Pinnacle Financial Reports Record Loan Growth, Strong Asset Quality and Earnings of $0.34 per Fully Diluted Share for Second Quarter of 2008

Pinnacle Financial Partners Inc. (Nasdaq/NGS: PNFP) today reported strong earnings and record loan growth for the quarter ended June 30, 2008. Fully diluted earnings per share were $0.34 for the quarter ended June 30, 2008, compared to $0.33 per fully diluted share for the quarter ended June 30, 2007. Excluding merger related expense associated with its Nov. 30, 2007 acquisition of Mid-America Bancshares Inc., fully diluted earnings per share were $0.37 for the quarter ended June 30, 2008, compared to $0.33 for the same period last year, an increase of 12.1 percent. Fully diluted earnings per share were $0.60 for the six months ended June 30, 2008, compared to $0.66 per fully diluted share for the six months ended June 30, 2007. Excluding merger related expense associated with the Mid-America acquisition, fully diluted earnings per share were $0.71 for the six months ended June 30, 2008, compared to $0.66 for the same period last year, an increase of 7.6 percent. Pinnacle also reported a record $166 million in organic loan growth in the second quarter of 2008, a 52 percent increase over the $109 million reported in the same quarter of 2007. The growth in loans contributed to a higher provision for loan loss expense for the second quarter of 2008 when compared to the same quarter last year. SECOND QUARTER 2008 HIGHLIGHTS: Strong Earnings Net income for the second quarter of 2008 was $7.96 million, up 46.7 percent from the prior year's second quarter net income of $5.43 million. Excluding after-tax merger related expense of $820,000, net income was $8.78 million, up 61.8 percent over the same period last year. Revenue (the sum of net interest income and noninterest income) for the quarter ended June 30, 2008, amounted to $36.74 million, compared to $23.21 million for the same quarter of last year, an increase of 58.3 percent. Continued balance sheet growth Loans at June 30, 2008, were $3.03 billion, up $1.37 billion from $1.66 billion at June 30, 2007. This 12-month increase in loans includes organic growth of $505 million, or an annualized growth rate of 30.4 percent, and $864 million in loans acquired in conjunction with the Mid-America merger. Total deposits at June 30, 2008, were $3.15 billion, up $1.35 billion from $1.80 billion at June 30, 2007. This 12-month increase includes organic growth of $398 million, or an annualized growth rate of 22.1 percent, and $957 million in deposits acquired in conjunction with the Mid-America merger. Superior credit quality Annualized net charge-offs as a percentage of average loan balances were 0.12 percent and 0.07 percent for the three and six months ended June 30, 2008, respectively, compared to 0.08 percent and 0.06 percent for the three and six months ended June 30, 2007, respectively. Nonperforming assets were 0.73 percent of total loans and other real estate at June 30, 2008, compared to 0.72 percent at March 31, 2008, 0.78 percent at Dec. 31, 2007 and 0.19 percent at June 30, 2007. Approximately $9.60 million of the $22.25 million of nonperforming assets at June 30, 2008 were attributable to the Mid-America acquisition. Past due loans over 30 days, excluding nonperforming loans, were 0.34 percent of total loans and other real estate at June 30, 2008, 0.77 percent at March 31, 2008, compared to 0.45 percent at Dec. 31, 2007 and 0.31 percent at June 30, 2007. "Pinnacle’s solid performance in the second quarter, in the face of a difficult operating environment in which many banks are struggling, is a tribute to the skill and long-term experience of our associates. Our approach of hiring only highly experienced bankers pays off in more difficult economic environments because it enables us to continue moving market share from struggling large regional banks and to grow assets at a rapid rate while maintaining excellent asset quality. During the second quarter, we produced annualized linked-quarter loan growth of 23 percent, year-over-year earnings per share growth of 12.1 percent adjusted for merger related expenses, and maintained an extraordinarily sound loan portfolio with just 0.07 percent in year-to-date annualized net charge-offs,” said M. Terry Turner, Pinnacle's president and CEO. "We also maintained low and stable non-performing and past due loan trends.” FINANCIAL PERFORMANCE AND BALANCE SHEET GROWTH Return on average assets for second quarter 2008 was 0.82 percent compared to 0.98 percent for the second quarter of 2007. Excluding the impact of the Mid-America merger related expense, return on average assets for the second quarter of 2008 would have approximated 0.90 percent. Return on average stockholders' equity for the quarter ended June 30, 2008, was 6.71 percent compared to 8.24 percent for the second quarter of 2007. Excluding the impact of the Mid-America merger related expense, return on average stockholders' equity for the second quarter of 2008 would have approximated 7.40 percent. Return on average tangible stockholders' equity (average stockholders' equity less goodwill and core deposit intangibles) for the quarter ended June 30, 