U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 29549
----------------------
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
Commission File Number 33-67528
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PINNACLE FINANCIAL CORPORATION
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Georgia 58-1538862
- ------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization
884 Elbert Street,
P.O. Box 430, Elberton, Georgia 30635-0430
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (706) 283-2854
--------------
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes X No
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
AS OF OCTOBER 31, 1996 THERE WERE 768,000 SHARES OF COMMON STOCK OUTSTANDING.
<PAGE>
PINNACLE FINANCIAL CORPORATION
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Position at
September 30, 1996 and December 31, 1995 1
Consolidated Statements of Income for the Three
Months ended September 30, 1996 and 1995 2
Consolidated Statements of Income for the Nine
Months ended September 30, 1996 and 1995 3
Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 1996 and 1995 4
Item 2. Managements Discussion and Analysis or Plan of
Operation 6
PART II - OTHER INFORMATION 12
I<PAGE>
PINNACLE FINANCIAL CORPORATION
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
II<PAGE>
PINNACLE FINANCIAL CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
ASSETS
- ------
<S> <C> <C>
Cash and due from banks $ 7,205,330 $ 6,079,376
Federal funds sold 447,207 8,062,879
Securities available for sale 90,274,015 77,875,874
Loans, net of allowance for credit losses
of $1,849,944 and $1,828,722, respectively 126,454,261 119,637,013
Premises and equipment 4,961,920 4,766,974
Accrued interest receivable 2,810,983 2,514,723
Foreclosed real estate 469,382 584,523
Other assets 1,607,168 1,123,889
----------- -----------
Total assets $234,230,266 $220,645,251
=========== ===========
LIABILITIES
- -----------
Demand deposits $ 32,574,260 $ 30,196,769
Savings and NOW deposits 61,462,562 61,403,287
Other time deposits 106,159,335 96,318,071
----------- -----------
Total deposits 200,196,157 187,918,127
Accrued interest and other liabilities 2,004,378 2,267,921
----------- -----------
Total liabilities 202,200,535 190,186,048
----------- -----------
SHAREHOLDERS' EQUITY
- --------------------
Common stock, $10 par value; 5,000,000 shares
authorized, 768,000 shares issued and outstanding 7,680,000 7,680,000
Capital surplus 7,280,000 7,280,000
Retained earnings 17,028,748 14,589,472
Net unrealized appreciation on securities available for sale,
net of taxes of $21,112 and $468,649, respectively 40,983 909,731
----------- -----------
Total shareholders' equity 32,029,731 30,459,203
----------- -----------
Total liabilities and shareholders' equity $234,230,266 $220,645,251
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
1<PAGE>
PINNACLE FINANCIAL CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
INTEREST INCOME
- ---------------
<S> <C> <C>
Loans $3,288,006 $3,176,132
Securities available for sale 1,355,365 1,099,656
Federal funds sold 40,629 69,308
--------- ---------
Total interest income 4,684,000 4,345,096
--------- ---------
INTEREST EXPENSE
- ----------------
Deposits 1,811,539 1,697,150
--------- ---------
Total interest expense 1,811,539 1,697,150
--------- ---------
NET INTEREST INCOME 2,872,461 2,647,946
- -------------------
Provision for credit losses 75,000 75,000
--------- ---------
Net interest income after provision for credit losses 2,797,461 2,572,946
--------- ---------
OTHER INCOME
- ------------
Service charges on deposit accounts 309,646 295,032
Other service charges and fees 85,993 60,206
Other income 51,514 33,882
--------- ---------
Total other income 447,153 389,120
--------- ---------
OTHER EXPENSES
- --------------
Salaries and employee benefits 985,569 871,080
Occupancy expense 229,924 215,998
Net realized losses on sales of securities available for sale 4,223 13,829
Other expenses 412,472 438,981
--------- ---------
Total other expenses 1,632,188 1,539,888
--------- ---------
Income before income taxes 1,612,426 1,422,178
Income tax expense 441,500 385,750
--------- ---------
NET INCOME $1,170,926 1,036,428
- ---------- ========= =========
Net income per share of common stock $1.52 $1.35
