Pinnacle Financial Partners, Inc. · NYSE:PNFP
Pinnacle Financial Partners — Raymond James 30th Annual Institutional Investor Conference (March 2009)
32 slides from Pinnacle Financial Partners's conference presentation, March 2009
Slide 1: Continued Rapid Growth for Tennessee's Premier Financial Services Franchise
Continued Rapid Growth for Tennessee’s Premier Financial Services Franchise Terry Turner, President and CEO March 2009
Slide 2: Safe Harbor Statements
Safe Harbor 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 t
Slide 3: Today's Agenda
PNFP - Pinnacle Financial Partners Today’s Agenda 1. Company profile and track record 2. Balance sheet strength 3. Case for continued growth
Slide 4: Company profile and track record
Company profile and track record
Slide 5: Pinnacle Profile
Pinnacle Profile • High growth, one-bank holding company • Headquartered in Nashville, Tennessee • 8+ years old • Denovo operation in Knoxville – October 2007 • Total assets at Dec. 31, 2008 – $4.75 billion • Market cap – $19.10 per share (2/25/09) = $450 million • Institutional ownership – 39% • In
Slide 6: Pinnacle Profile: Five simple strategies
Pinnacle Profile Five simple strategies 1. Focus on businesses and affluent consumers 2. Provide distinctive service and effective advice 3. Hire and retain a large cadre of experienced advisors 4. Offer a full line of financial services 5. Offer extraordinary convenience
Slide 7: Pinnacle Profile: Philosophy of sustainable high performance
Pinnacle Profile Philosophy of sustainable high performance Associates • Nashville’s “Best Place to Work” six consecutive years (NBJ) • “Best Employer in Tennessee” (Business TN) Clients • 97% agreement Pinnacle is “the best” • Fortune 100’s fastest growing bank in the United States (2007) Sharehold
Slide 8: Reliable Track Record for Growth
4/08 3/08 2/08 1/08 4/07 3/07 2/07 1/07 4-06 3-06 2-06 Deposits 1-06 4-05 3-05 Reliable Track Record for Growth 2-05 1-05 4-04 3-04 2-04 1-04 4-03 3-03 2-03 1-03 4-02 3-02 2-02 1-02 4-01 3-01 2-01 1-01 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 4/08 3/08 2/08 1/08 4/07 3/07 2/07 1/07 4
Slide 9: Reliable Track Record for Growth
Reliable Track Record for Growth Continued EPS growth in 2008 (*) $1.45 $1.50 FD EPS $1.25 FD EPS without merger $1.00 expenses $0.75 $0.50 $0.25 $- 2001 2002 2003 2004 2005 2006 2007 2008
Slide 10: Balance Sheet Strength
“innacle Balance Sheet Strength
Slide 11: Balance Sheet Strength: Conservative bond portfolio
Balance Sheet Strength Corporates Conservative bond portfolio Municipals 17.5% 0.2% PNFP avoided the following investment Agency traps: Notes 7.9% Agency A. Private label MBS CMOs B. FNMA / Freddie preferred 2.8% C. Tax driven leveraged leases MBS pass thrus 71.6% As of Dec. 31, 2008 FNMA, FHLMC and
Slide 12: Balance Sheet Strength: Diversified loan portfolio
Balance Sheet Strength Diversified loan portfolio CRE Owner Occupied 11.1% PNFP avoided: C&I CRE 28.7% • Sub prime Investment • Indirect auto 16.5% • Credit card • Student lending • SBA loans only 0.2% of book Other 4.3% Constr 1-4 Family Res Mortgages 5.2% 20.1% Constr Comm Land Dev 2.3% 11.8%
Slide 13: Balance Sheet Strength: Nonaccruing loans
Balance Sheet Strength $10.9 MM nonaccruing loansConst Res Other 0.5% - 0.32% of loan balances 2.5% Comm & Indust 10.1% Const & Land Dev Comm Real 43.6% Estate 14.4% 1-4 Family As of Dec 31, 2008 Mortgages 28.9%
Slide 14: Balance Sheet Strength: Asset quality versus peers
Balance Sheet Strength (*) Asset Quality Expressed as a % of Category At 12/31/08 PNFP Peer PNFP Peer 30-90 30-90 NPLs and NPLs and days past days past > 90 days > 90 days due due Const. and land dev. 0.95% 2.42% 0.81% 7.16% CRE 0.36% 0.82% 0.20% 1.20% Total real estate 0.66% 1.58% 0.45% 2.88% C&I 0
Slide 15: Activity in NPAs throughout 2008
Balance Sheet Strength Activity in NPA’s throughout 2008 Payments, Balances Sales, Balances Dec. 31, 2007 Reductions Increases Dec. 31, 2008 Nonperforming loans: Res. Construction $ 10,204 $ 23,242 $ 18,090 $ 5,052 (dollars in thousands) Other 9,473 12,522 8,857 5,808 Totals $ 19,677 $ 35,764 $ 26,9
Slide 16: Market best asset quality: net charge-offs
Balance Sheet Strength Reliable track record for “market best” asset quality Net Charge-offs / Average Loans 1.00% 0.80% PNFP Peer data (*) 0.60% 0.40% 0.20% 0.00% 2004 2005 2006 2007 2008 (*) Uniform Bank Performance Report – 12/08
Slide 17: Allowance for Loan Losses