2008, was 14.67 percent compared to 15.65 percent for the second quarter of 2007. Excluding the impact of the Mid-America merger related expense, return on average tangible stockholders' equity for the second quarter of 2008 would have approximated 16.18 percent. Total assets grew to $4.11 billion as of June 30, 2008, up $1.79 billion from the $2.32 billion reported at the same time last year. The 12-month increase in assets includes organic growth of $542 million, or 23 percent, and $1.25 billion in assets acquired in conjunction with the Mid-America merger in November of last year. CREDIT QUALITY Provision for loan losses was $2.79 million for the second quarter of 2008, compared to $900,000 in the second quarter of 2007. During the second quarter of 2008, the firm recorded net charge-offs of $870,000, compared to net charge-offs of $317,000 during the same period in 2007. Annualized net charge-offs to total average loans were 0.07 percent for the six months ended June 30, 2008. The annualized provision for loan losses expressed as a percentage of average loans was 0.38 percent for the second quarter of 2008 compared to 0.23 percent for the same quarter last year. The increase in provision for loan loss expense between the second quarter of 2008 and the second quarter of 2007 was primarily due to the significant increase in loan balances recorded during the second quarter of 2008 over the amount recorded in the second quarter of 2007. Allowance for loan losses represented 1.05 percent of total loans at June 30, 2008, compared to 1.04 percent a year ago. The ratio of the allowance for loan losses to nonperforming loans was 243 percent at June 30, 2008, compared to 145 percent at Dec. 31, 2007 and 726 percent at June 30, 2007. As noted above, Pinnacle reported that nonperforming loans and other real estate as a percentage of total loans and other real estate decreased from 0.78 percent at Dec. 31, 2007 to 0.73 percent at June 30, 2008. The following is a summary of the activity in various nonperforming asset categories for the quarter ended June 30, 2008:   Balances   Payments and     Balances (in thousands) March 31, 2008 Reductions Increases June 30, 2008 Nonperforming loans: Residential construction & development $ 8,815 $ 10,623 $ 6,984 $ 5,176 Other 8,309 2,680 2,262 7,891 Totals 17,124 13,303 9,246 13,067 Other real estate: Residential construction & development 2,318 4,682 10,263 7,899 Other 1,249 727 2,153 1,282 Totals 3,567 5,409 11,023 9,181 Total nonperforming assets $ 20,691 $ 18,712 $ 20,269 $ 22,248 REVENUE Net interest income for second quarter 2008 was $27.68 million, compared to $17.66 million for the same quarter last year, an increase of 56.7 percent. Net interest margin for the second quarter of 2008 was 3.24 percent, compared to a net interest margin of 3.58 percent for the same period last year and 3.37 for the first quarter of 2008. Noninterest income for second quarter 2008 was $9.06 million, a 63.2 percent increase over the $5.55 million recorded during the same quarter in 2007. "We have anticipated compression in our net interest margins for the last several quarters,” said Harold Carpenter, chief financial officer of Pinnacle Financial Partners. "This compression continued during the second quarter of 2008. At this time, we are optimistic, based on our internal modeling, that further compression in our margins should be modest for the next few quarters. Additionally, we experienced another significant loan growth quarter. Our loan pipelines remain robust, which should provide increased core revenue growth in future periods.” The 63.2 percent increase in noninterest income between the second quarter of 2007 and the second quarter of 2008 was due several factors, including a $1.0 million gain from the disposition of two branch locations as a result of the Mid-America acquisition; increased fee revenue as a result of the Mid-America merger; record investment sales commissions from Pinnacle Asset Management; and record gains on the sales of mortgage loans from the firm's mortgage origination unit. During the second quarter of 2008, Pinnacle's mortgage origination unit sold $79.69 million of mortgage loans compared to $52.20 million in 2007, an increase of 52.7 percent. "As in so many other areas, Pinnacle is bucking national trends with its record investment sales commissions and record mortgage originations during the second quarter of 2008,” Turner said. Noninterest income during the second quarter of 2008 represented approximately 24.66 percent of total revenues, compared to 23.92 percent for the same quarter in 2007. NONINTEREST EXPENSE Noninterest expense for the quarter ended June 30, 2008, was $23.07 million ($21.73 million, excluding merger expenses) compared to $25.49 million ($22.39 million, excluding merger expenses) in the first quarter of 2008 and $14.48 million in the second quarter of 2007. Compensation expense was $12.50 million during the second quarter of 2008, compared to $13.87 million during the first quarter of 2008 and $8.79 million during the second quarter of 2007. Total full-time equivalent employees were 704.5 at June 30, 2008, compared to 702.0 at Dec. 31, 2007, and 441.0 at June 30, 