Pinnacle Finanical Partners
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-159395
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JUNE 4, 2009)
7,700,000 Shares
Common Stock
We are offering 7,700,000 shares of our common stock to
be sold in this offering.
Our common stock is traded on the NASDAQ Global Select Market
under the symbol PNFP. On June 10, 2009, the
closing sale price of our common stock was $14.36 per
share, as reported on the NASDAQ Global Select Market.
Investing in our securities involves risks. You should
carefully read this prospectus supplement, the accompanying
prospectus, our periodic reports and other information we file
with the Securities and Exchange Commission, or the SEC, and any
information under the heading Risk Factors beginning
on
page S-7
of this prospectus supplement before making a decision to
purchase our securities.
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Per
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Share
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Total
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Public offering price
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$
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13.00
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$
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100,100,000
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Underwriting discount
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$
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0.65
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$
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5,005,000
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Proceeds, before expenses, to us
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$
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12.35
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$
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95,095,000
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The underwriters also may purchase up to an additional
1,155,000 shares of our common stock at the public offering
price, less the underwriting discount, within 30 days from
the date of this prospectus supplement to cover over-allotments,
if any.
Neither the SEC, any state securities commission, the Federal
Deposit Insurance Corporation, or the FDIC, the Board of
Governors of the Federal Reserve System, or the Federal Reserve
Board, nor any other regulatory body has approved or disapproved
of these securities or passed upon the adequacy or accuracy of
this prospectus supplement or the accompanying prospectus. Any
representation to the contrary is a criminal offense.
These securities are not savings accounts, deposits or other
obligations of any bank and are not insured or guaranteed by the
FDIC or any other governmental agency.
The underwriters expect to deliver the shares to purchasers
against payment on or about June 16, 2009.
RAYMOND JAMES
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SANDLER
ONEILL + PARTNERS, L.P. |
SUNTRUST ROBINSON HUMPHREY |
WUNDERLICH SECURITIES,
INC.
The date of this prospectus supplement is June 11,
2009.
ABOUT
THIS PROSPECTUS SUPPLEMENT
This document consists of two parts. The first part is this
prospectus supplement, which describes the specific terms of
this offering and certain other matters and also adds to and
updates information contained in the accompanying prospectus and
the documents incorporated by reference into this prospectus
supplement and the accompanying prospectus. The second part, the
accompanying prospectus, gives more general information about us
and the common stock offered hereby. Some of the information in
the accompanying prospectus may not apply to this offering.
Generally, when we refer to the prospectus, we are referring to
both parts of this document combined. To the extent the
description of this offering in the prospectus supplement
differs from the description of our common stock in the
accompanying prospectus or any document incorporated by
reference filed prior to the date of this prospectus supplement,
you should rely on the information in this prospectus supplement.
We are offering to sell, and seeking offers to buy, shares of
our common stock only in jurisdictions where offers and sales
are permitted. The distribution of this prospectus and the
offering of the common stock in certain jurisdictions may be
restricted by law. Persons outside the United States who come
into possession of this prospectus must inform themselves about,
and observe any restrictions relating to, the offering of the
common stock and the distribution of this prospectus outside the
United States. This prospectus does not constitute, and may not
be used in connection with, an offer to sell, or a solicitation
of an offer to buy, any common stock offered by this prospectus
by any person in any jurisdiction in which it is unlawful for
such person to make such an offer or solicitation.
It is important for you to read and consider all of the
information contained in this prospectus supplement and the
accompanying prospectus, including the documents incorporated by
reference therein, in making your investment decision. You
should rely only on the information contained in, or
incorporated by reference in, this prospectus supplement and the
accompanying prospectus. We have not authorized anyone to
provide you with information different from that contained in
this prospectus. This prospectus may only be used where it is
legal to sell our common stock. You should not assume that the
information that appears in this prospectus supplement, the
accompanying prospectus and any document incorporated by
reference into this prospectus supplement or the accompanying
prospectus is accurate as of any date other than their
respective dates. Our business, financial condition, results of
operations and prospects may have changed since the date of such
information.
Unless this prospectus supplement indicates otherwise or the
context otherwise requires, the terms we,
our, us, Pinnacle Financial
or the Company as used in this prospectus supplement
refer to Pinnacle Financial Partners, Inc. and its subsidiaries,
including Pinnacle National Bank, which we sometimes refer to as
Pinnacle National, the bank, our
bank subsidiary or our bank. Unless
otherwise expressly stated or the context otherwise requires,
all information in this prospectus supplement assumes that the
option to purchase additional shares granted to the underwriter
is not exercised in whole or in part.
FORWARD-LOOKING
STATEMENTS
This prospectus supplement, the accompanying prospectus and the
documents incorporated by reference contain forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, or the Securities Act, and
Section 21E of the Securities Exchange Act of 1934, as
amended, or the Exchange Act. The words expect,
anticipate, intend,
consider, plan, project,
believe, probably,
potentially, outlook, seek,
should, estimate, and similar
expressions are intended to identify such forward-looking
statements, but other statements may constitute forward-looking
statements. These statements should be considered subject to
various risks and uncertainties, and are made based upon
managements belief as well as assumptions made by, and
information currently available to, management pursuant to
safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Pinnacle Financials actual
results may differ materially from the results anticipated in
forward-looking statements due to a variety of factors
including, without limitation, those described below under
Risk Factors, and those described in
Item 1A
i
Risk Factors of our annual report on
Form 10-K
for the year ended December 31, 2008, and include, among
other factors:
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deterioration in the financial condition of borrowers resulting
in significant increases in loan losses and provisions for those
losses;
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continuation of the historically low short-term interest rate
environment;
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the inability of Pinnacle Financial to continue to grow its loan
portfolio at historic rates in the
Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville
MSA;
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changes in loan underwriting, credit review or loss reserve
policies associated with economic conditions, examination
conclusions, or regulatory developments;
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increased competition with other financial institutions;
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greater than anticipated deterioration or lack of sustained
growth in the national or local economies including the
Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville
MSA, particularly in commercial and residential real estate
markets;
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rapid fluctuations or unanticipated changes in interest rates;
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the development of any new market other than Nashville or
Knoxville;
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a merger or acquisition;
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any activity in the capital markets that would cause Pinnacle
Financial to conclude that there was impairment of any asset,
including intangible assets;
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the impact of governmental restrictions on entities
participating in the Capital Purchase Program of the
U.S. Department of the Treasury, or the Treasury; and
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changes in state and federal legislation, regulations or
policies applicable to banks and other financial service
providers, including regulatory or legislative developments
arising out of current unsettled conditions in the economy.
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Many of these risks are beyond our ability to control or
predict, and you are cautioned not to put undue reliance on such
forward-looking statements. Pinnacle Financial does not intend
to update or reissue any forward-looking statements contained in
this prospectus supplement as a result of new information or
other circumstances that may become known to Pinnacle Financial.
ii
PROSPECTUS
SUMMARY
This summary highlights some information from this prospectus
supplement and the accompanying prospectus, and it may not
contain all of the information that is important to you. To
understand the terms of the common stock offered hereby, you
should read this prospectus supplement and the accompanying
prospectus carefully. Together, these documents describe the
specific terms of the shares we are offering. You should
carefully read the sections entitled Risk Factors in
this prospectus supplement and in the accompanying prospectus
and the documents identified in the sections Where You Can
Find More Information and Incorporation of Certain
Information by Reference in this prospectus supplement.
Except as otherwise noted, all information in this prospectus
supplement assumes no exercise of the underwriters
over-allotment option.
Pinnacle
Financial Partners, Inc.
Pinnacle Financial Partners, Inc., is the second-largest bank
holding company headquartered in Tennessee, with approximately
$5.0 billion in assets as of March 31, 2009 and 33
banking offices throughout the Nashville and Knoxville MSAs.
Incorporated on February 28, 2000, we own 100% of the
capital stock of Pinnacle National Bank, which is our primary
business operation. As of March 31, 2009, we had total
deposits of approximately $3.8 billion and
shareholders equity of approximately $631.6 million.
