FOR IMMEDIATE RELEASE

 
MEDIA CONTACT:
Nikki Klemmer, 615-743-6132
 
FINANCIAL CONTACT:
Harold Carpenter, 615-744-3742
 
WEBSITE:
www.pnfp.com

PNFP REPORTS DILUTED EARNINGS PER SHARE OF $0.78 FOR 4Q 2016
Excluding merger-related charges, diluted EPS was $0.83 for 4Q 2016

NASHVILLE, TN, January 17, 2017 –
Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) reported net income per diluted common share of $0.78 for the quarter ended Dec. 31, 2016, compared to net income per diluted common share of $0.65 for the quarter ended Dec. 31, 2015, an increase of 20.0 percent. Net income per diluted common share was $2.91 for the year ended Dec. 31, 2016, compared to net income per diluted common share of $2.52 for the year ended Dec. 31, 2015, an increase of 15.5 percent.
Excluding pre-tax merger-related charges of $3.3 million and $11.7 million for the three months and year ended Dec. 31, 2016, respectively, net income per diluted common share was $0.83 and $3.07, respectively. Net income per diluted common share was $0.69 and $2.61 for the three months and year ended Dec. 31, 2015, excluding pre-tax merger-related charges of $2.5 million and $4.8 million, respectively. As a result, net income per diluted common share excluding merger-related charges increased 20.3 percent and 17.6 percent, respectively, over the same periods ending Dec. 31, 2015.
Pinnacle completed the acquisition of Avenue Financial Holdings, Inc. (Avenue) on July 1, 2016. The financial statements accompanying this press release and the financial condition and results of operations described herein reflect the impact of the Avenue acquisition beginning on July 1, 2016 and are subject to future refinements in the firm's purchase accounting adjustments.
"2016 was a very eventful year," said M. Terry Turner, Pinnacle's president and chief executive officer. "In the first quarter of 2016, we announced the Avenue Bank acquisition in Nashville, followed by the technology conversion of the former CapitalMark Bank & Trust in Chattanooga and the Avenue technology conversion later in the year. We also acquired an additional 19 percent interest in Bankers Healthcare Group, LLC (BHG) early in 2016, increasing our ownership in BHG to 49 percent. These transactions occurred after a very busy year of acquisitions in 2015. Our effective acquisition and integration capabilities in concert with our continued ability to produce rapid organic growth are evident throughout the financial results. Excluding merger-related charges, we are reporting year-over-year earnings per share growth of 20.3 percent for the fourth quarter of 2016. Looking forward, we are optimistic about 2017, believing that our current momentum in the very strong urban markets of Tennessee puts us in a position to continue the outsized growth in revenue and earnings per share."

GROWING THE CORE EARNINGS CAPACITY OF THE FIRM:
·
Revenues for the quarter ended Dec. 31, 2016 were a record $120.2 million, an increase of $1.8 million from the third quarter of 2016. Revenues increased 22.5 percent over the same quarter last year.
·
Loans at Dec. 31, 2016 were a record $8.450 billion, an increase of $208.9 million from Sept. 30, 2016 and $1.907 billion from Dec. 31, 2015, reflecting year-over-year growth of 29.1 percent. Annualized linked-quarter loan growth approximated 10.1 percent when comparing balances as of Dec. 31, 2016 to balances as of Sept. 30, 2016.
·
Average deposit balances for the quarter ended Dec. 31, 2016 were a record $8.791 billion, an increase of $336.8 million from Sept. 30, 2016 and $2.004 billion from Dec. 31, 2015, reflecting year-over-year growth of 29.5 percent.

"We continue to believe that outsized organic growth through hiring the best bankers in our markets is the cornerstone of our firm," Turner said. "Our loan and deposit growth rates for 2016 were very strong at 14.6 percent and 11.8 percent, respectively, exclusive of the $952 million in loans and the $967 million in deposits we acquired as a result of the Avenue merger. We are also pleased with the continued organic loan growth in our newly acquired markets, as Chattanooga's loans increased by 13.0 percent during 2016, and Memphis' loans were up 26.6 percent in 2016 excluding a $156.5 million loan purchase in the Memphis market in 2016.
"Relative to hiring the best bankers in our markets, during 2016 we also increased our associate base by 121 FTE's including 81 revenue producers, of which 30 were attributable to the Avenue acquisition. These new associates provide capacity for continued rapid growth in the years to come."

FOCUSING ON PROFITABILITY:
·
Return on average assets was 1.30 percent for the fourth quarter of 2016, compared to 1.18 percent for the third quarter of 2016 and 1.24 percent for the same quarter last year. Return on average assets was 1.27 percent for 2016, compared to 1.34 percent for 2015.
o
Excluding merger-related charges in each respective period, return on average assets was 1.37 percent for the fourth quarter of 2016, compared to 1.31 percent for both the third quarter of 2016 and the fourth quarter of 2015. Excluding merger-related charges, return on average assets was 1.34 percent for 2016, compared to 1.38 percent for 2015.
·
Fourth quarter 2016 return on average common equity amounted to 9.61 percent, compared to 8.93 percent for the third quarter of 2016 and 9.24 percent for the same quarter last year. Fourth quarter 2016 return on average tangible common equity amounted to 15.49 percent, compared to 14.47 percent for the third quarter of 2016 and 14.97 percent for the same quarter last year. Return on average tangible common equity was 15.26 percent for 2016, compared to 15.07 percent for 2015.
o
Excluding merger-related charges in each respective period, return on average tangible common equity amounted to 16.34 percent for the fourth quarter of 2016, compared to 16.01 percent for the third quarter of 2016 and 15.81 percent for the fourth quarter of 2015. Excluding merger-related charges, return on average tangible common equity was 16.11 percent for 2016, compared to 15.53 percent for 2015.

"We continue to operate our firm at a high level of profitability," said Harold R. Carpenter, Pinnacle's chief financial officer. "Even with significant investments in Avenue and BHG and in new revenue producing associates in 2016, our return on average assets and return on average tangible common equity after excluding merger-related charges remain very high versus peers. While we believe the profitability metrics are very important, the consistent growth of the core earnings capacity of our firm through attracting the best revenue producers in our markets will remain our primary focus."

OTHER HIGHLIGHTS:
·
Revenue growth
o
Revenue per fully-diluted share was $10.20 for 2016, compared to $8.51 in 2015, reflecting growth of 19.9 percent year-over-year. Revenue per fully-diluted share was $2.61 for the quarter ended Dec. 31, 2016, compared to $2.58 for the third quarter of 2016 and $2.39 for the fourth quarter of 2015.
o
Net interest income for the quarter ended Dec. 31, 2016 increased to $89.4 million, compared to $86.6 million for the third quarter of 2016 and $71.5 million for the fourth quarter of 2015.
§
The firm's net interest margin was 3.72 percent for the quarter ended Dec. 31, 2016, compared to 3.60 percent last quarter and 3.73 percent for the quarter ended Dec. 31, 2015.

The following information was filed by Pinnacle Financial Partners Inc (PNFP) on Wednesday, January 18, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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