2007. Linked quarter compensation expense was lower due to lower average headcount during the second quarter of 2008 compared to the first quarter of 2008, reduced incentive expense and increased loan origination activity that contributed to increased deferred lending charges. Merger related expense was $1.35 million during the quarter ended June 30, 2008 and was composed primarily of $1.03 million in retention bonus accruals for former Mid-America associates. The efficiency ratio (noninterest expense divided by net interest income and noninterest income) was 62.8 percent during the second quarter of 2008 compared to 71.4 percent for the first quarter of 2008 and 62.4 percent in the second quarter of 2007. Excluding merger related expenses, the efficiency ratio was 59.1 percent in the second quarter of 2008. Carpenter noted that the firm will continue to make investments in future growth and, consequently, anticipates increased noninterest expense (excluding merger related expense) for the last half of 2008 of approximately 2 to 3 percent over the amount the firm has experienced during the first six months of 2008, primarily attributable to increasing headcount and other variable costs associated with the growth of the firm. INVESTMENTS IN FUTURE GROWTH Pinnacle has hired 27 highly experienced associates for its denovo expansion to Knoxville that was announced on April 9, 2007. Loans outstanding in Knoxville at June 30, 2008 were $207 million, which is $45 million ahead of our original target disclosed at the time the Knoxville expansion was announced. Pinnacle has negotiated a site for construction of another full service location in the Fountain City area of Knoxville, currently scheduled to open during the first quarter of 2009. Pinnacle also has initiated construction of a new Dickson County location in the Nashville MSA to replace the current temporary location. The new facility is scheduled to open in the fourth quarter of 2008. On July 2, 2008, Pinnacle announced the acquisition of Murfreesboro, Tenn.- based Beach and Gentry Insurance LLC. Beach & Gentry has 18 associates and 4,000 clients. Miller & Loughry, Pinnacle’s wholly-owned insurance agency, also located in Murfreesboro, has 22 associates and 6,300 clients. The combined company, Miller Loughry Beach, is the largest independent insurance agency headquartered in Rutherford County. Pinnacle's total associate base at June 30, 2008, was 704.5 full-time equivalents (FTEs) compared to 441.0 at June 30, 2007. Approximately 220 FTEs were added to Pinnacle's associate base in conjunction with the Mid-America merger. Pinnacle also anticipates hiring 29 associates during the remainder of 2008. NASHVILLE HOUSING MARKET UPDATE Market Graphics Research Group reports both the developed lot inventory and inventory of unoccupied new homes in the Nashville MSA appear to have peaked in February of 2008. The developed lot inventory increased from 24,809 lots in June 2006 to 37,760 lots in February 2008 and down to 37,056 lots in June 2008. Unoccupied new homes increased from 2,228 homes in June 2006 to 4,353 homes in February 2008 and were down to 3,990 homes in June 2008. The Greater Nashville Realtors Association reported residential closings down 28 percent in June 2008 in comparison to June 2007, essentially the same year over year decrease since September of 2007. At June 30, 2008, the inventory of residential homes was less than an eight month supply based on June 2008 closings, while condominium inventory was approximately a five month supply, again based on June 2008 closings. The Greater Nashville Realtors Association also reported that the median residential home sales price for the three months ended June 30, 2008 averaged $183,600, which was up 2.9 percent from the three months ended March 31, 2008. INVESTMENT OUTLOOK Management has developed several financial forecast scenarios for the next several quarters. Based on anticipated growth trends and future investments in the franchise, including the impact of the Knoxville expansion, Pinnacle estimates its third quarter 2008 diluted earnings per share will approximate $0.35 to $0.40, including merger related expense, or $0.38 to $0.43, excluding merger related expense. Pinnacle estimates its 2008 diluted earnings per share will approximate $1.36 to $1.44, including merger related expense, or $1.54 to $1.62, excluding merger related expense. Merger related expense should approximate $2.0 million to $2.5 million for the remainder of 2008 with substantially the entire amount being attributable to retention awards for former Mid-America associates. Pinnacle anticipates no additional Mid-America merger related expense after 2008. As noted previously, management has developed several scenarios under which these estimates can be achieved and believes these estimates to be reasonable based on these scenarios. However, unanticipated events or developments, including, but not limited to the development of any markets other than metropolitan Nashville or Knoxville, any merger or acquisition, the opportunity to hire more seasoned professionals than anticipated, increased volatility in interest rates, deterioration in national or local