,
Inc.
|
(Exact
name
of registrant as specified in its
charter)
|
Tennessee
|
62-1812853
|
|
(State
or other
jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
211
Commerce Street, Suite 300, Nashville, Tennessee
|
37201
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(615)
744-3700
|
(Registrant’s
telephone number, including area
code)
|
Not
Applicable
|
(Former
name, former address and former fiscal year,
if changes since last report)
|
Yes
x
|
No
o
|
Large
Accelerated Filer o
|
Accelerated
Filer x
|
Non-accelerated
Filer o
|
Yes
o
|
No
x
|
TABLE
OF CONTENTS
|
|
Page
No.
|
|
PART
I:
|
|
Item
1. Consolidated Financial Statements (Unaudited)
|
2
|
Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
|
26
|
Item
3. Quantitative and Qualitative Disclosures About Market Risk
|
49
|
Item
4. Controls and Procedures
|
49
|
PART
II:
|
|
Item
1. Legal Proceedings
|
50
|
Item
1A. Risk Factors
|
50
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
50
|
Item
3. Defaults Upon Senior Securities
|
50
|
Item
4. Submission of Matters to a Vote of Security Holders
|
50
|
Item
5. Other Information
|
50
|
Item
6. Exhibits
|
50
|
Signatures
|
51
|
September
30,
2006
|
December
31,
2005
|
||||||
ASSETS
|
|||||||
Cash
and noninterest-bearing due from banks
|
$
|
55,199,117
|
$
|
25,935,948
|
|||
Interest-bearing
due from banks
|
6,176,891
|
839,960
|
|||||
Federal
funds sold
|
51,623,544
|
31,878,362
|
|||||
Cash
and cash equivalents
|
112,999,552
|
58,654,270
|
|||||
Securities
available-for-sale, at fair value
|
303,483,224
|
251,749,094
|
|||||
Securities
held-to-maturity (fair value of $26,531,147 and $26,546,297 at September
30, 2006 and December 31, 2005, respectively)
|
27,275,651
|
27,331,251
|
|||||
Mortgage
loans held-for-sale
|
8,960,447
|
4,874,323
|
|||||
Loans
|
1,405,401,429
|
648,024,032
|
|||||
Less
allowance for loan losses
|
(15,172,446
|
)
|
(7,857,774
|
)
|
|||
Loans,
net
|
1,390,228,983
|
640,166,258
|
|||||
Premises
and equipment, net
|
36,222,088
|
12,915,595
|
|||||
Investments
in unconsolidated subsidiaries and other entities
|
11,278,614
|
6,622,645
|
|||||
Accrued
interest receivable
|
10,455,981
|
4,870,197
|
|||||
Goodwill
|
115,064,500
|
-
|
|||||
Core
deposit intangible
|
11,920,001
|
-
|
|||||
Other
assets
|
24,363,133
|
9,588,097
|
|||||
Total
assets
|
$
|
2,052,252,174
|
$
|
1,016,771,730
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Deposits:
|
|||||||
Noninterest-bearing
demand
|
$
|
306,296,117
|
$
|
155,811,214
|
|||
Interest-bearing
demand
|
199,967,210
|
72,520,757
|
|||||
Savings
and money market accounts
|
481,684,245
|
304,161,625
|
|||||
Time
|
597,290,358
|
277,657,129
|
|||||
Total
deposits
|
1,585,237,930
|
810,150,725
|
|||||
Securities
sold under agreements to repurchase
|
122,354,264
|
65,834,232
|
|||||
Federal
Home Loan Bank advances
|
28,739,443
|
41,500,000
|
|||||
Subordinated
debt
|
51,548,000
|
30,929,000
|
|||||
Accrued
interest payable
|
4,183,121
|
1,884,596
|
|||||
Other
liabilities
|
11,130,028
|
3,036,752
|
|||||
Total
liabilities
|
1,803,192,786
|
953,335,305
|
|||||
Stockholders’
equity:
|
|||||||
Preferred
stock, no par value; 10,000,000 shares authorized; no shares issued
and
outstanding
|
-
|
-
|
|||||
Common
stock, par value $1.00; 90,000,000 shares authorized; 15,409,341
issued
and outstanding at September 30, 2006 and 8,426,551 issued and outstanding
at December 31, 2005
|
15,409,341
|
8,426,551
|
|||||
Additional
paid-in capital
|
210,752,785
|
44,890,912
|
|||||
Unearned
compensation
|
-
|
(169,689
|
)
|
||||
Retained
earnings
|
25,455,618
|
13,182,291
|
|||||
Accumulated
other comprehensive loss, net
|
(2,558,356
|
)
|
(2,893,640
|
)
|
|||
Stockholders’
equity
|
249,059,388
|
63,436,425
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
2,052,252,174
|
$
|
1,016,771,730
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Interest
income:
|
|||||||||||||
Loans,
including fees
|
$
|
26,771,110
|
$
|
9,470,954
|
$
|
64,195,835
|
$
|
24,427,821
|
|||||
Securities:
|
|||||||||||||
Taxable
|
3,240,878
|
2,245,019
|
9,250,455
|
6,401,537
|
|||||||||
Tax-exempt
|
521,240
|
318,235
|
1,416,862
|
758,572
|
|||||||||
Federal
funds sold and other
|
806,829
|
344,498
|
1,591,941
|
601,468
|
|||||||||
Total
interest income
|
31,340,057
|
12,378,706
|
76,455,093
|
32,189,398
|
|||||||||
Interest
expense:
|
|||||||||||||
Deposits
|
11,800,394
|
3,968,648
|
27,213,738
|
8,999,838
|
|||||||||
Securities
sold under agreements to repurchase
|
1,382,418
|
399,731
|
2,569,383
|
803,114
|
|||||||||
Federal
funds purchased and other borrowings
|
997,899
|
554,694
|
3,110,660
|
1,635,506
|
|||||||||
Total
interest expense
|
14,180,711
|
4,923,073
|
32,893,781
|
11,438,458
|
|||||||||
Net
interest income
|
17,159,346
|
7,455,633
|
43,561,312
|
20,750,940
|
|||||||||
Provision
for loan losses
|
586,589
|
366,304
|
2,680,638
|
1,450,244
|
|||||||||
Net
interest income after provision for loan losses
|
16,572,757
|
7,089,329
|
40,880,674
|
19,300,696
|
|||||||||
Noninterest
income:
|
|||||||||||||
Service
charges on deposit accounts
|
1,357,280
|
228,994
|
3,151,664
|
732,130
|
|||||||||
Investment
sales commissions
|
644,931
|
474,354
|
1,811,428
|
1,403,231
|
|||||||||
Insurance
sales commissions
|
549,584
|
-
|
1,562,946
|
-
|
|||||||||
Gain
on loans and loan participations sold, net
|
490,254
|
348,577
|
1,285,609
|
899,393
|
|||||||||
Trust
fees
|
311,997
|
-
|
675,994
|
-
|
|||||||||
Gain
on sales of investment securities, net
|
-
|
-
|
-
|
114,410
|
|||||||||
Other
noninterest income
|
1,069,811
|
247,208
|
2,364,592
|
743,689
|
|||||||||
Total
noninterest income
|
4,423,857
|
1,299,133
|
10,852,233
|
3,892,853
|
|||||||||
Noninterest
expense:
|
|||||||||||||
Compensation
and employee benefits
|
7,576,011
|
3,410,436
|
19,314,365
|
9,491,712
|
|||||||||
Equipment
and occupancy
|
2,070,727
|
1,034,661
|
5,325,274
|
2,712,624
|
|||||||||
Marketing
and other business development
|
351,432
|
186,430
|
899,807
|
479,313
|
|||||||||
Postage
and supplies
|
487,689
|
159,782
|
1,118,308
|
453,716
|
|||||||||
Amortization
of core deposit intangible
|
534,957
|
-
|
1,248,335
|
-
|
|||||||||
Other
noninterest expense
|
1,815,392
|
729,528
|
3,999,832
|
1,927,564
|
|||||||||
Merger
related expense
|
218,167
|
-
|
1,582,734
|
-
|
|||||||||
Total
noninterest expense
|
13,054,375
|
5,520,837
|
33,488,655
|
15,064,929
|
|||||||||
Income
before income taxes
|
7,942,239
|
2,867,625
|
18,244,252
|
8,128,620
|
|||||||||
Income
tax expense
|
2,595,465
|
789,382
|
5,963,112
|
2,311,455
|
|||||||||
Net
income
|
$
|
5,346,774
|
$
|
2,078,243
|
$
|
12,281,140
|
$
|
5,817,165
|
|||||
Per
share information:
|
|||||||||||||
Basic
net income per common share
|
$
|
0.35
|
$
|
0.25
|
$
|
0.91
|
$
|
0.69
|
|||||
Diluted
net income per common share
|
$
|
0.32
|
$
|
0.22
|
$
|
0.84
|
$
|
0.62
|
|||||
Weighted
average shares outstanding:
|
|||||||||||||
Basic
|
15,393,735
|
8,417,980
|
13,450,282
|
8,402,916
|
|||||||||
Diluted
|
16,655,349
|
9,495,187
|
14,649,418
|
9,455,756
|
Common
Stock
|
||||||||||||||||||||||
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Unearned
Compensation
|
Retained
Earnings
|
Accumulated
Other Comprehensive Income (Loss)
|
Total
Stockholders’ Equity
|
||||||||||||||||
Balances,
December 31, 2004
|
8,389,232
|
$
|
8,389,232
|
$
|
44,376,307
|
$
|
(37,250
|
)
|
$
|
5,127,023
|
$
|
24,863
|
$
|
57,880,175
|
||||||||
Exercise
of employee common stock options and related tax benefits
|
18,619
|
18,619
|
124,951
|
-
|
-
|
-
|
143,570
|
|||||||||||||||
Issuance
of restricted common shares pursuant to 2004 Equity Incentive
Plan
|
16,366
|
16,366
|
403,601
|
(419,967
|
)
|
-
|
-
|
-
|
||||||||||||||
Amortization
of unearned compensation associated with restricted shares
|
-
|
-
|
-
|
128,920
|
-
|
-
|
128,920
|
|||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
5,817,165
|
-
|
5,817,165
|
|||||||||||||||
Net
unrealized holding losses on available-for-sale securities, net of
deferred tax benefit of $153,376
|
-
|
-
|
-
|
-
|
-
|
(1,078,951
|
)
|
(1,078,951
|
)
|
|||||||||||||
Total
comprehensive income
|
4,738,214
|
|||||||||||||||||||||
Balances,
September 30, 2005
|
8,424,217
|
$
|
8,424,217
|
$
|
44,904,859
|
$
|
(328,297
|
)
|
$
|
10,944,188
|
$
|
(1,054,088
|
)
|
$
|
62,890,879
|
|||||||
Balances,
December 31, 2005
|
8,426,551
|
$
|
8,426,551
|
$
|
44,890,912
|
$
|
(169,689
|
)
|
$
|
13,182,291
|
$
|
(2,893,640
|
)
|
$
|
63,436,425
|
|||||||
Transfer
of unearned compensation to additional paid-in capital upon adoption
of
SFAS No. 123(R)
|
-
|
-
|
(169,689
|
)
|
169,689
|
-
|
-
|
-
|
||||||||||||||
Exercise
of employee common stock options and related tax benefits
|
93,435
|
93,435
|
964,582
|
-
|
-
|
-
|
1,058,017
|
|||||||||||||||
Issuance
of restricted common shares pursuant to 2004 Equity Incentive
Plan
|
22,057
|
22,057
|
(22,057
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Exercise
of director common stock warrants
|
11,000
|
11,000
|
44,000
|
-
|
-
|
-
|
55,000
|
|||||||||||||||
Amortization
expense for restricted shares
|
-
|
-
|
311,229
|
-
|
-
|
-
|
311,229
|
|||||||||||||||
Dividends
paid to minority interest shareholders of PNFP Properties,
Inc.
