Pinnacle Financial Partners, Inc. · NYSE:PNFP
Pinnacle Financial Partners — Raymond James and Associates 2007 Institutional Investor Conference
28 slides from Pinnacle Financial Partners's conference presentation, February 2007
Slide 1: Reliably faster growth, consistently better profitability
Reliably faster growth, consistently better profitability 1
Slide 2: Safe Harbor Statements
Safe Harbor Statements Forward looking statements Certain of the statements in this presentation may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "expec
Slide 3: Why Pinnacle?
Why Pinnacle? • Large, fast-growing metropolitan market • Extremely attractive competitive landscape • Reliable track record for growth and execution • Strong asset quality • Aggressive growth and profitability targets • Attractive valuation Reliably faster growth, consistently better profitability
Slide 4: Pinnacle Profile
Pinnacle Profile • High growth, one-bank holding company • Headquartered in Nashville, Tennessee • Market cap – $32.98 per share (2/20/07) = $509 million • 6 ½ years old • Total assets at December 31, 2006 – $2.1 billion • Reliable track record of growth and execution • $1.4 billion in organic growt
Slide 5: Pinnacle Profile: Achievements
Pinnacle Profile Achievements • Fastest growing bank in the nation’s “class of 2000” • Largest, locally-owned financial institution • 9 denovo branch offices in 6 years • Nashville’s Best Place to Work four consecutive years • Successful integration of Cavalry Bancorp (CAVB) • $640 million in tangib
Slide 6: Pinnacle Profile: Successful Integrator
Pinnacle Profile Successful Integrator 1. Major milestones completed on time 2. Achieved earnings synergies as advertised 3. Retained 100% targeted associates and clients 4. Maintained extraordinary reputation for service 5. Accelerated growth Acquired market Combined firm 6
Slide 7: The Nashville Market
The Nashville Market A large, fast growing metropolitan market Current Size and Growth Dynamics Size • 38th largest MSA • 1.5 million population • $29 billion deposits Growth • 18th fastest growing population • 4th fastest growing per capita income • Annual deposit growth rate of 13.5% vs. national
Slide 8: The Nashville Market
The Nashville Market A large, fast growing metropolitan market Future Growth Predictors • America’s Hottest Corporate Relocation Market • Kiplinger's #1 Smart Places to Live • Top 10 City for Business and Careers • Hottest Headquarters MSA for the 21st century • Top 10 Least Costly City for Business
Slide 9: The Nashville Market
The Nashville Market A Large, Fast Growing, Metropolitan Market Nashville is one of the least likely markets in the U.S. to be damaged by a “real estate bubble.” % Risk of Value Decline in 24 months 1. Pittsburgh, PA 6.2 2. Indianapolis, IN 6.4 3. Memphis, TN 6.8 4. Cincinnati, OH 7.1 5. Fort Worth,
Slide 10: Deposit Market Share Trends in the Nashville MSA
The Nashville Market Extremely attractive competitive landscape Deposit Market Share Trends in the Nashville MSA 40 35 30 Percentage 25 20 15 10 5 0 Jun- Jun- Jun- Jun- Jun- Jun- Jun- Jun- Jun- Jun- Jun- Jun- 95 96 97 98 99 00 01 02 03 04 05 06 Regions SunTrust B of A Community Banks Source: FDIC 10
Slide 11: Market Share – Nashville MSA – June 2006
The Nashville Market Extremely attractive competitive landscape Market Share – Nashville MSA – June 2006 Total Total 06-05 Rank Institution Deposits Share Share ($000) (%) Diff (%) 1 Regions / AmSouth $ 6,516,716 22.78% (1.41)% 2 SunTrust Bank 4,491,264 15.70% (2.07)% 3 Bank of America 4,444,939 15.
