Pinnacle Financial Partners, Inc. · NYSE:PNFP
Pinnacle Financial Partners — Investor Presentation (May 2009)
36 slides from Pinnacle Financial Partners's investor presentation, May 19, 2009
Slide 1: Continued Growth for Tennessee's Premier Financial Services Franchise
Terry Turner, President and CEO Harold Carpenter, EVP and CFO May 2009 Continued Growth for Tennessee's Premier Financial Services Franchise
Slide 2: Forward-looking statements
Forward-looking statements Pinnacle Financial Partners, Inc. ("Pinnacle Financial") may from time to time make written or oral statements, including statements contained in this presentation which may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 19
Slide 3: Today's Agenda
PNFP - Pinnacle Financial Partners Company profile Asset quality Financial highlights Case for continued growth Today's Agenda
Slide 4: Company Profile
einnacle Company Profile
Slide 5: Pinnacle Profile
Source: Nasdaq, finance. yahoo.com Pinnacle Profile High growth, one-bank holding company Headquartered in Nashville, Tennessee 8+ years old Denovo operation in Knoxville - October 2007 Total assets at March 31, 2009 - $4.95 billion Market cap - $19.65 per share (5/08/09) = $470 million Institutiona
Slide 6: Pinnacle Profile: Four simple strategies
Pinnacle Profile Focus on businesses and affluent consumers Provide distinctive service and effective advice Hire and retain a large cadre of experienced advisors Offer a full line of financial services Four simple strategies
Slide 7: Pinnacle Profile: Awards and 5-year total return
Second Best 5-year total return for publicly traded banks - 12/31/08 Nashville Business Journal, Business TN, Fortune, SNL Pinnacle Profile Nashville's Best in Business, NBJ 2009
Slide 8: Asset Quality
einnacle Asset Quality
Slide 9: Second Quarter 2009 charge-off
Second Qtr 2009 May 1 announced a $21.5 million charge off Equates to $0.53 FDEPS loss in 2Q Our only bank holding company loan Not forecasting any recoveries, although minor amount possible Believed to be an isolated occurrence
Slide 10: Asset Quality
Asset Quality Expressed as a % of Total Loans within Category PNFP 30-90 days past due 1Q09 Peer 30-90 days past due (*) PNFP NPLs and > 90 days 1Q09 Peer NPLs and > 90 days (*) Const. and land dev. 2.33% 2.42% 3.19% 7.16% CRE 0.03% 0.82% 0.46% 1.20% Total real estate 1.26% 1.58% 1.39% 2.88% C&I 0.4
Slide 11: Modified Underwriting Standards in 2009
Modified Underwriting Standards in 2009 Requires builders and developers to begin amortization of loan at renewal should project be "off initial plan" Vertical construction - 20 yr amortization Land - 10 yr amortization Resulted in acceleration of risk rating downgrades in 1Q09 for builder and devel
Slide 12: Nonaccruing loans and NPAs
$33.9 MM nonaccruing loans 0.97% of loan balances Asset Quality Metrics As of March 31, 2009 Nonaccrual loans $33.9 ORE 19.8 Total NPA's $53.7 NPA's as a % of Total loans + ORE 1.54%
Slide 13: Non-accruing loans: Three largest NPLs
Non-accruing loans Three largest NPL's #1 - $9.5 mm in loans to builder / developer #2 - Three development loans to same entity - $4.8 mm #3 - $4.5 mm to real estate investor Approximately $5.2 mm in reserves assigned to NPL's Asset Quality Metrics
Slide 14: ORE Classifications
ORE Classifications (dollars in thousands) Balances March 31, 2009 Fair value as a % of book value Average Appraisal Age in Months ORE classifications: New home construction $ 12,418 111% 6.2 Developed lots 4,689 131% 3.8 Undeveloped land 2,062 166% 2.5 Other 647 104% 4.4 Total ORE $ 19,817 121% 4.9
Slide 15: Net Charge-offs
Net Charge-off's Expressed as a % of Category PNFP Net Charge Off's 1Q09 Peer Net Charge Off's (*) Const. and land dev. 0.60% 2.23% CRE - 0.18% Total real estate 0.32% 0.82% C&I 1.04% 0.84% Total loans 0.56% 0.90% (*) Uniform Bank Performance Report - 12/08 Largest 1Q09 charge-offs: - $1.8mm real es
Slide 16: Financial Highlights
einnacle Financial Highlights
Slide 17: Financial Highlights
Financial Highlights Net income and EPS 1Q09 net income available to common stockholders of $643,000 compared to $6.0 million in 1Q08 FDEPS of $0.03 in 1Q09 compared to $0.26 in 1Q08 Includes $1.45 million in TARP preferred stock charges Loan growth - Loans up $119 million in 1Q09. Pipelines remain
Slide 18: Strong capital base
Strong capital base March 31, 2009 December 31, 2008 Tangible common equity ratio 6.0% 6.1% Tier 1 leverage 9.7% 10.5% Tier 1 risk based capital 11.8% 12.1% Total risk based capital 13.3% 13.5% Tangible common book value per common share $11.75 $11.70 Financial Highlights
Slide 19: Conservative bond portfolio
Conservative bond portfolio Financial Highlights FNMA, FHLMC and GNMA Average yield on bond portfolio = 5.24% Average life = 2.5 years As of March 31, 2009
Slide 20: Diversified loan portfolio
Diversified loan portfolio PNFP avoided: Sub prime Indirect auto Credit card Student lending SBA loans only 0.2% of book Financial Highlights
Slide 21: Loan Categories
Financial Highlights Loan Categories Amts. 1Q09 %'s 1Q09 Amts. 4Q08 %'s 4Q08 C&D and Land $ 663.4 19.1% $ 645.4 19.2% Consumer RE 710.3 20.5% 675.6 20.1% CRE - Owner Occ. 408.1 11.7% 371.6 11.1% CRE - Investment 566.5 16.3% 554.9 16.6% Other RE loans 46.7 1.3% 50.4 1.5% Total real estate 2,395.0 68.