Balance Sheet Strength Allowance for Loan Losses 2.00% PNFP Allowance to Total Loans 1.60% Peer data (*) 1.20% 0.80% 1800% 0.40% PNFP 1500% Peer data (*) 0.00% 1200% 2004 2005 2006 2007 2008 900% Allowance to NPL’s 600% 300% 0% (*) Uniform Bank Performance Report – 12/08 2004 2005 2006 2007 2008
Slide 18: Strong capital base supports growth opportunity
Balance Sheet Strength Strong capital base supports growth opportunity Private placement in 3Q and TARP funding in 4Q provide significant growth capital. December 31, 2008 Tangible equity ratio 6.1% Tier 1 Leverage 10.5% Tier 1 risk based capital 12.1% Total risk based capital 13.5% Tangible Book Va
Slide 19: 2009 Expectations
Balance Sheet Strength 2009 Expectations A. Bonds – Likely restructuring to take place B. 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’
Slide 20: The Health of the Markets
“innacle The Health of the Markets
Slide 21: Projected Population Growth for Southeast Markets
2006 - 2011 Projected Population Growth Rate (%) 5.0 0.0 10.0 15.0 20.0 Atlanta Nashville Knoxville Memphis Chattanooga Jacksonville Orlando Miami Tampa The Health of the Markets Richmond va Beach Charlotte Louisville Birmingham Projected Population Growth (2007-2012) for Major Southeast Metropolita
Slide 22: Employment and unemployment rates
The Health of the Markets Dec Dec 2008 2007 March 2008 June 2008 Sep 2008 (prelim) Nonfarm Employment: Nashville 774.8 766.2 765.2 767.4 763.6 Knoxville 341.3 337.8 337.3 339.8 336.3 Tennessee 2,829.4 2,784.5 2,789.8 2,798.5 2,764.9 Unemployment Rate: Nashville 4.2% 4.9% 5.8% 6.0% 6.5% Knoxville 4.0
Slide 23: Nashville residential housing
The Health of the Markets Nashville residential housing $250,000 16 Median Home Prices 14 $200,000 Months of inventory 12 10 $150,000 8 $100,000 6 Median home price Months of inventory 4 $50,000 2 $0 0
Slide 24: The Case for Growth
“innacle The Case for Growth
Slide 25: Significant Growth Opportunity Persists
Significant Growth Opportunity Persists Enter Tennessee’s 3 metropolitan markets on a de novo basis 1. Nashville 2. Knoxville 3. Memphis Pinnacle has de novoed in Nashville and Knoxville Pinnacle’s bias for market extensions continues to be de novo versus acquisition Criteria for market extensi
Slide 26: Aggregate Market Share: Nashville
Significant Growth Opportunity Persists Nashville 80% 70% 60% Aggregate Market Share 50% 40% 30% Aggregate market share for the top 3 in Nashville MSA has declined almost 25% in the last 9 years. 20% 10% 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: FDIC 6/08 Top 3 banks in Nashville
Slide 27: Nashville deposit market share ranking
Significant Growth Opportunity Persists Nashville At June 30, 2008 30-Jun-07 No of Market Market Rank Institution offices Total Deposits Share Share 1 Regions 78 $ 5,888,707 18.7% 19.9% 2 Bank of America 40 $ 4,325,231 13.8% 14.8% 3 SunTrust 59 $ 4,073,828 13.0% 14.2% 4 Pinnacle Financial Partners 3
Slide 28: Aggregate Market Share: Knoxville
Significant Growth Opportunity Persists Knoxville 70% Aggregate Market Share 65% 60% 55% Aggregate market share for the top 3 in Knoxville 50% MSA has declined almost 12% in the last 10 years. 45% 40% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: FDIC – 6/08 Top 3 banks in Knox
Slide 29: Knoxville original multi-year performance targets
Significant Growth Opportunity Persists Knoxville Original multi-year performance targets 2007 2008 2009 2010 2011 Associate hiring plan 26 39 51 59 63 32 Facilities 2 2 4 5 5 2 Loan growth targets $ 100 $ 225 $ 375 $ 490 $ 600 (millions) $ 318 Deposit growth targets $ 62 $ 155 $ 280 $ 365 $ 450 (mi
Slide 30: Knoxville deposit market share ranking
Significant Growth Opportunity Persists Knoxville At June 30, 2008 30-Jun-07 Rank Institution No of Total Deposits Market Market 1 First Tennessee 33 $ 2,184,460 19.7% 20.8% 2 SunTrust 35 $ 1,999,546 18.0% 18.1% 3 Regions 36 $ 1,879,196 16.9% 17.8% 4 Home Federal 20 $ 1,383,218 12.5% 12.4% 5 Branch
Slide 31: Summary: Why PNFP?
SUMMARY Why PNFP? • Reliable track record for growth and asset quality • Healthy balance sheet •Securities portfolio •Relatively strong loan portfolio •Strong capital base • Healthy markets • Significant growth opportunity persists
Slide 32: Continued Rapid Growth for Tennessee's Premier Financial Services Franchise
Continued Rapid Growth for Tennessee’s Premier Financial Services Franchise Terry Turner, President and CEO Harold Carpenter, CFO March 2009