Slide 12: Reliable Track Record
$5.65M $1.50B 4-06 4-06 3-06 3-06 2-06 2-06 1-06 1-06 4-05 4-05 3-05 3-05 2-05 Total Loans (EOP) 2-05 1-05 Net Income 4-04 1-05 3-04 4-04 2-04 3-04 1-04 2-04 4-03 3-03 1-04 2-03 4-03 1-03 3-03 4-02 2-03 3-02 2-02 1-03 1-02 4-02 4-01 3-02 3-01 2-02 2-01 Reliable Track Record 1-01 1-02 $6.0 $5.0 $4.0
Slide 13: Reliable Track Record
Reliable Track Record Organic Asset Growth versus 2002 Commitments Millions $1,200 $1,017 $1,000 $1,000 $800 $727 $600 $498 $400 $305 $175 $200 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Targets established in 6/02 prospectus Plan Actual Reliably faster growth, consistently better profitab
Slide 14: Reliable Track Record: Earnings Guidance
Reliable Track Record Guidance Range Actual LOW HIGH 4Q02 $0.04 $0.05 $0.04 1Q03 $0.04 $0.05 $0.05 2Q03 $0.06 $0.07 $0.07 Earnings 3Q03 $0.08 $0.10 $0.10 Guidance 4Q03 1Q04 $0.10 $0.11 $0.11 $0.12 $0.11 $0.13 2Q04 $0.13 $0.15 $0.14 3Q04 $0.15 $0.17 $0.16 4Q04 $0.17 $0.19 $0.18 1Q05 $0.17 $0.19 $0.19
Slide 15: Strong Asset Quality
1.08% Allowance to Total Loans (EOP) 4-06 4-06 4.1 Weighted Average Commercial 3-06 3-06 7 through 10 = criticized / classified 2-06 2-06 1-06 1-06 1 through 6 = “pass” credits 4-05 4-05 3-05 3-05 2-05 2-05 1-05 1-05 4-04 4-04 3-04 3-04 Loan Risk Rating 2-04 2-04 1-04 1-04 4-03 4-03 3-03 3-03 2-03 2
Slide 16: Growth Opportunity: Organic Growth in Nashville MSA
Growth Opportunity I. Organic Growth in Nashville MSA A - Leverage existing capacity • Significant room to grow share in Nashville (<6%) • Existing sales force should produce additional $1 billion in assets B - Add capacity in Nashville MSA • Add one denovo office per year • Increase the size of the
Slide 17: Growth Opportunity: Acquire High Growth Middle Tennessee Banks
Growth Opportunity II. Acquire High Growth Middle Tennessee Banks Criteria for acquisitions include: 1. Substantially above average growth rate 2. Accretive in the first 12 months Reliably faster growth, consistently better profitability 17
Slide 18: Growth Opportunity: Market Extensions in Tennessee
Growth Opportunity III. Market Extensions in Tennessee 1. Nashville 2. Knoxville 3. Memphis Pinnacle’s bias for market extensions is de novo versus acquisition. Criteria for market extensions include: 1. Only launch when PNFP can control FAs to build a $500 - $750 million bank in < 5 years 2. C
Slide 19: Aggressive Growth & Profitability Targets
Aggressive Growth & Profitability Targets Multi-year Strategic Planning Targets Soundness Criticized / classified assets to capital Allowance for loan losses to total loans Nonperforming loans to total loans Past due loans > 30 days Net charged-off loans to average loans Tier 1 leverage ratio Total
Slide 20: Organic Asset Growth Targets in Nashville MSA
Aggressive Growth & Profitability Targets Organic Asset Growth Targets in Nashville MSA Millions $3,800 $3.5 $3,300 $2,800 Targeted ROA of $2,300 $2.1 1.30% by 2010 $1,800 2006 2007 2008 2009 2010 Reliably faster growth, consistently better profitability Plan Actual 20
Slide 21: Pinnacle Is On Track to Achieve Profitability Target
Aggressive Growth & Profitability Targets Pinnacle Is On Track to Achieve Profitability Target 1.50 1.00 Targeted ROA of 0.50 1.30% by 2010 0.00 3Q09 1Q10 3Q10 1Q09 1Q02 3Q02 1Q03 3Q03 1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 21
Slide 22: Attractive Valuation
Attractive Valuation Summary December 31, 2006 Stockholders’ equity $256,017,000 Tangible book equity $130,344,000 Shares outstanding 15,446,000 Stockholders’ equity per share $16.57 Tangible book value $ 8.44 February 21, 2007 Closing price $32.98 Price to book 2.0x Price to tangible book 3.9x Pric
Slide 23: Analysts' Forecasts for 2007 Earnings Growth
Attractive Valuation Analysts’ Forecasts for 2007 Earnings Growth Latest Review Earnings Targets Firm Date 1Q07 2007 2008 Rating Suntrust RH 19-Jan-07 $ 0.35 $ 1.54 -- Buy FTN Midwest Research 22-Jan-07 $ 0.35 $ 1.52 $ 1.77 Neutral Howe Barnes 22-Jan-07 -- $ 1.54 $ 1.78 Neutral Baird (*) 19-Jan-07 $
Slide 24: High Growth Peer Group Comparisons
Attractive Valuation High Growth Peer Group Comparisons FD EPS Jan 27, 2007 CAGR for Close to Closing Jan 27, 2007 two year 2007 PE Ratio to Price on Jan. Close to period ended Projected Growth Company 27, 2007 Tangible BV Dec. 2007 EPS (P/E) (PEG) Wintrust $45.29 247% 1% 16.2 17.87 East West $37.91
Slide 25: Recent Pullback Provides Great Entry Point
Attractive Valuation Recent Pullback Provides Great Entry Point $40 $35 $30 $25 PNFP Closing Price $20 30-Nov 30-Nov 30-Oct 30-Oct 30-Dec 30-Dec 30-Jul 30-Aug 30-Jan 30-Jan 28-Feb 30-Jun 30-Apr 30-May 30-Sep 30-Sep 30-Mar Reliably faster growth, consistently better profitability 25
Slide 26: Why Pinnacle?
Why Pinnacle? • Large, fast-growing metropolitan market • Extremely attractive competitive landscape • Reliable track record for growth and execution • Strong asset quality • Aggressive growth and profitability targets • Attractive valuation Reliably faster growth, consistently better profitability
Slide 27: Reliably faster growth, consistently better profitability
Reliably faster growth, consistently better profitability
Slide 28: Appendix A – Reconciliation of Non-GAAP Measures
Appendix A – Reconciliation of Non-GAAP Measures Reconciliation of Non-GAAP measures: (dollars in thousands) 1Q06 2Q06 3Q06 4Q06 2006 Net income, as reported $ 2,612 $ 4,322 $ 5,347 $ 5,646 $ 17,927 Impact of merger related expense, net of tax 269 560 132 33 994 Net income before impact of merger re