(mark
one)
|
|
||
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF
1934
|
||
For
the quarterly period ended June 30, 2007
|
|||
or
|
|||
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OF 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF
1934
|
||
For
the transition period from ____ to ____
|
|||
Commission
File Number: 000-31225
|
,
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 T
|
No £
|
Large
Accelerated Filer £
|
Accelerated
Filer T
|
Non-accelerated
Filer £
|
Yes £
|
No T
|
Page
No.
|
||
2
|
||
23
|
||
43
|
||
43
|
||
44
|
||
44
|
||
44
|
||
44
|
||
44
|
||
44
|
||
45
|
||
46
|
June
30,
2007
|
December
31,
2006
|
|||||||
ASSETS
|
||||||||
Cash
and noninterest-bearing due from banks
|
$ |
51,816,558
|
$ |
43,611,533
|
||||
Interest-bearing
due from banks
|
10,375,896
|
1,041,174
|
||||||
Federal
funds sold
|
43,808,801
|
47,866,143
|
||||||
Cash
and cash equivalents
|
106,001,255
|
92,518,850
|
||||||
Securities
available-for-sale, at fair value
|
312,712,769
|
319,237,428
|
||||||
Securities
held-to-maturity (fair value of $26,211,163 and $26,594,235 at
June 30,
2007 and December 31, 2006, respectively)
|
27,068,467
|
27,256,876
|
||||||
Mortgage
loans held-for-sale
|
4,972,689
|
5,654,381
|
||||||
Loans
|
1,663,029,941
|
1,497,734,824
|
||||||
Less
allowance for loan losses
|
(17,375,408 | ) | (16,117,978 | ) | ||||
Loans,
net
|
1,645,654,533
|
1,481,616,846
|
||||||
Premises
and equipment, net
|
37,854,546
|
36,285,796
|
||||||
Investments
in unconsolidated subsidiaries and other entities
|
17,000,500
|
16,200,684
|
||||||
Accrued
interest receivable
|
11,434,826
|
11,019,173
|
||||||
Goodwill
|
114,287,640
|
114,287,640
|
||||||
Core
deposit intangible, net
|
10,353,498
|
11,385,006
|
||||||
Other
assets
|
27,986,475
|
26,724,183
|
||||||
Total
assets
|
$ |
2,315,327,198
|
$ |
2,142,186,863
|
||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
demand
|
$ |
294,630,589
|
$ |
300,977,814
|
||||
Interest-bearing
demand
|
284,080,394
|
236,674,425
|
||||||
Savings
and money market accounts
|
530,081,179
|
485,935,897
|
||||||
Time
|
688,744,094
|
598,823,167
|
||||||
Total
deposits
|
1,797,536,256
|
1,622,411,303
|
||||||
Securities
sold under agreements to repurchase
|
140,442,583
|
141,015,761
|
||||||
Federal
Home Loan Bank advances
|
26,698,614
|
53,725,833
|
||||||
Federal
funds purchased
|
20,000,000
|
-
|
||||||
Subordinated
debt
|
51,548,000
|
51,548,000
|
||||||
Accrued
interest payable
|
5,960,627
|
4,952,422
|
||||||
Other
liabilities
|
7,946,624
|
12,516,523
|
||||||
Total
liabilities
|
2,050,132,704
|
1,886,169,842
|
||||||
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;
|
|
|
||||||
15,545,581
issued and outstanding at June 30, 2007 and
|
||||||||
15,446,074
issued and outstanding at December 31, 2006
|
15,545,581
|
15,446,074
|
||||||
Additional
paid-in capital
|
212,922,658
|
211,502,516
|
||||||
Retained
earnings
|
42,137,029
|
31,109,324
|
||||||
Accumulated
other comprehensive loss, net of deferred income taxes
|
(5,410,774 | ) | (2,040,893 | ) | ||||
Total
stockholders’ equity
|
265,194,494
|
256,017,021
|
||||||
Total
liabilities and stockholders’ equity
|
$ |
2,315,327,198
|
$ |
2,142,186,863
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Interest
income:
|
||||||||||||||||
Loans,
including fees
|
$ |
30,555,889
|
$ |
24,245,895
|
$ |
59,533,113
|
$ |
37,424,725
|
||||||||
Securities:
|
||||||||||||||||
Taxable
|
3,394,359
|
3,148,459
|
6,740,479
|
6,009,577
|
||||||||||||
Tax-exempt
|
693,417
|
494,849
|
1,362,936
|
895,622
|
||||||||||||
Federal
funds sold and other
|
864,198
|
415,437
|
1,610,577
|
785,112
|
||||||||||||
Total
interest income
|
35,507,863
|
28,304,640
|
69,247,105
|
45,115,036
|
||||||||||||
Interest
expense:
|
||||||||||||||||
Deposits
|
14,456,629
|
9,563,035
|
27,993,892
|
15,413,344
|
||||||||||||
Securities
sold under agreements to repurchase
|
1,890,743
|
678,177
|
3,602,834
|
1,186,965
|
||||||||||||
Federal
funds purchased and other borrowings
|
1,499,436
|
1,168,265
|
2,906,896
|
2,112,761
|
||||||||||||
Total
interest expense
|
17,846,808
|
11,409,477
|
34,503,622
|
18,713,070
|
||||||||||||
Net
interest income
|
17,661,055
|
16,895,163
|
34,743,483
|
26,401,966
|
||||||||||||
Provision
for loan losses
|
899,998
|
1,706,865
|
1,687,964
|
2,094,049
|
||||||||||||
Net
interest income after provision for loan losses
|
16,761,057
|
15,188,298
|
33,055,519
|
24,307,917
|
||||||||||||
Noninterest
income:
|
||||||||||||||||
Service
charges on deposit accounts
|
1,920,085
|
1,356,114
|
3,717,234
|
1,794,384
|
||||||||||||
Investment
sales commissions
|
850,207
|
652,900
|
1,584,767
|
1,166,497
|
||||||||||||
Insurance
sales commissions
|
628,953
|
748,534
|
1,265,915
|
1,013,362
|
||||||||||||
Gain
on loans and loan participations sold, net
|
638,895
|
470,809
|
1,002,201
|
795,355
|
||||||||||||
Trust
fees
|
425,205
|
311,997
|
845,495
|
363,997
|
||||||||||||
Other
noninterest income
|
1,088,172
|
839,771
|
2,161,488
|
1,294,781
|
||||||||||||
Total
noninterest income
|
5,551,517
|
4,380,125
|
10,577,100
|
6,428,376
|
||||||||||||
Noninterest
expense:
|
||||||||||||||||
Compensation
and employee benefits
|
8,794,853
|
7,289,996
|
17,061,354
|
11,738,354
|
||||||||||||
Equipment
and occupancy
|
2,412,528
|
2,081,194
|
4,577,230
|
3,254,547
|
||||||||||||
Marketing
and other business development
|
430,291
|
357,904
|
682,026
|
548,375
|
||||||||||||
Postage
and supplies
|
524,197
|
445,211
|
979,114
|
630,619
|
||||||||||||
Amortization
of core deposit intangible
|
515,755
|
515,755
|
1,031,508
|
647,437
|
||||||||||||
Other
noninterest expense
|
1,806,680
|
1,493,765
|
3,276,764
|
2,250,377
|
||||||||||||
Merger
related expense
|
-
|
921,237
|
-
|
1,364,567
|
||||||||||||
Total
noninterest expense
|
14,484,304
|
13,105,062
|
27,607,996
|
20,434,276
|
||||||||||||
Income
before income taxes
|
7,828,270
|
6,463,361
|
16,024,623
|
10,302,017
|
||||||||||||
Income
tax expense
|
2,402,405
|
2,140,887
|
4,996,918
|
3,367,647
|
||||||||||||
Net
income
|
$ |
5,425,865
|
$ |
4,322,474
|
$ |
11,027,705
|
$ |
6,934,370
|
||||||||
Per
share information:
|
||||||||||||||||
Basic
net income per common share
|
$ |
0.35
|
$ |
0.28
|
$ |
0.71
|
$ |
0.56
|
||||||||
Diluted
net income per common share
|
$ |
0.33
|
$ |
0.26
|
$ |
0.66
|
$ |
0.51
|
||||||||
Weighted
average shares outstanding:
|
||||||||||||||||
Basic
|
15,494,522
|
15,335,754
|
15,464,151
|
12,473,187
|
||||||||||||
Diluted
|
16,664,213
|
16,503,692
|
16,640,977
|
13,640,565
|
Common
Stock
|
||||||||||||||||||||||||||||
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Unearned
Compensation
|
Retained
Earnings
|
Accumulated
Other Comprehensive Loss
|
Total
Stockholders’ Equity
|
||||||||||||||||||||||
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
|
83,667
|
83,667
|
813,688
|
-
|
-
|
-
|
897,355
|
|||||||||||||||||||||
Issuance
of restricted common shares pursuant to 2004 Equity Incentive
Plan
|
4,400
|
4,400
|
(4,400 | ) |
-
|
-
|
-
|
-
|
||||||||||||||||||||
Compensation
expense for restricted stock
|
-
|
-
|
127,218
|
-
|
-
|
-
|
127,218
|
|||||||||||||||||||||
Compensation
expense for stock options
|
-
|
-
|
405,394
|
-
|
-
|
405,394
|
||||||||||||||||||||||
Merger
with Cavalry Bancorp, Inc.