We operate as an urban community bank serving the
Nashville-Davidson-Murfreesboro-Franklin MSA, which we refer to
as the Nashville MSA, and the Knoxville MSA. As an urban
community bank, we provide the personalized service most often
associated with small community banks, while offering the
sophisticated products and services, such as investments and
treasury management, often associated with larger financial
institutions. Our banking approach has enabled us to move
clients from regional and national financial institutions that
historically had the largest market shares in the markets we
serve. As a result, in less than ten years, we have grown to
capture the fourth largest market share in the Nashville MSA.
Our principal business is to originate loans and fund such loans
with customer deposits. Our bank also provides fee-income
producing ancillary services, including investment, trust and
insurance services. We contract with Raymond James Financial
Services, Inc., or RJFS, an independent contractor brokerage
affiliate of Raymond James Financial, Inc., to offer and sell
various securities and other financial products to the public
from our banks locations. We also maintain a trust
department which provides fiduciary and investment management
services for individual and institutional clients. We have also
established Pinnacle Advisory Services, Inc., a registered
investment advisor, to provide investment advisory services to
our clients. Additionally, Miller Loughry Beach Insurance
Services, Inc., a wholly-owned subsidiary of our bank, provides
insurance products, particularly in the property and casualty
area, to our clients.
Business
Strategies
Our business strategies are simple and consist of the following:
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Focus our efforts on small- and medium-sized businesses, real
estate professionals and affluent households within the
Nashville and Knoxville MSAs. We use
one-on-one
marketing to establish comprehensive relationships with our
clients. As a result, and unlike many of our competitors, we
have elected to forego a mass market retail strategy which would
include significant expenditures for print and television
advertising. Instead, we offer extraordinary convenience to our
clients by building a distribution system which includes online
banking, telephone banking, remote deposit services and global
access to ATMs which provide options to our clients to access
our financial services
24/7.
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Hire and retain highly experienced and qualified banking and
financial professionals with successful track records and, for
client contact personnel, established books of business. On
average, our senior client contact associates have in excess of
20 years experience in their local market. We have also
achieved an annual associate retention rate in excess of
90 percent. We believe we will continue to be successful in
attracting more market-best associates to our firm as well as
retaining our highly experienced and successful group of
associates. Our compensation has traditionally included cash
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S-1
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incentives and equity based awards to all associates to promote
this employment objective, and our compensation expense has
traditionally been higher than our peers as a result.
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Provide distinctive service and effective advice through
individualized attention to clients with consistent, local
decision-making authority and capitalize on customer
dissatisfaction that we believe has been caused by our
competitors less than satisfactory response to the
financial needs of todays sophisticated consumers and
small- to medium-sized businesses. Since we began our company,
we have surveyed our customers on numerous matters related to
their relationship with us. Historically, customer responses
indicate that better than 97 percent believe that we are
recognizably better than our competitors in customer service.
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Offer a full line of financial services from traditional
depository and credit products to sophisticated investment,
trust and insurance products and services. We offer brokerage
products through dual employees licensed by RJFS. As of
March 31, 2009, Pinnacle Nationals brokerage
division, Pinnacle Asset Management, had accumulated
approximately $671 million in brokerage assets and, in 2008
and 2007, was the top producer among RJFS branches nationwide.
Additionally, our trust department had accumulated approximately
$544 million in trust assets under management at
March 31, 2009. We use our trust department, Pinnacle Asset
Management, and our insurance agency subsidiary, Miller Loughry
Beach Insurance Services, Inc., to provide a broad array of
sophisticated and convenient investment and insurance products
and services.
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Recent
Developments
We expect our second quarter 2009 performance will include
several charges that will negatively impact earnings per share
for the three and six months ended June 30, 2009. We expect
improved performance levels later in the year. Included in our
second quarter results are the following:
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FDIC Special Insurance Assessment We expect
to incur a $2.5 million pre-tax charge relating to the
special assessment imposed on all FDIC-insured institutions. The
FDIC has indicated that future special assessments are possible,
although the FDIC has not determined the magnitude or timing of
any possible future special assessments.
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Silverton Charge-off On May 1, 2009, we
announced that we charged-off a $21.55 million loan to
Silverton Financial Services, Inc., after learning that its
subsidiary, Silverton Bank, had been placed in receivership by
the Office of the Comptroller of the Currency, or the OCC.
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Increased Loan Charge-offs Due to
continued stress in the residential construction and development
market, we anticipate an increased level of charge-offs in our
loan portfolio. We currently expect full year 2009 net
charge-offs expressed as a percentage of average loans to
approximate 0.80% to 1.00%, exclusive of the Silverton
charge-off. We expect the majority of these charge-offs will
occur in the second quarter.
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Increased Allowance For Loan Losses We expect
our allowance for loan losses expressed as a percentage of total
loans at the end of the second quarter to be within a range of
1.40% to 1.60%. We expect allowance levels for the remainder of
2009 will fluctuate in response to economic conditions in our
markets.
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Other We are projecting a slight increase in
our net interest margin, as a result of improved loan pricing
(in part due to interest rate floors) and a decrease in funding
costs, although increased non-performing loans will have a
negative impact. Additionally, fee income in the second quarter
will likely be flat with the first quarter of 2009; however we
continue to experience increased mortgage revenues associated
with refinancings. We anticipate modest increases in the second
half of 2009 from our other fee business primarily attributable
to increased personnel in those areas. We expect a modest
increase in expenses, excluding the impact of the FDIC special
assessment described above, throughout the remainder of the year
due to increased personnel and the addition of two new offices
scheduled to open within a few months.
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S-2
Company
Information
We were incorporated in the State of Tennessee on
February 28, 2000. Our principal executive offices are
located at 211 Commerce Street, Suite 300, Nashville,
Tennessee 37201 and our telephone number at these offices
is
(615) 744-3700.
Our internet address is www.pnfp.com. The information contained
on our web site is not part of this prospectus supplement.
The
Offering
The following summary contains basic information about our
common stock and is not intended to be complete. It does not
contain all the information that is important to you. For a more
complete description of our common stock, see Description
of Common Stock beginning on
page S-20.
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Common stock we are offering |
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7,700,000 shares of our common stock, par value $1.00 per share. |
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Option to purchase additional shares |
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The underwriter may purchase up to an additional
1,155,000 shares of common stock from us at the public
offering price, less the underwriting discount, within
30 days from the date of this prospectus supplement. |
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Common stock outstanding after this offering (1)(2) |
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31,775,173 shares |
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Net proceeds |
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The net proceeds of this offering will be approximately
$94,795,000 (after deducting offering expenses payable by us)
based on the public offering price of $13.00 per share. |
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Use of proceeds |
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We intend to use the net proceeds of this offering for general
corporate purposes, including additional capital contributions
to Pinnacle National. |
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After completion of an evaluation of our capital position, and
discussions with our primary regulators, we may seek regulatory
approval to redeem all of the shares of our Fixed Rate
Cumulative Perpetual Preferred Stock, Series A, which we
refer to as our Series A preferred stock, which we issued
to the Treasury as part of the Capital Purchase Program, or the
CPP, under the Troubled Asset Relief Program, or TARP. We will
undertake the proposed redemption with our available cash
resources. In addition, we may purchase the remaining
outstanding portion of the warrants we issued to the Treasury in
connection with that transaction. There can be no assurance as
to when, or if, we can redeem our Series A preferred stock
or whether we will repurchase the outstanding portion of the
warrants following the redemption of the Series A preferred
stock. |
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NASDAQ Global Select Market symbol |
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PNFP |
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Risk Factors |
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An investment in our common stock involves certain risks. You
should carefully consider the risks described below under the
heading Risk Factors, before you purchase any shares
of our common stock. |
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(1) |
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The number of shares of common stock outstanding immediately
after the closing of this offering is based on
24,075,173 shares of common stock outstanding as of
June 9, 2009. |
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(2) |
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Unless otherwise indicated, the number of shares of common stock
presented in this prospectus supplement excludes
1,155,000 shares issuable pursuant to the exercise of the
underwriters over-allotment |
S-3
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option, 2,156,421 shares of common stock issuable upon
exercise of outstanding options under our equity incentive plans
as of June 9, 2009 and 879,910 shares of common stock
issuable upon the exercise of various warrants (including the
warrant for 534,910 shares of common stock held by the
Treasury). Of the options and warrants outstanding as of
June 9, 2009, 1,605,981 options were exercisable as of
that date at a weighted average exercise price of $13.80. The
exercise price for the 534,910 warrants held by the Treasury is
$26.64 and for the 345,000 warrants held by our organizers is
$5.00. |
S-4
Summary
Consolidated Financial Data
The following table sets forth summary historical consolidated
financial data from our consolidated financial statements and
should be read in conjunction with our consolidated financial
statements including the related notes and
Managements Discussion and Analysis of Financial
Condition and Results of Operations set forth in our
annual report on
Form 10-K
for the year ended December 31, 2008 and incorporated by
reference into this prospectus supplement. Except for the data
under Performance Ratios and Other Data and
Asset Quality Ratios, the summary historical
consolidated financial data as of December 31, 2008, 2007,
2006, 2005 and 2004 and for the years ended December 31,
2008, 2007, 2006, 2005 and 2004 is derived from our audited
consolidated financial statements and related notes, which were
audited by KPMG LLP, an independent registered public accounting
firm. The summary historical consolidated financial data as of
and for the three months ended March 31, 2009 and
March 31, 2008 is derived from unaudited consolidated
financial statements for those periods included in our quarterly
reports on
Form 10-Q
for those periods. The unaudited consolidated financial
statements include all adjustments, consisting only of normal
recurring items, which our management considers necessary for a
fair presentation of our financial position and results of
operations for these periods filed in our quarterly report on
Form 10-Q
for the quarter ended March 31, 2009. The financial
condition and results of operations as of and for the three
months ended March 31, 2009 do not purport to be indicative
of the financial condition or results of operations to be
expected as of or for the fiscal year ending December 31,
2009. For more information, see the sections entitled
Where You Can Find More Information and
Incorporation Of Certain Information By Reference.