|
-
|
-
|
-
|
-
|
(7,813
|
)
|
-
|
(7,813
|
)
|
|||||||||||||
Merger
with Cavalry Bancorp, Inc.
|
6,856,298
|
6,856,298
|
164,231,274
|
-
|
-
|
-
|
171,087,572
|
|||||||||||||||
Costs
to register common stock issued in connection with the merger with
Cavalry
Bancorp, Inc.
|
-
|
-
|
(187,609
|
)
|
-
|
-
|
-
|
(187,609
|
)
|
|||||||||||||
Stock
based compensation expense
|
-
|
-
|
690,143
|
-
|
-
|
-
|
690,143
|
|||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
12,281,140
|
-
|
12,281,140
|
|||||||||||||||
Net
unrealized holding gains on available-for-sale securities, net of
deferred
tax expense of $205,497
|
-
|
-
|
-
|
-
|
-
|
335,284
|
335,284
|
|||||||||||||||
Total
comprehensive income
|
12,616,424
|
|||||||||||||||||||||
Balances,
September 30, 2006
|
15,409,341
|
$
|
15,409,341
|
$
|
210,752,785
|
$
|
-
|
$
|
25,455,618
|
$
|
(2,558,356
|
)
|
$
|
249,059,388
|
Nine
months ended
September
30,
|
|||||||
2006
|
2005
|
||||||
Operating
activities:
|
|||||||
Net
income
|
$
|
12,281,140
|
$
|
5,817,165
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Net
amortization of securities
|
591,794
|
838,169
|
|||||
Depreciation
and amortization
|
3,645,465
|
1,293,099
|
|||||
Provision
for loan losses
|
2,680,638
|
1,450,244
|
|||||
Gain
on sale of investment securities, net
|
-
|
(114,410
|
)
|
||||
Gains
on loans and loan participations sold, net
|
(1,285,609
|
)
|
(899,393
|
)
|
|||
Stock-based
compensation expense
|
1,001,372
|
128,920
|
|||||
Deferred
tax benefit
|
(1,110,490
|
)
|
(460,109
|
)
|
|||
Tax
benefit on exercise of stock awards
|
-
|
26,200
|
|||||
Excess
tax benefit from stock compensation arrangements
|
(110,244
|
)
|
-
|
||||
Mortgage
loans held for sale:
|
|||||||
Loans
originated
|
(104,455,073
|
)
|
(74,482,774
|
)
|
|||
Loans
sold
|
102,030,399
|
70,543,400
|
|||||
Increase
in other assets
|
(3,580,936
|
)
|
(3,218,949
|
)
|
|||
Increase
(decrease) in other liabilities
|
(9,368,829
|
)
|
1,118,840
|
||||
Net
cash provided by operating activities
|
2,319,627
|
2,040,402
|
|||||
Investing
activities:
|
|||||||
Activities
in securities available-for-sale:
|
|||||||
Purchases
|
(38,573,610
|
)
|
(70,642,913
|
)
|
|||
Sales
|
-
|
6,791,867
|
|||||
Maturities,
prepayments and calls
|
26,320,244
|
22,642,721
|
|||||
(12,253,366
|
)
|
(41,208,325
|
)
|
||||
Net
increase in loans
|
(207,144,996
|
)
|
(131,791,769
|
)
|
|||
Purchases
of premises and equipment and software
|
(3,708,595
|
)
|
(3,334,110
|
)
|
|||
Cash
and cash equivalents acquired in merger with Cavalry Bancorp,
Inc.
|
37,420,210
|
-
|
|||||
Purchases
of other assets
|
(1,271,982
|
)
|
(827,850
|
)
|
|||
Net
cash used in investing activities
|
(186,958,729
|
)
|
(177,102,054
|
)
|
|||
Financing
activities:
|
|||||||
Net
increase in deposits
|
191,447,162
|
217,900,717
|
|||||
Net
increase in securities sold under agreements to repurchase
|
56,520,032
|
35,723,929
|
|||||
Advances
from Federal Home Loan Bank:
|
|||||||
Issuances
|
31,000,000
|
27,000,000
|
|||||
Payments
|
(61,527,218
|
)
|
(56,000,000
|
)
|
|||
Proceeds
from the issuance of subordinated debt
|
20,619,000
|
20,619,000
|
|||||
Exercise
of common stock warrants
|
55,000
|
-
|
|||||
Exercise
of common stock options
|
947,773
|
143,570
|
|||||
Excess
tax benefit from stock compensation arrangements
|
110,244
|
-
|
|||||
Costs
incurred in connection with registration of common stock issued in
merger
|
(187,609
|
)
|
-
|
||||
Net
cash provided by financing activities
|
238,984,384
|
245,387,216
|
|||||
Net
increase in cash and cash equivalents
|
54,345,282
|
70,325,564
|
|||||
Cash
and cash equivalents, beginning of period
|
58,654,270
|
26,745,787
|
|||||
Cash
and cash equivalents, end of period
|
$
|
112,999,552
|
$
|
97,071,351
|
· |
PFP
Title Company is a wholly-owned subsidiary of Pinnacle National.
PFP Title
Company is licensed to sell title insurance policies to Pinnacle
National
customers and others.
|
· |
PNFP
Holdings, Inc. is a wholly-owned subsidiary of PFP Title Company
and is
the parent of PNFP Properties, Inc., which was established as a Real
Estate Investment Trust pursuant to Internal Revenue Service regulations.
|
· |
Pinnacle
Community Development, Inc. is a wholly-owned subsidiary of Pinnacle
National and is certified as a Community Development Entity by the
Community Development Financial Institutions Fund of the United States
Department of the Treasury.
|
· |
PNFP
Statutory Trust I, PNFP Statutory Trust II and PNFP Statutory Trust
III,
wholly-owned subsidiaries of Pinnacle Financial, were created for
the
exclusive purpose of issuing capital trust preferred securities.
|
· |
Pinnacle
Advisory Services, Inc. is a wholly-owned subsidiary of Pinnacle
Financial
and was established as a registered investment advisor pursuant to
regulations promulgated by the Board of Governors of the Federal
Reserve
System.
|
· |
Miller
and Loughry Insurance and Services, Inc. is a wholly-owned subsidiary
of
Pinnacle National. Miller and Loughry is a general insurance agency
located in Murfreesboro, Tennessee and is licensed to sell various
commercial and consumer insurance products.
|
· |
Pinnacle
Credit Enhancement Holdings, Inc. is a wholly-owned subsidiary of
Pinnacle
Financial and was established to own a 24.5% membership interest
in
Collateral Plus, LLC. Collateral Plus, LLC serves as an intermediary
between investors and borrowers in certain financial transactions
whereby
the borrowers require enhanced collateral in the form of letters
of credit
issued by the investors for the benefit of banks and other financial
institutions.