===== =====
Average shares outstanding 768,000 768,000
======= =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
2<PAGE>
PINNACLE FINANCIAL CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
YTD YTD
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
INTEREST INCOME
- ---------------
<S> <C> <C>
Loans $ 9,731,407 $ 9,311,032
Securities available for sale 3,833,871 3,233,834
Federal funds sold 197,912 211,727
---------- ----------
Total interest income 13,763,190 12,756,593
---------- ----------
INTEREST EXPENSE
- ----------------
Deposits 5,370,609 4,846,976
---------- ----------
Total interest expense 5,370,609 4,846,976
---------- ----------
NET INTEREST INCOME 8,392,581 7,909,617
- -------------------
Provision for credit losses 334,300 235,000
---------- ----------
Net interest income after provision for credit losses 8,058,281 7,674,617
---------- ----------
OTHER INCOME
- ------------
Service charges on deposit accounts 952,034 877,845
Other service charges and fees 291,873 246,638
Other income 147,434 183,245
---------- ----------
Total other income 1,391,341 1,307,728
---------- ----------
OTHER EXPENSES
- --------------
Salaries and employee benefits 2,831,418 2,638,861
Occupancy expense 675,659 635,520
Net realized losses on sales of securities available for sale 1,937 36,293
Other expenses 1,216,152 1,386,423
---------- ----------
Total other expenses 4,725,166 4,697,097
---------- ----------
Income before income taxes 4,724,456 4,285,248
Income tax expense 1,317,500 1,158,500
---------- ----------
NET INCOME $3,406,956 $3,126,748
- ---------- ========= =========
Net income per share of common stock $4.44 $4.07
==== ====
Average shares outstanding 768,000 768,000
======= =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3<PAGE>
PINNACLE FINANCIAL CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30,
1996 1995
<S> <S> <S>
Cash flow from operating activities
Net income $3,406,956 $3,126,748
Adjustments to reconcile net income to net
Cash provided by operating activities:
Depreciation and amortization 298,134 311,040
Provision for credit losses 334,300 235,000
Deferred income taxes ---- ----
Net realized (gains) losses on securities available for sale (1,937) (36,293)
(Increase) decrease in accrued interest and other assets (664,398) 149,072
Increase (decrease) in accrued expenses and other liabilities (263,543) 244,069
---------- ---------
Total adjustments (297,444) 902,888
---------- ---------
Net cash provided by operating activities 3,109,512 4,029,636
---------- -----------
Cash flows from investing activities
Net (increase) decrease in federal funds sold 7,615,672 (2,560,000)
Purchase of securities available for sale (34,986,843) (17,724,857)
Proceeds from sales of securities available for sale 1,999,066 7,426,967
Proceeds from maturities of securities available for sale 19,722,825 9,875,000
Net increase in loans (7,151,548) (1,416,901)
Purchases of premises and equipment (493,080) (239,637)
---------- -----------
Net cash used by investing activities (13,293,908) (4,639,428)
---------- -----------
Cash flows from financing activities
Net increase (decrease) in non-interest bearing demand deposits,
Savings and NOW deposit accounts 2,436,766 (1,828,222)
Net increase in time deposits 9,841,264 5,024,406
Net decrease in federal funds purchased 0 (540,000)
Dividends paid (967,680) (921,600)
---------- ----------
Net cash provided by financing activities 11,310,350 1,734,584
---------- ----------
Net increase in cash and due from banks 1,125,954 1,124,792
Cash and cash equivalents at January 1 6,079,376 7,320,285
---------- ----------
Cash and cash equivalents at September 30 $7,205,330 $8,445,077
========= =========
Interest paid $5,408,749 $4,675,435
========= =========
Income taxes paid $1,405,258 $1,112,848
========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
4<PAGE>
PINNACLE FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(1) BASIS OF PRESENTATION
The consolidated financial statements include the accounts
of Pinnacle Financial Corporation (the Company) and its wholly-
owned commercial bank subsidiaries, First National Bank in
Elberton and Tri-County Bank of Royston. All significant
intercompany accounts have been eliminated in consolidation.