|
6,856,298
|
6,856,298
|
164,231,274
|
-
|
-
|
-
|
171,087,572
|
|||||||||||||||||||||
Dividends
paid to minority interest shareholders of PNFP Properties,
Inc.
|
-
|
-
|
-
|
-
|
(7,813 | ) |
-
|
(7,813 | ) | |||||||||||||||||||
Costs
to register common stock issued in connection with the merger
with Cavalry
Bancorp, Inc.
|
-
|
-
|
(187,609 | ) |
-
|
-
|
-
|
(187,609 | ) | |||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
6,934,370
|
-
|
6,934,370
|
|||||||||||||||||||||
Net
unrealized holding losses on available-for-sale securities, net
of
deferred tax benefit of $2,316,138
|
-
|
-
|
-
|
-
|
-
|
(3,954,393 | ) | (3,954,393 | ) | |||||||||||||||||||
Total
comprehensive income
|
2,979,977
|
|||||||||||||||||||||||||||
Balances,
June 30, 2006
|
15,370,916
|
$ |
15,370,916
|
$ |
210,106,788
|
$ |
-
|
$ |
20,108,848
|
$ | (6,848,033 | ) | $ |
238,738,519
|
||||||||||||||
Balances,
December 31, 2006
|
15,446,074
|
$ |
15,446,074
|
$ |
211,502,516
|
$ |
-
|
$ |
31,109,324
|
$ | (2,040,893 | ) | $ |
256,017,021
|
||||||||||||||
Exercise
of employee common stock options and related tax benefits
|
70,981
|
70,981
|
525,216
|
-
|
-
|
-
|
596,197
|
|||||||||||||||||||||
Issuance
of restricted common shares pursuant to 2004 Equity Incentive
Plan
|
28,526
|
28,526
|
(28,526 | ) |
-
|
-
|
-
|
-
|
||||||||||||||||||||
Compensation
expense for restricted stock
|
-
|
-
|
121,747
|
-
|
-
|
-
|
121,747
|
|||||||||||||||||||||
Compensation
expense for stock options
|
-
|
-
|
801,705
|
-
|
-
|
-
|
801,705
|
|||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
-
|
-
|
-
|
-
|
11,027,705
|
-
|
11,027,705
|
|||||||||||||||||||||
Net
unrealized holding losses on available-for-sale securities, net
of
deferred tax benefit of $1,285,456
|
-
|
-
|
-
|
-
|
-
|
(3,369,881 | ) | (3,369,881 | ) | |||||||||||||||||||
Total
comprehensive income
|
7,657,824
|
|||||||||||||||||||||||||||
Balances,
June 30, 2007
|
15,545,581
|
$ |
15,545,581
|
$ |
212,922,658
|
$ |
-
|
$ |
42,137,029
|
$ | (5,410,774 | ) | $ |
265,194,494
|
||||||||||||||
Six
months ended
June
30,
|
||||||||
2007
|
2006
|
|||||||
Operating
activities:
|
||||||||
Net
income
|
$ |
11,027,705
|
$ |
6,934,370
|
||||
Adjustments
to reconcile net income to net cash provided by (used in) operating
activities:
|
||||||||
Net
amortization of premium on securities
|
256,167
|
407,638
|
||||||
Depreciation
and net amortization
|
1,040,380
|
2,102,657
|
||||||
Provision
for loan losses
|
1,687,964
|
2,094,049
|
||||||
Gains
on loans and loan participations sold, net
|
(1,002,201 | ) | (795,355 | ) | ||||
Stock-based
compensation expense
|
923,452
|
532,612
|
||||||
Deferred
tax benefit from exercise of stock options
|
(328,621 | ) | (1,155,385 | ) | ||||
Excess
tax benefit from stock compensation
|
(94,640 | ) | (74,908 | ) | ||||
Mortgage
loans held for sale:
|
||||||||
Loans
originated
|
(81,770,437 | ) | (61,896,095 | ) | ||||
Loans
sold
|
83,242,466
|
60,374,707
|
||||||
(Increase)
decrease in other assets
|
1,263,176
|
(7,284,404 | ) | |||||
Decrease
in other liabilities
|
(3,561,695 | ) | (7,225,932 | ) | ||||
Net
cash provided by (used in) operating activities
|
12,683,716
|
(5,986,046 | ) | |||||
Investing
activities:
|
||||||||
Activities
in securities available-for-sale:
|
||||||||
Purchases
|
(19,457,551 | ) | (10,779,152 | ) | ||||
Sales
|
-
|
-
|
||||||
Maturities,
prepayments and calls
|
20,479,160
|
17,014,717
|
||||||
1,021,609
|
6,235,565
|
|||||||
Increase
in loans, net
|
(164,558,472 | ) | (159,916,412 | ) | ||||
Purchases
of premises and equipment and software
|
(3,425,182 | ) | (2,852,886 | ) | ||||
Cash
and cash equivalents acquired in merger with Cavalry Bancorp,
Inc., net of acquisition costs
|
-
|
37,420,210
|
||||||
Investments
in unconsolidated subsidiaries and other entities
|
(823,474 | ) |
-
|
|||||
Purchases
of other assets
|
-
|
(519,689 | ) | |||||
Net
cash used in investing activities
|
(167,785,519 | ) | (119,633,212 | ) | ||||
Financing
activities:
|
||||||||
Net
increase in deposits
|
175,588,408
|
166,094,406
|
||||||
Net
increase (decrease) in securities sold under agreements to
repurchase
|
(573,178 | ) |
38,545,678
|
|||||
Net
increase in Federal funds purchased
|
20,000,000
|
-
|
||||||
Advances
from Federal Home Loan Bank:
|
||||||||
Issuances
|
45,000,000
|
31,000,000
|
||||||
Payments
|
(72,027,219 | ) | (56,518,145 | ) | ||||
Exercise
of common stock options
|
501,557
|
822,447
|
||||||
Excess
tax benefit from stock compensation
|
94,640
|
74,908
|
||||||
Costs
incurred in connection with registration of common stock issued
in
merger
|
-
|
(187,609 | ) | |||||
Net
cash provided by financing activities
|
168,584,208
|
179,831,685
|
||||||
Net
increase in cash and cash equivalents
|
13,482,405
|
54,212,427
|
||||||
Cash
and cash equivalents, beginning of period
|
92,518,850
|
58,654,270
|
||||||
Cash
and cash equivalents, end of period
|
$ |
106,001,255
|
$ |
112,866,697
|
Note
1.
|
Summary
of Significant Accounting
Policies
|
For
the six months ended June 30,
|
||||||||
2007
|
2006
|
|||||||
Cash
Payments:
|
||||||||
Interest
|
$ |
35,975,282
|
$ |
12,618,997
|
||||
Income
taxes
|
7,850,000
|
3,600,000
|
||||||
Noncash
Transactions:
|
||||||||
Loans
charged-off to the allowance for loan losses
|
552,180
|
500,158
|
||||||
Loans
foreclosed upon with repossessions transferred to other
assets
|
110,570
|
-
|
||||||
Common
stock and options issued to acquire Cavalry Bancorp, Inc
|
-
|
171,087,572
|
For
the three months ended June 30,
|
For
the six months ended June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Basic
earnings per share calculation:
|
||||||||||||||||
Numerator
- Net income
|
$ |
5,425,865
|
$ |
4,322,474
|
$ |
11,027,705
|
$ |
6,934,370
|
||||||||
Denominator
- Average common shares outstanding
|
15,494,522
|
15,335,754
|
15,464,151
|
12,473,187
|
||||||||||||
Basic
net income per share
|
$ |
0.35
|
$ |
0.28
|
$ |
0.71
|
$ |
0.56
|
||||||||
Diluted
earnings per share calculation:
|
||||||||||||||||
Numerator
- Net income
|
$ |
5,425,865
|
$ |
4,322,474
|
$ |
11,027,705
|
$ |
6,934,370
|
||||||||
Denominator
- Average common shares outstanding
|
15,494,522
|
15,335,754
|
15,464,151
|
12,473,187
|
||||||||||||
Dilutive
shares contingently issuable
|
1,169,691
|
1,167,938
|
1,176,826
|
1,167,378
|
||||||||||||
Average
diluted common shares outstanding
|
16,664,213
|
16,503,692
|
16,640,977
|
13,640,565
|
||||||||||||
Diluted
net income per share
|
$ |
0.33
|
$ |
0.26
|
$ |
0.66
|
$ |
0.51
|
Note
2.
|
Merger
with Cavalry Bancorp, Inc.