|
For
the nine months ended September 30,
|
|||||||
2006
|
2005
|
||||||
Cash
Payments:
|
|||||||
Interest
|
$
|
34,444,269
|
$
|
10,692,618
|
|||
Income
taxes
|
6,380,000
|
2,660,133
|
|||||
Noncash
Transactions:
|
|||||||
Loans
charged-off to the allowance for loan losses
|
627,838
|
125,449
|
|||||
Loans
foreclosed upon with repossessions transferred to other
assets
|
-
|
34,750
|
|||||
Common
stock and options issued to acquire Cavalry Bancorp, Inc.
|
171,087,572
|
-
|
For
the three months ended September 30,
|
For
the nine months ended September 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Basic
earnings per share calculation:
|
|||||||||||||
Numerator
-
Net income
|
$
|
5,346,774
|
$
|
2,078,243
|
$
|
12,281,140
|
$
|
5,817,165
|
|||||
Denominator
-
Average common shares outstanding
|
15,393,735
|
8,417,980
|
13,450,282
|
8,402,916
|
|||||||||
Basic
net income per share
|
$
|
0.35
|
$
|
0.25
|
$
|
0.91
|
$
|
0.69
|
|||||
Diluted
earnings per share calculation:
|
|||||||||||||
Numerator
-
Net income
|
$
|
5,346,774
|
$
|
2,078,243
|
$
|
12,281,140
|
$
|
5,817,165
|
|||||
Denominator
-
Average common shares outstanding
|
15,393,735
|
8,417,980
|
13,450,282
|
8,402,916
|
|||||||||
Dilutive
shares contingently issuable
|
1,261,614
|
1,077,207
|
1,199,136
|
1,052,840
|
|||||||||
Average
diluted common shares outstanding
|
16,655,349
|
9,495,187
|
14,649,418
|
9,455,756
|
|||||||||
Diluted
net income per share
|
$
|
0.32
|
$
|
0.22
|
$
|
0.84
|
$
|
0.62
|
Cash
and cash equivalents
|
$
|
37,420,210
|
||
Investment
securities - available-for-sale
|
39,476,178
|
|||
Loans,
net of an allowance for loan losses of $5,102,296
|
545,598,367
|
|||
Goodwill
|
115,064,500
|
|||
Core
deposit intangible
|
13,168,236
|
|||
Other
assets
|
47,933,728
|
|||
Total
assets acquired
|
798,661,219
|
|||
Deposits
|
583,640,043
|
|||
Federal
Home Loan Bank advances
|
17,766,661
|
|||
Other
liabilities
|
24,977,272
|
|||
Total
liabilities assumed
|
626,383,976
|
|||
Total
consideration paid for Cavalry
|
$
|
172,277,243
|
Nine
Months Ended September 30,
|
|||||||
2006
|
2005(1)
|
||||||
Pro
Forma Income Statements:
|
|||||||
Net
interest income
|
$
|
48,512
|
$
|
40,674
|
|||
Provision
for loan losses
|
3,662
|
1,661
|
|||||
Noninterest
income
|
13,249
|
13,051
|
|||||
Noninterest
expense (2):
|
|||||||
Compensation
|
22,095
|
19,158
|
|||||
Other
noninterest expense
|
15,094
|
13,984
|
|||||
Net
income before taxes
|
20,910
|
18,922
|
|||||
Income
tax expense
|
7,809
|
6,092
|
|||||
Net
income
|
$
|
13,101
|
$
|
12,830
|
|||
Pro
Forma Per Share Information:
|
|||||||
Basic
net income per common share
|
$
|
0.86
|
$
|
0.84
|
|||
Diluted
net income per common share
|
$
|
0.79
|
$
|
0.78
|
|||
Weighted
average shares outstanding:
|
|||||||
Basic
|
15,308,766
|
15,259,603
|
|||||
Diluted
|
16,507,901
|
16,417,195
|
(1) |
In
the first quarter of 2005, Cavalry recorded a tax benefit of $427,000
due
to a cash distribution of dividends to the participants in their
employee
stock ownership plan. Excluding this benefit would have lowered pro
forma
net income for the nine months ended September 30, 2005 by $427,000
resulting in pro forma net income of $12,404,000 or $0.81 per basic
share
and $0.76 per fully-diluted share.
|
(2) |
In
preparation and as a result of the merger during 2006, Cavalry and
Pinnacle Financial incurred significant merger related charges of
approximately $11.6 million in the aggregate primarily for severance
benefits, accelerated vesting of defined compensation agreements,
investment banker fees, etc. Including these charges would have decreased
pro forma net income for the nine months ended September 30, 2006
by $7.05
million resulting in net income of $6,051,000 and a basic and fully
diluted pro forma net income per share of $0.40 and $0.37, respectively.
|
September
30, 2006
|
|||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||
Securities
available-for-sale:
|
|||||||||||||
U.S.
Treasury securities
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||
U.S.
government agency securities
|
32,071,059
|
10,369
|
515,196
|
31,566,232
|
|||||||||
Mortgage-backed
securities
|
222,272,968
|
326,785
|
3,610,267
|
218,989,486
|
|||||||||
State
and municipal securities
|
51,166,848
|
77,279
|
534,778
|
50,709,349
|
|||||||||
Corporate
notes and other
|
2,289,519
|
-
|
71,362
|
2,218,157
|
|||||||||
$
|
307,800,394
|
$
|
414,433
|
$
|
4,731,603
|
$
|
303,483,224
|
||||||
Securities
held-to-maturity:
|
|||||||||||||
U.S.
government agency securities
|
$
|
17,747,119
|
$
|
-
|
$
|
416,594
|
$
|
17,330,525
|
|||||
State
and municipal securities
|
9,528,532
|
-
|
327,910
|
9,200,622
|
|||||||||
$
|
27,275,651
|
$
|
-
|
$
|
744,504
|
$
|
26,531,147
|
December
31, 2005
|
|||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||
Securities
available-for-sale:
|
|||||||||||||
U.S.
Treasury securities
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||
U.S.
government agency securities
|
31,054,469
|
-
|
534,899
|
30,519,570
|
|||||||||
Mortgage-backed
securities
|
190,708,007
|
44,378
|
3,866,210
|
186,886,175
|
|||||||||
State
and municipal securities
|
32,583,283
|
19,044
|
464,984
|
32,137,343
|
|||||||||
Corporate
notes
|
2,300,442
|
-
|
94,436
|
2,206,006
|
|||||||||
$
|
256,646,201
|
$
|
63,422
|
$
|
4,960,529
|
$
|
251,749,094
|
||||||
Securities
held-to-maturity:
|
|||||||||||||
U.S.
government agency securities
|
$
|
17,746,883
|
$
|
-
|
$
|
441,208
|
$
|
17,305,675
|
|||||
State
and municipal securities
|
9,584,368
|
-
|
343,746
|
9,240,622
|
|||||||||
$
|
27,331,251
|
$
|
-
|
$
|
784,954
|
$
|
26,546,297
|
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
September 30, 2006:
|
|||||||||||||||||||
U.S.
government agency securities
|
$
|
7,761,607
|
$
|
49,142
|
$
|
40,125,251
|
$
|
882,647
|
$
|
47,886,858
|
$
|
931,789
|
|||||||
Mortgage-backed
securities
|
48,077,830
|
447,709
|
129,662,420
|
3,162,559
|
177,740,250
|
3,610,268
|
|||||||||||||
State
and municipal securities
|
22,638,865
|
209,771
|
24,237,720
|
652,917
|
46,876,585
|
862,688
|
|||||||||||||
Corporate
notes
|
-
|
-
|
2,218,157
|
71,362
|
2,218,157
|
71,362
|
|||||||||||||
Total
temporarily-impaired securities
|
$
|
78,478,302
|
$
|
706,622
|
$
|
196,243,548
|
$
|
4,769,485
|
$
|
274,721,850
|
$
|
5,476,107
|
|||||||
At
December 31, 2005:
|
|||||||||||||||||||
U.S.
