011
|
||||||||||||||||
Type
|
Maximum
Loss Exposure
|
Liability
Recognized
|
Maximum
Loss Exposure
|
Liability
Recognized
|
Classification
|
||||||||||||
Low Income Housing Partnerships
|
$ | 6,096 | $ | - | $ | 5,917 | $ | - |
Other Assets
|
||||||||
Trust Preferred Issuances
|
N/A | 82,476 | N/A | 82,476 |
Subordinated Debt
|
||||||||||||
Commercial Troubled Debt Restructurings
|
20,951 | - | 17,223 | - |
Loans
|
||||||||||||
Managed Discretionary Trusts
|
N/A | N/A | N/A | N/A |
N/A
|
Note 21.
|
Regulatory Matters
|
Actual
|
Minimum Capital
Requirement
|
Minimum
To Be Well-Capitalized
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
At December 31, 2012
|
||||||||||||||||||||||||
Total capital to risk weighted assets:
|
||||||||||||||||||||||||
Pinnacle Financial
|
$ | 552,021 | 13.0 | % | $ | 339,151 | 8.0 | % | $ | 425,748 | 10.0 | % | ||||||||||||
Pinnacle Bank
|
$ | 545,615 | 12.9 | % | $ | 338,548 | 8.0 | % | $ | 425,005 | 10.0 | % | ||||||||||||
Tier I capital to risk weighted assets:
|
||||||||||||||||||||||||
Pinnacle Financial
|
$ | 498,802 | 11.8 | % | $ | 169,575 | 4.0 | % | $ | 255,449 | 6.0 | % | ||||||||||||
Pinnacle Bank
|
$ | 492,489 | 11.6 | % | $ | 169,274 | 4.0 | % | $ | 255,003 | 6.0 | % | ||||||||||||
Tier I capital to average assets (*):
|
||||||||||||||||||||||||
Pinnacle Financial
|
$ | 498,802 | 10.6 | % | $ | 188,695 | 4.0 | % | N/A | N/A | ||||||||||||||
Pinnacle Bank
|
$ | 492,489 | 10.5 | % | $ | 187,981 | 4.0 | % | $ | 234,976 | 5.0 | % | ||||||||||||
At December 31, 2011
|
||||||||||||||||||||||||
Total capital to risk weighted assets:
|
||||||||||||||||||||||||
Pinnacle Financial
|
$ | 579,877 | 15.3 | % | $ | 302,433 | 8.0 | % | $ | 380,799 | 10.0 | % | ||||||||||||
Pinnacle Bank
|
$ | 528,436 | 14.0 | % | $ | 301,838 | 8.0 | % | $ | 380,063 | 10.0 | % | ||||||||||||
Tier I capital to risk weighted assets:
|
||||||||||||||||||||||||
Pinnacle Financial
|
$ | 523,277 | 13.8 | % | $ | 151,216 | 4.0 | % | $ | 228,479 | 6.0 | % | ||||||||||||
Pinnacle Bank
|
$ | 471,928 | 12.5 | % | $ | 150,919 | 4.0 | % | $ | 228,038 | 6.0 | % | ||||||||||||
Tier I capital to average assets (*):
|
||||||||||||||||||||||||
Pinnacle Financial
|
$ | 523,277 | 11.4 | % | $ | 184,138 | 4.0 | % | N/A | N/A | ||||||||||||||
Pinnacle Bank
|
$ | 471,928 | 10.3 | % | $ | 183,431 | 4.0 | % | $ | 229,289 | 5.0 | % |
|
(*) Average assets for the above calculations were based on the most recent quarter.
|
Note 22.