In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting only of normal recurring adjustments) necessary for
fair statements of the consolidated financial position and the
results of operations of the Company for the interim periods.
The results of operations for the nine month period ended
September 30, 1996 are not necessarily indicative of the results
which may be expected for the entire year.
(2) INVESTMENT SECURITIES
As of December 31, 1994, the Company adopted FAS No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities". All investment securities are classified as
available-for-sale and are recorded at their estimated fair
market values in accordance with the provision of FAS No. 115.
From time to time, the Company may decide to sell certain
securities prior to maturity for liquidity, tax planning and
other valid business purposes. Gains and losses are determined
using the specific identification method when securities are
sold.
(3) INCOME TAXES
Deferred income taxes are recorded as required by FAS No.
109, "Accounting for Income Taxes", using the liability method
under which deferred tax assets and liabilities are determined
based on the differences between the financial accounting and tax
basis of assets and liabilities.
(4) ACCOUNTING FOR IMPAIRED LOANS
FAS 114, "Accounting by Creditors for Impairment of a Loan"
was adopted as of January 1, 1995 as required. Loans having
carrying values of $818,000 as of September 30, 1996 have been
recognized as impaired in conformity with FAS 114. The total
allowance for credit losses related to the impaired loans was
$265,000. For impairment recognized in conformity with FAS 114,
the entire change in the present value of expected cash flows is
reported as bad debt expense in the same manner in which the
initial impairment was recognized or as a reduction in the amount
of bad debt expense that otherwise would be reported. The
company has recognized specific allowances in prior periods for
each of these loans based on previous methodology for calculating
its allowance for credit losses.
5<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial
Condition and Results of Operations of Pinnacle analyses the
major elements of Pinnacle's consolidated balance sheets and
statements of income. This section reflects the results of its
two subsidiary banks, First National Bank in Elberton and Tri-
County Bank of Royston.
Pinnacle continues to weigh the merits of additional
business combinations while maintaining a focus on its general
mission to responsibly serve the needs of its customers and
communities and to enhance profit potential and shareholder
value. First National opened a full service branch office at 135
E. Franklin Street, Hartwell, Georgia on September 9, 1996 after
receiving approval from the Southeastern District office of the
Comptroller of the Currency as allowed by section 12 U.S.C. 36
and Georgia statutes sections O.C.G.A. 7-1-601, 7-1-602 and 7-1-
394. Tri-County Bank of Royston opened a full service branch
office at 5784 West Avenue, Lavonia, Georgia on September 9 after
receiving approval from the Georgia Department of Banking and the
Federal Deposit Insurance Corporation.
For a comprehensive presentation of Pinnacle's
financial condition and results of operations, the following
analysis should be viewed along with other information contained
in this report, including the financial statements and
accompanying disclosures. All amounts throughout this section
are rounded to the nearest 1,000 dollars, the nearest .1 million
dollars and to the nearest .1 percent to represent approximations
of reported amounts.
LIQUIDITY AND CAPITAL RESOURCES
The objective of liquidity management is to maintain
cash flows adequate to meet immediate and ongoing future needs of
credit demand, deposit withdrawal, maturing liabilities and
corporate operating expenses. Pinnacle seeks to meet liquidity
requirements primarily through the management of federal funds
and the investment securities portfolio. At September 30, 1996,
23.9% of the investment securities portfolio had maturity dates
within the next year and an additional 66.1% matures within the
next 5 years. During the first nine months of 1996, federal
funds sold averaged $5.5 million thereby providing sufficient
funds to meet immediate needs. Other sources of liquidity are
payments on commercial and installment loans and repayment of
maturing single payment loans. Also, Pinnacle retains
relationships with four correspondent banks which could provide
funds to it on short term notice, if needed. Presently, Pinnacle
has arrangements with commercial banks for short term unsecured
advances up to $9.8 million. Pinnacle's management intends to
continue to closely monitor and maintain appropriate levels of
interest bearing assets and liabilities in future periods so that
maturities of assets are such that adequate funds are provided to
meet customer withdrawals and loan requests while net interest
margins are maximized.