|
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
|
114,287,640
|
|||
Core
deposit intangible
|
13,168,236
|
|||
Other
assets
|
42,936,956
|
|||
Total
assets acquired
|
792,887,587
|
|||
Deposits
|
583,992,422
|
|||
Federal
Home Loan Bank advances
|
17,766,661
|
|||
Other
liabilities
|
18,851,261
|
|||
Total
liabilities assumed
|
620,610,344
|
|||
Total
consideration paid for Cavalry
|
$ |
172,277,243
|
Six
months ended June 30,
|
||||||||
2007
|
2006(1)
|
|||||||
Pro
Forma Income Statements:
|
||||||||
Net
interest income
|
$ |
34,737
|
$ |
32,775
|
||||
Provision
for loan losses
|
1,688
|
3,075
|
||||||
Noninterest
income
|
10,577
|
8,825
|
||||||
Noninterest
expense:
|
||||||||
Compensation
|
17,061
|
14,519
|
||||||
Other
noninterest expense
|
10,547
|
9,752
|
||||||
Net
income before taxes
|
16,018
|
14,254
|
||||||
Income
tax expense
|
4,995
|
6,075
|
||||||
Net
income
|
$ |
11,023
|
$ |
8,179
|
||||
Pro
Forma Per Share Information:
|
||||||||
Basic
net income per common share
|
$ |
0.71
|
$ |
0.53
|
||||
Diluted
net income per common share
|
$ |
0.66
|
$ |
0.50
|
||||
|
||||||||
Weighted
average shares outstanding:
|
||||||||
Basic
|
15,494,522
|
15,314,194
|
||||||
Diluted
|
16,664,213
|
16,481,573
|
(1)
|
In
preparation and as a result of the merger during 2006, Cavalry
and
Pinnacle Financial incurred significant merger related charges
of
approximately $10.6 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 six months ended June 30, 2006 by
$6.1
million resulting in net income of $2,080,000 and a basic and
fully
diluted net income per share of $0.14 and $0.13,
respectively.
|
Note
3.
|
Securities
|
June
30, 2007
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
Securities
available-for-sale:
|
||||||||||||||||
U.S.
Treasury securities
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
||||||||
U.S.
government agency securities
|
37,088,067
|
-
|
748,524
|
36,339,543
|
||||||||||||
Mortgage-backed
securities
|
214,963,742
|
33,903
|
6,512,318
|
208,485,327
|
||||||||||||
State
and municipal securities
|
67,633,103
|
1,315
|
1,582,346
|
66,052,072
|
||||||||||||
Corporate
notes and other
|
1,886,814
|
-
|
50,987
|
1,835,827
|
||||||||||||
$ |
321,571,726
|
$ |
35,218
|
$ |
8,894,175
|
$ |
312,712,769
|
|||||||||
Securities
held-to-maturity:
|
||||||||||||||||
U.S.
government agency securities
|
$ |
17,747,406
|
$ |
-
|
$ |
491,431
|
$ |
17,255,975
|
||||||||
State
and municipal securities
|
9,321,061
|
-
|
365,873
|
8,955,188
|
||||||||||||
$ |
27,068,467
|
$ |
-
|
$ |
857,304
|
$ |
26,211,163
|
December
31, 2006
|
||||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
Securities
available-for-sale:
|
||||||||||||||||
U.S.
Treasury securities
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
-
|
||||||||
U.S.
Government agency securities
|
38,076,428
|
9,739
|
457,321
|
37,628,846
|
||||||||||||
Mortgage-backed
securities
|
220,397,093
|
455,203
|
3,028,241
|
217,824,055
|
||||||||||||
State
and municipal securities
|
62,215,952
|
131,412
|
388,124
|
61,959,240
|
||||||||||||
Corporate
notes and other
|
1,887,475
|
-
|
62,188
|
1,825,287
|
||||||||||||
$ |
322,576,948
|
$ |
596,354
|
$ |
3,935,874
|
$ |
319,237,428
|
|||||||||
Securities
held-to-maturity:
|
||||||||||||||||
U.S.
government agency securities
|
$ |
17,747,228
|
$ |
-
|
$ |
378,528
|
$ |
17,368,700
|
||||||||
State
and municipal securities
|
9,509,648
|
-
|
284,113
|
9,225,535
|
||||||||||||
$ |
27,256,876
|
$ |
-
|
$ |
662,641
|
$ |
26,594,235
|
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
June 30, 2007:
|
||||||||||||||||||||||||
U.S.
government agency securities
|
$ |
5,942,800
|
$ |
56,794
|
$ |
47,652,718
|
$ |
1,183,161
|
$ |
53,595,518
|
$ |
1,239,955
|
||||||||||||
Mortgage-backed
securities
|
58,120,871
|
869,050
|
143,303,914
|
5,643,267
|
201,424,785
|
6,512,317
|
||||||||||||||||||
State
and municipal securities
|
34,888,249
|
602,524
|
38,230,860
|
1,345,696
|
73,119,109
|
1,948,220
|
||||||||||||||||||
Corporate
notes and other
|
-
|
-
|
1,835,827
|
50,987
|
1,835,827
|
50,987
|
||||||||||||||||||
Total
temporarily-impaired securities
|
$ |
98,951,920
|
$ |
1,528,368
|
$ |
231,023,319
|
$ |
8,223,111
|
$ |
329,975,239
|
$ |
9,751,479
|
||||||||||||
At
December 31, 2006:
|
||||||||||||||||||||||||
U.S.
government agency securities
|
$ |
-
|
$ |
-
|
$ |
47,988,246
|
$ |
835,849
|
$ |
47,988,246
|
$ |
835,849
|
||||||||||||
Mortgage-backed
securities
|
13,959,080
|
68,965
|
149,496,521
|
2,959,276
|
163,455,601
|
3,028,241
|
||||||||||||||||||
State
and municipal securities
|
13,975,595
|
47,071
|
35,660,379
|
625,166
|
49,635,974
|
672,237
|
||||||||||||||||||
Corporate
notes and other
|
-
|
-
|
1,825,286
|
62,188
|
1,825,286
|
62,188
|
||||||||||||||||||
Total
temporarily-impaired securities
|
$ |
27,934,675
|
$ |
116,036
|
$ |
234,970,432
|
$ |
4,482,479
|
$ |
262,905,107
|
$ |
4,598,515
|
Note
4.
|
Loans
and Allowance for Loan
Losses
|
At
June 30,
|
At
December 31,
|
|||||||
2007
|
2006
|
|||||||
Commercial
real estate – Mortgage
|
$ |
307,757,223
|
$ |
284,301,650
|
||||
Commercial
real estate – Construction
|
177,425,911
|
161,903,496
|
||||||
Commercial
– Other
|
738,866,187
|
608,529,830
|
||||||
Total
Commercial
|
1,224,049,321
|
1,054,734,976
|
||||||
Consumer
real estate – Mortgage
|
288,325,366
|
299,626,769
|
||||||
Consumer
real estate – Construction
|
102,998,286
|
91,193,738
|
||||||
Consumer
– Other
|
47,656,968
|
52,179,341
|
||||||
Total
Consumer
|
438,980,620
|
442,999,848
|
||||||
Total
Loans
|
1,663,029,941
|
1,497,734,824
|
||||||
Allowance
for loan losses
|
(17,375,408 | ) | (16,117,978 | ) | ||||
Loans,
net
|
$ |
1,645,654,533
|
$ |
1,481,616,846
|
June
30, 2007
|
December
31, 2006
|
|||||||
Balance
at beginning of period
|
$ |
16,117,978
|
$ |
7,857,774
|
||||
Charged-off
loans
|
(552,180 | ) | (818,467 | ) | ||||
Recovery
of previously charged-off loans
|
121,646
|
244,343
|
||||||
Allowance
acquired in acquisition of Cavalry (see note 2)
|
-
|
5,102,296
|
||||||
Provision
for loan losses
|
1,687,964
|
3,732,032
|
||||||
Balance
at end of period
|
$ |
17,375,408
|
$ |
16,117,978
|
Note
5.