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Three Months Ended
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For the Years Ended December 31,
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March 31,
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March 31,
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2009
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2008
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2008
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2007
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2006
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2005
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2004
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(Unaudited)
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(In thousands, except per share data, ratios and
percentages)
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Statement of Financial Condition Data:
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Total assets
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$
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4,952,151
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$
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3,889,286
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$
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4,754,075
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$
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3,794,170
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$
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2,142,187
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$
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1,016,772
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$
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727,139
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Loans, net of unearned income
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3,473,959
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2,866,536
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3,354,907
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2,749,641
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1,497,735
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648,024
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472,362
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Allowance for loan losses
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45,334
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29,871
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36,484
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28,470
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16,118
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7,858
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5,650
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Total securities
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868,472
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505,377
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849,781
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522,685
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346,494
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279,080
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208,170
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Goodwill and core deposit intangibles
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260,233
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260,043
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261,032
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260,900
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125,673
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Deposits and securities sold under agreements to repurchase
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3,960,548
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3,138,211
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3,717,544
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3,081,390
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1,763,427
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875,985
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602,655
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Advances from FHLB and other borrowings
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222,039
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168,606
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273,609
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141,666
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53,726
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41,500
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53,500
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Subordinated debt
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97,476
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82,476
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97,476
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82,476
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51,548
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30,929
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10,310
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Stockholders equity
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631,646
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477,158
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627,298
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466,610
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256,017
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63,436
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57,880
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Income Statement Data:
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Interest income
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$
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49,518
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$
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52,161
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$
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206,082
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$
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150,931
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$
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109,696
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$
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46,308
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$
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27,679
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Interest expense
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20,818
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24,802
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91,867
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75,219
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48,743
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17,270
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7,415
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Net interest income
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|
28,700
|
|
|
|
27,359
|
|
|
|
114,215
|
|
|
|
75,712
|
|
|
|
60,953
|
|
|
|
29,038
|
|
|
|
20,264
|
|
Provision for loan losses
|
|
|
13,610
|
|
|
|
1,591
|
|
|
|
11,214
|
|
|
|
4,720
|
|
|
|
3,732
|
|
|
|
2,152
|
|
|
|
2,948
|
|
Net interest income after provision for loan losses
|
|
|
15,091
|
|
|
|
25,768
|
|
|
|
103,001
|
|
|
|
70,992
|
|
|
|
57,221
|
|
|
|
26,886
|
|
|
|
17,316
|
|
Noninterest income
|
|
|
13,136
|
|
|
|
8,367
|
|
|
|
34,718
|
|
|
|
22,521
|
|
|
|
15,786
|
|
|
|
5,394
|
|
|
|
4,978
|
|
Noninterest expense
|
|
|
25,243
|
|
|
|
25,492
|
|
|
|
94,478
|
|
|
|
60,480
|
|
|
|
46,624
|
|
|
|
21,032
|
|
|
|
14,803
|
|
Income before income taxes
|
|
|
2,983
|
|
|
|
8,644
|
|
|
|
43,241
|
|
|
|
33,033
|
|
|
|
26,383
|
|
|
|
11,248
|
|
|
|
7,491
|
|
Income tax expense
|
|
|
893
|
|
|
|
2,579
|
|
|
|
12,367
|
|
|
|
9,992
|
|
|
|
8,456
|
|
|
|
3,193
|
|
|
|
2,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
2,090
|
|
|
$
|
6,065
|
|
|
$
|
30,874
|
|
|
$
|
23,041
|
|
|
$
|
17,927
|
|
|
$
|
8,055
|
|
|
$
|
5,319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred dividends and accretion on common stock warrants
|
|
|
1,447
|
|
|
|
|
|
|
|
309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common stockholders
|
|
$
|
643
|
|
|
$
|
6,065
|
|
|
$
|
30,565
|
|
|
$
|
23,041
|
|
|
$
|