government agency securities
|
$
|
28,605,270
|
$
|
463,534
|
$
|
19,219,975
|
$
|
512,573
|
$
|
47,825,245
|
$
|
976,107
|
|||||||
Mortgage-backed
securities
|
110,636,351
|
1,586,394
|
69,512,865
|
2,279,816
|
180,149,216
|
3,866,210
|
|||||||||||||
State
and municipal securities
|
22,692,062
|
341,869
|
14,074,344
|
466,861
|
36,766,406
|
808,730
|
|||||||||||||
Corporate
notes
|
-
|
-
|
2,206,006
|
94,436
|
2,206,006
|
94,436
|
|||||||||||||
Total
temporarily-impaired securities
|
$
|
161,933,683
|
$
|
2,391,797
|
$
|
105,013,190
|
$
|
3,353,686
|
$
|
266,946,873
|
$
|
5,745,483
|
At
September 30,
|
At
December 31,
|
||||||
2006
|
2005
|
||||||
Commercial
real estate - Mortgage
|
$
|
265,173,969
|
$
|
148,102,053
|
|||
Commercial
real estate - Construction
|
152,627,475
|
30,295,106
|
|||||
Commercial
- Other
|
554,617,009
|
239,128,969
|
|||||
Total
Commercial
|
972,418,453
|
417,526,128
|
|||||
Consumer
real estate - Mortgage
|
292,206,262
|
169,952,860
|
|||||
Consumer
real estate - Construction
|
87,890,024
|
37,371,834
|
|||||
Consumer
- Other
|
52,886,690
|
23,173,210
|
|||||
Total
Consumer
|
432,982,976
|
230,497,904
|
|||||
Total
Loans
|
1,405,401,429
|
648,024,032
|
|||||
Allowance
for loan losses
|
(15,172,446
|
)
|
(7,857,774
|
)
|
|||
Loans,
net
|
$
|
1,390,228,983
|
$
|
640,166,258
|
2006
|
2005
|
||||||
Balance
at beginning of period
|
$
|
7,857,774
|
$
|
5,650,014
|
|||
Charged-off
loans
|
(627,838
|
)
|
(207,647
|
)
|
|||
Recovery
of previously charged-off loans
|
159,576
|
263,441
|
|||||
Allowance
from Cavalry acquisition (see note 2)
|
5,102,296
|
-
|
|||||
Provision
for loan losses
|
2,680,638
|
2,151,966
|
|||||
Balance
at end of period
|
$
|
15,172,446
|
$
|
7,857,774
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Current
tax expense:
|
|||||||||||||
Federal
|
$
|
2,404,721
|
$
|
742,824
|
$
|
6,644,857
|
$
|
2,678,092
|
|||||
State
|
118,652
|
822
|
428,745
|
93,472
|
|||||||||
Total
current tax expense
|
2,523,373
|
743,646
|
7,073,602
|
2,771,564
|
|||||||||
Deferred
tax benefit:
|
|||||||||||||
Federal
|
57,292
|
37,534
|
(949,171
|
)
|
(382,960
|
)
|
|||||||
State
|
14,800
|
8,201
|
(161,319
|
)
|
(77,149
|
)
|
|||||||
Total
deferred tax expense (benefit)
|
72,092
|
45,736
|
(1,110,490
|
)
|
(460,109
|
)
|
|||||||
$
|
2,595,465
|
$
|
789,382
|
$
|
5,963,112
|
$
|
2,311,455
|
Three
Months Ended
September 30,
|
Nine
Months Ended September 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Income
taxes at statutory rate
|
$
|
2,779,782
|
$
|
974,994
|
$
|
6,385,488
|
$
|
2,763,731
|
|||||
State
tax expense, net of federal tax effect
|
86,743
|
(12,622
|
)
|
173,827
|
10,773
|
||||||||
Federal
tax credits
|
(75,000
|
)
|
(75,000
|
)
|
(225,000
|
)
|
(225,000
|
)
|
|||||
Tax-exempt
securities
|
(155,154
|
)
|
(116,739
|
)
|
(425,766
|
)
|
(232,716
|
)
|
|||||
Other
items
|
(40,906
|
)
|
18,749
|
54,563
|
(5,333
|
)
|
|||||||
Income
tax expense
|
$
|
2,595,465
|
$
|
789,382
|
$
|
5,963,112
|
$
|
2,311,455
|
September
30, 2006
|
December
31, 2005
|
||||||
Deferred
tax assets:
|
|||||||
Loans
and loan loss allowance
|
$
|
7,808,264
|
$
|
3,019,094
|
|||
Securities
|
1,568,024
|
1,773,521
|
|||||
Merger
related deferred deductions
|
1,447,810
|
-
|
|||||
Accrued
liability for salaried executive retirement plan
|
1,486,314
|
-
|
|||||
Other
deferred tax assets
|
192,024
|
174,816
|
|||||
12,502,436
|
4,967,431
|
||||||
Deferred
tax liabilities:
|
|||||||
Depreciation
and amortization
|
1,805,264
|
417,207
|
|||||
Deposits
|
4,051,911
|
-
|
|||||
FHLB
dividends
|
724,633
|
-
|
|||||
Other
deferred tax liabilities
|
499,272
|
139,602
|
|||||
7,081,080
|
556,809
|
||||||
Net
deferred tax assets
|
$
|
5,421,356
|
$
|
4,410,622
|
Commitments
to extend credit
|
$
|
502,295,000
|
||
Standby
letters of credit
|
$
|
56,439,000
|
Number
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Contractual
Remaining
Term
(in
years)
|
Aggregate
Intrinsic
Value
(1)
(000’s)
|
||||||||||
Outstanding
at December 31, 2005
|
1,242,393
|
$
|
9.78
|
||||||||||
Additional
stock option grants resulting from assumption of the Cavalry
Plan
|
195,551
|
10.80
|
|||||||||||
Granted
|
310,569
|
28.24
|
|||||||||||
Exercised
|
(93,435
|
)
|
10.15
|
||||||||||
Forfeited
|
(5,832
|
)
|
12.65
|
||||||||||
Outstanding
at September 30, 2006
|
1,649,246
|
$
|
13.31
|
6.53
|
$
|
37,123
|
|||||||
Outstanding
and expected to vest at September 30, 2006
|
1,623,405
|
$
|
13.16
|
6.50
|
$
|
36,749
|
|||||||
Options
exercisable at September 30, 2006
|
954,346
|
$
|
7.39
|
5.17
|
$
|
27,117
|
(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 $35.80 per common share for the 1.65 million
options that were in-the-money at September 30,
2006.
|
Awards
granted with
the
intention to be classified
as
incentive stock options
|
Non-qualified
stock
option
awards
|
Totals
|
||||||||
Stock-based
compensation expense
|
$
|
437,911
|
$
|
252,232
|
$
|
690,143
|
||||
Deferred
income tax benefit
|
-
|
98,951
|
98,951
|
|||||||
Impact
of stock-based compensation expense after deferred income tax
benefit
|
$
|
437,911
|
$
|
153,281
|
$
|
591,192
|
||||
Impact
on earnings per share:
|
||||||||||
Basic
- 13,450,282 weighted average shares outstanding
|
$
|
0.033
|
$
|
0.011
|
$
|
0.044
|
||||
Fully
diluted - 14,649,418 weighted average shares outstanding
|
$
|
0.030
|
$
|
0.010
|
$
|
0.040
|
For
the nine months ended September 30,
|
||
2006
|
2005
|
|
Risk
free interest rate
|
4.66%
|
2.89%
|
Expected
life of options
|
6.50
years
|
6.50
years
|
Expected
dividend yield
|
0.00%
|
0.00%
|
Expected
volatility
|
23.5%
|
23.9%
|
Weighted
average fair value
|
$10.29
|
$7.43
|
Executive
Management Awards
|
Board
of Director Awards
|
||||||||||||||||||
(number
of share awards)
|
Vested
|
Unvested
|
Totals
|
Vested
|
Unvested
|
Totals
|
|||||||||||||
Balances
at Dec. 31, 2005
|
8,014
|
12,198
|
20,212
|
-
|
-
|
-
|
|||||||||||||
Granted
|
-
|
18,057
|
18,057
|
-
|
4,400
|
4,400
|
|||||||||||||
Forfeited
|
-
|
-
|
-
|
-
|
(400
|
)
|
(400
|
)
|
|||||||||||
Vested
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||
Balances at September 30, 2006
|
8,014
|
30,255
|
38,269
|
-
|
4,000
|
4,000
|
For
the three
months
ended September 30, 2005
|
For
the nine
months
ended
September
30, 2005
|
||||||
Net
income, as reported
|
$
|
2,078,243
|
$
|
5,817,165
|
|||
Add:
Compensation expense recognized in the accompanying consolidated
statement
of income, net of related tax effects
|
69,235
|
78,351
|
|||||
Deduct:
Total stock-based compensation expense determined under the fair
value
based method for all awards, net of related tax effects
|
(212,547
|
)
|
(564,912
|
)
|
|||
Pro
forma net income
|
$
|
1,934,931
|
$
|
5,330,604
|
|||
Per
share information:
|
|||||||
Basic
net
income
As reported
|
$
|
0.25
|
$
|
0.69
|
|||
Pro forma
|
0.23
|
0.63
|
|||||
Diluted
net
income
As reported
|
$
|
0.22
|
$
|
0.62
|
|||
Pro
forma
|
0.20
|
0.56
|
Actual
|
Minimum