|
Income
Taxes
|
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Current
tax expense (benefit):
|
||||||||||||||||
Federal
|
$ |
2,738,401
|
$ |
2,738,720
|
$ |
5,131,999
|
$ |
4,212,938
|
||||||||
State
|
126,740
|
200,060
|
193,541
|
310,094
|
||||||||||||
Total
current tax expense (benefit)
|
2,865,141
|
2,938,780
|
5,325,540
|
4,523,032
|
||||||||||||
Deferred
tax expense (benefit):
|
||||||||||||||||
Federal
|
(386,066 | ) | (667,940 | ) | (274,172 | ) | (979,266 | ) | ||||||||
State
|
(76,670 | ) | (129,953 | ) | (54,449 | ) | (176,119 | ) | ||||||||
Total
deferred tax expense (benefit)
|
(462,736 | ) | (797,893 | ) | (328,621 | ) | (1,155,385 | ) | ||||||||
$ |
2,402,405
|
$ |
2,140,887
|
$ |
4,996,919
|
$ |
3,367,647
|
Three
Months Ended
June 30,
|
Six
Months Ended June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Income
taxes at statutory rate
|
$ |
2,739,894
|
$ |
2,262,176
|
$ |
5,608,618
|
$ |
3,605,706
|
||||||||
State
tax expense, net of federal tax effect
|
32,546
|
45,568
|
90,410
|
87,084
|
||||||||||||
Federal
tax credits
|
(90,000 | ) | (75,000 | ) | (180,000 | ) | (150,000 | ) | ||||||||
Tax-exempt
securities
|
(202,123 | ) | (150,639 | ) | (398,730 | ) | (270,612 | ) | ||||||||
Insurance
related items
|
(161,541 | ) | (41,607 | ) | (324,486 | ) | (54,351 | ) | ||||||||
Other
items
|
83,629
|
100,389
|
201,106
|
149,820
|
||||||||||||
Income
tax expense
|
$ |
2,402,405
|
$ |
2,140,887
|
$ |
4,996,918
|
$ |
3,367,647
|
2007
|
2006
|
|||||||
Deferred
tax assets:
|
||||||||
Allowance
for loan losses
|
$ |
7,147,562
|
$ |
6,654,334
|
||||
Loans
|
1,068,495
|
1,337,983
|
||||||
Securities
|
3,317,047
|
1,251,636
|
||||||
Accrued
liability for supplemental retirement agreements
|
1,568,234
|
1,535,688
|
||||||
Deposits
|
405,848
|
585,568
|
||||||
Other
deferred tax assets
|
349,517
|
340,296
|
||||||
13,856,703
|
11,705,505
|
|||||||
Deferred
tax liabilities:
|
||||||||
Depreciation
and amortization
|
1,511,134
|
1,563,078
|
||||||
Core
deposit intangible asset
|
4,068,467
|
4,473,076
|
||||||
FHLB
dividends
|
837,744
|
770,156
|
||||||
Other
deferred tax liabilities
|
586,771
|
440,642
|
||||||
7,004,116
|
7,246,952
|
|||||||
Net
deferred tax assets
|
$ |
6,852,587
|
$ |
4,458,553
|
Note
6.
|
Commitments
and Contingent Liabilities
|
Commitments
to extend credit
|
$ 542,953,929
|
||
Standby
letters of credit
|
62,979,736
|
Note
7.
|
Stock
Option Plan and Restricted
Shares
|
Number
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Contractual
Remaining
Term
(in
years)
|
Aggregate
Intrinsic
Value
(1)
(000’s)
|
|||||||||||||
Outstanding
at December 31, 2006
|
1,658,459
|
$ |
12.93
|
6.4
|
$ |
31,848
|
||||||||||
Granted
|
327,843
|
30.98
|
||||||||||||||
Exercised
|
(70,981 | ) |
7.07
|
|||||||||||||
Forfeited
|
(13,188 | ) |
29.43
|
|||||||||||||
Outstanding
at June 30, 2007
|
1,902,133
|
$ |
17.12
|
6.6
|
$ |
24,262
|
||||||||||
Outstanding
and expected to vest as of June 30,
2007
|
1,859,493
|
$ |
16.90
|
6.6
|
$ |
24,095
|
||||||||||
Options
exercisable at June 30, 2007
|
1,028,479
|
$ |
8.80
|
4.9
|
$ |
21,149
|
(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 $29.36 and $33.18 per common share
for the
approximately 1.3 million and 1.6 million options that were in-the-money
at June 30, 2007 and December 31, 2006,
respectively.
|
Three
months ended June 30, 2007
|
||||||||||||||||
Awards
granted with the
intention to be classified as
incentive stock options
|
Non-qualified
stock option
awards
|
Total
|
Three
months ended
June 30,
2006
|
|||||||||||||
Stock-based
compensation expense
|
$ |
116,000
|
$ |
341,000
|
$ |
457,000
|
$ |
218,000
|
||||||||
Deferred
income tax benefit
|
-
|
134,000
|
134,000
|
8,000
|
||||||||||||
Impact
of stock-based compensation expense after deferred income tax
benefit
|
$ |
116,000
|
$ |
207,000
|
$ |
323,000
|
$ |
210,000
|
||||||||
Impact
on earnings per share:
|
||||||||||||||||
Basic
|
$ |
0.01
|
$ |
0.01
|
$ |
0.02
|
$ |
0.01
|
||||||||
Fully
diluted
|
$ |
0.01
|
$ |
0.01
|
$ |
0.02
|
$ |
0.01
|
Six
months ended June 30, 2007
|
||||||||||||||||
Awards
granted with the
intention to be classified as
incentive stock options
|
Non-qualified
stock option
awards
|
Total
|
Six
months ended
June 30, 2006
|
|||||||||||||
Stock-based
compensation expense
|
$ |
233,000
|
$ |
569,000
|
$ |
801,000
|
$ |
405,000
|
||||||||
Deferred
income tax benefit
|
-
|
223,000
|
223,000
|
42,000
|
||||||||||||
Impact
of stock-based compensation expense after deferred income tax
benefit
|
$ |
233,000
|
$ |
346,000
|
$ |
578,000
|
$ |
363,000
|
||||||||
Impact
on earnings per share:
|
||||||||||||||||
Basic
|
$ |
0.02
|
$ |
0.02
|
$ |
0.04
|
$ |
0.03
|
||||||||
Fully
diluted
|
$ |
0.01
|
$ |
0.02
|
$ |
0.03
|
$ |
0.03
|
2007
|
2006
|
||
Risk
free interest rate
|
4.63%
|
4.48%
|
|
Expected
life of options
|
6.50
years
|
6.50
years
|
|
Expected
dividend yield
|
0.00%
|
0.00%
|
|
Expected
volatility
|
20.8%
|
23.6%
|
|
Weighted
average fair value
|
$10.13
|
$9.61
|
Executive
Management Awards
|
Board
of Director Awards
|
|||||||||||||||||||||||
(number
of share awards)
|
Vested
|
Unvested
|
Totals
|
Vested
|
Unvested
|
Totals
|
||||||||||||||||||
Balances
at December 31, 2006
|
20,769
|
17,500
|
38,269
|
-
|
4,000
|
4,000
|
||||||||||||||||||
Granted
|
-
|
8,431
|
8,431
|
-
|
3,230
|
3,230
|
||||||||||||||||||
Forfeited
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Vested
|
12,755
|
(12,755 | ) |
-
|
4,000
|
(4,000 | ) |
-
|
||||||||||||||||
Balances
at June 30, 2007
|
33,524
|
13,176
|
46,700
|
4,000
|
3,230
|
7,230
|
Three
months
ended
June 30,
|
Six
months
ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Stock-based
compensation expense
|
$ |
16,000
|
$ |
34,000
|
$ |
122,000
|
$ |
127,000
|
||||||||
Income
tax benefit
|
6,000
|
13,000
|
47,000
|
50,000
|
||||||||||||
Impact
of stock-based compensation expense, net of income tax
benefit
|
$ |
10,000
|
$ |
21,000
|
$ |
75,000
|
$ |
77,000
|
||||||||
Impact
on earnings per share:
|
||||||||||||||||
Basic
|
$ |
0.00
|
$ |
0.00
|
$ |
0.00
|
$ |
0.01
|
||||||||
Fully
diluted
|
$ |
0.00
|
$ |
0.00
|
$ |
0.00
|
$ |
0.01
|
Note
8.
|
Regulatory
Matters
|
Actual
|
Minimum
Capital
Requirement
|
Minimum
To
Be Well-Capitalized
Under
Prompt
Corrective
Action
Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
At
June 30, 2007
|
||||||||||||||||||||||||
Total
capital to risk weighted assets:
|
||||||||||||||||||||||||
Pinnacle
Financial
|
$ |
217,400
|
11.3 | % | $ |
153,707
|
8.0 | % |
not
applicable
|
|||||||||||||||
Pinnacle
National
|
$ |
194,373
|
10.1 | % | $ |
153,431
|
8.0 | % | $ |
191,754
|
10.0 | % | ||||||||||||
Tier
I capital to risk weighted assets:
|
||||||||||||||||||||||||
Pinnacle
Financial
|
$ |
200,025
|
10.4 | % | $ |
76,854
|
4.0 | % |
not
applicable
|
|||||||||||||||
Pinnacle
National
|
$ |
176,988
|
9.2 | % | $ |
76,715
|
4.0 | % | $ |
115,052
|
6.0 | % | ||||||||||||
Tier
I capital to average assets (*):
|
||||||||||||||||||||||||
Pinnacle
Financial
|
$ |
200,025
|
9.5 | % | $ |
84,342
|
4.0 | % |
not
applicable
|
|||||||||||||||
Pinnacle
National
|
$ |
176,988
|
8.4 | % | $ |
84,381
|
4.0 | % | $ |
105,477
|
5.0 | % | ||||||||||||
At
December 31, 2006
|
||||||||||||||||||||||||
Total
capital to risk weighted assets:
|
||||||||||||||||||||||||
Pinnacle
Financial
|
$ |
202,881
|
11.8 | % | $ |
137,638
|
8.0 | % |
not
applicable
|
|||||||||||||||
Pinnacle
National
|
$ |
175,159
|
10.2 | % | $ |
137,340
|
8.0 | % | $ |
171,676
|
10.0 | % | ||||||||||||
Tier
I capital to risk weighted assets:
|
||||||||||||||||||||||||
Pinnacle
Financial
|
$ |
186,763
|
10.9 | % | $ |
68,819
|
4.0 | % |
not
applicable
|
|||||||||||||||
Pinnacle
National
|
$ |
159,031
|
9.3 | % | $ |
68,670
|
4.0 | % | $ |
103,005
|
6.0 | % | ||||||||||||
Tier
I capital to average assets (*):
|
||||||||||||||||||||||||
Pinnacle
Financial
|
$ |
186,763
|
9.5 | % | $ |
79,021
|
4.0 | % |
not
applicable
|
|||||||||||||||
Pinnacle
National
|
$ |
159,031
|
8.1 | % | $ |
79,056
|
4.0 | % | $ |
98,820
|
5.0 | % |
|
Note
9.