|
Parent Company Only Financial Information
|
2012
|
2011
|
|||||||
Assets:
|
||||||||
Cash and cash equivalents
|
$ | 13,657,278 | $ | 36,496,508 | ||||
Investments in consolidated subsidiaries
|
758,512,213 | 743,704,779 | ||||||
Investment in unconsolidated subsidiaries:
|
||||||||
PNFP Statutory Trust I
|
310,000 | 310,000 | ||||||
PNFP Statutory Trust II
|
619,000 | 619,000 | ||||||
PNFP Statutory Trust III
|
619,000 | 619,000 | ||||||
PNFP Statutory Trust IV
|
928,000 | 928,000 | ||||||
Other investments
|
3,214,358 | 3,400,183 | ||||||
Current income tax receivable
|
472,869 | 478,134 | ||||||
Other assets
|
6,954,411 | 6,439,735 | ||||||
$ | 785,287,129 | $ | 792,995,339 | |||||
Liabilities and stockholders’ equity:
|
||||||||
Income taxes payable to subsidiaries
|
$ | - | $ | 309,118 | ||||
Subordinated debt and other borrowings
|
106,158,292 | 82,476,000 | ||||||
Other liabilities
|
57,478 | 65,653 | ||||||
Stockholders’ equity
|
679,071,359 | 710,144,568 | ||||||
$ | 785,287,129 | $ | 792,995,339 |
2012
|
2011
|
2010
|
||||||||||
Revenues
|
$ | 157,443 | $ | 1,228,999 | $ | 1,054,997 | ||||||
Expenses:
|
||||||||||||
Interest expense – subordinated debentures
|
2,689,197 | 2,082,836 | 2,749,085 | |||||||||
Stock-based compensation expense
|
3,664,494 | 4,435,739 | 3,981,013 | |||||||||
Other expense
|
778,947 | 669,560 | 702,728 | |||||||||
Loss before income taxes and equity in undistributed income (loss) of subsidiaries
|
(6,975,195 | ) | (5,959,136 | ) | (6,377,829 | ) | ||||||
Income tax benefit
|
(2,736,020 | ) | (7,641,435 | ) | (2,125,035 | ) | ||||||
(Loss) income before equity in undistributed income of subsidiaries and accretion on preferred stock discount
|
(4,239,175 | ) | 1,682,299 | (4,252,794 | ) | |||||||
Equity in undistributed income (loss) of subsidiaries
|
46,123,056 | 42,055,068 | (20,047,698 | ) | ||||||||
Net income (loss)
|
41,883,881 | 43,737,367 | (24,300,492 | ) | ||||||||
Preferred stock dividends
|
1,660,868 | 4,606,493 | 4,815,972 | |||||||||
Accretion on preferred stock discount
|
2,153,172 | 2,058,146 | 1,326,050 | |||||||||
Net income (loss) available to common stockholders
|
$ | 38,069,841 | $ | 37,072,728 | $ | (30,442,514 | ) |
2012
|
2011
|
2010
|
||||||||||
Operating activities
:
|
||||||||||||
Net income (loss)
|
$ | 41,883,881 | $ | 43,737,367 | $ | (24,300,492 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||||||
Stock-based compensation expense
|
3,664,494 | 4,435,739 | 3,981,013 | |||||||||
Loss (gain) on other investments
|
138,020 | (313,562 | ) | (272,116 | ) | |||||||
Increase (decrease) in income tax payable, net
|
169,016 | (5,351,564 | ) | 12,796,200 | ||||||||
(Increase) decrease in other assets
|
(912,116 | ) | 124,239 | (2,408,735 | ) | |||||||
Decrease in other liabilities
|
(8,176 | ) | (1,040 | ) | (19,339,542 | ) | ||||||
Excess tax benefit from stock compensation
|
(36,071 | ) | (13,819 | ) | (16,776 | ) | ||||||
Deferred tax (expense) benefit
|
(75,427 | ) | (636,040 | ) | 842,292 | |||||||
Equity in undistributed (income) loss of subsidiaries
|
(46,123,056 | ) | (42,055,068 | ) | 20,047,698 | |||||||
Net cash used in operating activities
|
(1,299,435 | ) | (73,748 | ) | (8,670,458 | ) | ||||||
Investing activities
:
|
||||||||||||
Investment in consolidated subsidiaries:
|
||||||||||||
Banking subsidiaries
|
27,210,000 | - | (25,000,000 | ) | ||||||||
Other subsidiaries
|
- | - | (200,000 | ) | ||||||||
Investments in other entities
|
47,804 | (393,304 | ) | (422,076 | ) | |||||||
Net cash provided by (used in) investing activities
|
27,257,804 | (393,304 | ) | (25,622,076 | ) | |||||||
Financing activities
:
|
||||||||||||
Net increase in borrowings from line of credit
|
23,682,291 | - | - | |||||||||
(Repurchase) exercise of common stock warrants
|
(755,000 | ) | - | 285,000 | ||||||||
Exercise of common stock options
|
1,616,643 | 1,447,362 | 3,037,064 | |||||||||
Preferred dividends paid
|
(2,127,604 | ) | (4,891,840 | ) | (4,750,000 | ) | ||||||
Excess tax benefit from stock compensation arrangements
|
36,071 | 13,819 | 16,776 | |||||||||
Repurchase of preferred shares outstanding
|
(71,250,000 | ) | (23,750,000 | ) | - | |||||||
Net cash used in financing activities
|
(48,797,599 | ) | (27,180,659 | ) | (1,411,160 | ) | ||||||
Net decrease in cash
|
(22,839,230 | ) | (27,647,711 | ) | (35,703,694 | ) | ||||||
Cash and cash equivalents, beginning of year
|
36,496,508 | 64,144,219 | 99,847,913 | |||||||||
Cash and cash equivalents, end of year
|
$ | 13,657,278 | $ | 36,496,508 | $ | 64,144,219 |
Note 23.