Capital
Requirement
|
Minimum
To
Be Well-Capitalized
Under
Prompt
Corrective
Action
Provisions
|
|||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||
At
September 30, 2006
|
|||||||||||||||||||
Total
capital to risk weighted assets:
|
|||||||||||||||||||
Pinnacle
Financial
|
$
|
194,427
|
12.0
|
%
|
$
|
130,154
|
8.0
|
%
|
not
applicable
|
||||||||||
Pinnacle
National
|
$
|
165,699
|
10.2
|
%
|
$
|
130,002
|
8.0
|
%
|
$
|
161,966
|
10.0
|
%
|
|||||||
Tier
I capital to risk weighted assets:
|
|||||||||||||||||||
Pinnacle
Financial
|
$
|
172,339
|
10.6
|
%
|
$
|
65,077
|
4.0
|
%
|
not
applicable
|
||||||||||
Pinnacle
National
|
$
|
150,517
|
9.3
|
%
|
$
|
65,001
|
4.0
|
%
|
$
|
97,179
|
6.0
|
%
|
|||||||
Tier
I capital to average assets (*):
|
|||||||||||||||||||
Pinnacle
Financial
|
$
|
172,339
|
9.2
|
%
|
$
|
74,597
|
4.0
|
%
|
not
applicable
|
||||||||||
Pinnacle
National
|
$
|
150,517
|
8.1
|
%
|
$
|
74,569
|
4.0
|
%
|
$
|
93,211
|
5.0
|
%
|
|||||||
At
December 31, 2005
|
|||||||||||||||||||
Total
capital to risk weighted assets:
|
|||||||||||||||||||
Pinnacle
Financial
|
$
|
105,101
|
12.6
|
%
|
$
|
66,521
|
8.0
|
%
|
not
applicable
|
||||||||||
Pinnacle
National
|
$
|
90,215
|
10.9
|
%
|
$
|
66,334
|
8.0
|
%
|
$
|
82,917
|
10.0
|
%
|
|||||||
Tier
I capital to risk weighted assets:
|
|||||||||||||||||||
Pinnacle
Financial
|
$
|
97,243
|
11.7
|
%
|
$
|
33,261
|
4.0
|
%
|
not
applicable
|
||||||||||
Pinnacle
National
|
$
|
82,357
|
9.9
|
%
|
$
|
33,167
|
4.0
|
%
|
$
|
49,751
|
6.0
|
%
|
|||||||
Tier
I capital to average assets (*):
|
|||||||||||||||||||
Pinnacle
Financial
|
$
|
97,243
|
9.9
|
%
|
$
|
39,444
|
4.0
|
%
|
not
applicable
|
||||||||||
Pinnacle
National
|
$
|
82,357
|
8.4
|
%
|
$
|
39,444
|
4.0
|
%
|
$
|
49,305
|
5.0
|
%
|
Commercial
Banking
|
Trust
and Investment Services
|
Mortgage
Origination
|
Insurance
Services
|
Total
Company
|
||||||||||||
For
the three months ended September 30, 2006:
|
||||||||||||||||
Net
interest income
|
$
|
17,159
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
17,159
|
||||||
Provision
for loan losses
|
587
|
-
|
-
|
-
|
587
|
|||||||||||
Noninterest
income
|
2,451
|
838
|
446
|
689
|
4,424
|
|||||||||||
Noninterest
expense
|
11,717
|
663
|
243
|
431
|
13,054
|
|||||||||||
Income
tax expense
|
2,361
|
68
|
79
|
87
|
2,595
|
|||||||||||
Net
income
|
$
|
4,945
|
$
|
107
|
$
|
124
|
$
|
171
|
$
|
5,347
|
||||||
For
the three months ended September 30, 2005:
|
||||||||||||||||
Net
interest income
|
$
|
7,456
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
7,456
|
||||||
Provision
for loan losses
|
366
|
-
|
-
|
-
|
366
|
|||||||||||
Noninterest
income
|
347
|
413
|
539
|
-
|
1,299
|
|||||||||||
Noninterest
expense
|
4,911
|
303
|
307
|
-
|
5,521
|
|||||||||||
Income
tax expense
|
656
|
43
|
91
|
-
|
790
|
|||||||||||
Net
income
|
$
|
1,870
|
$
|
67
|
$
|
141
|
$
|
-
|
$
|
2,078
|
||||||
For
the nine months ended September 30, 2006:
|
||||||||||||||||
Net
interest income
|
$
|
43,561
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
43,561
|
||||||
Provision
for loan losses
|
2,681
|
-
|
-
|
-
|
2,681
|
|||||||||||
Noninterest
income
|
5,874
|
2,208
|
1,187
|
1,583
|
10,852
|
|||||||||||
Noninterest
expense
|
30,209
|
1,603
|
725
|
951
|
33,488
|
|||||||||||
Income
tax expense
|
5,298
|
237
|
181
|
247
|
5,963
|
|||||||||||
Net
income
|
$
|
11,247
|
$
|
368
|
$
|
281
|
$
|
385
|
$
|
12,281
|
||||||
For
the nine months ended September 30, 2005:
|
||||||||||||||||
Net
interest income
|
$
|
20,751
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
20,751
|
||||||
Provision
for loan losses
|
1,450
|
-
|
-
|
-
|
1,450
|
|||||||||||
Noninterest
income
|
1,354
|
1,187
|
1,352
|
-
|
3,893
|
|||||||||||
Noninterest
expense
|
13,229
|
885
|
951
|
-
|
15,065
|
|||||||||||
Income
tax expense
|
2,037
|
118
|
157
|
-
|
2,312
|
|||||||||||
Net
income
|
$
|
5,389
|
$
|
184
|
$
|
284
|
$
|
-
|
$
|
5,817
|
||||||
As
of September 30, 2006:
|
||||||||||||||||
End
of period assets
|
$
|
2,048,033
|
$
|
-
|
$
|
-
|
$
|
4,219
|
$
|
2,052,252
|
||||||
As
of September 30, 2005:
|
||||||||||||||||
End
of period assets
|
$
|
978,539
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
978,539
|
Combined
Summary Balance Sheets
|
|||||||
September
30, 2006
|
December
31, 2005
|
||||||
Asset
-
Investment in subordinated debentures issued by Pinnacle
Financial
|
$
|
51,548
|
$
|
30,929
|
|||
Liabilities
|
$
|
-
|
$
|
-
|
|||
Stockholder’s
equity
-
Trust preferred securities
|
50,000
|
30,000
|
|||||
Common
securities (100% owned by Pinnacle Financial)
|
1,548
|
929
|
|||||
Total
stockholder’s equity
|
51,548
|
30,929
|
|||||
Total
liabilities and stockholder’s equity
|
$
|
51,548
|
$
|
30,929
|
Combined
Summary Income Statement
|
|||||||
Nine
months ended September 30,
|
|||||||
2006
|
2005
|
||||||
Income
- Interest
income from subordinated debentures issued by Pinnacle
Financial
|
$
|
1,617
|
$
|
506
|
|||
Net
Income
|
$
|
1,617
|
$
|
506
|
Combined
Summary Statement of Stockholder’s Equity
|
|||||||||||||
Trust
Preferred
Securities
|
Total
Common
Stock
|
Retained
Earnings
|
Stockholder’s
Equity
|
||||||||||
Beginning
balances, December 31, 2005
|
$
|
30,000
|
$
|
929
|
$
|
-
|
$
|
30,929
|
|||||
Net
income
|
-
|
-
|
1,617
|
1,617
|
|||||||||
Issuance
of trust preferred securities
|
20,000
|
619
|
-
|
20,619
|
|||||||||
Dividends:
|
|||||||||||||
Trust
preferred securities
|
-
|
-
|
(1,580
|
)
|
(1,580
|
)
|
|||||||
Common
paid to Pinnacle Financial
|
-
|
-
|
(37
|
)
|
(37
|
)
|
|||||||
Ending
balances, September 30, 2006
|
$
|
50,000
|
$
|
1,548
|
$
|
-
|
$
|
51,548
|
Cash
and cash equivalents
|
$
|
37,420,210
|
||
Investment
securities - available-for-sale
|
39,476,178
|
|||
Loans,
net of an allowance for loan losses of $5,102,296
|
545,598,367
|
|||
Goodwill
|
115,064,500
|
|||
Core
deposit intangible
|
13,168,236
|
|||
Other
assets
|
47,933,728
|
|||
Total
assets acquired
|
798,661,219
|
|||
Deposits
|
583,640,043
|
|||
Federal
Home Loan Bank advances
|
17,766,661
|
|||
Other
liabilities
|
24,977,272
|
|||
Total
liabilities assumed
|
626,383,976
|
|||
Total
consideration paid for Cavalry
|
$
|
172,277,243
|
|
Three
months ended
|
2006-2005
|
Nine
months ended
|
2006-2005
|
|||||||||||||||
|
September
30, 2006
|
Percent
|
September
30, 2006
|
Percent
|
|||||||||||||||
|
2006
|
2005
|
Increase
|
2006
|
2005
|
Increase
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
Interest
income
|
$
|
31,340
|
$
|
12,378
|
153.2
|
%
|
$
|
76,455
|
$
|
32,189
|
137.5
|
%
|
|||||||
Interest
expense
|
14,181
|
4,923
|
188.1
|
%
|
32,894
|
11,438
|
187.6
|
%
|
|||||||||||
Net
interest income
|
17,159
|
7,455
|
130.2
|
%
|
43,561
|
20,751
|
109.9
|
%
|
|||||||||||
Provision
for loan losses
|
587
|
366
|
60.4
|
%
|
2,680
|
1,450
|
84.8
|
%
|
|||||||||||
Net
interest income after provision for loan losses
|
16,572
|
7,089
|
133.8
|
%
|
40,881
|
19,301
|
111.8
|
%
|
|||||||||||