17,927
|
|
|
$
|
8,055
|
|
|
$
|
5,319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S-5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
For the Years Ended December 31,
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share data, ratios and
percentages)
|
|
|
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share available to common stockholders
basic
|
|
$
|
0.03
|
|
|
$
|
0.27
|
|
|
$
|
1.34
|
|
|
$
|
1.43
|
|
|
$
|
1.28
|
|
|
$
|
0.96
|
|
|
$
|
0.69
|
|
Weighted average shares outstanding basic
|
|
|
23,510,944
|
|
|
|
22,331,398
|
|
|
|
22,793,699
|
|
|
|
16,100,076
|
|
|
|
13,954,077
|
|
|
|
8,408,663
|
|
|
|
7,750,943
|
|
Earnings per share available to common stockholders
diluted
|
|
$
|
0.03
|
|
|
$
|
0.26
|
|
|
$
|
1.27
|
|
|
$
|
1.34
|
|
|
$
|
1.18
|
|
|
$
|
0.85
|
|
|
$
|
0.61
|
|
Weighted average shares outstanding diluted
|
|
|
24,814,408
|
|
|
|
23,484,754
|
|
|
|
24,053,972
|
|
|
|
17,255,543
|
|
|
|
15,156,837
|
|
|
|
9,464,500
|
|
|
|
8,698,139
|
|
Book value per common share
|
|
$
|
22.57
|
|
|
$
|
21.22
|
|
|
$
|
22.68
|
|
|
$
|
20.96
|
|
|
$
|
16.57
|
|
|
$
|
7.53
|
|
|
$
|
6.90
|
|
Common shares outstanding at end of period
|
|
|
24,060,703
|
|
|
|
22,467,263
|
|
|
|
23,762,124
|
|
|
|
22,264,817
|
|
|
|
15,446,074
|
|
|
|
8,426,551
|
|
|
|
8,389,232
|
|
Performance Ratios and Other Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets(1)
|
|
|
0.05
|
%
|
|
|
0.65
|
%
|
|
|
0.74
|
%
|
|
|
0.96
|
%
|
|
|
1.01
|
%
|
|
|
0.93
|
%
|
|
|
0.89
|
%
|
Return on average stockholders equity(1)
|
|
|
0.41
|
%
|
|
|
5.14
|
%
|
|
|
6.13
|
%
|
|
|
8.34
|
%
|
|
|
8.66
|
%
|
|
|
13.23
|
%
|
|
|
12.31
|
%
|
Net interest margin(2)
|
|
|
2.72
|
%
|
|
|
3.37
|
%
|
|
|
3.17
|
%
|
|
|
3.55
|
%
|
|
|
3.90
|
%
|
|
|
3.60
|
%
|
|
|
3.62
|
%
|
Net interest spread(3)
|
|
|
2.43
|
%
|
|
|
2.94
|
%
|
|
|
2.78
|
%
|
|
|
2.88
|
%
|
|
|
3.20
|
%
|
|
|
3.16
|
%
|
|
|
3.34
|
%
|
Noninterest income to average assets
|
|
|
1.09
|
%
|
|
|
0.89
|
%
|
|
|
0.84
|
%
|
|
|
0.94
|
%
|
|
|
0.89
|
%
|
|
|
0.62
|
%
|
|
|
0.83
|
%
|
Noninterest expense to average assets
|
|
|
2.10
|
%
|
|
|
2.71
|
%
|
|
|
2.30
|
%
|
|
|
2.53
|
%
|
|
|
2.61
|
%
|
|
|
2.42
|
%
|
|
|
2.48
|
%
|
Efficiency ratio(4)
|
|
|
60.34
|
%
|
|
|
71.35
|
%
|
|
|
63.43
|
%
|
|
|
61.57
|
%
|
|
|
60.76
|
%
|
|
|
61.08
|
%
|
|
|
58.64
|
%
|
Average loan to average deposit ratio
|
|
|
93.64
|
%
|
|
|
95.84
|
%
|
|
|
97.70
|
%
|
|
|
94.88
|
%
|
|
|
88.73
|
%
|
|
|
81.3
|
%
|
|
|
79.0
|
%
|
Average interest-earning assets to average interest-bearing
liabilities
|
|
|
114.80
|
%
|
|
|
114.30
|
%
|
|
|
115.27
|
%
|
|
|
119.46
|
%
|
|
|
122.10
|
%
|
|
|
120.0
|
%
|
|
|
120.0
|
%
|
Average equity to average total assets ratio
|
|
|
13.03
|
%
|
|
|
12.57
|
%
|
|
|
12.15
|
%
|
|
|
11.56
|
%
|
|
|
11.64
|
%
|
|
|
7.00
|
%
|
|
|
7.23
|
%
|
Asset Quality Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses to nonaccrual loans
|
|
|
133.87
|
%
|
|
|
174.44
|
%
|
|
|
335.95
|
%
|
|
|
144.69
|
%
|
|
|
227.98
|
%
|
|
|
1708.26
|
%
|
|
|
1007.13
|
%
|
Allowance for loan losses to total loans
|
|
|
1.30
|
%
|
|
|
1.04
|
%
|
|
|
1.09
|
%
|
|
|
1.04
|
%
|
|
|
1.08
|
%
|
|
|
1.21
|
%
|
|
|
1.20
|
%
|
Nonperforming assets to total assets
|
|
|
1.08
|
%
|
|
|
0.53
|
%
|
|
|
0.61
|
%
|
|
|
0.56
|
%
|
|
|
0.37
|
%
|
|
|
0.05
|
%
|
|
|
0.08
|
%
|
Nonaccrual loans to total loans
|
|
|
0.97
|
%
|
|
|
0.60
|
%
|
|
|
0.32
|
%
|
|
|
0.72
|
%
|
|
|
0.47
|
%
|
|
|
0.07
|
%
|
|
|
0.12
|
%
|
Net loan charge-offs (recoveries) to average loans(1)
|
|
|
0.56
|
%
|
|
|
0.03
|
%
|
|
|
0.11
|
%
|
|
|
0.06
|
%
|
|
|
0.05
|
%
|
|
|
(0.01
|
)%
|
|
|
0.27
|
%
|
Capital Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leverage(5)
|
|
|
9.7
|
%
|
|
|
8.6
|
%
|
|
|
10.5
|
%
|
|
|
11.6
|
%
|
|
|
9.5
|
%
|
|
|
9.9
|
%
|
|
|
9.7
|
%
|
Tier 1 risk-based capital
|
|
|
11.8
|
%
|
|
|
9.5
|
%
|
|
|
12.1
|
%
|
|
|
9.5
|
%
|
|
|
10.9
|
%
|
|
|
11.7
|
%
|
|
|
11.7
|
%
|
Total risk-based capital
|
|
|
13.3
|
%
|
|
|
10.4
|
%
|
|
|
13.5
|
%
|
|
|
10.4
|
%
|
|
|
11.8
|
%
|
|
|
12.6
|
%
|
|
|
12.7
|
%
|
|
|
|
(1) |
|
Ratios and data for the three months ended March 31, 2009,
and March 31, 2008 are annualized. |
|
(2) |
|
Net interest margin is the result of net interest expense for
the period divided by average interest earning assets. |
|
(3) |
|
Net interest spread is the result of the difference between the
interest yield earned on interest earning assets less the
interest paid on
interest-bearing
liabilities. |
|
(4) |
|
Efficiency ratio is the result of noninterest expense divided by
the sum of net interest income and noninterest income. |
|
(5) |
|
Leverage ratio is defined as Tier 1 capital (pursuant to
risk-based capital guidelines) as a percentage of adjusted
average assets. |
S-6
RISK
FACTORS
An investment in our common stock involves certain risks. You
should carefully consider the risks described below, the risk
factors included in our annual report on
Form 10-K
for the year ended December 31, 2008, and the other
information included or incorporated by reference in this
prospectus supplement and the accompanying prospectus, before
making an investment decision. Our business, financial condition
or results of operations could be materially adversely affected
by any of these risks. The trading price of our common stock
could decline due to any of these risks, and you may lose all or
part of your investment. This prospectus supplement also
contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a
result of certain factors, including the risks faced by us
described below and elsewhere in this prospectus supplement and
the accompanying prospectus and in the documents incorporated by
reference therein.
Risk
Related to Our Business
Recent
negative developments in the financial services industry and
U.S. and global economy and credit markets have adversely
impacted our operations and results and may continue to
adversely impact our results in the future.
The global and U.S. economies, and the economies in the
markets in which we operate, deteriorated throughout 2008 and
the first half of 2009. As a result of these declining economic
conditions, we have experienced a significant reduction in our
earnings, resulting primarily from provisions for loan losses
related to declining collateral values in our construction and
development loan portfolio. We believe that this difficult
economic environment will continue at least throughout the
remainder of 2009 and expect that our results of operations will
continue to be negatively impacted as a result. There can be no
assurance that the economic conditions that have adversely
affected the financial services industry, and the capital,
credit and real estate markets generally or us in particular,
will improve in 2009, or thereafter, in which case we could
continue to experience significant losses and write-downs of
assets, and could face capital and liquidity constraints or
other business challenges.
Our
loan portfolio includes a significant amount of real estate
construction and development loans, which have a greater credit
risk than residential mortgage loans.
The percentage of real estate construction and development loans
in our bank subsidiarys portfolio was approximately 19.4%
of total loans at March 31, 2009. This type of lending is
generally considered to have more complex credit risks than
traditional single-family residential lending because the
principal is concentrated in a limited number of loans with
repayment dependent on the successful operation of the related
real estate project. Consequently, these loans are more
sensitive to the current adverse conditions in the real estate
market and the general economy. These loans are generally less
predictable and more difficult to evaluate and monitor and the
collateral is difficult to dispose of in a market decline like
the one we are now experiencing. Throughout 2009, the number of
newly constructed homes or lots sold in our market areas has
continued to decline, negatively affecting collateral values and
contributing to increased provision expense and higher levels of
non-performing assets. A continued reduction in residential real
estate market prices and demand could result in further price
reductions in home and land values adversely affecting the value
of collateral securing the construction and development loans
that we hold, as well as our levels of non-performing assets,
loan originations and gains on sale of loans, all of which would
negatively impact our financial condition and results of
operations.
We
have a concentration of credit exposure to borrowers in certain
industries and we also target small to medium-sized
businesses.