economic conditions in excess of expectation, materially adverse developments in our borrowers' ability to repay their loans, any activity in the capital markets which would cause Pinnacle to conclude that there was impairment of any asset including intangible assets, or the ability to grow loans significantly in excess of the levels contemplated, may cause the actual results of Pinnacle to differ materially from these estimates. Pinnacle Financial Partners provides a full range of banking, investment, mortgage and insurance products and services designed for small- to mid-sized businesses and their owners, real estate professionals and individuals interested in a comprehensive relationship with their financial institution. Comprehensive wealth management services, such as financial planning and trust, help clients increase, protect and distribute their assets. The firm also has a well-established expertise in commercial real estate. The firm began operations in a single downtown Nashville location in October 2000 and has since grown to $4.1 billion in assets. In 2007, Pinnacle launched an expansion into Knoxville, another high growth MSA. The addition of Mid-America has made Pinnacle the second-largest bank holding company headquartered in Tennessee, with 31 offices in eight Middle Tennessee counties and two in Knoxville. Additional information concerning Pinnacle can be accessed at www.pnfp.com. Certain of the statements in this release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking. All forward-looking statements are subject to risks, uncertainties and other facts that may cause the actual results, performance or achievements of Pinnacle to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, without limitation, (i) unanticipated deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses, (ii) the inability of Pinnacle to continue to grow its loan portfolio at historic rates in the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA, (iii) increased competition with other financial institutions, (iv) lack of sustained growth in the economy in the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA, (v) rapid fluctuations or unanticipated changes in interest rates, (vi) the inability of Pinnacle to satisfy regulatory requirements for its expansion plans, (vii) the inability of Pinnacle to execute its expansion plans and (viii) changes in state and Federal legislation or regulations applicable to financial services providers, including banks. Additionally, risk factors exist in connection with Pinnacle’s merger with Mid-America including, among others, (1) the risk that the cost savings and any revenue synergies from the merger may not be realized or take longer than anticipated, (2) disruption from the merger with customers, suppliers or employee relationships, and (3) the risk of successful integration of the two companies’ businesses. Many of such factors are beyond Pinnacle's ability to control or predict, and readers are cautioned not to put undue reliance on such forward-looking statements. Pinnacle disclaims any obligation to update or revise any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS – UNAUDITED         June 30, 2008   December 31, 2007 ASSETS Cash and noninterest-bearing due from banks $ 77,109,394 $ 76,941,931 Interest-bearing due from banks 1,758,085 24,706,966 Federal funds sold and other   66,342,642       20,854,966   Cash and cash equivalents 145,210,121 122,503,863   Securities available-for-sale, at fair value 509,972,917 495,651,939 Securities held-to-maturity (fair value of $11,161,324 and $26,883,473 at June 30, 2008 and December 31, 2007, respectively) 11,241,469 27,033,356 Mortgage loans held-for-sale 16,507,630 11,251,652   Loans 3,032,272,183 2,749,640,689 Less allowance for loan losses   (31,788,776 )     (28,470,207 ) Loans, net 3,000,483,407 2,721,170,482   Premises and equipment, net 67,096,558 68,385,946 Other investments 25,208,539 22,636,029 Accrued interest receivable 16,185,503 18,383,004 Goodwill 241,988,969 243,573,636 Core deposit intangible, net 17,177,922 17,325,988 Other assets   54,981,917       46,254,566   Total assets $ 4,106,054,952     $ 3,794,170,461     LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Noninterest-bearing $ 438,458,200 $ 400,120,147 Interest-bearing 390,956,511 410,661,187 Savings and money market accounts 719,961,996 742,354,465 Time   1,603,136,919       1,372,183,317   Total deposits 3,152,513,626 2,925,319,116 Securities sold under agreements to repurchase 183,188,428 156,070,830 Federal Home Loan Bank advances and other borrowings 187,314,802 141,666,133 Subordinated debt 82,476,000 82,476,000 Accrued interest payable 8,328,868 10,374,538 Other liabilities   10,523,794       11,653,550   Total liabilities 3,624,345,518 3,327,560,167   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; 22,587,564 issued and outstanding at June 30, 2008 and 22,264,817 issued and outstanding at December 31, 2007 22,587,564 22,264,817 Additional paid-in capital 393,742,295 390,977,308 Retained earnings 67,577,903 54,150,679 Accumulated other comprehensive loss, net of taxes   (2,198,328 )     (782,510 ) Stockholders’ equity   481,709,434       