Slide 22: Construction and Land Categories
Financial Highlights Construction and Land Categories Amts 1Q09 %'s(*) 1Q09 Amts 4Q08 %'s (*) 4Q08 Resid - Spec $ 93.7 2.7% $ 96.9 2.9% Resid - Custom 25.9 0.7% 29.0 0.9% Resid - Condo 55.4 1.6% 48.5 1.4% Comm Construct 86.3 2.5% 77.1 2.3% Land Devel - Resi 240.3 6.9% 243.2 7.2% Land Devel - Comm 12
Slide 23: Expectations for 2009
Expectations for 2009 Should see some margin improvement NPA's will weigh on margin Loan floors and CD pricing Provision to be impacted by increased charge offs Charge-off's for 2009 currently forecasted at 0.70% to 0.90% with 2Q09 being the heaviest quarter. Fee income expected to experience modest
Slide 24: The Health of the Markets
einnacle The Health of the Markets
Slide 25: The Health of the Markets: Employment
The Health of the Markets (Nonfarm employment in thousands - US Labor Bureau of Labor Statistics) March 2008 June 2008 Sep 2008 Dec 2008 March 2009 (prelim) Nonfarm Employment Nashville 765.1 761.4 757.7 747.4 740.6 Knoxville 336.0 336.3 334.2 329.6 327.5 Unemployment Rate Nashville 4.9% 5.8% 6.0% 6
Slide 26: Nashville residential housing
Nashville residential housing The Health of the Markets Greater Nashville Association of Realtors
Slide 27: The Case for Growth
einnacle The Case for Growth
Slide 28: Reliable Track Record for Growth
Reliable Track Record for Growth Loans Deposits
Slide 29: Reliable Track Record for Growth
Reliable Track Record for Growth Take market share (Nashville, Knoxville) ~$1B consolidation from existing sales force Increase branch offices and staff ~ 10% 2. Extend to new markets (Memphis)
Slide 30: Nashville Significant Growth Opportunity Persists
Source: FDIC 6/08 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 0.7051 0.6704 0.6482 0.6298 0.6179 0.5904 0.5816 0.5402 0.4886 0.4545 Top 3 banks in Nashville are Regions, SunTrust and Bank of America Aggregate Market Share Aggregate market share for the top 3 in Nashville MSA has declined almos
Slide 31: Knoxville Significant Growth Opportunity Persists
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 0.6662 0.6574 0.6395 0.6334 0.6191 0.6042 0.6121 0.6033 0.5937 0.5763 0.5671 0.5456 Aggregate Market Share Source: FDIC - 6/08 Top 3 banks in Knoxville are First Horizon, Regions and SunTrust Aggregate market share for the top 3 in Knoxvill
Slide 32: Original multi-year performance targets
Original multi-year performance targets (*) 2007 2008 2009 2010 2011 Associate hiring plan Target Actual 26 22 39 32 51 39 59 63 Facilities Target Actual 2 2 2 2 4 2 5 5 Loan growth targets (millions) Target Actual $ 100 $109 $ 225 $ 318 $ 375 $ 330 $ 490 $ 600 Deposit growth targets (millions) Targ
Slide 33: Significant Growth Opportunity Persists: Memphis
Enter Tennessee's 3 metropolitan markets on a de novo basis ? 3. Memphis ? 1. Nashville ? 2. Knoxville Pinnacle has de novoed in Nashville and Knoxville Pinnacle's bias for market extensions continues to be de novo versus acquisition Criteria for market extensions include: Only launch when PNFP can
Slide 34: 2009 Expectations
2009 Expectations Loans - Assume continued weakness in 2009 Client selection has been good Credit quality deterioration likely in 1H09 Land acquisition and construction book receiving significant attention NCO's and NPL's higher than historical performance Capital - Appears sufficient Continued moni
Slide 35: Final Thoughts
Final Thoughts Reliable track record for growth Healthy balance sheet compared to peers Securities portfolio Relatively strong loan portfolio Strong capital base Healthy markets compared to national trends Growth opportunity persists
Slide 36: Continued Growth for Tennessee's Premier Financial Services Franchise
Terry Turner, President and CEO Harold Carpenter, EVP and CFO May 2009 Continued Growth for Tennessee's Premier Financial Services Franchise
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