6<PAGE>
Regulatory policy generally requires the maintenance of
a liquidity ratio of 25%, which is generally defined as cash plus
liquid investments divided by deposits plus borrowings due within
one year. The desired level of liquidity is determined by
management based in part on Pinnacle's commitment to make loans
and an assessment of its ability to generate funds. At September
30, 1996, liquidity ratios were: Pinnacle 44.5%, First National
50.1% and Tri-County Bank 36.4%.
Average yields on interest bearing assets averaged 8.8%
for the current quarter compared to 9.0% for the same period the
year before. Total interest bearing assets increased by $15.1
million or 7.7% for the current period when compared with the
quarter ended September 30, 1995. Average net loans increased
$5.5 million or 4.7% in the three months ended September 30, 1996
from the same 1995 period, primarily as a result of a healthy
economy in Northeast Georgia. Average net loans during the
quarter for First National were $68.1 million while Tri-County
Bank's average net loans were $55.4 million.
Average yields on interest bearing assets remained 8.7%
for the nine month period ended September 30, 1996 compared to
the average for the same period the year before. Total interest
bearing assets increased by $17.3 million or 8.9% for the current
period when compared with the nine month period ended September
30, 1995. Average net loans increased $4.6 million or 3.9% in
the nine months ended September 30, 1996 from the same 1995
period, primarily as a result of a healthy economy in Northeast
Georgia. Average net loans during the period for First National
were $67.4 million while Tri-County Bank's average net loans were
$55.5 million.
Other real estate owned during the first nine months of
1996 were reduced by $116,000, resulting in $469,000 held at
September 30, 1996 compared to $585,000 at December 31, 1995.
Non-performing loans totaled $448,000 as of September 30, 1996
representing .3% of total loans at September 30, 1996 compared to
$621,000 at December 31, 1995, which represented .5% of total
loans at that date. Accrued interest as of September 30, 1996 on
non-performing loans totaled $29,000 which is not reported as
income. Non-performing loans at September 30, 1996 are
classified as: real estate, $381,000; other collateralized loans,
$50,000; and unsecured, $17,000.
Pinnacle continues to maintain a concentration of core
deposits from an established customer base which provides a
stable funding source. Deposits increased $12.3 million to
$200.2 million at September 30, 1996 from $187.9 million at
December 31, 1995, due primarily to continued economic expansion
in Northeast Georgia and to the deposits raised by our two new
full service branches. Non-interest bearing deposits increased
$2.4 million to $32.6 million compared to December 31, 1995
balance of $30.2 million. Interest bearing deposits increased
$9.9 million at September 30, 1996.
Management continues to give priority to the importance
of maintaining high levels of assets with interest rate
sensitivity. Cash and cash equivalents decreased during the
first nine months of 1996 from December 31, 1995 levels by $6.5
million and investment securities increased $12.4 million from
December 31, 1995 levels. This reflects a growth in the assets
which management is investing to maximize interest income by
purchasing investments with higher yields than federal funds.
7<PAGE>
Shareholders' equity increased $1.5 million to $32.0
million at September 30, 1996 from $30.5 million at December 31,
1995. Earnings retained during the nine months amounted to $2.4
million and equity was decreased $869,000 as a result of a
decline in net unrealized gains during the first nine months due
to a decline in the bond market. FAS 115 which was adopted on
December 31, 1994 requires that unrealized gains/losses on
certain marketable securities be recorded in shareholder's
equity.
Pinnacle continues to maintain adequate capital ratios
(see "Risk Based Capital Ratios" below and see "Results of
Operations" below for discussion of dividend levels.) Pinnacle
maintained a level of capital, as measured by its average equity
to average assets ratio, of 13.8% during the first nine months of
1996, compared to 13.4% for the year which ended December 31,
1995.
Management is not aware of any known trends, events or
uncertainties that are reasonably likely to have a material
effect on the registrants liquidity, capital resources, or
results of operation. Pinnacle is not aware of any current
recommendations by the regulatory authorities which, if they were
implemented, would have such an effect. Loans classified for
regulatory purposes as loss, doubtful, substandard or special
mention do not represent trends or uncertainties which management
reasonably expects will materially impact future operational
trends.