Noninterest
income
|
4,424
|
1,299
|
240.6
|
%
|
10,852
|
3,893
|
178.8
|
%
|
|||||||||||
Noninterest
expense:
|
|
|
|
|
|
|
|||||||||||||
Merger
related expense
|
218
|
-
|
-
|
1,583
|
-
|
-
|
|||||||||||||
Other
noninterest expense
|
12,836
|
5,521
|
132.5
|
%
|
31,906
|
15,065
|
111.8
|
%
|
|||||||||||
Net
income before income taxes
|
7,942
|
2,867
|
177.0
|
%
|
18,244
|
8,129
|
124.4
|
%
|
|||||||||||
Income
tax expense
|
2,595
|
789
|
228.9
|
%
|
5,963
|
2,312
|
157.9
|
%
|
|||||||||||
Net
income
|
$
|
5,347
|
$
|
2,078
|
157.3
|
%
|
$
|
12,281
|
$
|
5,817
|
111.1
|
%
|
|
Three
months ended
|
Nine
months ended
|
|||||||||||
|
September
30, 2006
|
September
30, 2006
|
|||||||||||
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Reconciliation
of Non-GAAP financial measures :
|
|||||||||||||
Net
income
|
$
|
5,347
|
$
|
2,078
|
$
|
12,281
|
$
|
5,817
|
|||||
Merger
related expense net of tax of $86 and $621 for the three and nine
months
ended September 30, 2006, respectively
|
132
|
-
|
962
|
-
|
|||||||||
Net
income excluding merger related expense
|
$
|
5,479
|
$
|
2,078
|
$
|
13,243
|
$
|
5,817
|
|||||
|
|||||||||||||
Diluted
net income per common share
|
$
|
0.32
|
$
|
0.22
|
$
|
0.84
|
$
|
0.62
|
|||||
Diluted
net income per common share, excluding merger related
expense
|
$
|
0.33
|
$
|
0.22
|
$
|
0.90
|
$
|
0.62
|
Three
months ended
|
Three
months ended
|
||||||||||||||||||
(dollars
in thousands)
|
September
30, 2006
|
September
30, 2005
|
|||||||||||||||||
|
Average
Balances
|
Interest
|
Rates/
Yields
|
Average
Balances
|
Interest
|
Rates/
Yields
|
|||||||||||||
Interest-earning
assets:
|
|
|
|
|
|
|
|||||||||||||
Loans
|
$
|
1,375,036
|
$
|
26,771
|
7.72
|
%
|
$
|
587,902
|
$
|
9,471
|
6.40
|
%
|
|||||||
Securities:
|
|
|
|
|
|
|
|||||||||||||
Taxable
|
260,688
|
3,241
|
4.93
|
%
|
205,213
|
2,245
|
4.34
|
%
|
|||||||||||
Tax-exempt
(1)
|
56,644
|
521
|
4.81
|
%
|
35,312
|
318
|
4.72
|
%
|
|||||||||||
Federal
funds sold
|
51,075
|
685
|
5.32
|
%
|
34,204
|
282
|
3.27
|
%
|
|||||||||||
Other
|
8,116
|
122
|
7.16
|
%
|
4,075
|
62
|
7.02
|
%
|
|||||||||||
Total
interest-earning assets
|
1,751,559
|
$
|
31,340
|
7.14
|
%
|
866,706
|
$
|
12,378
|
5.73
|
%
|
|||||||||
Nonearning
assets
|
235,677
|
|
|
48,095
|
|
|
|||||||||||||
Total
assets
|
$
|
1,987,236
|
|
|
$
|
914,801
|
|
|
|||||||||||
|
|
|
|
|
|
|
|||||||||||||
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|||||||||||||
Interest
bearing deposits
|
|
|
|
|
|
|
|||||||||||||
Interest
checking
|
$
|
181,752
|
$
|
1,202
|
2.62
|
%
|
$
|
64,369
|
$
|
242
|
1.49
|
%
|
|||||||
Savings
and money market
|
473,883
|
3,809
|
3.19
|
%
|
266,327
|
1,408
|
2.10
|
%
|
|||||||||||
Certificates
of deposit
|
598,220
|
6,789
|
4.50
|
%
|
274,303
|
2,319
|
3.35
|
%
|
|||||||||||
Total
deposits
|
1,253,855
|
11,800
|
3.73
|
%
|
604,999
|
3,969
|
2.60
|
%
|
|||||||||||
Securities
sold under agreements to repurchase
|
122,292
|
1,383
|
4.49
|
%
|
63,337
|
400
|
2.50
|
%
|
|||||||||||
Federal
funds purchased
|
-
|
-
|
0.00
|
%
|
-
|
-
|
0.00
|
%
|
|||||||||||
Federal
Home Loan Bank advances
|
33,299
|
383
|
4.57
|
%
|
41,456
|
336
|
3.22
|
%
|
|||||||||||
Subordinated
debt
|
36,084
|
615
|
6.75
|
%
|
13,896
|
218
|
6.22
|
%
|
|||||||||||
Total
interest-bearing liabilities
|
1,445,530
|
14,181
|
3.89
|
%
|
723,688
|
4,923
|
2.72
|
%
|
|||||||||||
Noninterest-bearing
deposits
|
281,812
|
-
|
-
|
125,447
|
-
|
-
|
|||||||||||||
Total
deposits and interest-bearing liabilities
|
1,727,342
|
$
|
14,181
|
3.26
|
%
|
849,135
|
$
|
4,923
|
2.30
|
%
|
|||||||||
Other
liabilities
|
14,914
|
|
|
3,328
|
|
|
|||||||||||||
Stockholders'
equity
|
244,980
|
|
|
62,338
|
|
|
|||||||||||||
|
$
|
1,987,236
|
|
|
$
|
914,801
|
|
|
|||||||||||
Net interest income
|
|
$
|
17,159
|
|
|
$
|
7,455
|
|
|||||||||||
Net
interest spread (2)
|
|
|
3.25
|
%
|
|
|
3.01
|
%
|
|||||||||||
Net
interest margin (3)
|
|
|
3.95
|
%
|
|
|
3.48
|
%
|
(1) |
Yields
computed on tax-exempt instruments on a tax equivalent
basis.
|
(2) |
Yields
realized on interest-earning assets less the rates paid on
interest-bearing liabilities.
|
(3) |
Net
interest margin is the result of annualized net interest income divided
by
average interest-earning assets for the
period.
|
Nine
months ended
|
Nine
months ended
|
||||||||||||||||||
(dollars in thousands) |
September
30, 2006
|
September
30, 2005
|
|||||||||||||||||
|
Average
Balances
|
Interest
|
Rates/
Yields
|
Average
Balances
|
Interest
|
Rates/
Yields
|
|||||||||||||
Interest-earning
assets:
|
|
|
|
|
|
|
|||||||||||||
Loans
|
$
|
1,154,828
|
$
|
64,196
|
7.43
|
%
|
$
|
537,842
|
$
|
24,428
|
6.08
|
%
|
|||||||
Securities:
|
|
|
|
|
|
|
|||||||||||||
Taxable
|
250,373
|
9,250
|
4.94
|
%
|
194,993
|
6,401
|
4.39
|
%
|
|||||||||||
Tax-exempt
(1)
|
50,481
|
1,417
|
4.95
|
%
|
28,657
|
758
|
4.67
|
%
|
|||||||||||
Federal
funds sold
|
30,103
|
1,225
|
5.44
|
%
|
19,311
|
436
|
3.02
|
%
|
|||||||||||
Other
|
7,017
|
367
|
7.95
|
%
|
3,694
|
166
|
6.92
|
%
|
|||||||||||
Total
interest-earning assets
|
1,492,802
|
$
|
76,455
|
6.89
|
%
|
784,497
|
$
|
32,189
|
5.53
|
%
|
|||||||||
Nonearning
assets
|
180,522
|
|
|
46,846
|
|
|
|||||||||||||
Total
assets
|
$
|
1,673,324
|
|
|
$
|
831,343
|
|
|
|||||||||||
|
|
|
|
|
|
|
|||||||||||||
Interest-bearing
liabilities:
|
|
|
|
|
|
|
|||||||||||||
Interest
bearing deposits
|
|
|
|
|
|
|
|||||||||||||
Interest
checking
|
$
|
158,643
|
$
|
2,532
|
2.13
|
%
|
$
|
59,919
|
$
|
403
|
0.90
|
%
|
|||||||
Savings
and money market
|
417,610
|
9,384
|
3.00
|
%
|
235,697
|
3,012
|
1.71
|
%
|
|||||||||||
Certificates
of deposit
|
486,642
|
15,297
|
4.20
|
%
|
247,773
|
5,585
|
3.01
|
%
|
|||||||||||
Total
deposits
|
1,062,895
|
27,213
|
3.42
|
%
|
543,389
|
9,000
|
2.21
|
%
|
|||||||||||
Securities
sold under agreements to repurchase
|
83,364
|
2,569
|
4.12
|
%
|
50,456
|
803
|
2.13
|
%
|
|||||||||||
Federal
funds purchased
|
41,351
|
52
|
5.11
|
%
|
1,796
|
45
|
3.31
|
%
|
|||||||||||
Federal
Home Loan Bank advances
|
32,647
|
1,443
|
4.66
|
%
|
48,880
|
1,084
|
2.97
|
%
|
|||||||||||
Subordinated
debt
|
1,358
|
1,617
|
6.62
|
%
|
11,506
|
506
|
5.89
|
%
|
|||||||||||
Total
interest-bearing liabilities
|
1,221,615
|
32,894
|
3.60
|
%
|
656,027
|
11,438
|
2.33
|
%
|
|||||||||||
Noninterest-bearing
deposits
|
248,448
|
-
|
-
|
112,771
|
-
|
-
|
|||||||||||||
Total
deposits and interest-bearing liabilities
|
1,470,063
|
$
|
32,894
|
2.99
|
%
|
768,798
|
$
|
11,438
|
1.99
|
%
|
|||||||||
Other
liabilities
|
11,623
|
|
|
2,436
|
|
|
|||||||||||||
Stockholders'
equity
|
191,638
|
|
|
60,109
|
|
|
|||||||||||||
|
$
|
1,673,324
|
|
|
$
|
831,343
|
|
|
|||||||||||
Net interest income
|
|
$
|
43,561
|
|
|
$
|
20,751
|
|
|||||||||||
Net
interest spread (2)
|
|
|
3.29
|
%
|
|
|
3.20
|
%
|
|||||||||||
Net
interest margin (3)
|
|
|
3.97
|
%
|
|
|
3.60
|
%
|
(1) |
Yields
computed on tax-exempt instruments on a tax equivalent
basis.