466,610,294   Total liabilities and stockholders’ equity $ 4,106,054,952     $ 3,794,170,461   PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED         Three Months Ended Six Months Ended June 30, June 30,     2008   2007   2008   2007 Interest income: Loans, including fees $ 42,227,538 $ 30,555,889 $ 87,619,700 $ 59,533,113 Securities: Taxable 4,792,481 3,394,359 9,429,758 6,740,479 Tax-exempt 1,339,732 693,417 2,690,769 1,362,936 Federal funds sold and other   414,118     864,198     1,195,035     1,610,577 Total interest income   48,773,869     35,507,863     100,935,262     69,247,105   Interest expense: Deposits 17,719,109 14,456,629 38,804,742 27,993,892 Securities sold under agreements to repurchase 567,090 1,890,743 1,399,143 3,602,834 Federal Home Loan Bank advances and other borrowings   2,805,541     1,499,436     5,690,127     2,906,896 Total interest expense   21,091,740     17,846,808     45,894,012     34,503,622 Net interest income 27,682,129 17,661,055 55,041,250 34,743,483 Provision for loan losses   2,787,470     899,998     4,378,593     1,687,964 Net interest income after provision for loan losses 24,894,659 16,761,057 50,662,657 33,055,519   Noninterest income: Service charges on deposit accounts 2,684,486 1,920,085 5,258,223 3,717,234 Investment services 1,220,247 850,207 2,488,495 1,584,767 Insurance sales commissions 589,488 628,953 1,653,151 1,265,915 Gain on loans and loan participations sold, net 879,824 638,895 1,535,912 1,002,201 Net gain on sale of premises 1,010,881 - 1,010,881 56,078 Trust fees 531,458 425,205 1,036,458 845,495 Other noninterest income   2,142,101     1,088,172     4,442,768     2,105,410 Total noninterest income   9,058,485     5,551,517     17,425,888     10,577,100   Noninterest expense: Salaries and employee benefits 12,502,540 8,794,853 26,369,277 17,061,354 Equipment and occupancy 3,226,932 2,412,528 7,503,205 4,577,230 Marketing and other business development 478,507 430,291 854,378 682,026 Postage and supplies 843,287 524,197 1,491,627 979,114 Amortization of core deposit intangible 758,033 515,755 1,524,066 1,031,508 Other noninterest expense 3,916,573 1,806,680 6,369,214 3,276,764 Merger related expense   1,349,276     -     4,455,039     - Total noninterest expense   23,075,148     14,484,304     48,566,806     27,607,996 Income before income taxes 10,877,996 7,828,270 19,521,739 16,024,623 Income tax expense   2,916,863     2,402,405     5,495,816     4,996,918 Net income $ 7,961,133   $ 5,425,865   $ 14,025,923   $ 11,027,705   Per share information: Basic net income per common share $0.36   $0.35   $0.63   $0.71 Diluted net income per common share $0.34   $0.33   $0.60   $0.66   Weighted average shares outstanding: Basic 22,356,667 15,494,522 22,248,292 15,464,151 Diluted 23,629,234 16,664,213 23,519,844 16,640,977 PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED           (dollars in thousands) Three months endedJune 30, 2008   Three months endedJune 30, 2007 Average Balances   Interest   Rates/ Yields   Average Balances   Interest   Rates/ Yields Interest-earning assets: Loans $ 2,941,973 $ 42,228 5.77% $ 1,598,967 $ 30,556 7.66% Securities: Taxable 380,733 4,792 5.06% 272,024 3,394 5.00% Tax-exempt (1) 136,216 1,340 5.22% 75,057 693 4.89% Federal funds sold and other   41,931     414   4.42%     58,836     865   6.08% Total interest-earning assets 3,500,853 $ 48,774   5.66% 2,004,884 $ 35,508   7.15% Nonearning assets Intangible assets 259,217 125,020 Other nonearning assets   153,449   99,323 Total assets $ 3,913,519 $ 2,229,227   Interest-bearing liabilities: Interest-bearing deposits Interest checking $ 379,714 $ 1,339 1.42% $ 254,171 $ 2,147 3.39% Savings and money market 702,933 2,722 1.56% 501,373 4,239 3.39% Certificates of deposit   1,466,685     13,658   3.75%     646,251     8,071   5.01% Total interest-bearing deposits 2,549,332 17,719 2.80% 1,401,795 14,457 4.14% Securities sold under agreements to repurchase 174,847 567 1.30% 172,872 1,891 4.39% Federal Home Loan Bank advances and other borrowings 208,773 1,687 3.20% 47,998 621 5.19% Subordinated debt   82,476     1,119   5.46%     51,548     878   6.84% Total interest-bearing liabilities 3,015,428 21,092 2.81% 1,674,213 17,847 4.28% Noninterest-bearing deposits   398,337     -   -     276,241     -   - Total deposits and interest-bearing liabilities 3,413,765 $ 21,092   2.48% 1,950,454 $ 17,847   3.67% Other liabilities 22,252 14,718 Stockholders' equity   477,502   264,055 $ 3,913,519 $ 2,229,227 Net interest income $ 27,682 $ 17,661 Net interest spread (2) 2.85% 2.88% Net interest margin (3) 3.24% 3.58%       (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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED           (dollars in thousands) Six months endedJune 30, 2008   Six months endedJune 30, 2007 Average Balances   Interest   Rates/ Yields   Average Balances   Interest   Rates/ Yields Interest-earning assets: Loans $ 2,851,859 $ 87,620 6.18% $ 1,564,869 $ 59,533 7.67% Securities: Taxable 373,929 9,430 5.07% 272,346 6,740 4.99% Tax-exempt (1) 136,453 2,691 4.60% 74,009 1,363 4.90% Federal funds sold and other   50,412     1,195   4.95%     57,367     1,611   5.66% Total interest-earning