RESULTS OF OPERATIONS (for the three month period ended September
30, 1996)
Pinnacle's operational results primarily depend on the
earnings of the banks. Their earnings depend to a large degree
on net interest income, which is the difference between the
interest income received from investments (such as loans,
investment securities, federal funds sold, etc.) and the interest
expense which is paid on deposit liabilities.
Net interest income in the three months ended September
30, 1996 increased 8.5% as a result of growth in interest bearing
assets and deposits, favorable rate spreads and management's
ability to match rate sensitive assets with rate sensitive
liabilities in such a way that net interest margins have
increased from the same period the prior year. As a result of
increased deposits, interest expense increased $114,000 or 6.7%
while interest income increased $338,000 or 7.8% in the three
months ended September 30, 1996 compared to the same period the
year before.
The provision for possible loan losses is the charge to
operating expenses that management believes is necessary to fund
the reserve for possible loan losses. The provision reflects
management's estimate of potential loan losses and the creation
of an allowance for loan losses adequate to absorb losses
inherent in the portfolio. Pinnacle provided $75,000 for loan
losses in the three months ended September 30, 1996 as it did for
the same period in 1995. Pinnacle experienced loan charge-offs
in the three months ended September 30, 1996 of $37,000 compared
to $62,000 in the same period in 1995. The allowance for loan
8<PAGE>
losses increased $17,000 to $1.8 million at September 30, 1996
compared to $1.7 million at September 30, 1995. Pinnacle's
allowance for loan losses represents 1.4% of total loans
outstanding at September 30, 1996. Its net recoveries were
$18,000 during the three months ended September 30, 1996 and its
net charge offs were $51,000 during the same period in 1995.
Other operating expenses for Pinnacle during the three
months ended September 30, 1996 increased $90,000 to $1.6 million
from $1.5 million for the same period in the previous year. The
increase in other operating expenses is attributable to the
increase in the salaries and employee benefits associated with
staffing the two new full service branch locations.
Pinnacle's income tax expense increased $56,000 for the
quarter compared to the same period in the previous year due
primarily to increased taxable income. The effective income tax
rate during the quarter of 27.4% is a increase of .3% over the
same quarter in 1995.
Results of operations can be measured by various ratio
analyses. Two widely recognized performance indicators are
return on average equity and return on average assets. Net
income during the three months ended September 30, 1996 was $1.2
million and represents annualized returns of 14.9% on average
shareholders' equity and 2.0% on average assets. Comparable
amounts during the same period of 1995 were $1.1 million, 15.1%
and 2.0%, respectively. As detailed in previous paragraphs, the
increase in net income of $134,000 was primarily due to the
increase in the net interest margin.
Dividends declared during the three months ended
September 30, 1996 increased $.07 per share to $.42 from $.35 per
share during the same period of 1995.
RESULTS OF OPERATIONS (for the nine month period ended September
30, 1996)
Pinnacle's operational results primarily depend on the
earnings of the banks. Their earnings depend to a large degree
on net interest income, which is the difference between the
interest income received from investments (such as loans,
investment securities, federal funds sold, etc.) and the interest
expense which is paid on deposit liabilities.
Net interest income in the nine months ended September
30, 1996 increased 6.1% as a result of growth of interest bearing
assets and liabilities, favorable rate spreads and management's
ability to match rate sensitive assets with rate sensitive
liabilities in such a way that net interest margins have
increased from the same period the prior year. As a result of
increased deposits, interest expense increased $524,000 or 10.8%
while interest income increased $1.0 million or 7.9% in the nine
months ended September 30, 1996 compared to the same period the
year before.
The provision for possible loan losses is the charge to
operating expenses that management believes is necessary to fund
the reserve for possible loan losses. The provision reflects
management's estimate of potential loan losses and the creation
of an allowance for loan losses adequate to absorb losses
9<PAGE>
inherent in the portfolio. Pinnacle provided $334,000 for loan
losses in the nine months ended September 30, 1996 and $235,000
for the same period in 1995. Pinnacle experienced loan charge-
offs in the nine months ended September 30, 1996 of $380,000
compared to $300,000 in the same period in 1995. Management
charged off a large loan totaling $258,000 in the first quarter
and subsequently increased the provision for possible loan losses
to a level which management deems adequate based on their review
of the portfolio. This large charge-off does not indicate a
trend or uncertainty which management reasonably expects will
materially impact future operational results. Its net charge-
offs were $339,000 during the nine months ended September 30,
1996 and $245,000 during the same period in 1995.