|
Quarterly Financial Results (unaudited)
|
First
|
Second
|
Third
|
Fourth
|
|||||||||||||
(in thousands, except per share data)
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
||||||||||||
2012
|
||||||||||||||||
Interest income
|
$ | 45,824 | $ | 45,953 | $ | 46,441 | $ | 47,203 | ||||||||
Net interest income
|
39,504 | 40,185 | 40,932 | 42,243 | ||||||||||||
Provision for loan losses
|
1,034 | 634 | 1,413 | 2,488 | ||||||||||||
Net income before taxes
|
12,599 | 15,545 | 16,371 | 18,012 | ||||||||||||
Net income
|
8,365 | 10,440 | 11,349 | 11,730 | ||||||||||||
Net income available to common stockholders
|
7,206 | 7,785 | 11,349 | 11,730 | ||||||||||||
Basic net income per share available to common stockholders
|
$ | 0.21 | $ | 0.23 | $ | 0.33 | $ | 0.35 | ||||||||
Diluted net income per share available to common stockholders
|
$ | 0.21 | $ | 0.23 | $ | 0.33 | $ | 0.34 | ||||||||
2011
|
||||||||||||||||
Interest income
|
$ | 47,224 | $ | 47,789 | $ | 46,888 | $ | 46,446 | ||||||||
Net interest income
|
29,882 | 31,208 | 34,723 | 33,854 | ||||||||||||
Provision for loan losses
|
6,139 | 6,587 | 3,632 | 5,439 | ||||||||||||
Net income before taxes
|
3,505 | 6,660 | 9,128 | 9,207 | ||||||||||||
Net income
|
3,505 | 6,372 | 26,101 | 7,760 | ||||||||||||
Net income available to common stockholders
|
2,011 | 4,844 | 24,537 | 5,681 | ||||||||||||
Basic net income per share available to common stockholders
|
$ | 0.06 | $ | 0.14 | $ | 0.74 | $ | 0.17 | ||||||||
Diluted net income per share available to common stockholders
|
$ | 0.06 | $ | 0.14 | $ | 0.72 | $ | 0.17 | ||||||||
2010
|
||||||||||||||||
Interest income
|
$ | 52,690 | $ | 50,929 | $ | 50,650 | $ | 49,079 | ||||||||
Net interest income
|
36,560 | 35,697 | 36,060 | 36,056 | ||||||||||||
Provision for loan losses
|
13,226 | 30,509 | 4,789 | 5,171 | ||||||||||||
Net (loss) income before taxes
|
(4,347 | ) | (20,734 | ) | 2,091 | 3,098 | ||||||||||
Net (loss) income
|
(3,822 | ) | (26,364 | ) | 2,091 | 3,796 | ||||||||||
Net (loss) income available to common stockholders
|
(5,368 | ) | (27,871 | ) | 549 | 2,248 | ||||||||||
Basic net (loss) income per share available to common stockholders
|
$ | (0.16 | ) | $ | (0.85 | ) | $ | 0.02 | $ | 0.07 | ||||||
Diluted net (loss) income per share available to common stockholders
|
$ | (0.16 | ) | $ | (0.85 | ) | $ | 0.02 | $ | 0.07 |
ITEM 9.
|
CHANGES IN A
ND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTR
OL
S AND PROCEDURES
|
ITEM 9B.
|
OTH
ER
INFORMATION
|
ITEM 10.
|
DIREC
TO
RS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECU
TIV
E COMPENSATION
|
ITEM 12.