At March 31, 2009, we had significant credit exposures to
borrowers in the trucking industry, commercial and residential
building lessors, new home builders and land subdividers. All of
these industries are experiencing adversity in the current
recession and, as a result, some borrowers in these industries
have been unable to perform their obligations under their
existing loan agreements with us, which has negatively
S-7
impacted our results of operations. If the current recessionary
environment continues, additional borrowers in these, and other
industries, may be unable to meet their obligations under their
existing loan agreements, which could cause our earnings to be
negatively impacted, causing the value of our common stock to
decline. Furthermore, any of our large credit exposures that
deteriorates unexpectedly could cause us to have to make
significant additional loan loss provisions, negatively
impacting our earnings. In May 2009, we charged off in full a
$21.5 million loan to Silverton Financial Services, the
parent of Silverton Bank, which was placed in receivership by
the OCC on May 1, 2009. This loan was our only bank holding
company loan.
Additionally, a substantial focus of our marketing and business
strategy is to serve small to medium-sized businesses in the
Nashville and Knoxville MSAs. As a result, a relatively high
percentage of our loan portfolio consists of commercial loans
primarily to small to medium-sized businesses. At March 31,
2009, our commercial and industrial loans accounted for almost
28% of our total loans. During periods of economic weakness like
those we are currently experiencing, small to medium-sized
businesses may be impacted more severely and more quickly than
larger businesses. Consequently, the ability of such businesses
to repay their loans may deteriorate, and in some cases this
deterioration may occur quickly, which would adversely impact
our results of operations and financial condition.
We are
geographically concentrated in the Nashville, Tennessee and
Knoxville, Tennessee MSAs, and changes in local economic
conditions impact our profitability.
We currently operate primarily in the Nashville, Tennessee and
Knoxville, Tennessee MSAs, and most of our loan, deposit and
other customers live or have operations in these areas.
Accordingly, our success significantly depends upon the growth
in population, income levels, deposits and housing starts in
these markets, along with the continued attraction of business
ventures to the areas, and our profitability is impacted by the
changes in general economic conditions in these markets.
Economic conditions in the Nashville and Knoxville MSAs have
weakened in 2009, negatively affecting our operations,
particularly the real estate construction and development
segment of our loan portfolio. We cannot assure you that
economic conditions in our markets will improve over the
remainder of 2009 or during 2010 or thereafter, and continued
weak economic conditions in our markets could reduce our growth
rate, affect the ability of our customers to repay their loans
and generally affect our financial condition and results of
operations.
We are less able than a larger institution to spread the risks
of unfavorable local economic conditions across a large number
of diversified economies. Moreover, we cannot give any assurance
that we will benefit from any market growth or return of more
favorable economic conditions in our primary market areas if
they do occur.
If our
allowance for loan losses is not sufficient to cover actual loan
losses, our earnings will decrease.
If loan customers with significant loan balances fail to repay
their loans, our earnings and capital levels will suffer. We
make various assumptions and judgments about the probable losses
in our loan portfolio, including the creditworthiness of our
borrowers and the value of any collateral securing the loans. We
maintain an allowance for loan losses to cover our estimate of
the probable losses in our loan portfolio. In determining the
size of this allowance, we rely on an analysis of our loan
portfolio based on volume and types of loans, internal loan
classifications, trends in classifications, volume and trends in
delinquencies, nonaccruals and charge-offs, national and local
economic conditions, industry and peer bank loan quality
indications, and other pertinent factors and information. If our
assumptions are inaccurate, our current allowance may not be
sufficient to cover potential loan losses, and additional
provisions may be necessary which would decrease our earnings.
In addition, federal and state regulators periodically review
our loan portfolio and may require us to increase our allowance
for loan losses or recognize loan charge-offs. Their conclusions
about the quality of our loan portfolio may be different than
ours. Any increase in our allowance for loan losses or loan
charge-offs as required by these regulatory agencies could have
a negative effect on our operating results. Moreover, additions
to the allowance may be necessary based on changes in economic
and real estate market conditions,
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new information regarding existing loans, identification of
additional problem loans and other factors, both within and
outside of our managements control.
We
cannot predict the effect on our operations of recent
legislative and regulatory initiatives that were enacted in
response to the ongoing financial crisis.
The U.S. federal, state and foreign governments have taken
or are considering extraordinary actions in an attempt to deal
with the worldwide financial crisis and the severe decline in
the global economy. To the extent adopted, many of these actions
have been in effect for only a limited time, and have produced
limited or no relief to the capital, credit and real estate
markets. There is no assurance that these actions or other
actions under consideration will ultimately be successful.
In the United States, the federal government has adopted the
Emergency Economic Stabilization Act of 2008 (enacted on
October 3, 2008), or EESA, and the American Recovery and
Reinvestment Act of 2009 (enacted on February 17, 2009), or
ARRA. With authority granted under these laws, the Treasury has
proposed a financial stability plan that is intended to:
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provide for the government to invest additional capital into
banks and otherwise facilitate bank capital formation;
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temporarily increase the limits on federal deposit
insurance; and
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provide for various forms of economic stimulus, including to
assist homeowners restructure and lower mortgage payments on
qualifying loans.
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There can be no assurance that the financial stability plan
proposed by the Treasury, or any other legislative or regulatory
initiatives enacted or adopted in response to the ongoing
economic crisis, will be effective at dealing with the ongoing
economic crisis and improving economic conditions globally,
nationally or in our markets or that the measures adopted will
not have adverse consequences.
In addition to the EESA and ARRA, there is a potential for new
federal or state laws and regulations regarding lending and
funding practices and liquidity standards, and financial
institution regulatory agencies are expected to be very
aggressive in responding to concerns and trends identified in
examinations, including the expected issuance of many formal
enforcement actions. Negative developments in the financial
services industry and the impact of recently enacted or new
legislation in response to those developments could negatively
impact our operations by restricting our business operations,
including our ability to originate or sell loans, and adversely
impact our financial performance. In addition, industry,
legislative or regulatory developments may cause us to
materially change our existing strategic direction, capital
strategies, compensation or operating plans.
We may
not be able to continue to expand into the Knoxville MSA in the
time frame and at the levels that we currently
expect.
In order to continue our expansion into the Knoxville MSA, we
will be required to hire additional associates and build out a
branch network. We cannot assure you that we will be able to
hire the number of experienced associates that we need to
successfully execute our strategy in the Knoxville MSA, nor can
we assure you that the associates we hire will be able to
successfully execute our growth strategy in that market. Because
we seek to hire experienced associates, the compensation cost
associated with these individuals may be higher than that of
other financial institutions of similar size in the market. If
we are unable to grow our loan portfolio at planned rates, the
increased compensation expense of these experienced associates
may negatively impact our results of operations. Because there
will be a period of time before we are able to fully deploy our
resources in the Knoxville MSA, our start up costs, including
the cost of our associates and our branch expansion, will
negatively impact our results of operations. In addition, if we
are not able to expand our branch footprint in the Knoxville MSA
in the time period that we have targeted, our results of
operations may be negatively impacted. Execution of our growth
plans in the Knoxville MSA also depends on continued growth in
the Knoxville economy, and continued unfavorable local or
national economic conditions could reduce our growth rate,
affect the ability of our customers to repay their obligations
to us and generally negatively affect our financial condition
and results of operations.
S-9
Our
ability to maintain required capital levels and adequate sources
of funding and liquidity could be impacted by changes in the
capital markets and deteriorating economic and market
conditions.
We are required to maintain certain capital levels in
accordance with banking regulations. We must also maintain
adequate funding sources in the normal course of business to
support our operations and fund outstanding liabilities. Our
ability to maintain capital levels, sources of funding and
liquidity could be impacted by changes in the capital markets in
which we operate and deteriorating economic and market
conditions. In addition, we have from time to time supported our
capital position with the issuance of trust preferred
securities. The trust preferred market has deteriorated
significantly since the second half of 2007 and it is unlikely
that we would be able to issue trust preferred securities in the
future on terms consistent with our previous issuances, if at
all.
Failure by our bank subsidiary to meet applicable capital
guidelines or to satisfy certain other regulatory requirements
could subject our bank subsidiary to a variety of enforcement
remedies available to the federal regulatory authorities. These
include limitations on the ability to pay dividends, the
issuance by the regulatory authority of a capital directive to
increase capital, and the termination of deposit insurance by
the FDIC.
