<PAGE>
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 JUNE 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
incorporation or organization Identification Number)
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 JULY 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
June 30, 1997 and December 31, 1996 1
Consolidated Statements of Income for the Three
Months ended June 30, 1997 and 1996 2
Consolidated Statements of Income for the Six
Months ended June 30, 1997 and 1996 3
Consolidated Statements of Cash Flows for the
Six Months Ended June 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
JUNE 30, 1997 AND DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- -----------
<S> <C> <C>
Assets
- -------
Cash and due from banks $9,466,575 $7,025,730
Federal funds sold 721,661 661,972
Securities available for sale 86,714,315 87,148,507
Loans, net of allowance for credit losses
of $1,956,912 and $1,842,152, respectively 136,743,935 131,392,264
Premises and equipment 7,272,157 5,558,659
Accrued interest receivable 2,634,275 2,864,465
Foreclosed real estate 370,971 491,859
Other assets 1,347,052 1,354,405
----------- -----------
Total assets $245,270,941 $236,497,861
=========== ===========
Liabilities
- -----------
Demand deposits $36,217,348 $32,507,926
Savings and NOW deposits 60,357,993 60,903,412
Other time deposits 110,901,086 107,460,818
----------- -----------
Total deposits 207,476,427 200,872,156
Federal funds purchased 770,000 110,000
Accrued interest and other liabilities 2,138,800 2,249,414
----------- -----------
Total liabilities 210,385,227 203,231,570
----------- -----------
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 19,563,763 17,830,536
Net unrealized appreciation on securities available for sale,
net of taxes of $186,459 and $245,086, respectively 361,951 475,755
----------- -----------
Total shareholders' equity 34,885,714 33,266,291
----------- -----------
Total liabilities and shareholders' equity $245,270,941 $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 JUNE 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
June 30, June 30,
1997 1996
<S> <C> <C>
Interest income
- ---------------
Loans $3,586,967 $3,243,074
Securities available for sale 1,359,187 1,292,041
Federal funds sold 56,843 58,719
--------- ---------
Total interest income 5,002,997 4,593,834
--------- ---------
Interest expense
- ----------------
Deposits 1,878,303 1,791,444
Fed Funds Purchased 1,318 508
--------- ---------
Total interest expense 1,879,621 1,791,952
--------- ---------
Net interest income 3,123,376 2,801,882
- -------------------
Provision for credit losses 88,000 88,300
--------- ---------
Net interest income after provision for credit losses 3,035,376 2,713,582
--------- ---------
Other income
- ------------
Service charges on deposit accounts 331,496 320,048
Other service charges and fees 96,153 104,012
Net realized gains on sales of securities available for sale 2,172 2,286
Other income 48,700 58,003
--------- ---------
Total other income 478,521 484,349
--------- ---------
Other expenses
- --------------
Salaries and employee benefits 1,081,084 915,555
Occupancy expense 240,135 216,722
Net realized losses on sales of securities available for sale 2,541 0
Other expenses 484,170 377,302
--------- ---------
Total other expenses 1,807,930 1,509,579
--------- ---------
Income before income taxes 1,705,967 1,688,352
Income tax expense 490,200 450,000
--------- ---------
Net income $1,215,767 1,238,352
- ---------- ========= =========
Net income per share of common stock $1.58 $1.61
==== ====
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 SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
YTD YTD
June 30, June 30,
1997 1996
<S> <C> <C>
Interest income
Loans $7,086,033 $6,443,401
Securities available for sale 2,719,229 2,478,506
Federal funds sold 104,381 157,283
--------- ---------
Total interest income 9,909,643 9,079,190
--------- ---------
Interest expense
Deposits 3,710,302 3,558,349
Fed Funds Purchased 1,788 721
--------- ---------
Total interest expense 3,712,090 3,559,070
--------- ---------
Net interest income 6,197,553 5,520,120
Provision for credit losses 171,000 259,300
--------- ---------
Net interest income after provision for credit losses 6,026,553 5,260,820
--------- ---------
Other income
Service charges on deposit accounts 660,680 642,388
Other service charges and fees 176,222 205,880
Net realized gains on sales of securities available for sale 2,172 2,286
Other income 99,442 95,920