|
SECU
RITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan Category
|
Number of
Securities to be
Issued upon
Exercise of
Outstanding
Options,
Warrants
and Rights
|
Weighted
Average
Exercise
Price of
Outstanding
Options,
Warrants
and Rights
|
Number of
Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation
Plans (Excluding
Securities Reflected
in First Column)
|
|||||||||
Equity compensation plans approved by stockholders:
|
||||||||||||
2000 Stock Incentive Plan
|
165,792 | $ | 9.57 | - | ||||||||
2004 Equity Incentive Plan
|
1,237,076 | (1) | 26.71 | 680,374 | ||||||||
1999 Cavalry Bancorp, Inc. Stock Option Plan
|
- | - | - | |||||||||
Bank of the South 2001 Stock Option Plan
|
25,384 | 10.05 | - | |||||||||
PrimeTrust Bank 2001 Statutory-Non-Statutory Stock Option Plan
|
- | - | - | |||||||||
PrimeTrust Bank 2005 Statutory-Non-Statutory Stock Option Plan
|
51,989 | 7.50 | - | |||||||||
Mid-America Bancshares, Inc. 2006 Omnibus Equity Incentive Plan
|
65,239 | (2) | 8.80 | 83,557 | ||||||||
Equity compensation plans not approved by stockholders
|
N/A | N/A | N/A | |||||||||
Total
|
1,318,701 | $ | 23.36 | 763,931 |
|
(1)
|
Includes 223,057 performance-based restricted stock units which do not have an exercise price because their value is dependent upon the achievement of certain performance goals, and are to be settled for shares of common stock. The number of performance-based restricted stock units included is based on an assumption that the maximum number of units are earned.
|
|
(2)
|
Includes 3,722 performance-based restricted stock units which do not have an exercise price because their value is dependent upon the achievement of certain performance goals, and are to be settled for shares of common stock. The number of performance-based restricted stock units included is based on an assumption that the maximum number of units are earned.
|
ITEM 13.
|
CERT
AIN
RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRIN
CIP
AL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND F
INAN
CIAL STATEMENT SCHEDULES
|
Exhibit No.
|
Description
|
|
2.1
|
Merger Agreement, dated September 30, 2005, by and between Pinnacle Financial Partners, Inc. and Cavalry Bancorp, Inc. (schedules and exhibits to which have been omitted pursuant to Item 601(b)(2) of Regulation S-K)
(1)
|
|
2.2
|
Agreement and Plan of Merger by and between Pinnacle Financial Partners, Inc. and Mid-America Bancshares, Inc. (schedules and exhibits to which been omitted pursuant to Item 601(b)(2) of Regulation S-K)
(2)
|
|
3.1
|
Amended and Restated Charter, as amended (Restated for SEC filing purposes only)
(3)
|
|
3.2
|
Bylaws
(4)
|
|
4.1.1
|
Specimen Common Stock Certificate
(5)
|
|
4.1.2
|
See Exhibits 3.1 and 3.2 for provisions of the Charter and Bylaws defining rights of holders of the Common Stock
|
|
10.1
|
Letter Agreement dated March 14, 2000 and accepted March 16, 2000 by and between Pinnacle Financial Corporation (now known as Pinnacle Financial Partners, Inc.) and Atkinson Public Relations
(5)
|
|
10.2
|
Pinnacle Financial Partners, Inc. 2000 Stock Incentive Plan
(5)
*
|
|
10.3
|
Form of Pinnacle Financial Partners, Inc.'s Stock Option Award
(5)
*
|
|
10.4
|
Form of Restricted Stock Award Agreement
(6)
|
|
10.5
|
Form of Incentive Stock Option Agreement
(6)
|
|
10.6
|
Form of Restricted Stock Agreement for non-employee directors
(7) *
|
|
10.7
|
Form of Non-Qualified Stock Option Agreement
(8)
*
|
|
10.8
|
Cavalry Bancorp, Inc. 1999 Stock Option Plan
(9)
*
|
|
10.9
|
Amendment No. 1 to Cavalry Bancorp, Inc. 1999 Stock Option Plan
(9) *
|
|
10.10
|
Form of Non-Qualified Stock Option Agreement
(9)
*
|
|
10.11
|
Amendment No. 1 to Pinnacle Financial Partners, Inc. 2000 Stock Incentive Plan
(9) *
|
|
10.12
|
Form of Restricted Stock Award Agreement
(10) *
|
|
10.13
|
Form of Restricted Stock Award Agreement
(11)
*
|
|
10.14
|
Amended Employment Agreement by and among Pinnacle Bank, Pinnacle Financial Partners, Inc. and M. Terry Turner
(12) *
|
|
10.15
|
Amended Employment Agreement by and among Pinnacle Bank, Pinnacle Financial Partners, Inc. and Robert A. McCabe, Jr.
