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, 1997
Commission File Number 33-67528
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, 1997 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, 1997 and December 31, 1996 1
Consolidated Statements of Income for the Three
Months ended September 30, 1997 and 1996 2
Consolidated Statements of Income for the Nine
Months ended September 30, 1997 and 1996 3
Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 1997 and 1996 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, 1997 AND DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
<S> <C> <C>
Assets
Cash and due from banks $7,700,669 $7,025,730
Federal funds sold 2,322,506 661,972
Securities available for sale 83,705,989 87,148,507
Loans, net of allowance for credit losses
of $2,035,572 and $1,842,152, respectively 138,189,602 131,392,264
Premises and equipment 7,258,931 5,558,659
Accrued interest receivable 2,577,791 2,864,465
Foreclosed real estate 336,626 491,859
Other assets 1,274,868 1,354,405
----------- -----------
Total assets $243,366,982 $236,497,861
============ ============
Liabilities
Demand deposits $36,115,808 $32,507,926
Savings and NOW deposits 58,782,711 60,903,412
Other time deposits 110,057,632 107,460,818
----------- -----------
Total deposits 204,956,151 200,872,156
Federal Funds Purchased 0 110,000
Accrued interest and other liabilities 2,356,179 2,249,414
----------- -----------
Total liabilities 207,312,330 203,231,570
----------- -----------
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 20,483,784 17,830,536
Net unrealized appreciation on securities available for sale,
net of taxes of $313,899 and $245,086, respectively 610,868 475,755
----------- -----------
Total shareholders' equity 36,054,652 33,266,291
----------- -----------
Total liabilities and shareholders' equity $243,366,982 $236,497,861
============ ============
</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, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
September 30, September 30,
1997 1996
------------ -------------
<S> <C> <C>
INTEREST INCOME
Loans $3,674,999 $3,288,006
Securities available for sale 1,364,703 1,355,365
Federal funds sold 31,560 40,629
----------- ---------
Total interest income 5,071,262 4,684,000
----------- ---------
INTEREST EXPENSE
Deposits 1,927,032 1,811,539
----------- ---------
Total interest expense 1,927,032 1,811,539
----------- ---------
NET INTEREST INCOME 3,144,230 2,872,461
Provision for credit losses 38,000 75,000
----------- ---------
Net interest income after provision for credit losses 3,106,230 2,797,461
----------- ---------
OTHER INCOME
Service charges on deposit accounts 350,768 309,646
Other service charges and fees 108,346 85,993
Net realized gains on sales of securities available for sale 180 0
Other income 121,446 51,514
----------- ---------
Total other income 580,740 447,153
----------- ---------
OTHER EXPENSES
Salaries and employee benefits 1,094,411 985,569
Occupancy expense 244,892 229,924
Net realized losses on sales of securities available for sale 0 4,223
Other expenses 533,595 412,472
----------- ---------
Total other expenses 1,872,898 1,632,188
----------- ---------
Income before income taxes 1,814,072 1,612,426
Income tax expense 544,800 441,500
---------- ---------
Net income $1,269,272 1,170,926
========== =========
Net income per share of common stock $1.65 $1.52
========== =========
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, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
YTD YTD
September 30, September 30,
1997 1996
<S> <C> <C>
INTEREST INCOME
Loans $10,761,033 $9,731,407
Securities available for sale 4,083,931 3,833,871
Federal funds sold 135,941 197,912
Total interest income 14,980,905 13,763,190
----------- -----------
INTEREST EXPENSE
Deposits 5,637,334 5,370,609
Federal funds borrowed 5,441 0
----------- -----------
Total interest expense 5,642,775 5,370,609
----------- -----------
NET INTEREST INCOME 9,338,130 8,392,581
Provision for credit losses 209,000 334,300
----------- -----------
Net interest income after provision for credit losses 9,129,130 8,058,281
----------- -----------
OTHER INCOME
Service charges on deposit accounts 1,011,448 952,034
Other service charges and fees 284,568 291,873
Other income 220,887 147,434
----------- -----------
Total other income 1,516,903 1,391,341
----------- -----------
OTHER EXPENSES
Salaries and employee benefits 3,225,056 2,831,418
Occupancy expense 721,281 675,659
Net realized losses on sales of securities available for sale 1,969 1,937
Other expenses 1,471,680 1,216,152
----------- -----------
Total other expenses 5,419,986 4,725,166
----------- -----------
Income before income taxes 5,226,047 4,724,456
Income tax expense 1,536,000 1,317,500
----------- -----------
NET INCOME $3,690,047 $3,406,956
============ ===========