--------- ---------
Total other income 938,516 946,474
--------- ---------
Other expenses
Salaries and employee benefits 2,130,645 1,845,849
Occupancy expense 476,389 445,735
Net realized losses on sales of securities available for sale 4,322 0
Other expenses 938,086 803,680
--------- ---------
Total other expenses 3,549,442 3,095,264
--------- ---------
Income before income taxes 3,415,627 3,112,030
Income tax expense 991,200 876,000
--------- ---------
Net income $2,424,427 $2,236,030
========= =========
Net income per share of common stock $3.16 $2.91
==== ====
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 SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
June 30, June 30,
1997 1996
-------- --------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income $2,424,427 $2,236,030
Adjustments to reconcile net income to net
Cash provided by operating activities:
Depreciation and amortization 208,571 198,756
Provision for credit losses 171,000 259,300
Deferred income taxes ---- ----
Net realized (gains) losses on securities available for sale 4,854 2,286
(Increase) decrease in
accrued interest and other assets 358,431 (602,485)
Increase (decrease) in accrued expenses and other liabilities (110,614) (515,976)
--------- ----------
Total adjustments 632,242 (658,119)
--------- ----------
Net cash provided by operating activities 3,056,669 1,577,911
--------- ----------
Cash flows from investing activities
Net (increase) decrease in federal funds sold (59,689) 5,712,548
Purchase of securities available for sale (14,496,150) (25,029,421)
Proceeds from sales of securities available for sale 4,731,484 500,000
Proceeds from maturities of securities available for sale 10,578,861 15,227,907
Net increase in loans (5,351,671) (3,828,442)
Purchases of premises and equipment (1,922,069) (337,129)
----------- ----------
Net cash used by investing activities (7,188,895) (7,754,537)
----------- -----------
Cash flows from financing activities
Net increase (decrease) in non-interest bearing demand deposits,
Savings and NOW deposit accounts 3,164,003 4,067,045
Net increase in time deposits 3,440,268 5,260,860
Net increase in federal funds purchased 660,000 0
Dividends paid (691,200) (645,120)
----------- -----------
Net cash provided by financing activities 6,463,071 8,682,785
----------- -----------
Net increase in cash and due from banks 2,440,845 2,506,159
Cash and cash equivalents at January 1 7,025,730 6,079,376
----------- -----------
Cash and cash equivalents at June 30 $ 9,466,575 $ 8,585,535
=========== ===========
Interest paid $ 3,730,928 $ 3,704,732
=========== ===========
Income taxes paid $ 902,243 $ 898,258
=========== ===========
</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 SIX MONTHS ENDED JUNE 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 six month period ended June 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 $823,000 as of June 30, 1997 have been
recognized as impaired in conformity with FAS 114. The total
allowance for credit losses related to the impaired loans was
$421,000. 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 June 30, 1997, 8.4%
of the investment securities portfolio had maturity dates within
the next year and an additional 77.4% matures within the next 5
years. During the first six months of 1997, federal funds sold
averaged $3.9 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 June 30,
6
<PAGE>
1997, liquidity ratios were: Pinnacle 42.0%, Pinnacle Bank, N.A.
48.3% and Pinnacle Bank 31.9%.
Average yields on interest bearing assets increased to
8.8% for the current quarter compared to 8.7% for the same period
the year before. Total average interest bearing assets increased
by $16.8 million or 8.0% for the current period when compared
with the quarter ended June 30, 1996. Average net loans
increased $11.4 million or 9.2% in the three months ended June
30, 1997 from the same 1996 period, primarily as a result of
loans originated in the new branches in Hartwell and Lavonia and
a healthy economy in Northeast Georgia. Average net loans during
the quarter for Pinnacle Bank, N.A. were $73.1 million while
Pinnacle Bank's average net loans were $62.0 million.
Average yields on interest bearing assets increased to
8.8% for the six month period ended June 30, 1997 compared to
8.6% for the same period the year before. Total interest bearing
assets increased by $13.8 million or 6.5% for the current period
when compared with the six month period ended June 30, 1996.