(12) *
|
|
10.16
|
Amended Employment Agreement by and among Pinnacle Bank, Pinnacle Financial Partners, Inc. and Hugh M. Queener
(12) *
|
|
10.17
|
Amended Employment Agreement by and among Pinnacle Bank, Pinnacle Financial Partners, Inc. and Harold R. Carpenter
(12) *
|
|
10.18
|
Bank of the South 2001 Stock Option Plan
(12)
|
|
10.19
|
PrimeTrust Bank 2001 Statutory – Nonstatutory Stock Option Plan
(12)
*
|
|
10.20
|
PrimeTrust Bank 2005 Statutory – Nonstatutory Stock Option Plan
(12)
*
|
|
10.21
|
Mid-America Bancshares, Inc. 2006 Omnibus Equity Incentive Plan
(12)
*
|
|
10.22
|
Amendment No. 1 to Mid-America Bancshares, Inc. 2006 Omnibus Equity Incentive Plan
(13)
*
|
|
10.23
|
Pinnacle Financial Partners, Inc. Stock Purchase Agreement by and between Pinnacle Financial Partners, Inc. and T. Rowe Price Associates, Inc. dated July 17, 2008
(14)
|
|
10.24
|
Registration Rights Agreement by and between Pinnacle Financial Partners, Inc. and T. Rowe Price Associates, Inc. dated July 17, 2008
(14)
|
|
10.25
|
2010 TARP CPP Executive Officer Performance Vested Restricted Stock Agreement
(15)*
|
|
10.26
|
2010 TARP CPP Executive Officer Time Vested Restricted Stock Agreement
(15)*
|
|
10.27
|
Form of Salary Stock Unit Award Agreement
(16)*
|
|
10.28
|
Form of 2011TARP CPP Executive Officer Performance Vested Restricted Stock Agreement
(17)*
|
|
10.29
|
Form of 2011 TARP CPP Executive Officer Time Vested Restricted Stock Agreement
(17)*
|
|
10.30
|
Form of Named Executive Officers 2012 Restricted Stock Unit Award Agreement
(18)*
|
|
10.31
|
Pinnacle Financial Partners, Inc. 2012 Annual Cash Incentive Plan
(18)*
|
|
10.32
|
2011 Named Executive Officer Compensation Summary
(3)*
|
|
10.33
|
Pinnacle Financial Partners, Inc. Amended and Restated 2004 Equity Incentive Plan
(19)
|
|
10.34
|
Loan Agreement, dated as of June 15, 2012, by and between Pinnacle Financial Partners, Inc., as Borrower, and US Bank, National Association, as Lender
(20)
|
|
10.35
|
Change of Control Agreement dated as of September 4, 2012 by and among Pinnacle Financial Partners, Inc., Pinnacle Bank and Joseph Harvey White
(21)
|
|
10.36
|
Form of Named Executive Officers 2013 Restricted Stock Unit Award Agreement
(22)
|
|
10.37
|
Pinnacle Financial Partners, Inc. 2013 Annual Cash Incentive Plan
(22)
|
|
Amendment No. 1 dated November 20, 2012 to Amended Employment Agreement by and among Pinnacle Bank, Pinnacle Financial Partners, Inc. and M. Terry Turner
*
|
||
Amendment No. 1 dated November 20, 2012 to Amended Employment Agreement by and among Pinnacle Bank, Pinnacle Financial Partners, Inc. and Robert A. McCabe
*
|
||
Amendment No. 1 dated November 20, 2012 to Amended Employment Agreement by and among Pinnacle Bank, Pinnacle Financial Partners, Inc. and Hugh M. Queener
*
|
||
Amendment No. 1 dated November 20, 2012 to Amended Employment Agreement by and among Pinnacle Bank, Pinnacle Financial Partners, Inc. and Harold R. Carpenter
*
|
||
Amendment No. 1 dated November 20, 2012 to Amended Change of Control Agreement by and among Pinnacle Bank, Pinnacle Financial Partners, Inc. and J. Harvey White
*
|
||
10.43 | 2012 Named Executive Officer compensation summary* |
Subsidiaries of Pinnacle Financial Partners, Inc.