Net income per share of common stock $4.80 $4.44
===== =====
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, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
September 30, September 30,
1997 1996
<S> <C> <C>
Cash flow from operating activities
Net income $3,690,047 $3,406,956
Adjustments to reconcile net income to net
Cash provided by operating activities:
Depreciation and amortization 312,856 298,134
Provision for credit losses 209,000 334,300
Deferred income taxes ---- ----
Net realized (gains) losses on securities available for sale 1,969 (1,937)
(Increase) decrease in accrued interest and other assets 521,444 (664,398)
Increase (decrease) in accrued expenses and other liabilities 106,765 (263,543)
----------- ---------
Total adjustments 1,152,034 (297,444)
----------- ---------
Net cash provided by operating activities 4,842,081 3,109,512
----------- ---------
Cash flows from investing activities
Net (increase) decrease in federal funds sold (1,660,534) 7,615,672
Purchase of securities available for sale (19,180,868) (34,986,843)
Proceeds from sales of securities available for sale 7,729,843 1,999,066
Proceeds from maturities of securities available for sale 15,026,688 19,722,825
Net increase in loans (7,006,338) (7,151,548)
Purchases of premises and equipment (2,013,128) (493,080)
----------- ---------
Net cash used by investing activities (7,104,337) (13,293,908)
----------- ---------
Cash flows from financing activities
Net increase in non-interest bearing demand deposits,
Savings and NOW deposit accounts 1,487,181 2,436,766
Net increase in time deposits 2,596,814 9,841,264
Net decrease in federal funds purchased (110,000) 0
Dividends paid (1,036,800) (967,680)
----------- ---------
Net cash provided by financing activities 2,937,195 11,310,350
----------- ---------
Net increase in cash and due from banks 674,939 1,125,954
Cash and cash equivalents at January 1 7,025,730 6,079,376
----------- ---------
Cash and cash equivalents at September 30 $7,700,669 $7,205,330
=========== ==========
Interest paid $5,571,283 $5,408,749
=========== ==========
Income taxes paid $1,438,243 $1,405,258
=========== ==========
</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, 1997 AND 1996
(1) BASIS OF PRESENTATION
The consolidated financial statements include the accounts
of Pinnacle Financial Corporation (the Company) and its wholly-
owned commercial bank subsidiaries, Pinnacle Bank, N.A. and
Pinnacle Bank. 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, 1997 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 $866,000 as of September 30, 1997 have been
recognized as impaired in conformity with FAS 114. The total
allowance for credit losses related to the impaired loans was
$375,000. 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, Pinnacle Bank, National Association
(formerly First National Bank in Elberton) and Pinnacle Bank
(formerly Tri-County Bank of Royston). The name change was
effective April 4, 1997 in preparation for the merger of the two
bank subsidiaries with a proposed consummation date of December
31, 1997.
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.
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, 1997,
9.8% of the investment securities portfolio had maturity dates
within the next year and an additional 74.7% matures within the
next 5 years. During the first nine months of 1997, federal
funds sold averaged $3.3 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.
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, 1997, liquidity ratios were: Pinnacle 43.6%, Pinnacle Bank,
N.A. 47.7% and Pinnacle Bank 37.0%.
6<PAGE>
Average yields on interest bearing assets averaged 8.9%
for the current quarter compared to 8.8% for the same period the
year before. Total average interest bearing assets increased by
$15.2 million or 7.2% for the current period when compared with
the quarter ended September 30, 1996. Average net loans
increased $12.7 million or 10.2% in the three months ended
September 30, 1997 from the same 1996 period, primarily as a
result of a healthy economy in Northeast Georgia. Average net
loans during the quarter for Pinnacle Bank, N.A. were $73.7
million while Pinnacle Bank's average net loans were $63.3
million.
Average yields on interest bearing assets increased to
8.8% for the nine month period ended September 30, 1997 compared
to 8.7% for the same period the year before. Total average
interest bearing assets increased by $14.2 million or 6.7% for
the current period when compared with the nine month period ended
September 30, 1996. Average net loans increased $12.2 million or
9.9% in the nine months ended September 30, 1997 from the same
1996 period, primarily as a result of a healthy economy in
Northeast Georgia. Average net loans during the period for
Pinnacle Bank, N.A. were $72.9 million while Pinnacle Bank's
average net loans were $61.9 million.