Average net loans increased $11.9 million or 9.8% in the six
months ended June 30, 1997 from the same 1996 period, primarily
as a result of originations in the two new branches and a healthy
economy in Northeast Georgia. Average net loans during the six
month period for Pinnacle Bank, N.A. were $72.5 million while
Pinnacle Bank's average net loans were $61.1 million.
Other real estate owned decreased by $121,000 during
the first six months of 1997, resulting in $371,000 held at June
30, 1997 compared to $492,000 at December 31, 1996. Non-
performing loans totaled $482,000 as of June 30, 1997
representing .3% of total loans at June 30, 1997 compared to
$494,000 at December 31, 1996, which represented .4% of total
loans at that date. Accrued interest as of June 30, 1997 on non-
performing loans totaled $19,000 which is not reported as income.
Non-performing loans at June 30, 1997 are classified as: real
estate, $388,000; other collateralized loans, $93,000; and
unsecured, $1,000.
Pinnacle continues to maintain a concentration of core
deposits from an established customer base which provides a
stable funding source. Deposits increased $6.6 million to $207.5
million at June 30, 1997 from $200.9 million at December 31,
1996, due primarily to deposits at the new offices in Hartwell
and Lavonia and normal growth and continued economic expansion in
Northeast Georgia. Non-interest bearing deposits increased $3.7
million to $36.2 million compared to December 31, 1996 balance of
$32.5 million. Interest bearing deposits increased $2.9 million
at June 30, 1997.
Cash and cash equivalents increased during the first
six months of 1997 from December 31, 1996 levels by $2.5 million.
This reflected a temporary situation with funds in cash and cash
equivalents. Investment securities increased $8.4 million from
December 31, 1996 levels as management continues to give priority
to the importance of maintaining high levels of assets with
interest rate sensitivity.
Shareholders' equity increased $1.6 million to $34.9
million at June 30, 1997 from $33.3 million at December 31, 1996.
Earnings retained during the six months amounted to $1.7 million
7
<PAGE>
and equity decreased $114,000 as a result of a reduction in net
unrealized gains 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 six 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 JUNE 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 three months ended June 30,
1997 increased 11.5% as a result of growth, more 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 $88,000
or 4.9% while interest income increased $409,000 or 8.9% in the
three months ended June 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 $88,000 for
loan losses in the three months ended June 30, 1997 as it
provided for the three months ended June 30, 1996. Pinnacle
experienced loan charge-offs in the three months ended June 30,
1997 of $26,000 compared to $56,000 in the same period in 1996.
The allowance for loan losses increased $200,000 to $2.0 million
at June 30, 1997 compared to $1.8 million at June 30, 1996.
Pinnacle's allowance for loan losses represents 1.6% of total
loans outstanding at June 30, 1997. Its net charge-offs were
$16,000 during the three months ended June 30, 1997 and $42,000
during the same period in 1996.
8
<PAGE>
Other operating expenses for Pinnacle during the three
months ended June 30, 1997 increased $298,000 to $1.8 million
from $1.5 million for the same period in the previous year. The
increase in other operating expenses is attributable to the two
new branches in Hartwell and Lavonia and the expenses associated
with changing the banks' names to Pinnacle Bank.
Pinnacle's income tax expense increased $40,000 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 28.7% is a increase of 2.0% 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 June 30, 1997 was $1.2
million and represents annualized returns of 14.3% on average
shareholders' equity and 2.1% on average assets. Comparable
amounts during the same period of 1996 were $1.2 million, 15.9%
and 2.2%, respectively. As detailed in previous paragraphs, the
decrease in net income of $23,000 was primarily due to the net
effect of the increase in the net interest margin and increased
expenses associated with the new branches and the name changes.
Dividends declared during the three months ended June
30, 1997 increased $.03 per share to $.45 from $.42 per share
during the same period of 1996.
RESULTS OF OPERATIONS (FOR THE SIX MONTH PERIOD ENDED JUNE 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 six months ended June 30,
1997 increased 12.3% as a result of more 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 $153,000 or
4.3% while interest income increased $830,000 or 9.5% in the six
months ended June 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 $171,000 for loan
losses in the six months ended June 30, 1997 and $259,000 for the
same period in 1996. Pinnacle experienced loan charge-offs in
the six months ended June 30, 1997 of $75,000 compared to
$368,000 in the same period in 1996. Its net charge-offs were
9
<PAGE>
$56,000 during the six months ended June 30, 1997 and $332,000
during the same period in 1996.