|
Business
Segment Information
|
Commercial
Banking
|
Trust
and Investment Services
|
Mortgage
Origination
|
Insurance
Services
|
Total
Company
|
||||||||||||||||
For
the three months ended June 30, 2007:
|
||||||||||||||||||||
Net
interest income
|
$ |
17,661
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
17,661
|
||||||||||
Provision
for loan losses
|
900
|
-
|
-
|
-
|
900
|
|||||||||||||||
Noninterest
income
|
2,851
|
1,122
|
949
|
630
|
5,552
|
|||||||||||||||
Noninterest
expense
|
12,558
|
816
|
643
|
467
|
14,484
|
|||||||||||||||
Income
tax expense
|
2,099
|
120
|
120
|
64
|
2,403
|
|||||||||||||||
Net
income
|
$ |
4,955
|
$ |
186
|
$ |
186
|
$ |
99
|
$ |
5,426
|
||||||||||
For
the three months ended June 30, 2006:
|
||||||||||||||||||||
Net
interest income
|
$ |
16,898
|
$ |
-
|
$ |
-
|
$ | (3 | ) | $ |
16,895
|
|||||||||
Provision
for loan losses
|
1,707
|
-
|
-
|
-
|
1,707
|
|||||||||||||||
Noninterest
income
|
2,357
|
941
|
453
|
629
|
4,380
|
|||||||||||||||
Noninterest
expense
|
11,776
|
568
|
317
|
444
|
13,105
|
|||||||||||||||
Income
tax expense
|
1,854
|
148
|
55
|
84
|
2,141
|
|||||||||||||||
Net
income
|
$ |
3,918
|
$ |
225
|
$ |
81
|
$ |
98
|
$ |
4,322
|
Commercial
Banking
|
Trust
and Investment Services
|
Mortgage
Origination
|
Insurance
Services
|
Total
Company
|
||||||||||||||||
For
the six months ended June 30, 2007:
|
||||||||||||||||||||
Net
interest income
|
$ |
34,743
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
34,743
|
||||||||||
Provision
for loan losses
|
1,688
|
-
|
-
|
-
|
1,688
|
|||||||||||||||
Noninterest
income
|
5,498
|
2,236
|
1,570
|
1,273
|
10,577
|
|||||||||||||||
Noninterest
expense
|
23,955
|
1,617
|
1,130
|
906
|
27,608
|
|||||||||||||||
Income
tax expense
|
4,433
|
243
|
173
|
147
|
4,996
|
|||||||||||||||
Net
income
|
$ |
10,165
|
$ |
376
|
$ |
267
|
$ |
220
|
$ |
11,028
|
||||||||||
For
the six months ended June 30, 2006:
|
||||||||||||||||||||
Net
interest income
|
$ |
26,402
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
26,402
|
||||||||||
Provision
for loan losses
|
2,094
|
-
|
-
|
-
|
2,094
|
|||||||||||||||
Noninterest
income
|
3,423
|
1,370
|
741
|
894
|
6,428
|
|||||||||||||||
Noninterest
expense
|
18,492
|
940
|
482
|
520
|
20,434
|
|||||||||||||||
Income
tax expense
|
2,937
|
169
|
102
|
160
|
3,368
|
|||||||||||||||
Net
income
|
$ |
6,302
|
$ |
261
|
$ |
157
|
$ |
214
|
$ |
6,934
|
||||||||||
As
of June 30, 2007:
|
||||||||||||||||||||
End
of period assets
|
$ |
2,306,150
|
$ |
-
|
$ |
4,973
|
$ |
4,204
|
$ |
2,315,327
|
||||||||||
As
of December 31, 2006:
|
||||||||||||||||||||
End
of period assets
|
$ |
2,132,615
|
$ |
-
|
$ |
5,654
|
$ |
3,918
|
$ |
2,142,187
|
Note
10.
|
Investments
in Unconsolidated Subsidiaries and Other
Entities
|
Combined
Summary Balance
Sheets
|
June
30, 2007
|
December
31, 2006
|
|||||||
Asset–
Investment in subordinated debentures issued by Pinnacle
Financial
|
$ |
51,548
|
$ |
51,548
|
||||
Liabilities
|
$ |
-
|
$ |
-
|
||||
Stockholder’s
equity– Trust preferred securities
|
50,000
|
50,000
|
||||||
Common
securities (100% owned by Pinnacle Financial)
|
1,548
|
1,548
|
||||||
Total
stockholder’s equity
|
51,548
|
51,548
|
||||||
Total
liabilities and stockholder’s equity
|
$ |
51,548
|
$ |
51,548
|
Combined
Summary Income
Statements
|
Six
months ended June 30,
|
||||||||
2007
|
2006
|
|||||||
Income
– Interest income from subordinated debentures issued
by
Pinnacle Financial
|
$ |
1,754
|
$ |
1,001
|
||||
Net
Income
|
$ |
1,754
|
$ |
1,001
|
Combined
Summary Statements of Stockholder’s
Equity
|
Trust
Preferred
Securities
|
Total
Common
Stock
|
Retained
Earnings
|
Stockholder’s
Equity
|
|||||||||||||
Balances,
December 31, 2005
|
$ |
30,000
|
$ |
929
|
$ |
-
|
$ |
30,929
|
||||||||
Net
income
|
-
|
-
|
1,001
|
1,001
|
||||||||||||
Dividends:
|
||||||||||||||||
Trust
preferred securities
|
-
|
-
|
(986 | ) | (986 | ) | ||||||||||
Common
paid to Pinnacle Financial
|
-
|
-
|
(15 | ) | (15 | ) | ||||||||||
Balances,
June 30, 2006
|
$ |
30,000
|
$ |
929
|
$ |
-
|
$ |
30,929
|
||||||||
Balances,
December 31, 2006
|
$ |
50,000
|
$ |
1,548
|
$ |
-
|
$ |
51,548
|
||||||||
Net
income
|
-
|
-
|
1,754
|
1,754
|
||||||||||||
Issuance
of trust preferred securities
|
||||||||||||||||
Dividends:
|
||||||||||||||||
Trust
preferred securities
|
-
|
-
|
(1,721 | ) | (1,721 | ) | ||||||||||
Common
paid to Pinnacle Financial
|
-
|
-
|
(33 | ) | (33 | ) | ||||||||||
Balances,
June 30, 2007
|
$ |
50,000
|
$ |
1,548
|
$ |
-
|
$ |
51,548
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Cash
and cash equivalents
|
$ |
37,420
|
||
Investment
securities – available-for-sale
|
39,476
|
|||
Loans,
net of an allowance for loan losses of $5,102
|
545,598
|
|||
Goodwill
|
114,288
|
|||
Core
deposit intangible
|
13,168
|
|||
Other
assets
|
42,937
|
|||
Total
assets acquired
|
792,887
|
|||
Deposits
|
583,992
|
|||
Federal
Home Loan Bank advances
|
17,767
|
|||
Other
liabilities
|
18,851
|
|||
Total
liabilities assumed
|
620,610
|
|||
Total
consideration paid for Cavalry
|
$ |
172,277
|
|
Three
months ended
|
2007-2006
|
Six
months ended
|
2007-2006
|
||||||||||||||||||||
|
June
30,
|
Percent
|
June
30,
|
Percent
|
||||||||||||||||||||
|
2007
|
2006
|
Increase(decrease)
|
2007
|
2006
|
Increase(decrease)
|
||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||
Interest
income
|
$ |
35,508
|
$ |
28,305
|
25.4 | % | $ |
69,247
|
$ |
45,115
|
53.5 | % | ||||||||||||
Interest
expense
|
17,847
|
11,410
|
56.4 | % |
34,504
|
18,713
|
84.4 | % | ||||||||||||||||
Net
interest income
|
17,661
|
16,895
|
4.5 | % |
34,743
|
26,402
|
31.6 | % | ||||||||||||||||
Provision
for loan losses
|
900
|
1,707
|
(47.3 | %) |
1,688
|
2,094
|
(19.4 | %) | ||||||||||||||||
Net
interest income after provision for loan losses
|
16,761
|
15,188
|
10.4 | % |
33,055
|
24,308
|
36.0 | % | ||||||||||||||||
Noninterest
income
|
5,551
|
4,380
|
26.7 | % |
10,578
|
6,428
|
64.6 | % | ||||||||||||||||
Noninterest
expense:
|
||||||||||||||||||||||||
Merger
related expense
|
-
|
921
|
(100.0 | %) |
-
|
1,365
|
(100.0 | %) | ||||||||||||||||
Other
noninterest expense
|
14,484
|
12,184
|
18.9 | % |
27,608
|
19,069
|
44.8 | % | ||||||||||||||||
Net
income before income taxes
|
7,828
|
6,463
|
21.1 | % |
16,025
|
10,302
|
55.6 | % | ||||||||||||||||
Income
tax expense
|
2,402
|
2,141
|
12.2 | % |
4,997
|
3,368
|
48.4 | % | ||||||||||||||||
Net
income
|
$ |
5,426
|
$ |
4,322
|
25.5 | % | $ |
11,028
|
$ |
6,934
|
59.0 | % |
(dollars
in thousands)
|
Three
months ended
June
30, 2007
|
Three
months ended
June
30, 2006
|
||||||||||||||||||||||
|
Average
Balances
|
Interest