assets 3,412,653 $ 100,935   5.98% 1,968,591 $ 69,247   7.14% Nonearning assets Intangible assets 259,012 123,874 Other nonearning assets   172,116   97,113 Total assets $ 3,843,781 $ 2,189,578   Interest-bearing liabilities: Interest-bearing deposits Interest checking $ 392,011 $ 3,468 1.78% $ 249,425 $ 4,104 3.32% Savings and money market 719,416 6,820 1.91% 498,625 8,364 3.38% Certificates of deposit   1,419,792     28,517   4.04%     635,172     15,526   4.93% Total interest-bearing deposits 2,531,219 38,805 3.08% 1,383,222 27,994 3.41% Securities sold under agreements to repurchase 171,997 1,399 1.64% 165,026 3,603 4.40% Federal Home Loan Bank advances and other borrowings 176,287 3,112 3.49% 44,120 1,152 5.04% Subordinated debt   82,476     2,578   6.28%     51,548     1,755   6.86% Total interest-bearing liabilities 2,961,979 45,894 3.12% 1,643,916 34,504 4.23% Noninterest-bearing deposits   383,375     -   -     273,052     -   - Total deposits and interest-bearing liabilities 3,345,354 $ 45,894   2.76% 1,916,968 $ 34,504   3.63% Other liabilities 22,456 10,849 Stockholders' equity   475,971   261,761 $ 3,843,781 $ 2,189,578 Net interest income $ 55,041 $ 34,743 Net interest spread (2) 2.86% 2.91% Net interest margin (3) 3.27% 3.61%       (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. PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED                           (dollars in thousands)   June2008   March2008   Dec2007   Sept2007   June2007   Mar2007 Balance sheet data, at quarter end:             Total assets $ 4,106,055 3,888,900 3,794,170 2,368,079 2,315,327 2,193,132 Total loans 3,032,272 2,866,536 2,749,641 1,731,245 1,663,030 1,553,980 Allowance for loan losses (31,789 ) (29,871 ) (28,470 ) (17,978 ) (17,375 ) (16,792 ) Securities 521,214 505,377 522,685 352,222 339,781 340,255 Noninterest-bearing deposits 438,458 429,289 400,120 316,542 294,631 306,885 Total deposits 3,152,514 2,967,025 2,925,319 1,826,884 1,797,536 1,700,132 Securities sold under agreements to repurchase 183,188 171,186 156,071 145,332 140,443 116,952 Advances from FHLB and other borrowings 187,315 168,606 141,666 55,671 46,699 46,619 Subordinated debt 82,476 82,476 82,476 51,548 51,548 51,548 Total stockholders’ equity 481,709 476,772 466,610 274,636 265,194 262,917   Balance sheet data, quarterly averages: Total assets $ 3,913,519 3,774,042 2,791,669 2,378,501 2,229,227 2,149,928 Total loans 2,941,973 2,761,745 2,063,442 1,697,862 1,598,967 1,530,771 Securities 516,949 503,815 410,142 347,423 347,081 345,630 Total earning assets 3,500,853 3,324,452 2,541,799 2,151,583 2,004,884 1,932,298 Noninterest-bearing deposits 398,337 368,413 327,866 293,701 276,241 269,864 Total deposits 2,947,669 2,881,518 2,135,973 1,814,135 1,678,036 1,634,513 Securities sold under agreements to repurchase 174,847 169,146 201,605 194,774 172,872 157,180 Advances from FHLB and other borrowings 208,773 143,802 57,970 29,946 47,998 40,241 Subordinated debt 82,476 82,476 72,391 51,548 51,548 51,548 Total stockholders’ equity 477,502 474,439 309,431 271,653 264,055 259,466   Statement of operations data, for the three months ended: Interest income $ 48,774 52,161 43,338 38,347 35,508 33,739 Interest expense   21,092     24,802     21,329     19,387     17,847     16,657   Net interest income 27,682 27,359 22,009 18,960 17,661 17,082 Provision for loan losses   2,787     1,591     2,260     772     900     788   Net interest income after provision for loan losses 24,895 25,768 19,749 18,188 16,761 16,294 Noninterest income 9,058 8,367 6,612 5,332 5,552 5,026 Noninterest expense   23,075     25,492     17,762     15,110     14,484     13,124   Income before taxes 10,878 8,644 8,599 8,410 7,828 8,196 Income tax expense   2,917     2,579     2,357     2,638     2,402     2,594   Net income $ 7,961     6,065     6,242     5,772     5,426     5,602     Profitability and other ratios: Return on avg. assets (1) 0.82 % 0.65 % 0.89 % 0.96 % 0.98 % 1.06 % Return on avg. equity (1) 6.71 % 5.14 % 8.00 % 8.43 % 8.24 % 8.76 % Net interest margin (2) 3.24 % 3.37 % 3.49 % 3.54 % 3.58 % 3.64 % Noninterest income to total revenue (3) 24.66 % 23.42 % 23.10 % 21.95 % 23.92 % 22.73 % Noninterest income to avg. assets (1) 0.93 % 0.89 % 0.94 % 0.89 % 1.00 % 0.95 % Noninterest exp. to avg. assets (1) 2.36 % 2.71 % 2.52 % 2.52 % 2.61 % 2.48 % Efficiency ratio (4) 62.81 % 71.35 % 62.06 % 62.20 % 62.40 % 59.36 % Avg. loans to average deposits 99.81 % 95.84 % 96.60 % 93.59 % 95.29 % 93.65 % Securities to total assets 12.69 % 13.00 % 13.75 % 14.87 % 14.68 % 15.51 % Average interest-earning assets to average interest-bearing liabilities 116.10 % 114.30 % 118.77 % 119.75 % 119.75 % 119.75 % Brokered time deposits to total deposits 12.53 % 7.78 % 9.48 % 8.04 % 8.17 % 5.83 % PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED                                       (dollars in thousands)   June2008   March2008   Dec2007   Sept2007   June2007   Mar2007   Asset quality information and ratios: Nonperforming assets: Nonaccrual loans $ 13,067 17,124 19,677 2,364 2,392 4,705 Other real estate $ 9,181 3,567 1,673 878 687 927 Past due loans over 90 days and still accruing interest $ 2,272 2,002 