|
(2) |
Yields
realized on interest-earning assets less the rates paid on
interest-bearing liabilities.
|
(3) |
Net
interest margin is the result of annualized net interest income divided
by
average interest-earning assets for the
period.
|
· |
Our
loan yields increased by 135 basis points for the first nine months
of
2006 when compared to the first nine months of 2005. The pricing
of a
large portion of our loan portfolio is tied to our prime rate which
increased throughout 2005 and through September 30, 2006 consistent
with
the announced increases in the Federal funds target rate by the Open
Market Committee of the Federal Reserve System. During the period
from
January 1, 2005 through September 30, 2006, the Open Market Committee
increased the Federal funds target rate from 2.25% to 5.25%.
|
· |
We
have been able to grow our funding base significantly. For asset/liability
management, we continue to allocate a greater proportion of such
funds to
our loan portfolio versus our securities and shorter-term investment
portfolio. Average loan balances for the first nine months of 2006
approximated 77% of total interest-earning assets compared to 69%
for the
same period in 2005. Loans generally have higher yields than do securities
and other shorter-term investments.
|
· |
Impacting
our net interest margin at any point in time will be the level of
fixed
rate assets and liabilities. In a rising rate environment, these
assets
and liabilities do not reprice and thus impact the performance of
our net
interest margin. Fixed rate assets include fixed rate loans and
substantially all of our investment portfolio. Fixed rate liabilities
include certificates of deposits, FHLB advances and a portion of
our
subordinated indebtedness. In a rising rate environment these liabilities
impact our margin positively. We have experienced a rising rate
environment over the last few quarters. We believe that since we
have more
fixed rate assets than fixed rate liabilities the negative impact
of our
fixed rate assets impacted our net interest margin to a greater degree
than the impact of our fixed rate liabilities when comparing the
three and
nine months ended September 30, 2006 with that of the comparable
prior
year periods.
|
· |
During
2006, overall deposit rates were higher than those rates for the
comparable period in 2005. Changes in interest rates paid on such
products
as interest checking, savings and money market accounts, securities
sold
under agreements to repurchase and Federal funds purchased will generally
increase or decrease in a manner that is consistent with changes
in the
short-term rate environment. During 2006, as was the case with our
prime
lending rate, short-term rates were higher than in 2005. We also
monitor
the pricing of similar products by our primary competitors. Deposit
pricing in our markets has been very competitive over the last few
years
and we anticipate that such pricing pressure will continue. The changes
in
the short-term rate environment and the pricing of our primary competitors
required us to increase these rates in 2006 compared to the same
period in
2005 which resulted in increased pressure on our net interest margin.
|
· |
During
the first nine months of 2006, the average balances of noninterest
bearing
deposit balances, interest bearing transaction accounts, savings
and money
market accounts and securities sold under agreements to repurchase
amounted to 62% of our total funding compared to 60% for the first
nine
month in 2005. These funding sources generally have lower rates than
do
other funding sources, such as certificates of deposit and other
borrowings and contributed favorably to our net interest margin in
2006
when compared to 2005.
|
· |
Also
impacting the net interest margin during 2006 compared to 2005 was
pricing
of our floating rate subordinated indebtedness and the incurrence
of
additional fixed rate subordinated indebtedness. The average rate
on our
subordinated indebtedness increased by 73 basis points during the
first
nine months of 2006 when compared to the same period in 2005. The
interest
rate charged on this indebtedness is generally higher than other
funding
sources. The rate charged on the floating rate portion of the indebtedness
is determined in relation to the three-month LIBOR index and reprices
quarterly. During 2006, the short-term interest rate environment
was
higher than during 2005, and, as a result, the pricing for this funding
source was higher in 2006 than in 2005.
|
|
Three
months ended
|
2006-2005
|
Nine
months ended
|
2006-2005
|
|||||||||||||||
|
September
30,
|
Percent
|
September
30,
|
Percent
|
|||||||||||||||
|
2006
|
2005
|
Increase
(decrease)
|
2006
|
2005
|
Increase
(decrease)
|
|||||||||||||
Noninterest
income:
|
|
|
|
|
|
|
|||||||||||||
Service
charges on deposit accounts
|
$
|
1,357
|
$
|
229
|
492.6
|
%
|
$
|
3,152
|
$
|
732
|
330.6
|
%
|
|||||||
Investment
services
|
645
|
474
|
36.1
|
%
|
1,811
|
1,403
|
29.1
|
%
|
|||||||||||
Gains
on loans and loan participations sold, net:
|
|
|
|
|
|
|
|||||||||||||
Fees
from the origination and sale of mortgage loans, net of sales
commissions
|
388
|
375
|
3.5
|
%
|
1,061
|
790
|
34.3
|
%
|
|||||||||||
Gains
(losses) on loan participations sold, net
|
102
|
(26
|
)
|
492.3
|
%
|
224
|
110
|
103.6
|
%
|
||||||||||
Insurance
sales commissions
|
550
|
-
|
-
|
1,563
|
-
|
-
|
|||||||||||||
Gain
on sale of investment securities, net
|
-
|
-
|
-
|
-
|
114
|
-
|
|||||||||||||
Trust
fees
|
312
|
-
|
-
|
676
|
-
|
-
|
|||||||||||||
Other
noninterest income:
|
|
|
|
|
|
|
|||||||||||||
Letters
of credit fees
|
147
|
120
|
22.5
|
%
|
368
|
359
|
2.5
|
%
|
|||||||||||
Bank-owned
life insurance
|
126
|
18
|
600.0
|
%
|
281
|
55
|
410.9
|
%
|
|||||||||||
Equity
in earnings of Collateral Plus, LLC
|
11
|
76
|
(72.4
|
%)
|
80
|
140
|
(42.9
|
%)
|
|||||||||||
Other
noninterest income
|
776
|
33
|
2251.5
|
%
|
1,636
|
190
|
765.6
|
%
|
|||||||||||
Total
noninterest income
|
$
|
4,424
|
$
|
1,299
|
240.6
|
%
|
$
|
10,852
|
$
|
3,893
|
178.8
|
%
|
|
Three
months ended
|
2006-2005
|
Nine
months ended
|
2006-2005
|
|||||||||||||||
|
September
30,
|
Percent
|
September
30,
|
Percent
|
|||||||||||||||
|
2006
|
2005
|
Increase
(decrease)
|
2006
|
2005
|
Increase
(decrease)
|
|||||||||||||
Noninterest
expense:
|
|
|
|
|
|
|
|||||||||||||
Salaries
and employee benefits:
|
|
|
|
|
|
|
|||||||||||||
Salaries
|
$
|
4,964
|
$
|
2,315
|
114.4
|
%
|
$
|
12,752
|
$
|
6,239
|
104.4
|
%
|
|||||||
Commissions
|
331
|
179
|
84.9
|
%
|
890
|
533
|
67.0
|
%
|
|||||||||||
Other
compensation, primarily incentives
|
1,279
|
531
|
140.9
|
%
|
2,999
|
1,574
|
90.5
|
%
|
|||||||||||
Employee
benefits and other
|
1,002
|
385
|
160.3
|
%
|
2,674
|
1,146
|
133.2
|
%
|
|||||||||||
Total
salaries and employee benefits
|
7,576
|
3,410
|
122.2
|
%
|
19,315
|
9,492
|
103.5
|
%
|
|||||||||||
Equipment
and occupancy
|
2,071
|
1,035
|
100.1
|
%
|
5,325
|
2,713
|
96.3
|
%
|
|||||||||||
Marketing
and business development
|
351
|
186
|
88.7
|
%
|
900
|
479
|
87.9
|
%
|
|||||||||||
Postage
and supplies
|
488
|
160
|
205.0
|
%
|
1,118
|
454
|
146.3
|
%
|
|||||||||||
Amortization
of core deposit intangible
|
535
|
-
|
-
|
1,248
|
-
|
-
|
|||||||||||||
Other
noninterest expense:
|
|
|
|
|
|
|
|||||||||||||
Accounting
and auditing
|
143
|
140
|
2.1
|
%
|
616
|
320
|
92.5
|
%
|
|||||||||||
Consultants,
including independent loan review
|
58
|
26
|
123.1
|
%
|
222
|
89
|
149.4
|
%
|
|||||||||||
Legal,
including borrower-related charges
|
47
|
113
|
(58.4
|
)%
|
103
|
205
|
(49.8
|
)%
|
|||||||||||
OCC
exam fees
|
73
|
49
|
49.0
|
%
|
187
|
133
|
40.6
|
%
|
|||||||||||
Directors'
fees
|
52
|
77
|
(32.5
|
)%
|
178
|
175
|
1.7
|
%
|
|||||||||||
Insurance,
including FDIC assessments
|
189
|
82
|
130.5
|
%
|
465
|
235
|
97.9
|
%
|
|||||||||||
Other
noninterest expense
|
1,253
|
243
|
415.6
|
%
|
2,229
|
770
|
189.5
|
%
|
|||||||||||
Total
other noninterest expense
|
1,815
|
730
|
148.6
|
%
|
4,000
|
1,927
|
107.6
|
%
|
|||||||||||
Merger
related expense
|
218
|
-
|
-
|
1,583
|
-
|
-
|
|||||||||||||
Total
noninterest expense
|
$
|
13,054
|
$
|
5,521
|
136.4
|
%
|
$
|
33,489
|
$
|
15,065
|
122.3
|
%
|
|
September
30, 2006
|
December
31, 2005
|
|||||||||||
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||
Commercial
real estate - Mortgage
|
$
|
265,174
|
18.9
|
%
|
$
|
148,102
|
22.9
|
%
|
|||||
Commercial
real estate - Construction
|
152,627
|
10.9
|
%
|
30,295
|
4.7
|
%
|
|||||||
Commercial
- Other
|
554,617
|
39.5
|
%
|
239,129
|
36.9
|
%
|
|||||||
Total
commercial
|
972,418
|
69.2
|
%
|
417,526
|
64.4
|
%
|
|||||||
Consumer
real estate - Mortgage
|
292,206
|
20.8
|
%
|
169,953
|
26.2
|
%
|
|||||||
Consumer
real estate - Construction
|
87,890
|
6.3
|
%
|
37,372
|
5.8
|
%
|
|||||||
Consumer
- Other
|
52,887
|
3.8
|
%
|
23,173
|
3.6
|
%
|
|||||||
Total
consumer
|
432,983
|
30.8
|
%
|
230,498
|
35.6
|
%
|
|||||||
Total
loans
|
$
|
1,405,401
|
100.0
|
%
|
$
|
648,024
|
100.0
|
%
|
|
At
Sept. 30,
|
At
Dec. 31,
|
|||||
|
2006
|
2005
|
|||||
Nonaccrual
loans (1)
|
$
|
3,477
|
$
|
460
|
|||
Restructured
loans
|
-
|
-
|
|||||
Other
real estate owned
|
-
|
-
|
|||||
Total
nonperforming assets
|
3,477
|
460
|
|||||
Accruing
loans past due 90 days or more
|
1,123
|
-
|
|||||
Total
nonperforming assets and accruing loans past due 90 days or
more
|
$
|
4,600
|
$
|
460
|
|||
Total
loans outstanding
|
$
|
1,405,401
|
$
|
648,024
|
|||
Ratio
of nonperforming assets and accruing loans past due 90 days or more
to
total loans outstanding at end of period
|
0.33
|
%
|
0.07
|
%
|
|||
Ratio
of nonperforming assets and accruing loans past 90 days or more to
total
allowance for loan losses at end of period
|
30.32
|
%
|
5.85
|
%
|
|
Nine
months ended
Sept.