|
Rates/
Yields
|
Average
Balances
|
Interest
|
Rates/
Yields
|
||||||||||||||||||
Interest-earning
assets:
|
|
|
|
|
|
|
||||||||||||||||||
Loans
|
$ |
1,598,967
|
$ |
30,556
|
7.66 | % | $ |
1,328,121
|
$ |
24,246
|
7.32 | % | ||||||||||||
Securities:
|
||||||||||||||||||||||||
Taxable
|
272,024
|
3,394
|
5.00 | % |
248,682
|
3,148
|
5.08 | % | ||||||||||||||||
Tax-exempt
(1)
|
75,057
|
693
|
4.89 | % |
50,227
|
495
|
5.21 | % | ||||||||||||||||
Federal
funds sold and other
|
58,836
|
865
|
6.08 | % |
24,932
|
416
|
7.09 | % | ||||||||||||||||
Total
interest-earning assets
|
2,004,884
|
35,508
|
7.15 | % |
1,651,962
|
28,305
|
6.92 | % | ||||||||||||||||
Nonearning
assets
|
224,343
|
226,950
|
||||||||||||||||||||||
Total
assets
|
$ |
2,229,227
|
$ |
1,878,912
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
Interest
bearing deposits
|
||||||||||||||||||||||||
Interest
checking
|
$ |
254,171
|
$ |
2,147
|
3.39 | % | $ |
190,055
|
$ |
848
|
1.79 | % | ||||||||||||
Savings
and money market
|
501,373
|
4,239
|
3.39 | % |
434,094
|
3,234
|
2.99 | % | ||||||||||||||||
Certificates
of deposit
|
646,251
|
8,071
|
5.01 | % |
546,715
|
5,481
|
4.02 | % | ||||||||||||||||
Total
interest bearing deposits
|
1,401,795
|
14,457
|
4.14 | % |
1,170,864
|
9,563
|
3.28 | % | ||||||||||||||||
Securities
sold under agreements to repurchase
|
172,872
|
1,891
|
4.39 | % |
68,079
|
678
|
4.00 | % | ||||||||||||||||
Federal
Home Loan Bank advances and other borrowings
|
47,998
|
621
|
5.19 | % |
48,113
|
653
|
5.44 | % | ||||||||||||||||
Subordinated
debt
|
51,548
|
878
|
6.84 | % |
30,929
|
516
|
6.69 | % | ||||||||||||||||
Total
interest-bearing liabilities
|
1,674,213
|
17,847
|
4.28 | % |
1,317,985
|
11,410
|
3.47 | % | ||||||||||||||||
Noninterest-bearing
deposits
|
276,241
|
-
|
-
|
311,286
|
-
|
-
|
||||||||||||||||||
Total
deposits and interest-bearing liabilities
|
1,950,454
|
17,847
|
3.67 | % |
1,629,271
|
11,410
|
2.81 | % | ||||||||||||||||
Other
liabilities
|
14,718
|
15,241
|
||||||||||||||||||||||
Stockholders'
equity
|
264,055
|
234,400
|
||||||||||||||||||||||
$ |
2,229,227
|
$ |
1,878,912
|
|||||||||||||||||||||
Net
interest
income
|
$ |
17,661
|
$ |
16,895
|
||||||||||||||||||||
Net
interest spread (2)
|
2.88 | % | 3.45 | % | ||||||||||||||||||||
Net
interest margin (3)
|
3.58 | % | 4.17 | % |
(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
calculated
on a tax-equivalent basis divided by average interest-earning
assets for
the period.
|
(dollars
in thousands)
|
Six
months ended
June
30, 2007
|
Six
months ended
June
30, 2006
|
||||||||||||||||||||||
|
Average
Balances
|
Interest
|
Rates/
Yields
|
Average
Balances
|
Interest
|
Rates/
Yields
|
||||||||||||||||||
Interest-earning
assets:
|
|
|
|
|
|
|
||||||||||||||||||
Loans
|
$ |
1,564,869
|
$ |
59,533
|
7.67 | % | $ |
1,044,724
|
$ |
37,425
|
7.22 | % | ||||||||||||
Securities:
|
||||||||||||||||||||||||
Taxable
|
272,346
|
6,740
|
4.99 | % |
245,216
|
6,009
|
4.94 | % | ||||||||||||||||
Tax-exempt
(1)
|
74,009
|
1,363
|
4.90 | % |
47,399
|
896
|
5.04 | % | ||||||||||||||||
Federal
funds sold and other
|
57,367
|
1,611
|
5.66 | % |
26,085
|
785
|
6.45 | % | ||||||||||||||||
Total
interest-earning assets
|
1,968,591
|
69,247
|
7.14 | % |
1,363,424
|
45,115
|
6.72 | % | ||||||||||||||||
Nonearning
assets
|
220,987
|
152,944
|
||||||||||||||||||||||
Total
assets
|
$ |
2,189,578
|
$ |
1,516,368
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
Interest
bearing deposits
|
||||||||||||||||||||||||
Interest
checking
|
$ |
249,425
|
$ |
4,104
|
3.32 | % | $ |
147,089
|
$ |
1,330
|
1.82 | % | ||||||||||||
Savings
and money market
|
498,625
|
8,364
|
3.38 | % |
389,473
|
5,574
|
2.89 | % | ||||||||||||||||
Certificates
of deposit
|
635,172
|
15,526
|
4.93 | % |
430,854
|
8,509
|
3.98 | % | ||||||||||||||||
Total
interest bearing deposits
|
1,383,222
|
27,994
|
4.08 | % |
967,416
|
15,413
|
3.21 | % | ||||||||||||||||
Securities
sold under agreements to repurchase
|
165,026
|
3,603
|
4.40 | % |
63,901
|
1,187
|
3.75 | % | ||||||||||||||||
Federal
Home Loan Bank advances and other borrowings
|
44,120
|
1,152
|
5.04 | % |
47,412
|
1,112
|
4.73 | % | ||||||||||||||||
Subordinated
debt
|
51,548
|
1,755
|
6.86 | % |
30,929
|
1,001
|
6.53 | % | ||||||||||||||||
Total
interest-bearing liabilities
|
1,643,916
|
34,504
|
4.23 | % |
1,109,658
|
18,713
|
3.40 | % | ||||||||||||||||
Noninterest-bearing
deposits
|
273,052
|
-
|
-
|
231,767
|
-
|
-
|
||||||||||||||||||
Total
deposits and interest-bearing liabilities
|
1,916,968
|
34,504
|
3.63 | % |
1,341,425
|
18,713
|
2.81 | % | ||||||||||||||||
Other
liabilities
|
10,849
|
9,976
|
||||||||||||||||||||||
Stockholders'
equity
|
261,761
|
164,967
|
||||||||||||||||||||||
$ |
2,189,578
|
$ |
1,516,368
|
|||||||||||||||||||||
Net
interest
income
|
$ |
34,743
|
$ |
26,402
|
||||||||||||||||||||
Net
interest spread (2)
|
2.91 | % | 3.32 | % | ||||||||||||||||||||
Net
interest margin (3)
|
3.61 | % | 3.97 | % |
(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
calculated
on a tax-equivalent basis divided by average interest-earning
assets for
the period.
|
|
·
|
Our
loan yields increased between 2007 and 2006. The pricing of a
large portion of our loan portfolio (approximately 45.4% of total
loans at
June 30, 2007 compared to 47.0% at June 30, 2006) is tied to
our prime
rate. Our weighted average prime rate for the first six months
of 2007 was 8.25% compared to 7.66% in
2006.
|
|
·
|
We
have been able to grow our funding base significantly. For
asset/liability management purposes in 2007 and 2006, we elected
to
allocate a greater proportion of such funds to our loan portfolio
versus
our securities and shorter-term investment portfolio. For the
first six months of 2007, average loan balances were 71.5% of
total assets
compared to 68.9% in 2006. Loans generally have higher yields
than do securities and other shorter-term investments. This
change in allocation contributed to the increase in the overall
total
interest earning asset yields between the two
periods.
|
|
·
|
During
2007, overall deposit
rates were higher than those rates for the comparable period
in
2006. 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 2007, as was the case with
our prime lending rate, short-term rates were higher than in
2006. We also monitor the pricing of similar products by
our primary competitors. The changes in the short-term rate
environment and the pricing of our primary competitors required
us to
increase these rates in 2007 compared to the previous periods
which
resulted in increased rates paid on interest bearing
liabilities.