|
||
Consent of KPMG LLP
|
||
Certification pursuant to Rule 13a-14(a)/15d-14(a)
|
||
Certification pursuant to Rule 13a-14(a)/15d-14(a)
|
||
Certification pursuant to 18 USC Section 1350 – Sarbanes-Oxley Act of 2002
|
||
Certification pursuant to 18 USC Section 1350 – Sarbanes-Oxley Act of 2002
|
||
Certification of Chief Executive Officer under the Capital Purchase Program of the Troubled Assets Relief Program
|
||
Certification of the Chief Financial Officer under the Capital Purchase Program of the Troubled Assets Relief Program
|
||
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Schema Documents
|
|
101.CAL
|
XBRL Calculation Linkbase Document
|
|
101.LAB
|
XBRL Label Linkbase Document
|
|
101.PRE
|
XBRL Presentation Linkbase Document
|
|
101.DEF
|
XBRL Definition Linkbase Document
|
(1)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on October 3, 2005.
|
(2)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on August 15, 2007.
|
(3)
|
Registrant hereby incorporates by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, as filed with the SEC.
|
(4)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on October 26, 2009.
|
(5)
|
Registrant hereby incorporates by reference to the Registrant’s Registration Statement on Form SB-2, as amended (File No. 333-38018).
|
(6)
|
Registrant hereby incorporates by reference to Registrant’s Form 10-Q for the quarter ended September 30, 2004.
|
(7)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 23, 2006.
|
(8)
|
Registrant hereby incorporates by reference to Registrant’s Form 10-K for the fiscal year ended December 31, 2005 as filed with the SEC on February 24, 2006.
|
(9)
|
Registrant hereby incorporates by reference to Registrant’s Form 10-Q for the quarter ended on September 30, 2006.
|
(10)
|
Registrant hereby incorporates by reference to Registrant’s Form 10-K for the fiscal year ended December 31, 2006 as filed with the SEC on February 28, 2007.
|
(11)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 25, 2008.
|
(12)
|
Registrant hereby incorporates by reference to Registrant’s Form 10-K for the fiscal year ended December 31, 2007 as filed with the SEC on March 7, 2008.
|
(13)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 21, 2009.
|
(14)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on July 18, 2008.
|
(15)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 25, 2010.
|
(16)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on March 2, 2011.
|
(17)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on August 19, 2011.
|
(18)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 20, 2012.
|
(19)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on April 20, 2012.
|
(20)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on June 20, 2012.
|
(21)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on September 6, 2012.
|
(22)
|
Registrant hereby incorporates by reference to Registrant’s Current Report on Form 8-K filed on January 17, 2013.
|
PINNACLE FINANCIAL PARTNERS, INC
|
|||
By:
|
/s/ M. Terry Turner
|
||
M. Terry Turner
|
|||
Date: February 22, 2013
|
President and Chief Executive Officer
|
SIGNATURES
|
TITLE
|
DATE
|
|
/s/ Robert A. McCabe, Jr.
|
Chairman of the Board
|
February 22, 2013
|
|
Robert A. McCabe, Jr.
|
|||
/s/ M. Terry Turner
|
Director, President and Chief Executive Officer
|
February 22, 2013
|
|
M. Terry Turner
|
(Principal Executive Officer)
|
||
/s/ Harold R. Carpenter
|
Chief Financial Officer
|
February 22, 2013
|
|
Harold R. Carpenter
|
(Principal Financial and Accounting Officer)
|
||
Director
|
|
||
Sue R. Atkinson
|
|||
/s/ H. Gordon Bone
|
Director
|
February 22, 2013
|
|
H. Gordon Bone
|
|||
/s/ Gregory L. Burns
|
Director
|
February 22, 2013
|
|
Gregory L. Burns
|
|||
/s/ James C. Cope
|
Director
|
February 22, 2013
|
|
James C. Cope
|
|||
/s/ Colleen Conway-Welch
|
Director
|
February 22, 2013
|
|
Colleen Conway-Welch
|
|||
/s/ William H. Huddleston
|
Director
|
February 22, 2013
|
|
William H. Huddleston
|
|||
/s/ Ed C. Loughry, Jr.