Other real estate owned during the first nine months of
1997 were reduced by $155,000, resulting in $337,000 held at
September 30, 1997 compared to $492,000 at December 31, 1996.
Non-performing loans totaled $544,000 as of September 30, 1997
representing .4% of total loans at September 30, 1997 compared to
$494,000 at December 31, 1996, which represented .4% of total
loans at that date. Accrued interest as of September 30, 1997 on
non-performing loans totaled $9,000 which is not reported as
income. Non-performing loans at September 30, 1997 are
classified as: real estate, $490,000; other collateralized loans,
$47,000; and unsecured, $7,000.
Pinnacle continues to maintain a concentration of core
deposits from an established customer base which provides a
stable funding source. Deposits increased $4.1 million to $205.0
million at September 30, 1997 from $200.9 million at December 31,
1996, due primarily to continued economic expansion in
Northeast Georgia and to the deposits raised by two new full
service branches. Non-interest bearing deposits increased $3.6
million to $36.1 million compared to December 31, 1996 balance of
$32.5 million. Interest bearing deposits increased $476,000 at
September 30, 1997.
Management continues to give priority to the importance
of maintaining high levels of assets with interest rate
sensitivity. Cash and cash equivalents increased during the
first nine months of 1997 from December 31, 1996 levels by $2.3
million and investment securities decreased $3.4 million from
December 31, 1996 levels. This reflects managements ability to
invest the growth in the assets in loans yielding higher returns
than federal funds or other investments.
Shareholders' equity increased $2.8 million to $36.1
million at September 30, 1997 from $33.3 million at December 31,
1996. Earnings retained during the nine months amounted to $2.7
million and equity was increased $135,000 as a result of a
7<PAGE>
increase in net unrealized gains during the first nine months due
to a increase 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 14.1% during the first nine months of
1997, compared to 13.7% for the year which ended December 31,
1996.
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,
1997)
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, 1997 increased 8.4% 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 $115,000 or 6.4%
while interest income increased $387,000 or 8.3% in the three
months ended September 30, 1997 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 $38,000 for loan
losses in the three months ended September 30, 1997 as it did for
the same period in 1996. Pinnacle experienced loan charge-offs
in the three months ended September 30, 1997 of $73,000 compared
to $37,000 in the same period in 1996. The allowance for loan
losses increased $186,000 to $2.0 million at September 30, 1997
compared to $1.8 million at September 30, 1996. Pinnacle's
allowance for loan losses represents 1.5% of total loans
outstanding at September 30, 1997. Its net recoveries were
$41,000 during the three months ended September 30, 1997 and
$18,000 during the same period in 1996.
8<PAGE>
Other operating expenses for Pinnacle during the three
months ended September 30, 1997 increased $241,000 to $1.9
million from $1.6 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 and costs
associated with the changing of the banks names.
Pinnacle's income tax expense increased $103,000 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 30.0% is a increase of 2.6% over the
same quarter in 1996.
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, 1997 was $1.3
million and represents annualized returns of 14.4% on average
shareholders' quity and 2.1% on average assets. Comparable
amounts during the same period of 1996 were $1.2 million, 14.9%
and 2.0%, respectively. As detailed in previous paragraphs, the
increase in net income of $98,000 was primarily due to the
increase in the net interest margin.
Dividends declared during the three months ended
September 30, 1997 increased $.03 per share to $.45 from $.42 per
share during the same period of 1996.
RESULTS OF OPERATIONS (for the nine month period ended September 30,
1997)
Pinnacle's operational results primarily depend on the
earnings of the banks. 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, 1997 increased 11.3% 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 $272,000 or
5.1% while interest income increased $1.2 million or 8.9% in the
nine months ended September 30, 1997 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 $209,000 for loan
losses in the nine months ended September 30, 1997 and $334,000
for the same period in 1996. Pinnacle experienced loan charge-
offs in the nine months ended September 30, 1997 of $149,000
compared to $380,000 in the same period in 1996. Its net charge-
offs were $15,000 during the nine months ended September 30, 1997
and $339,000 during the same period in 1996.