|
|
·
|
During
2007, 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 61.9% of our total funding
compared
to 54.9% in 2006. These funding sources generally have lower
rates than do other funding sources, such as certificates of
deposit and
other borrowings and, as a result, these products served to offset
some of
the increase in funding costs in
2007.
|
|
·
|
Also
impacting the net interest margin during 2007 compared to 2006
was pricing
of our floating rate subordinated indebtedness which comprises
approximately $31 million of the $52 million of subordinated
indebtedness
as of June 30, 2007. 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 2007, the short-term interest rate
environment was higher than previous years, and, as a result,
the pricing
for this funding source was higher in
2007.
|
Three
months ended
|
2007-2006
|
Six
months ended
|
2007-2006
|
|||||||||||||||||||||
|
June
30,
|
Percent
|
June
30,
|
Percent
|
||||||||||||||||||||
|
2007
|
2006
|
Increase
(decrease)
|
2007
|
2006
|
Increase
(decrease)
|
||||||||||||||||||
Noninterest
income:
|
|
|
|
|
||||||||||||||||||||
Service
charges on deposit accounts
|
$ |
1,920
|
$ |
1,356
|
41.6 | % | $ |
3,717
|
$ |
1,794
|
107.2 | % | ||||||||||||
Investment
sales commissions
|
850
|
653
|
30.2 | % |
1,585
|
1,166
|
35.9 | % | ||||||||||||||||
Gains
on sales of loans and loan participations, net:
|
||||||||||||||||||||||||
Fees
from the origination and sale of mortgage loans, net of sales
commissions
|
472
|
422
|
11.8 | % |
790
|
673
|
17.4 | % | ||||||||||||||||
Gains
on loan participations sold, net
|
167
|
49
|
240.8 | % |
212
|
122
|
73.8 | % | ||||||||||||||||
Insurance
sales commissions
|
629
|
749
|
(16.0 | %) |
1,266
|
1,013
|
25.0 | % | ||||||||||||||||
Gain
on sale of investment securities, net
|
-
|
-
|
0.0 | % |
-
|
-
|
0.0 | % | ||||||||||||||||
Trust
fees
|
425
|
312
|
36.2 | % |
845
|
364
|
132.1 | % | ||||||||||||||||
Other
noninterest income:
|
||||||||||||||||||||||||
Letters
of credit fees
|
42
|
88
|
(52.3 | %) |
102
|
221
|
(53.8 | %) | ||||||||||||||||
Bank-owned
life insurance
|
133
|
119
|
11.8 | % |
271
|
155
|
74.8 | % | ||||||||||||||||
ATM,
check card and merchant card fees
|
672
|
466
|
44.2 | % |
1,309
|
500
|
161.8 | % | ||||||||||||||||
Equity
in earnings of Collateral Plus, LLC
|
78
|
22
|
254.5 | % |
89
|
59
|
50.8 | % | ||||||||||||||||
Other
noninterest income
|
163
|
144
|
13.2 | % |
392
|
361
|
8.6 | % | ||||||||||||||||
Total
noninterest income
|
$ |
5,551
|
$ |
4,380
|
26.7 | % | $ |
10,578
|
$ |
6,428
|
64.6 | % |
|
Three
months ended
|
2007-2006
|
Six
months ended
|
2007-2006
|
||||||||||||||||||||
|
June
30,
|
Percent
|
June
30,
|
Percent
|
||||||||||||||||||||
|
2007
|
2006
|
Increase
(decrease)
|
2007
|
2006
|
Increase
(decrease)
|
||||||||||||||||||
Noninterest
expense:
|
|
|
|
|
||||||||||||||||||||
Compensation
and employee benefits:
|
|
|
|
|
||||||||||||||||||||
Salaries
|
$ |
5,758
|
$ |
4,798
|
20.0 | % | $ |
11,173
|
$ |
7,788
|
43.5 | % | ||||||||||||
Commissions
|
400
|
325
|
23.1 | % |
790
|
559
|
41.3 | % | ||||||||||||||||
Other
compensation, primarily incentives
|
1,121
|
1,100
|
1.9 | % |
2,236
|
1,720
|
30.0 | % | ||||||||||||||||
Employee
benefits and other
|
1,516
|
1,067
|
42.1 | % |
2,862
|
1,671
|
71.3 | % | ||||||||||||||||
Total
compensation and employee benefits
|
8,795
|
7,290
|
20.6 | % |
17,061
|
11,738
|
45.3 | % | ||||||||||||||||
Equipment
and occupancy
|
2,413
|
2,081
|
16.0 | % |
4,577
|
3,254
|
40.7 | % | ||||||||||||||||
Marketing
and business development
|
430
|
358
|
20.1 | % |
682
|
548
|
24.5 | % | ||||||||||||||||
Postage
and supplies
|
524
|
445
|
17.8 | % |
979
|
631
|
55.2 | % | ||||||||||||||||
Amortization
of core deposit intangible
|
516
|
516
|
-
|
1,032
|
647
|
59.5 | % | |||||||||||||||||
Other
noninterest expense:
|
||||||||||||||||||||||||
Accounting
and auditing
|
250
|
301
|
(16.9 | %) |
421
|
473
|
(11.0 | %) | ||||||||||||||||
Consultants,
including independent loan review
|
123
|
133
|
(7.5 | %) |
217
|
164
|
32.3 | % | ||||||||||||||||
Legal,
including borrower-related charges
|
90
|
85
|
5.9 | % |
223
|
122
|
82.8 | % | ||||||||||||||||
OCC
exam fees
|
104
|
58
|
79.3 | % |
151
|
114
|
32.5 | % | ||||||||||||||||
Directors'
fees
|
57
|
70
|
(18.6 | %) |
117
|
126
|
(7.1 | %) | ||||||||||||||||
Insurance,
including FDIC assessments
|
308
|
175
|
76.0 | % |
592
|
276
|
114.5 | % | ||||||||||||||||
Charitable
contributions
|
190
|
107
|
77.6 | % |
97
|
73
|
32.9 | % | ||||||||||||||||
Other
professional fees
|
78
|
37
|
110.8 | % |
45
|
36
|
25.0 | % | ||||||||||||||||
Other
noninterest expense
|
606
|
528
|
44.3 | % |
1414
|
867
|
63.1 | % | ||||||||||||||||
Total
other noninterest expense
|
1,806
|
1,494
|
20.9 | % |
3,277
|
2,251
|
45.6 | % | ||||||||||||||||
Merger
related expense
|
-
|
921
|
(100.0 | %) |
-
|
1,365
|
(100.0 | %) | ||||||||||||||||
Total
noninterest expense
|
$ |
14,484
|
$ |
13,105
|
10.5 | % | $ |
27,608
|
$ |
20,434
|
35.1 | % |
|
June
30, 2007
|
December
31, 2006
|
||||||||||||||
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||
Commercial
real estate - Mortgage
|
$ |
307,757
|
18.5 | % | $ |
284,302
|
19.0 | % | ||||||||
Commercial
real estate - Construction
|
177,426
|
10.7 | % |
161,903
|
10.8 | % | ||||||||||
Commercial
- Other
|
738,866
|
44.4 | % |
608,530
|
40.6 | % | ||||||||||
Total
commercial
|
1,224,049
|
73.6 | % |
1,054,735
|
70.4 | % | ||||||||||
Consumer
real estate - Mortgage
|
288,325
|
17.3 | % |
299,627
|
20.0 | % | ||||||||||
Consumer
real estate - Construction
|
102,998
|
6.2 | % |
91,194
|
6.1 | % | ||||||||||
Consumer
– Other
|
47,658
|
2.9 | % |
52,179
|
3.5 | % | ||||||||||
Total
consumer
|
438,981
|
26.4 | % |
443,000
|
29.6 | % | ||||||||||
Total
loans
|
$ |
1,663,030
|
100.0 | % | $ |
1,497,735
|
100.0 | % |
At
June 30, 2007
|
||||||||||||||||
Outstanding
Principal Balances
|
Unfunded
Commitments
|
Total
exposure
|
Total
Exposure at December 31, 2006
|
|||||||||||||
Trucking
industry
|
$ |
65,459
|
$ |
28,984
|
$ |
99,443
|
$ |
89,862
|
||||||||
Lessors
of nonresidential buildings
|
144,663
|
17,718
|
162,381
|
133,504
|
||||||||||||
Lessors
of residential buildings
|
63,594
|
7,012
|
70,606
|
65,791
|
||||||||||||
Land
subdividers
|
126,711
|
53,989
|
180,700
|
164,535
|
||||||||||||
New
housing operative builders
|
131,572
|
81,263
|
212,835
|
192,373
|
|
Amounts
at June 30, 2007
|
|
|
|||||||||||||||||
|
Fixed
|
Variable
|
|
At
June 30,
|
At
December 31,
|
|||||||||||||||
|
Rates
|
Rates
|
Totals
|
2007
|
2006
|
|||||||||||||||
Based
on contractual maturity:
|
|
|
|
|
|
|||||||||||||||
Due
within one year
|
$ |
89,645
|
$ |
615,739
|
$ |
705,384
|
42.4 | % | 40.9 | % | ||||||||||
Due
in one year to five years
|
480,883
|
183,489
|
664,372
|
40.0 | % | 39.9 | % | |||||||||||||
Due
after five years
|
79,814
|
213,460
|
293,274
|
17.6 | % | 19.2 | % | |||||||||||||
Totals
|
$ |
650,342
|
$ |
1,012,688
|
$ |
1,663,030
|
100.0 | % | 100.0 | % | ||||||||||
Based
on contractual repricing dates:
|
||||||||||||||||||||
Daily
floating rate
|
$ |
-
|
$ |
755,310
|
$ |
755,310
|
45.4 | % | 46.1 | % | ||||||||||
Due
within one year
|
89,645
|
183,013
|
272,658
|
16.4 | % | 13.6 | % | |||||||||||||
Due
in one year to five years
|
480,883
|
63,474
|
544,357
|
32.7 | % | 34.2 | % | |||||||||||||
Due
after five years
|
79,814
|
10,891
|
90,705
|
5.5 | % | 6.1 | % | |||||||||||||
Totals
|
$ |
650,342
|
$ |
1,012,688
|
$ |
1,663,030
|
100.0 | % | 100.0 | % |
|
At
June 30,
|
At
Dec. 31,
|
||||||
|
2007
|
2006
|
||||||
Nonaccrual
loans (1)
|
$ |
2,392
|
$ |
7,070
|
||||
Restructured
loans
|
-
|
-
|
||||||
Other
real estate owned
|
687
|
995
|
||||||
Total
nonperforming assets
|
3,079
|
8,065
|
||||||
Accruing
loans past due 90 days or more
|
606
|
737
|
||||||
Total
nonperforming assets and accruing loans past due 90 days or
more
|
$ |
3,685
|
$ |
8,802
|
||||
Total
loans outstanding
|
$ |
1,663,030
|
$ |
1,497,735
|
||||
Ratio
of nonperforming assets and accruing loans past due 90 days or
more to
total loans outstanding at end of period
|
0.22 | % | 0.59 | % | ||||
Ratio
of nonperforming assets and accruing loans past 90 days or more
to total
allowance for loan losses at end of period
|
21.21 | % | 54.61 | % |
(1)
|
Interest
income that would have been recorded during the six months ended
June 30,
2007 related to nonaccrual loans was
$230,000.