|
Director
|
February 22, 2013
|
|
Ed C. Loughry, Jr.
|
|||
/s/ Hal N. Pennington
|
Director
|
February 22, 2013
|
|
Hal N. Pennington
|
|||
/s/ Wayne J. Riley
|
Director
|
February 22, 2013
|
|
Wayne J. Riley
|
|||
/s/ Gary Scott
|
Director
|
February 22, 2013
|
|
Gary Scott
|
PINNACLE FINANCIAL PARTNERS, INC.
|
|||
By:
|
/s/ Hugh M. Queener | ||
Name:
|
Hugh M. Queener | ||
Title:
|
CAO | ||
PINNACLE BANK
|
|||
By:
|
/s/ Hugh M. Queener | ||
Name:
|
Hugh M. Queener | ||
Title:
|
CAO | ||
EXECUTIVE
|
|||
/s/ M. Terry Turner | |||
MICHAEL TERRY TURNER
|
PINNACLE FINANCIAL PARTNERS, INC.
|
|||
By:
|
/s/ Hugh M. Queener | ||
Name:
|
Hugh M. Queener | ||
Title:
|
CAO | ||
PINNACLE BANK
|
|||
By:
|
/s/ Hugh M. Queener | ||
Name:
|
Hugh M. Queener | ||
Title:
|
CAO | ||
EXECUTIVE
|
|||
/s/ Robert A. McCabe, Jr. | |||
ROBERT A. MCCABE, JR.
|
PINNACLE FINANCIAL PARTNERS, INC.
|
|||
By:
|
/s/ Harold R. Carpenter | ||
Name:
|
Harold R. Carpenter | ||
Title:
|
CFO | ||
PINNACLE BANK
|
|||
By:
|
/s/ Harold R. Carpenter | ||
Name:
|
Harold R. Carpenter | ||
Title:
|
CFO | ||
EXECUTIVE
|
|||
/s/ Hugh M. Queener | |||
HUGH M. QUEENER
|
PINNACLE FINANCIAL PARTNERS, INC.
|
|||
By:
|
/s/ Hugh M. Queener | ||
Name:
|
Hugh M. Queener | ||
Title:
|
CAO | ||
PINNACLE BANK
|
|||
By:
|
/s/ Hugh M. Queener | ||
Name:
|
Hugh M. Queener | ||
Title:
|
CAO | ||
EXECUTIVE
|
|||
/s/ Harold R. Carpenter | |||
HAROLD R. CARPENTER
|
PINNACLE FINANCIAL PARTNERS, INC.
|
|||
By:
|
/s/ Hugh M. Queener | ||
Name:
|
Hugh M. Queener | ||
Title:
|
CAO | ||
PINNACLE BANK
|
|||
By:
|
/s/ Hugh M. Queener | ||
Name:
|
Hugh M. Queener | ||
Title:
|
CAO | ||
EXECUTIVE
|
|||
/s/ Joseph Harvey White | |||
JOSEPH HARVEY WHITE
|
Executive Officer
|
Current Base
Salary
|
|||
M. Terry Turner – CEO
|
$ | 733,000 | ||
Robert A. McCabe, Jr. - Chairman of the Board
|
$ | 696,000 | ||
Hugh M. Queener – CAO
|
$ | 352,000 | ||
Harold R. Carpenter – CFO
|
$ | 352,000 | ||
Joseph Harvey White - Chief Credit Officer
|
$ | 265,000 |
|
·
|
Receive cash bonuses under the Company’s 2013 Cash Incentive Plan;
|
|
·
|
Participate in the Company's equity incentive programs, which currently involves the award of performance-based restricted stock units pursuant to the Company's 2004 Equity Incentive Plan; and
|
|
·
|
Participate in the Company's broad-based benefit programs generally available to its employees, including health, disability and life insurance programs and the Company’s 401k plan.