Noncore
funding represents a large component of our funding
base.
In addition to the traditional core deposits, such as demand
deposit accounts, interest checking, money market savings and
certificates of deposits, we utilize several noncore funding
sources, such as brokered certificates of deposit, Federal Home
Loan Bank, or FHLB, of Cincinnati advances, federal funds
purchased and other sources. We utilize these noncore funding
sources to fund the ongoing operations and growth of Pinnacle
National. The availability of these noncore funding sources are
subject to broad economic conditions and, as such, the cost of
funds may fluctuate significantly
and/or be
restricted, thus impacting our net interest income, our
immediate liquidity
and/or our
access to additional liquidity.
Brokered certificates of deposit have received scrutiny from
regulators in recent months. We impose upon ourselves
limitations as to the absolute level of brokered deposits we may
have on our balance sheet at any point in time. The pricing of
these deposits are subject to the broader wholesale funding
market and may fluctuate significantly in a very short period of
time. Additionally, the availability of these deposits is
impacted by overall market conditions as investors determine
whether to invest in less risky certificates of deposit or in
riskier debt and equity markets. As money flows between these
various investment instruments, market conditions will impact
the pricing and availability of brokered funds, which may
negatively impact our liquidity and cost of funds.
The financial media has disclosed that the nations FHLB
system may be under stress due to deterioration in the financial
markets. The capital positions of several FHLB institutions have
deteriorated to the point that they may suspend dividend
payments to their members. Pinnacle National is a member of the
FHLB of Cincinnati which continues to pay dividends. However,
should financial conditions continue to weaken, the FHLB system
(including the FHLB of Cincinnati) in the future may have to,
not only suspend dividend payments, but also curtail advances to
member institutions, like Pinnacle National. Should the FHLB
system deteriorate to the point of not being able to fund future
advances to banks, including Pinnacle National, this would place
increased pressure on other wholesale funding sources.
We impose certain internal limits as to the absolute level of
noncore funding we will incur at any point in time. Should we
exceed those limitations, we may need to modify our growth
plans, liquidate certain assets, participate loans to
correspondents or execute other actions to allow for us to
return to an acceptable level of noncore funding within a
reasonable amount of time.
If the
federal funds rate remains at current extremely low levels, our
net interest margin, and consequently our net earnings, may
continue to be negatively impacted.
Because of significant competitive deposit pricing pressures in
our market and the negative impact of these pressures on our
cost of funds, coupled with the fact that a significant portion
of our loan portfolio has variable rate pricing that moves in
concert with changes to the Federal Reserve Boards federal
funds rate (which is at an
S-10
extremely low rate as a result of the current recession), we
have experienced net interest margin compression throughout 2008
and in the first quarter of 2009. Because of these competitive
pressures, we are unable to lower the rate that we pay on
interest-bearing liabilities to the same extent and as quickly
as the yields we charge on interest-earning assets. As a result,
our net interest margin, and consequently our profitability, has
been negatively impacted. If the Federal Reserves federal
funds rate remains at extremely low levels, our higher funding
costs may continue to negatively impact our net interest margin
and results of operations.
Fluctuations
in interest rates could reduce our profitability.
The absolute level of interest rates as well as changes in
interest rates may affect our level of interest income, the
primary component of our gross revenue, as well as the level of
our interest expense. Interest rate fluctuations are caused by
many factors which, for the most part, are not under our
control. For example, national monetary policy plays a
significant role in the determination of interest rates.
Additionally, competitor pricing and the resulting negotiations
that occur with our customers also impact the rates we collect
on loans and the rates we pay on deposits.
As interest rates change, we expect that we will periodically
experience gaps in the interest rate sensitivities
of our assets and liabilities, meaning that either our
interest-bearing liabilities will be more sensitive to changes
in market interest rates than our interest-earning assets, or
vice versa. In either event, if market interest rates should
move contrary to our position, this gap may work
against us, and our earnings may be negatively affected. Changes
in the level of interest rates also may negatively affect our
ability to originate real estate loans, the value of our assets
and our ability to realize gains from the sale of our assets,
all of which ultimately affect our earnings. A decline in the
market value of our assets may limit our ability to borrow
additional funds. As a result, we could be required to sell some
of our loans and investments under adverse market conditions,
upon terms that are not favorable to us, in order to maintain
our liquidity. If those sales are made at prices lower than the
amortized costs of the investments, we will incur losses.
A
decline in our stock price or expected future cash flows, or a
material adverse change in our results of operations or
prospects, could result in impairment of our
goodwill.
A significant and sustained decline in our stock price and
market capitalization below book value, a significant decline in
our expected future cash flows, a significant adverse change in
the business climate, slower growth rates or other factors could
result in impairment of our goodwill. If we were to conclude
that a write-down of our goodwill is necessary, then the
appropriate charge would likely cause a material less.
National or state legislation or regulation may increase
our expenses and reduce earnings.
Changes in tax law, federal legislation, regulation or policies,
such as bankruptcy laws, deposit insurance, and capital
requirements, among others, can result in significant increases
in our expenses and/or charge-offs, which may adversely affect
our earnings. Changes in state or federal tax laws or
regulations can have a similar impact.
Competition
with other banking institutions could adversely affect our
profitability.
A number of banking institutions in the Nashville market have
higher lending limits, more banking offices, and a larger market
share of loans or deposits. In addition, our asset management
division competes with numerous brokerage firms and mutual fund
companies which are also much larger. In some respects, this may
place these competitors in a competitive advantage, although
many of our customers have selected us because of service
quality concerns at the larger enterprises. This competition may
limit or reduce our profitability, reduce our growth and
adversely affect our results of operations and financial
condition.
Loss
of our senior executive officers or other key employees could
impair our relationship with our customers and adversely affect
our business.
We have assembled a senior management team which has substantial
background and experience in banking and financial services in
the Nashville market. Loss of these key personnel could
negatively impact
S-11
our earnings because of their skills, customer relationships
and/or the
potential difficulty of promptly replacing them.
The
limitations on bonuses, retention awards, severance payments and
incentive compensation contained in ARRA may adversely affect
our ability to retain our highest performing
employees.
For so long as any equity securities that we issued to the
Treasury under the CPP remain outstanding, ARRA restricts
bonuses, retention awards, severance payments and other
incentive compensation payable to our five senior executive
officers and up to the next 20 highest paid employees. Depending
upon the final regulations issued under ARRA, it is possible
that we may be unable to create a compensation structure that
permits us to retain our highest performing employees or recruit
additional employees, especially if we are competing against
institutions that are not subject to the same restrictions. If
this were to occur, our business and results of operations could
be materially adversely affected.
We may
not be able to repurchase the Series A preferred stock as
soon as we desire.
We may in the future seek to repurchase our Series A
preferred stock and the then-outstanding portion of warrants
held by the Treasury and issued under the CPP. These
transactions are subject to regulatory approval. We can make no
assurances as to when, or if, we will receive such approval.
Until such time as the Series A preferred stock is
redeemed, we will remain subject to the terms and conditions of
the agreements that we entered into with the Treasury in
connection with the CPP, including the requirement that we must
obtain regulatory approval to pay dividends on our common stock
or, with some exceptions, to repurchase shares of our common
stock. Further, our continued participation in the CPP subjects
us to increased regulatory and legislative oversight. ARRA
includes amendments to the executive compensation provisions of
EESA under which the CPP was established. These amendments apply
not only to future participants under the CPP, but also apply
retroactively to companies like ours that are current
participants under the CPP. The full scope and impact of these
amendments are uncertain and difficult to predict. These new and
future legal requirements and implementing standards under the
CPP may have unforeseen or unintended adverse effects on the
financial services industry as a whole, and particularly on CPP
participants, including us. They may require significant time,
effort and resources on our part to ensure compliance.
Our
business is dependent on technology, and an inability to invest
in technological improvements may adversely affect our results
of operations and financial condition.
The financial services industry is undergoing rapid
technological changes with frequent introductions of new
technology-driven products and services. In addition to better
serving customers, the effective use of technology increases
efficiency and enables financial institutions to reduce costs.