|
|
June
30, 2007
|
December
31, 2006
|
||||||||||||||
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||
Commercial
real estate - Mortgage
|
$ |
4,913
|
18.5 | % | $ |
4,550
|
19.0 | % | ||||||||
Commercial
real estate - Construction
|
2,833
|
10.7 | % |
2,591
|
10.8 | % | ||||||||||
Commercial
- Other
|
7,436
|
44.4 | % |
6,517
|
40.6 | % | ||||||||||
Total
commercial
|
15,182
|
73.6 | % |
13,658
|
70.4 | % | ||||||||||
Consumer
real estate - Mortgage
|
768
|
17.3 | % |
913
|
20.0 | % | ||||||||||
Consumer
real estate - Construction
|
274
|
6.2 | % |
278
|
6.1 | % | ||||||||||
Consumer
- Other
|
803
|
2.9 | % |
870
|
3.5 | % | ||||||||||
Total
consumer
|
1,845
|
26.4 | % |
2,061
|
29.6 | % | ||||||||||
Unallocated
|
348
|
NA
|
399
|
NA
|
||||||||||||
Total
allowance for loan losses
|
$ |
17,375
|
100.0 | % | $ |
16,118
|
100.0 | % |
|
June
30,
2007
|
Dec.
31,
2006
|
||||||
Balance
at beginning of period
|
$ |
16,118
|
$ |
7,858
|
||||
Provision
for loan losses
|
1,688
|
3,732
|
||||||
Allowance
acquired in Cavalry acquisition
|
-
|
5,102
|
||||||
Charged-off
loans:
|
||||||||
Commercial
real estate – Mortgage
|
-
|
-
|
||||||
Commercial
real estate - Construction
|
-
|
-
|
||||||
Commercial
– Other
|
(118 | ) | (436 | ) | ||||
Consumer
real estate – Mortgage
|
(298 | ) | (46 | ) | ||||
Consumer
real estate - Construction
|
-
|
-
|
||||||
Consumer
– Other
|
(136 | ) | (336 | ) | ||||
Total
charged-off loans
|
(552 | ) | (818 | ) | ||||
Recoveries
of previously charged-off loans:
|
||||||||
Commercial
real estate - Mortgage
|
-
|
-
|
||||||
Commercial
real estate - Construction
|
-
|
-
|
||||||
Commercial
- Other
|
37
|
166
|
||||||
Consumer
real estate - Mortgage
|
61
|
-
|
||||||
Consumer
real estate - Construction
|
-
|
-
|
||||||
Consumer
- Other
|
23
|
78
|
||||||
Total
recoveries of previously charged-off loans
|
121
|
244
|
||||||
Net
(charge-offs) recoveries
|
(431 | ) | (574 | ) | ||||
Balance
at end of period
|
$ |
17,375
|
$ |
16,118
|
||||
|
||||||||
Ratio
of allowance for loan losses to total loans outstanding at end
of
period
|
1.04 | % | 1.08 | % | ||||
Ratio
of net charge-offs (*) to average loans outstanding for the
period
|
0.06 | % | 0.05 | % |
June
30, 2007
|
December
31, 2006
|
|
Weighted
average life
|
4.81
years
|
4.93
years
|
Weighted
average coupon
|
5.04%
|
4.85%
|
Tax
equivalent yield
|
4.91%
|
5.01%
|
|
June
30,
|
December
31,
|
||||||||||||||
|
2007
|
Percent
|
2006
|
Percent
|
||||||||||||
Core
funding:
|
|
|
|
|
||||||||||||
Noninterest-bearing
deposit accounts
|
$ |
294,631
|
14.5 | % | $ |
300,978
|
16.1 | % | ||||||||
Interest-bearing
demand accounts
|
284,080
|
14.0 | % |
236,674
|
12.7 | % | ||||||||||
Savings
and money market accounts
|
530,081
|
26.0 | % |
485,936
|
26.0 | % | ||||||||||
Time
deposit accounts less than $100,000
|
159,741
|
7.8 | % |
158,687
|
8.5 | % | ||||||||||
Total
core funding
|
1,268,533
|
62.3 | % |
1,182,275
|
63.3 | % | ||||||||||
Non-core
funding:
|
||||||||||||||||
Time
deposit accounts greater than $100,000
|
||||||||||||||||
Public
funds
|
95,827
|
4.7 | % |
98,286
|
5.3 | % | ||||||||||
Brokered
deposits
|
146,802
|
7.2 | % |
61,718
|
3.3 | % | ||||||||||
Other
time deposits
|
286,373
|
14.1 | % |
280,132
|
15.0 | % | ||||||||||
Securities
sold under agreements to repurchase
|
140,443
|
6.9 | % |
141,016
|
7.5 | % | ||||||||||
Federal
Home Loan Bank advances and Federal funds purchased
|
46,699
|
2.3 | % |
53,726
|
2.9 | % | ||||||||||
Subordinated
debt
|
51,548
|
2.5 | % |
51,548
|
2.8 | % | ||||||||||
Total
non-core funding
|
767,692
|
37.7 | % |
686,426
|
36.7 | % | ||||||||||
Totals
|
$ |
2,036,225
|
100.0 | % | $ |
1,868,701
|
100.0 | % |
Amount
|
Interest
Rates
|
|
2007
|
$ 1,000
|
4.0%
|
2008
|
10,000
|
5.0%
|
2009
|
15,000
|
5.0%
|
Thereafter
|
699
|
2.3%
|
Total
|
$
26,699
|
|
Weighted
average interest rate
|
4.9%
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
CONTROLS
AND PROCEDURES
|
LEGAL
PROCEEDINGS
|
RISK
FACTORS
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
DEFAULTS
UPON SENIOR SECURITIES
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
|
(a)
|
Our
annual meeting of the shareholders was held on April 17,
2007. There were 12,795,756 shares of common stock represented
at the meeting either in person or by
proxy.
|
|
(b)
|
The
following directors were elected at the meeting to serve until
the annual
meeting of shareholders in the year 2010 (Class
I):
|
Votes
|
Votes
|
Broker
|
|
For
|
Withheld
|
Non-votes
|
|
Sue
G. Atkinson
|
12,609,746
|
186,010
|
-
|
Colleen
Conway-Welch
|
12,079,773
|
715,983
|
-
|
Gregory
L. Burns
|
12,613,806
|
181,950
|
-
|
Clay
T. Jackson
|
12,066,932
|
728,824
|
-
|
|
(c)
|
Other
matters voted upon and the results of the voting were as
follows:
|
OTHER
INFORMATION
|
EXHIBITS
|
|
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
|
PINNACLE
FINANCIAL PARTNERS, INC.
|
||
/s/
M. Terry Turner
|
||
M.
Terry Turner
|
||
August
1, 2007
|
President
and Chief Executive Officer
|
|
/s/
Harold R. Carpenter
|
||
Harold
R. Carpenter
|
||
August
1, 2007
|
Chief
Financial Officer
|