|
Subsidiaries
|
Jurisdiction or State of
Incorporation
|
Names Under Which
Subsidiary Does Business (1)
|
|
Pinnacle Bank (2)
|
Tennessee
|
||
PFP Title Company (3)
|
Tennessee
|
||
Pinnacle Community Development Corporation (3)
|
Tennessee
|
||
PNFP Statutory Trust I (4)
|
Connecticut
|
||
PNFP Statutory Trust II (4)
|
Delaware
|
||
PNFP Statutory Trust III (4)
|
Connecticut
|
||
PNFP Statutory Trust IV (4)
|
Delaware
|
||
PNFP Holdings, Inc. (5)
|
Nevada
|
||
PNFP Properties, Inc. (6)
|
Maryland
|
||
Pinnacle Advisory Services, Inc. (7)
|
Tennessee
|
||
Pinnacle Credit Enhancement Holdings, Inc. (7)
|
Tennessee
|
||
Pinnacle Rutherford Real Estate, Inc. (3)
|
Tennessee
|
||
Pinnacle Nashville Real Estate, Inc. (3)
|
Tennessee
|
||
Pinnacle Rutherford Towers, Inc.(3)
|
Tennessee
|
||
Pinnacle Service Company, Inc.(3)
|
Tennessee
|
||
PNFP Insurance, Inc.(7)
|
Nevada
|
||
Miller & Loughry, Inc. (2)
|
Tennessee
|
Miller Loughry Beach
|
|
PNB Holding Co. 1, Inc. (3)
|
Tennessee
|
||
PNB Holding Co. 2, Inc. (3)
|
Tennessee
|
|
1.
|
Unless otherwise noted, each Subsidiary only does business under its legal name as set forth under the heading “Subsidiaries.”
|
|
2.
|
Pinnacle Bank is organized under the laws of the State of Tennessee.
|
|
3.
|
PFP Title Company, Pinnacle Community Development Corporation, Pinnacle Rutherford Real Estate, Inc., Pinnacle Nashville Real Estate, Inc., Pinnacle Rutherford Towers, Inc., Pinnacle Service Company, Inc., Miller & Loughry, Inc., PNB Holding Co. 1, Inc. and PNB Holding Co. 2, Inc. are wholly-owned subsidiaries of Pinnacle Bank.
|
|
4.
|
PNFP Statutory Trust I, PNFP Statutory Trust II, PNFP Statutory Trust III and Statutory Trust IV are statutory business trusts which were established to issue capital trust preferred securities.
|
|
5.
|
PNFP Holdings, Inc. is a wholly-owned subsidiary of PFP Title Company.
|
|
6.
|
PNFP Properties, Inc. is a wholly-owned subsidiary of PNFP Holdings, Inc.
|
|
7.
|
Pinnacle Advisory Services, Inc., Pinnacle Credit Enhancement Holdings, Inc. and PNFP Insurance, Inc. are wholly owned subsidiaries of Pinnacle Financial Partners, Inc.
|
|
1.)
|
I have reviewed this annual report on Form 10-K of Pinnacle Financial Partners, Inc.;
|
|
2.)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.)
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) and 15d-15(f) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 22, 2013
|
Signature:
|
/s/ M. Terry Turner
|
|
M. Terry Turner
|
|||
President and Chief Executive Officer
|
|
1.)
|
I have reviewed this annual report on Form 10-K of Pinnacle Financial Partners, Inc.;
|
|
2.)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.)
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) and 15d-15(f) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 22, 2013
|
Signature:
|
/s/ Harold R. Carpenter
|
|
Harold R. Carpenter
|
|||
Chief Financial Officer
|
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 22, 2013
|
By:
|
/s/ M. Terry Turner
|
||
M. Terry Turner
|
||||
President and Chief Executive Officer
|
||||
Pinnacle Financial Partners, Inc.
|
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 22, 2013
|
By:
|
/s/ Harold R. Carpenter
|
|
Harold R. Carpenter
|
|||
Chief Financial Officer
|
|||
Pinnacle Financial Partners, Inc.
|
|
(A)
|
SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of the Company;
|
|
(B)
|
Employee compensation plans that unnecessarily expose the Company to risks; and
|
|
(C)
|
Employee compensation plans that could encourage the manipulation of reported earnings of the Company to enhance compensation of an employee;
|
Date: February 22, 2013
|
/s/ M. Terry Turner |
|
M. Terry Turner,
|
|
President and Chief Executive Officer
|
|
(A)
|
SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of the Company;
|
|
(B)
|
Employee compensation plans that unnecessarily expose the Company to risks; and
|
|
(C)
|
Employee compensation plans that could encourage the manipulation of reported earnings of the Company to enhance compensation of an employee;
|
Date: February 22, 2013
|
/s/ Harold R. Carpenter
|
|
Harold R. Carpenter,
|
|
Executive Vice President and Chief Financial Officer
|