We have made significant investments in data processing,
management information systems and internet banking
accessibility. Our future success will depend in part upon our
ability to create additional efficiencies in our operations
through the use of technology, particularly in light of our past
and projected growth strategy. Many of our competitors have
substantially greater resources to invest in technological
improvements. We cannot make assurances that our technological
improvements will increase our operational efficiency or that we
will be able to effectively implement new technology-driven
products and services or be successful in marketing these
products and services to our customers.
We are
subject to various statutes and regulations that may impose
additional costs or limit our ability to take certain
actions.
We operate in a highly regulated industry and are subject to
examination, supervision, and comprehensive regulation by
various regulatory agencies. Our compliance with these
regulations is costly and restricts certain of our activities,
including payment of dividends, mergers and acquisitions,
investments, loans and interest rates charged, interest rates
paid on deposits and locations of offices. We are also subject
to capitalization guidelines established by our regulators,
which require us to maintain adequate capital to support our
growth. Recent bank and thrift closures have depleted the
Deposit Insurance Fund, and the FDIC has recently issued a
special assessment upon insured institutions to seek to
recapitalize the fund. The FDIC has indicated it is
S-12
likely that it will have an additional special assessment in the
fourth quarter of 2009 and that further special assessments may
take place. Any future special assessment would negatively
impact our results of operations.
The laws and regulations applicable to the banking industry
could change at any time, and we cannot predict the effects of
these changes on our business and profitability. Because
government regulation greatly affects the business and financial
results of all commercial banks and bank holding companies, our
cost of compliance could adversely affect our ability to operate
profitably.
Risks
Related to Our Common Stock and this Offering
The
price of our common stock may fluctuate significantly, and this
may make it difficult for you to resell shares of common stock
owned by you at times or at prices you find
attractive.
The price of our common stock on the NASDAQ Global Select Market
constantly changes. We expect that the market price of our
common stock will continue to fluctuate and there can be no
assurance about the market prices for our common stock.
Our stock price may fluctuate as a result of a variety of
factors, many of which are beyond our control. These factors
include:
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our financial condition, performance, creditworthiness and
prospects;
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quarterly variations in our operating results or the quality of
our assets;
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operating results that vary from the expectations of management,
securities analysts and investors;
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changes in expectations as to our future financial performance;
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announcements of innovations, new products, strategic
developments, significant contracts, acquisitions and other
material events by us or our competitors;
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the operating and securities price performance of other
companies that investors believe are comparable to us;
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future sales of our equity or equity-related securities;
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the credit, mortgage and housing markets, the markets for
securities relating to mortgages or housing, and developments
with respect to financial institutions generally;
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changes in global financial markets and global economies and
general market conditions, such as interest or foreign exchange
rates, stock, commodity or real estate valuations or volatility
and other geopolitical, regulatory or judicial events; and
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the relatively low trading volume of our common stock.
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Even
though our common stock is currently traded on the NASDAQ Global
Select Market, it has less liquidity than many other stocks
quoted on a national securities exchange.
The trading volume in our common stock on the NASDAQ Global
Select Market has been relatively low when compared with larger
companies listed on the NASDAQ Global Select Market or other
stock exchanges. Although we have experienced increased
liquidity in our stock, we cannot say with any certainty that a
more active and liquid trading market for our common stock will
continue to develop. Because of this, it may be more difficult
for shareholders to sell a substantial number of shares for the
same price at which shareholders could sell a smaller number of
shares.
We cannot predict the effect, if any, that future sales of our
common stock in the market, or the availability of shares of
common stock for sale in the market, will have on the market
price of our common stock. We can give no assurance that sales
of substantial amounts of common stock in the market, or the
potential for large amounts of sales in the market, would not
cause the price of our common stock to decline or impair our
future ability to raise capital through sales of our common
stock.
S-13
The market price of our common stock has fluctuated
significantly, and may fluctuate in the future. These
fluctuations may be unrelated to our performance. General market
or industry price declines or overall market volatility in the
future could adversely affect the price of our common stock, and
the current market price may not be indicative of future market
prices.
The
Series A preferred stock impacts net income available to
our common shareholders and our earnings per
share.
As long as shares of our Series A preferred stock are
outstanding, no dividends may be paid on our common stock unless
all dividends on the Series A preferred stock have been
paid in full. Additionally, for so long as the Treasury owns
shares of the Series A preferred stock, we are not
permitted to pay cash dividends on our common stock without the
Treasurys consent. The dividends declared on shares of our
Series A preferred stock will reduce the net income
available to common shareholders and our earnings per share of
common stock. Additionally, warrants to purchase our common
stock issued to the Treasury, in conjunction with the issuance
of the Series A Preferred Stock, may be dilutive to our
earnings per share.
Moreover, holders of our common stock are entitled to receive
dividends only when, as and if declared by our board of
directors. To date, we have not paid any cash dividends on our
common stock and we do not believe that we will consider paying
dividends until Pinnacle National has reached a level of
profitability appropriate to fund such dividends and support
asset growth.
Holders
of the Series A preferred stock have rights that are senior
to those of our common shareholders.
The Series A preferred stock that we have issued to the
Treasury is senior to our shares of common stock and holders of
the Series A preferred stock have certain rights and
preferences that are senior to holders of our common stock. The
Series A preferred stock ranks senior to our common stock
and all other equity securities of ours designated as ranking
junior to the Series A preferred stock. So long as any
shares of the Series A preferred stock remain outstanding,
unless all accrued and unpaid dividends for all prior dividend
periods have been paid or are contemporaneously declared and
paid in full, no dividend whatsoever shall be paid or declared
on our common stock or other junior stock, other than a dividend
payable solely in common stock. We and our bank subsidiary also
may not purchase, redeem or otherwise acquire for consideration
any shares of our common stock or other junior stock unless we
have paid in full all accrued dividends on the Series A
preferred stock for all prior dividend periods, other than in
certain circumstances described more fully below. Furthermore,
the Series A preferred stock is entitled to a liquidation
preference over shares of our common stock in the event of our
liquidation, dissolution or winding up.
Holders
of the Series A preferred stock have limited voting
rights.
Except as otherwise required by law and in connection with the
election of directors to our board of directors in the event
that we fail to pay dividends on the Series A preferred
stock for an aggregate of at least six quarterly dividend
periods (whether or not consecutive), holders of the
Series A preferred stock have limited voting rights. So
long as shares of the Series A preferred stock are
outstanding, in addition to any other vote or consent of
shareholders required by law or our amended and restated
charter, the vote or consent of holders owning at least
662/3%
of the shares of Series A preferred stock outstanding is
required for: (1) any authorization or issuance of shares
ranking senior to the Series A preferred stock;
(2) any amendment to the rights of the Series A
preferred stock so as to adversely affect the rights,
preferences, privileges or voting power of the Series A
preferred stock; or (3) consummation of any merger, share
exchange or similar transaction unless the shares of
Series A preferred stock remain outstanding, or if we are
not the surviving entity in such transaction, are converted into
or exchanged for preference securities of the surviving entity
and the shares of Series A preferred stock remaining
outstanding or such preference securities have such rights,
preferences, privileges and voting power as are not materially
less favorable to the holders than the rights, preferences,
privileges and voting power of the shares of Series A
preferred stock.
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Holders
of the Series A preferred stock may, under certain
circumstances, have the right to elect two directors to our
board of directors.
In the event that we fail to pay dividends on the Series A
preferred stock for an aggregate of six quarterly dividend
periods or more (whether or not consecutive), the authorized
number of directors then constituting our board of directors
will be increased by two. Holders of the Series A preferred
stock, together with the holders of any outstanding parity stock
with like voting rights, referred to as voting parity stock,
voting as a single class, will be entitled to elect the two
additional members of our board of directors, referred to as the
preferred stock directors, at the next annual meeting (or at a
special meeting called for the purpose of electing the preferred
stock directors prior to the next annual meeting) and at each
subsequent annual meeting until all accrued and unpaid dividends
for all past dividend periods have been paid in full.
We may
issue additional common stock or other equity securities in the
future which could dilute the ownership interest of existing
shareholders.