Other operating expenses for Pinnacle during the six
months ended June 30, 1997 increased $454,000 to $3.5 million
from $3.1 million for the same period in the previous year. The
reduction in other operating expenses is attributable to the new
branches in Hartwell and Lavonia and the expenses associated with
the changing of the banks' names to Pinnacle Bank.
Pinnacle's income tax expense increased $115,000 for
the six months ended June 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 29.0% is a
increase of .8% 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 six months ended June 30, 1997 was $2.4 million
and represents annualized returns of 14.3% on average
shareholders' equity and 2.2% on average assets. Comparable
amounts during the same period of 1996 were $2.2 million, 14.4%
and 2.0%, respectively. As detailed in previous paragraphs, the
increase in net income of $188,000 was primarily due to the
increase in the net interest margin and a decrease in the Federal
Deposit Insurance Corporation insurance premiums.
Dividends declared during the six months ended June 30,
1997 increased $.06 per share to $.90 from $.84 per share during
the same period of 1996.
10
<PAGE>
The following tables present Pinnacle's Regulatory capital
position at June 30, 1997:
(Rounded to the nearest thousand)
<TABLE>
<CAPTION>
<S> <C> <C>
Total Risk Adjusted Assets $154,524
Risk Based Capital Ratios:
TIER 1 CAPITAL
Common stock $7,680 4.97%
Surplus 7,280 4.71%
Retained earnings 19,564 12.66%
Less: Goodwill 0 0.00%
-------- -------
Total Tier 1 capital 34,524 22.34%
Tier 1 minimum requirement 6,181 4.00%
-------- -------
Excess (shortfall) $28,343 18.34%
======== =======
TIER 2 CAPITAL
Tier 1 from above $34,524 22.34%
Subordinated debentures 0 0.00%
Allowance for loan losses, limited to 1.25%
of risk weighted assets 1,932 1.25%
------- ------
Total Tier 2 capital 36,456 23.59%
Tier 2 minimum requirement 12,362 8.00%
------- ------
Excess (shortfall) $24,094 15.59%
======= ======
LEVERAGE RATIO
Tier 1 capital $34,524 14.25%
Minimum requirement 7,269 3.00%
------- -----
Excess (shortfall) $27,255 11.25%
======= ======
Average total assets, net of goodwill $242,284
========
</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
(a) Exhibits - Exhibit 27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K - None
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: August 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 9,466,575
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 721,661
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<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 136,743,935
<ALLOWANCE> 1,956,912
<TOTAL-ASSETS> 245,270,941
<DEPOSITS> 207,476,426
<SHORT-TERM> 770,000
<LIABILITIES-OTHER> 2,138,800
<LONG-TERM> 0
0
0
<COMMON> 7,680,000
<OTHER-SE> 26,843,763
<TOTAL-LIABILITIES-AND-EQUITY> 245,270,941
<INTEREST-LOAN> 7,086,033
<INTEREST-INVEST> 2,823,610
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 9,909,643
<INTEREST-DEPOSIT> 3,710,302
<INTEREST-EXPENSE> 3,712,090
<INTEREST-INCOME-NET> 6,197,553
<LOAN-LOSSES> 171,000
<SECURITIES-GAINS> 2,172
<EXPENSE-OTHER> 3,549,442
<INCOME-PRETAX> 3,415,627
<INCOME-PRE-EXTRAORDINARY> 2,424,427
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,424,427
<EPS-PRIMARY> 3.16
<EPS-DILUTED> 3.16
<YIELD-ACTUAL> 8.8
<LOANS-NON> 170,506
<LOANS-PAST> 2,418,678
<LOANS-TROUBLED> 225,157
<LOANS-PROBLEM> 823,101
<ALLOWANCE-OPEN> 1,842,152
<CHARGE-OFFS> 75,038
<RECOVERIES> 18,798
<ALLOWANCE-CLOSE> 1,956,912
<ALLOWANCE-DOMESTIC> 421,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,535,912
</TABLE>