1,613 633 606 98 Net loan charge-offs (6) $ 870 190 462 169 317 114 Allowance for loan losses to total loans 1.05 % 1.04 % 1.04 % 1.04 % 1.04 % 1.08 % Allowance for loan losses to nonaccrual loans 243.3 % 174.4 % 144.7 % 760.5 % 726.4 % 356.9 % As a percentage of total loans and ORE: Past due accruing loans over 30 days 0.34 % 0.77 % 0.45 % 0.38 % 0.31 % 0.33 % Nonperforming assets 0.73 % 0.72 % 0.78 % 0.19 % 0.19 % 0.36 % Potential problem loans (5) 0.40 % 0.64 % 0.56 % 0.40 % 0.16 % 0.21 % Annualized net loan charge-offs year-to-date to avg. loans (6) 0.07 % 0.03 % 0.07 % 0.05 % 0.06 % 0.03 % Avg. commercial loan internal risk ratings (5) 4.0 4.1 4.1 4.1 4.1 4.1 Avg. loan account balances (7) $ 163 170 160 169 164 156   Interest rates and yields: Loans 5.77 % 6.61 % 7.23 % 7.65 % 7.66 % 7.68 % Securities 5.10 % 5.11 % 4.92 % 4.99 % 4.98 % 4.96 % Total earning assets 5.66 % 6.37 % 6.82 % 7.12 % 7.15 % 7.13 % Total deposits, including non-interest bearing 2.42 % 2.94 % 3.28 % 3.51 % 3.46 % 3.36 % Securities sold under agreements to repurchase 1.30 % 1.98 % 3.36 % 4.20 % 4.39 % 4.42 % FHLB advances and other borrowings 3.20 % 3.99 % 4.61 % 5.10 % 5.19 % 5.36 % Subordinated debt 5.46 % 7.11 % 7.20 % 6.90 % 6.84 % 6.89 % Total deposits and interest-bearing liabilities 2.48 % 3.04 % 3.43 % 3.68 % 3.67 % 3.59 %   Capital ratios (8): Stockholders’ equity to total assets 11.7 % 12.3 % 12.3 % 11.6 % 11.5 % 12.0 % Leverage 8.5 % 8.5 % 11.6 % 9.2 % 9.5 % 9.5 % Tier one risk-based 9.3 % 9.5 % 9.5 % 10.4 % 10.4 % 10.9 % Total risk-based 10.3 % 10.4 % 10.4 % 11.3 % 11.3 % 11.8 % PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED                                       (dollars in thousands, except per share data)   June2008   March2008   Dec2007   Sept2007   June2007   Mar2007   Per share data: Earnings – basic $ 0.36 0.27 0.35 0.37 0.35 0.36 Earnings – diluted $ 0.34 0.26 0.33 0.35 0.33 0.34 Book value at quarter end (9) $ 21.33 21.22 20.95 17.66 17.06 16.93   Weighted avg. shares – basic 22,356,667 22,331,398 17,753,661 15,503,284 15,494,522 15,433,442 Weighted avg. shares – diluted 23,629,234 23,484,754 19,110,851 16,609,328 16,664,213 16,617,484 Common shares outstanding 22,587,564 22,467,263 22,264,817 15,553,037 15,545,581 15,530,975   Investor information: Closing sales price $ 20.09 25.60 25.42 28.82 29.36 30.51 High sales price during quarter $ 29.29 26.75 30.93 31.31 31.48 33.85 Low sales price during quarter $ 20.05 20.82 24.85 21.62 28.27 29.40   Other information: Gains on sale of loans and loan participations sold: Mortgage loan sales: Gross loans sold $ 79,693 59,757 40,273 42,895 52,197 31,044 Gross fees (10) $ 1,364 1,114 750 659 846 544 Gross fees as a percentage of mortgage loans originated 1.71 % 1.86 % 1.86 % 1.54 % 1.62 % 1.75 % Commercial loan participations sold $ 8 4 8 19 167 45 Gains on sales of investment securities, net $ - 1 16 - - - Brokerage account assets, at quarter-end (11) $ 826,000 859,000 878,000 590,000 643,000 617,000 Trust account assets, at quarter-end $ 527,000 493,000 464,000 512,000 475,000 400,000 Floating rate loans as a percentage of loans (12) 44.0 % 41.4 % 41.8 % 44.6 % 45.5 % 46.3 % Balance of commercial loan participations sold to other banks and serviced by Pinnacle, at quarter end $ 125,308 113,701 110,352 125,370 115,913 114,143 Core deposits to total funding (13) 52.3 % 57.6 % 58.2 % 61.4 % 62.3 % 63.7 % Risk-weighted assets 3,353,142 3,181,612 3,103,293 1,998,401 1,921,648 1,780,107 Total assets per full-time equivalent employee 5,828 5,669 5,415 5,257 5,250 5,228 Annualized revenues per full-time equivalent employee 209.8 209.5 161.8 213.9 211.1 210.8 Number of employees (full-time equivalent) 704.5 686.0 702.0 450.5 441.0 419.5 Associate retention rate (14) 90.9 % 92.0 % 89.7 % 89.4 % 88.1 % 85.3 %   Selected economic information (in thousands) (15): Nashville MSA nonfarm employment 767.1 759.2 795.2 763.6 759.5 757.5 Knoxville MSA nonfarm employment 339.3 335.3 358.7 337.2 335.9 335.2 Nashville MSA unemployment 4.3 % 4.8 % 4.2 % 3.5 % 3.7 % 4.0 % Knoxville MSA unemployment 4.1 % 4.7 % 3.9 % 3.2 % 3.4 % 3.8 % Nashville residential median home price $ 183.6 178.4 187.9 182.3 196.0 173.4 Nashville inventory of residential homes for sale 15.8 15.1 13.4 15.4 14.6 12.9 PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY AND YEAR-TO-DATE FINANCIAL DATA – UNAUDITED         (dollars in thousands, except per share data)       As of June 30,2008   As of December 31,2007     Reconciliation of certain financial measures: Tangible assets: Total assets $ 4,106,055 $ 3,794,170 Less: Goodwill (241,989 ) (243,574 ) Core deposit intangible   (17,178 )     (17,326 ) Net tangible assets $ 3,846,888     $ 3,533,271     Tangible equity: Total stockholders’ equity $ 481,709 $ 466,610 Less: Goodwill (241,989 ) (243,574 ) Core deposit intangible   (17,178 )     (17,326 ) Net tangible equity $ 222,543     $ 205,711     Tangible equity divided by tangible assets   5.79 %     5.82 %   Tangible equity per common share $ 9.85     $ 9.24     For the three months ended June 30, For the six months ended June 30, (dollars in thousands)   2008   2007   2008   2007   Average tangible assets: Total average assets $ 