30, 2006
|
Year
ended
Dec.
31, 2005
|
|||||
Balance
at beginning of period
|
$
|
7,858
|
$
|
5,650
|
|||
Provision
for loan losses
|
2,680
|
2,152
|
|||||
Allowance
from Cavalry acquisition
|
5,102
|
-
|
|||||
Charged-off
loans:
|
|
|
|||||
Commercial
real estate - Mortgage
|
-
|
-
|
|||||
Commercial
real estate - Construction
|
-
|
-
|
|||||
Commercial
- Other
|
403
|
61
|
|||||
Consumer
real estate - Mortgage
|
24
|
38
|
|||||
Consumer
real estate - Construction
|
-
|
-
|
|||||
Consumer
- Other
|
200
|
109
|
|||||
Total
charged-off loans
|
627
|
208
|
|||||
Recoveries
of previously charged-off loans:
|
|
|
|||||
Commercial
real estate - Mortgage
|
-
|
-
|
|||||
Commercial
real estate - Construction
|
-
|
-
|
|||||
Commercial
- Other
|
(108
|
)
|
(3
|
)
|
|||
Consumer
real estate - Mortgage
|
-
|
(231
|
)
|
||||
Consumer
real estate - Construction
|
-
|
-
|
|||||
Consumer
- Other
|
(51
|
)
|
(30
|
)
|
|||
Total
recoveries of previously charged-off loans
|
(159
|
)
|
(264
|
)
|
|||
Net
charge-offs (recoveries)
|
468
|
(56
|
)
|
||||
Balance
at end of period
|
$
|
15,172
|
$
|
7,858
|
|||
|
|
||||||
Ratio
of allowance for loan losses to total loans outstanding at end of
period
|
1.08
|
%
|
1.21
|
%
|
|||
Ratio
of net charge-offs (recoveries) to average loans outstanding for
the
period
|
0.04
|
%
|
(0.01
|
)%
|
Impact
of SOP 03-03 on Rutherford County’s allowance for loan losses at March 15,
2006
|
Before
Application
of
SOP
03-03
|
Impact
of
Application
SOP
03-03
|
After
Application
of
SOP
03-03
|
|||||||
Allowance
for loan losses
|
$
|
6,129
|
$
|
1,027
|
$
|
5,102
|
||||
Fair
value of Cavalry loans at acquisition date
|
$
|
550,700
|
||||||||
Allowance
for loan losses to fair value of Cavalry loans at acquisition
date
|
1.11
|
%
|
0.93
|
%
|
September
30, 2006
|
December
31, 2005
|
|
Weighted
average life
|
4.72
years
|
4.81
years
|
Weighted
average coupon
|
5.21
%
|
5.24
%
|
Tax
equivalent yield
|
5.00
%
|
4.74
%
|
Modified
duration (*)
|
3.65
%
|
3.71
%
|
|
Sept.
30,
|
Dec.
31,
|
|||||||||||
|
2006
|
Percent
|
2005
|
Percent
|
|||||||||
Core
funding:
|
|
|
|
|
|||||||||
Noninterest-bearing
deposit accounts
|
$
|
306,296
|
17.1
|
%
|
$
|
155,811
|
16.4
|
%
|
|||||
Interest-bearing
demand accounts
|
199,967
|
11.2
|
%
|
72,521
|
7.6
|
%
|
|||||||
Savings
and money market accounts
|
481,684
|
26.9
|
%
|
304,162
|
32.1
|
%
|
|||||||
Time
deposit accounts less than $100,000
|
151,239
|
8.5
|
%
|
31,408
|
3.3
|
%
|
|||||||
Total
core funding
|
1,139,186
|
63.7
|
%
|
563,902
|
59.5
|
%
|
|||||||
Non-core
funding:
|
|
|
|
|
|||||||||
Time
deposit accounts greater than $100,000:
|
|
|
|
|
|||||||||
Public
funds
|
202,503
|
11.3
|
%
|
106,928
|
11.3
|
%
|
|||||||
Brokered
deposits
|
71,518
|
4.0
|
%
|
55,360
|
5.8
|
%
|
|||||||
Other
time deposits
|
172,032
|
9.6
|
%
|
83,961
|
8.9
|
%
|
|||||||
Securities
sold under agreements to repurchase
|
122,354
|
6.8
|
%
|
65,834
|
6.9
|
%
|
|||||||
Federal
Home Loan Bank advances
|
28,739
|
1.6
|
%
|
41,500
|
4.4
|
%
|
|||||||
Subordinated
debt
|
51,548
|
2.9
|
%
|
30,929
|
3.3
|
%
|
|||||||
Total
non-core funding
|
648,694
|
36.3
|
%
|
384,512
|
40.5
|
%
|
|||||||
Totals
|
$
|
1,787,880
|
100.0
|
%
|
$
|
948,414
|
100.0
|
%
|
Amount
|
Interest
Rate
|
||||||
January
26, 2007
|
$
|
2,000
|
3.24
|
||||
September
4, 2007
|
1,000
|
3.95
|
|||||
December
29, 2008
|
10,000
|
4.97
|
|||||
January
27, 2009
|
15,000
|
5.01
|
|||||
April
1, 2020
|
739
|
2.25
|
|||||
Total
|
$
|
28,739
|
|||||
Weighted
average interest rate
|
4.77
|
%
|
(a)
|
Not
applicable
|
(b)
|
Not
applicable
|
(c)
|
The
Company did not repurchase any shares of the Company’s common stock during
the quarter ended September 30, 2006.
|
10.1
|
Cavalry
Bancorp, Inc. 1999 Stock Option Plan
|
10.2
|
Amendment
No. 1 to Cavalry Bancorp, Inc. 1999 Stock Option Plan
|
10.3
|
Amendment
No. 1 to Pinnacle Financial Partners, Inc. 2000 Stock Incentive
Plan
|
10.4
|
Amendment
No. 3 to Pinnacle Financial Partners, Inc. 2004 Equity Incentive
Plan
|
10.5
|
Form
of Nonqualified Stock Option Agreement
|
31.1
|
Certification
pursuant to Rule 13a-14(a)/15d-14(a)
|
31.2
|
Certification
pursuant to Rule 13a-14(a)/15d-14(a)
|
32.1
|
Certification
pursuant to 18 USC Section 1350 - Sarbanes-Oxley Act of 2002
|
32.2
|
Certification
pursuant to 18 USC Section 1350 - Sarbanes-Oxley Act of 2002
|
PINNACLE
FINANCIAL PARTNERS, INC
|
||
/s/
M. Terry Turner
|
||
M.
Terry Turner
|
||
November
8, 2006
|
President
and Chief Executive Officer
|
/s/
Harold R. Carpenter
|
||
Harold
R. Carpenter
|
||
November
8, 2006
|
Chief
Financial Officer
|