Other operating expenses for Pinnacle during the nine
months ended September 30, 1996 remained $4.7 million as they
were during the same period in the previous year.
Pinnacle's income tax expense increased $159,000 for the
nine months ended September 30, 1996 compared to the same period
in the previous year due primarily to increased taxable income.
The effective income tax rate during the period of 27.9% is a
increase of .9% over the same quarter in 1995.
Results of operations can be measured by various ratio
analyses. Two widely recognized performance indicators are
return on average equity and return on average assets. Net
income during the nine months ended September 30, 1996 was $3.4
million and represents annualized returns of 14.6% on average
shareholders' equity and 2.0% on average assets. Comparable
amounts during the same period of 1995 were $3.1 million, 15.2%
and 2.0%, respectively. As detailed in previous paragraphs, the
increase in net income of $280,000 was primarily due to the
increase in the net interest margin.
Dividends declared during the nine months ended September
30, 1996 increased $.21 per share to $1.26 from $1.05 per share
during the same period of 1995.
10<PAGE>
The following tables present Pinnacle's Regulatory capital
position at September 30, 1996:
(Rounded to the nearest thousand)
<TABLE>
<CAPTION>
<S> <C> <C>
Total Risk Adjusted Assets $139,095
Risk Based Capital Ratios:
TIER 1 CAPITAL
Common stock $7,680 5.49%
Surplus 7,280 5.21%
Retained Earnings 17,029 12.24%
Less: Goodwill 0 0.00%
------- ------
Total Tier 1 capital 31,989 23.00%
Tier 1 minimum requirement 5,564 4.00%
------- ------
Excess (shortfall) $26,425 19.00%
======= =====
TIER 2 CAPITAL
Tier 1 from above $31,989 23.00%
Subordinated Debentures 0 0.00%
Allowance for loan losses, limited to 1.25%
of risk weighted assets 1,739 1.25%
------- -----
Total Tier 2 capital 33,728 24.25%
Tier 2 minimum requirement 11,128 8.00%
------- -----
Excess (shortfall) $22,600 16.25%
======= =====
LEVERAGE RATIO
Tier 1 capital $31,989 14.08%
Minimum requirement 6,816 3.00%
------- -----
Excess (shortfall) $25,173 11.08%
======= =====
Average total assets, net of goodwill $227,192
========
</TABLE>
11<PAGE>
PINNACLE FINANCIAL CORPORATION
PART II
ITEM 2. LEGAL PROCEEDINGS
Pinnacle is not aware of any material pending legal proceedings
to which Pinnacle or any of its subsidiaries is a party or to which any
of their property is subject.
ITEM 3. CHANGES IN SECURITIES
None.
ITEM 4. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 5. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On March 19, 1996 the Registrant held its annual meeting of
Shareholders where the following directors were elected at the meeting
for one year terms:
L. Jackson McConnell James E. Purcell
Lint W. Eberhardt Maurice Bond
C. Lewis Shurbutt Anderson Dilworth
William F. Grant H. Thomas Brown
Charles Bradshaw
597,011 shares (78%) were cast in favor of the each of the
directors other than William F. Grant. 595,991 shares (78%) were cast in
favor of Mr. Grant, and holder of 1020 shares (less than 1%) abstained
from voting with respect to the election of Mr. Grant.
There were no shares cast against any of the directors.
There were no abstentions or broker non-votes cast.
ITEM 6. OTHER INFORMATION
None.
ITEM 7. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K - None
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
PINNACLE FINANCIAL CORPORATION
Date: November 12, 1996 By: /s/ L. Jackson McConnell
L. Jackson McConnell
Chairman and Chief Executive Officer
(Principal Executive and Financial Officer)
12
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<NAME> PINNACLE FINANCIAL CORPORATION
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