3,913,519 $ 2,229,227 $ 3,843,781 $ 2,189,578 Less: Average intangible assets   (259,217 )     (125,020 )     (259,012 )     (123,874 ) Net average tangible assets $ 3,654,302     $ 2,104,207     $ 3,584,769     $ 2,065,704     Average tangible equity: Total average stockholders’ equity $ 477,502 $ 264,055 $ 475,971 $ 261,761 Less: Average intangible assets   (259,217 )     (125,020 )     (259,012 )     (123,874 ) Net average tangible stockholders’ equity $ 218,285     $ 139,035     $ 216,959     $ 137,887     Net income $ 7,961     $ 5,426     $ 14,026     $ 11,028     Return on average tangible assets (annualized)   0.88 %     1.03 %     0.79 %     1.07 %   Return on average tangible stockholders’ equity (annualized)   14.67 %     15.65 %     13.00 %     16.04 %   Net income $ 7,961 $ 5,426 $ 14,026 $ 11,028 Impact of merger related expense, net of tax   820       -       2,707       -   Net income before impact of merger related expense $ 8,781     $ 5,426     $ 16,733     $ 11,028   Fully-diluted earnings per share before impact of merger related expense $ 0.37     $ 0.33     $ 0.71     $ 0.66     Return on average assets before impact of merger expenses   0.90 %     0.98 %     0.88 %     1.01 % Return on average equity before impact of merger expenses   7.40 %     8.24 %     7.07 %     8.45 % Return on average tangible equity before impact of merger expenses   16.18 %     15.65 %     15.51 %     16.04 %     Total expenses $ 23,075 $ 14,484 $ 48,567 $ 27,608 Less: merger expense   (1,349 )     -       (4,455 )     -   Total expenses before impact of merger related expense $ 21,726     $ 14,484     $ 44,112     $ 27,608     Efficiency ratio before impact of merger related expense   59.13 %     62.40 %     60.87 %     60.92 % PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED       1. Ratios are presented on an annualized basis. 2. Net interest margin is the result of net interest income on a tax equivalent basis divided by average interest earning assets. 3. Total revenue is equal to the sum of net interest income and noninterest income. 4. Efficiency ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income. 5. Average risk ratings are based on an internal loan review system which assigns a numeric value of 1 to 10 to all loans to commercial entities based on their underlying risk characteristics as of the end of each quarter. A "1” risk rating is assigned to credits that exhibit Excellent risk characteristics, "2” exhibit Very Good risk characteristics, "3” Good, "4” Satisfactory, "5” Acceptable or Average, "6” Watch List, "7” Criticized, "8” Classified or Substandard, "9” Doubtful and "10” Loss (which are charged-off immediately). Additionally, loans rated "8” or worse are considered potential problem loans. Potential problem loans do not include nonperforming loans. Generally, consumer loans are not subjected to internal risk ratings. 6. Annualized net loan charge-offs to average loans ratios are computed by annualizing year-to-date net loan charge-offs and dividing the result by average loans for the year-to-date period. 7. Computed by dividing the balance of all loans by the number of loan accounts as of the end of each quarter. 8. Book value per share computed by dividing total stockholders’ equity by common shares outstanding. 9. Capital ratios are for Pinnacle Financial Partners, Inc. and are defined as follows: Equity to total assets – End of period total stockholders’ equity as a percentage of end of period assets. Leverage – Tier one capital (pursuant to risk-based capital guidelines) as a percentage of adjusted average assets. Tier one risk-based – Tier one capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets. Total risk-based – Total capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets. 10. Amounts are included in the statement of income in "Gains on the sale of loans and loan participations sold”, net of commissions paid on such amounts. 11. At fair value, based on information obtained from Pinnacle’s third party broker/dealer for non-FDIC insured financial products and services. 12. Floating rate loans are those loans that are eligible for repricing on a daily basis subject to changes in Pinnacle’s prime lending rate or other factors. 13. Core deposits include all transaction deposit accounts, money market and savings accounts and all certificates of deposit issued in a denomination of less than $100,000. The ratio noted above represents total core deposits divided by total funding, which includes total deposits, FHLB advances, securities sold under agreements to repurchase, subordinated indebtedness and all other interest-bearing liabilities. 14. Associate retention rate is computed by dividing the number of associates employed at quarter-end less the number of associates that have resigned in the last 12 months by the number of associates employed at quarter-end. 15. Employment and unemployment data is from the US Dept. of Labor Bureau of Labor Statistics. Labor force data is not seasonally adjusted. The most recent quarter data presented is as of the most recent month that data is available as of the release date. The Nashville home data is from the Greater Nashville Association of Realtors.