9
<PAGE>
Other operating expenses for Pinnacle during the nine
months ended September 30, 1997 increased $697,000 to $5.4
million compared to $4.7 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 and costs associated with the changing of the banks'
names.
Pinnacle's income tax expense increased $219,000 for the
nine months ended September 30, 1997 compared to the same period
in the previous year due primarily to increased taxable income.
The effective income tax rate during the period of 29.4% is a
increase of 1.5% over the same quarter in 1996.
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, 1997 was $3.7
million and represents annualized returns of 14.3% on average
shareholders' equity and 2.0% on average assets. Comparable
amounts during the same period of 1996 were $3.4 million, 14.6%
and 2.0%, respectively. As detailed in previous paragraphs, the
increase in net income of $283,000 was primarily due to the
increase in the net interest margin.
Dividends declared during the nine months ended September
30, 1997 increased $.09 per share to $1.35 from $1.26 per share
during the same period of 1996.
10<PAGE>
The following tables present Pinnacle's Regulatory capital
position at September 30, 1997:
<TABLE>
<CAPTION>
(Rounded to the nearest thousand)
<S> <C> <C>
Total Risk Adjusted Assets $149,745
Risk Based Capital Ratios:
TIER 1 CAPITAL
Common stock $7,680 5.13%
Surplus 7,280 4.86%
Retained Earnings 20,484 13.68%
Less: Goodwill 0 0.00%
--------- ------
Total Tier 1 capital 35,444 23.67%
Tier 1 minimum requirement 5,990 4.00%
--------- -------
Excess (shortfall) $29,454 19.67%
========= ======
TIER 2 CAPITAL
Tier 1 from above $35,444 23.67%
Subordinated Debentures 0 0.00%
Allowance for loan losses, limited to 1.25%
of risk weighted assets 1,872 1.25%
--------- -------
Total Tier 2 capital 37,316 24.92%
Tier 2 minimum requirement 11,980 8.00%
--------- -------
Excess (shortfall) $25,336 16.92%
========= ======
LEVERAGE RATIO
Tier 1 capital $35,444 14.50%
Minimum requirement 7,331 3.00%
--------- --------
Excess (shortfall) $28,113 11.50%
========= ======
Average total assets, net of goodwill $244,371
=========
</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 18, 1997 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 Steve Williams
Robert H. Hardy H. Thomas Brown
Charles Bradshaw
645,838 Shares (84%) were cast in favor of the directors.
There were no shares cast against any of the directors or broker non-
votes cast.
ITEM 6. OTHER INFORMATION
None.
ITEM 7. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibit 27 - Financial Data Schedule (for SEC use only)
There were no reports on Form 8-K.
12<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 13, 1997 By: /s/ L. Jackson McConnell
L. Jackson McConnell
Chairman and Chief Executive Officer
(Principal Executive and Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000910678
<NAME> PINNACLE FINANCIAL CORPORATION
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 7,700,669
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,322,500
<TRADING-ASSETS> 83,705,989
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 138,189,602
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<DEPOSITS> 204,956,151
<SHORT-TERM> 0
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<LONG-TERM> 0
0
0
<COMMON> 7,680,000
<OTHER-SE> 28,374,652
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<INTEREST-LOAN> 10,761,033
<INTEREST-INVEST> 4,219,872
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<INTEREST-DEPOSIT> 5,637,334
<INTEREST-EXPENSE> 5,642,775
<INTEREST-INCOME-NET> 9,338,130
<LOAN-LOSSES> 209,000
<SECURITIES-GAINS> 1,969
<EXPENSE-OTHER> 5,419,986
<INCOME-PRETAX> 5,226,047
<INCOME-PRE-EXTRAORDINARY> 3,690,047
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,690,047
<EPS-PRIMARY> 4.80
<EPS-DILUTED> 4.80
<YIELD-ACTUAL> 8.8
<LOANS-NON> 202,554
<LOANS-PAST> 588,995
<LOANS-TROUBLED> 253,653
<LOANS-PROBLEM> 886,087
<ALLOWANCE-OPEN> 1,842,152
<CHARGE-OFFS> 149,450
<RECOVERIES> 133,869
<ALLOWANCE-CLOSE> 2,035,572
<ALLOWANCE-DOMESTIC> 375,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,660,572
</TABLE>