In order to maintain our capital at desired or
regulatory-required levels or to replace existing capital such
as our Series A preferred stock, we may be required to
issue additional shares of common stock, or securities
convertible into, exchangeable for or representing rights to
acquire shares of common stock. Except as described under
Underwriting below, we are not restricted from
issuing such additional shares. We may sell any shares that we
issue at prices below the current market price of shares, and
the sale of these shares may significantly dilute shareholder
ownership. We could also issue additional shares in connection
with acquisitions of other financial institutions.
Offerings
of debt, which would be senior to our common stock upon
liquidation, and/or preferred equity securities which may be
senior to our common stock for purposes of dividend
distributions or upon liquidation, may adversely affect the
market price of our common stock.
We may attempt to increase our capital resources or, if our or
Pinnacle Nationals capital ratios fall below the required
minimums, we or Pinnacle National could be forced to raise
additional capital by making additional offerings of debt or
preferred equity securities, including medium-term notes, trust
preferred securities, senior or subordinated notes and preferred
stock. Upon liquidation, holders of our debt securities and
shares of preferred stock and lenders with respect to other
borrowings are likely to receive distributions of our available
assets prior to the holders of our common stock. Additional
equity offerings may dilute the holdings of our existing
shareholders or reduce the market price of our common stock, or
both. Holders of our common stock are not entitled to preemptive
rights or other protections against dilution.
Our board of directors is authorized to issue one or more
classes or series of preferred stock from time to time without
any action on the part of the shareholders. Our board of
directors also has the power, without shareholder approval, to
set the terms of any such classes or series of preferred stock
that may be issued, including voting rights, dividend rights,
and preferences over our common stock with respect to dividends
or upon our dissolution, winding up and liquidation and other
terms. If we issue preferred stock in the future that has a
preference over our common stock with respect to the payment of
dividends or upon our liquidation, dissolution or winding up, or
if we issue preferred stock with voting rights that dilute the
voting power of our common stock, the rights of holders of our
common stock or the market price of our common stock could be
adversely affected.
Holders
of Pinnacle Financials trust preferred securities have
rights that are senior to those of Pinnacle Financials
common shareholders.
Pinnacle Financial has supported its continued growth through
the issuance of trust preferred securities from special purpose
trusts and accompanying junior subordinated debentures. At
March 31, 2009, Pinnacle Financial had outstanding trust
preferred securities and accompanying junior subordinated
debentures totaling $82.5 million. Payments of the
principal and interest on the trust preferred securities of
these trusts are conditionally guaranteed by Pinnacle Financial.
Further, the accompanying junior subordinated debentures
Pinnacle Financial issued to the trusts are senior to Pinnacle
Financials shares of common stock. As a result,
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Pinnacle Financial must make payments on the junior subordinated
debentures before any dividends can be paid on its common stock
and, in the event of Pinnacle Financials bankruptcy,
dissolution or liquidation, the holders of the junior
subordinated debentures must be satisfied before any
distributions can be made on Pinnacle Financials common
stock. Pinnacle Financial has the right to defer distributions
on its junior subordinated debentures (and the related trust
preferred securities) for up to five years, during which time no
dividends may be paid on its common stock.
If a
change in control is delayed or prevented, the market price of
our common stock could be negatively affected.
Provisions in our corporate documents, as well as certain
federal and state regulations, may make it difficult and
expensive to pursue a tender offer, change in control or
takeover attempt that our board of directors opposes. As a
result, our shareholders may not have an opportunity to
participate in such a transaction, and the trading price of our
stock may not rise to the level of other institutions that are
more vulnerable to hostile takeovers. Anti-takeover provisions
contained in our charter also will make it more difficult for an
outside shareholder to remove our current board of directors or
management.
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USE OF
PROCEEDS
The net proceeds, after underwriting discounts and estimated
expenses, to us from the sale of the common stock offered hereby
will be approximately $94,795,000 (or approximately $109,059,250
if the underwriters exercise their over-allotment option in
full). We intend to use the net proceeds of this offering for
general corporate purposes, including additional capital
contributions to Pinnacle National.
After completion of an evaluation of our capital position, and
discussions with our primary regulators, we may seek regulatory
approval to redeem all of the shares of our Series A
preferred stock that we issued to the Treasury as part of the
CPP under the TARP. We will undertake the proposed redemption
with our available cash resources. In addition, we may purchase
the remaining outstanding portion of the warrants we issued to
the Treasury in connection with that transaction. There can be
no assurance as to when, or if, we can redeem our Series A
preferred stock or whether we will repurchase the outstanding
portion of the warrants following the redemption of the
Series A preferred stock.
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CAPITALIZATION
The following table sets forth our capitalization as of
March 31, 2009:
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on an actual basis; and
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on an as adjusted basis after giving effect to the sale and
issuance of 7,700,000 shares of common stock in this
offering at a public offering price of $13.00 per share and
our receipt of $ 94,795,000 in estimated net proceeds from this
offering after deducting the underwriting discount and estimated
offering expenses of this offering.
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The information should be read in conjunction with
Managements Discussion and Analysis of Financial
Condition and Results of Operations and the consolidated
financial statements and the notes to those statements that are
included in our annual report on
Form 10-K
for the year ended December 31, 2008, and our quarterly
report on
Form 10-Q
for the quarter ended March 31, 2009, which are
incorporated by reference into this prospectus supplement and
the accompanying prospectus.
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March 31, 2009
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Actual
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As Adjusted
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(Unaudited)
|
|
|
|
(Dollars in thousands)
|
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
Subordinated debt
|
|
$
|
97,476
|
|
|
$
|
97,476
|
|
Stockholders equity:
|
|
|
|
|
|
|
|
|
Preferred stock, no par value
|
|
|
|
|
|
|
|
|
Authorized shares 10,000,000
|
|
|
|
|
|
|
|
|
Issued shares 95,000 shares Fixed
Rate Cumulative Perpetual Preferred Stock, Series A, $1,000
liquidation value
|
|
|
88,608
|
|
|
|
88,608
|
|
Common stock, par value $1.00 per share
|
|
|
|
|
|
|
|
|
Authorized shares 90,000,000
|
|
|
|
|
|
|
|
|
Issued shares 24,060,703 actual; 31,760,703, as
adjusted
|
|
|
24,061
|
|
|
|
31,761
|
|
Common stock warrants
|
|
|
6,697
|
|
|
|
6,697
|
|
Additional paid-in capital
|
|
|
418,217
|
|
|
|
505,312
|
|
Retained earnings
|
|
|
85,380
|
|
|
|
85,380
|
|
Accumulated other comprehensive income, net of taxes
|
|
|
8,684
|
|
|
|
8,684
|
|
|
|
|
|
|
|
|
|
|
Total stockholders equity
|
|
$
|
631,646
|
|
|
|
726,442
|
|
|
|
|
|
|
|
|
|
|
Total long-term debt and stockholders equity
|
|
$
|
729,122
|
|
|
|
823,918
|
|
|
|
|
|
|
|
|
|
|
S-18
PRICE
RANGE OF COMMON STOCK
The following table presents the range of high and low sale
prices of our common stock reported on the NASDAQ Global Select
Market for the periods shown below:
|
|
|
|
|
|
|
|
|
|
|
Sale Price per Share
|
|
|
|
High
|
|
|
Low
|
|
|
Year Ended December 31, 2007
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
33.85
|
|
|
$
|
29.40
|
|
Second Quarter
|
|
$
|
31.48
|
|
|
$
|
28.27
|
|
Third Quarter
|
|
$
|
31.31
|
|
|
$
|
21.62
|
|
Fourth Quarter
|
|
$
|
30.93
|
|
|
$
|
24.85
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2008
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
26.78
|
|
|
$
|
20.82
|
|
Second Quarter
|
|
$
|
29.29
|
|
|
$
|
20.05
|
|
Third Quarter
|
|
$
|
36.57
|
|
|
$
|
19.30
|
|
Fourth Quarter
|
|
$
|
32.00
|
|
|
$
|
22.01
|
|
|
|
|
|
|
|
|
|
|
Year Ending December 31, 2009
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
29.90
|
|
|
$
|
13.32
|
|
Second Quarter (through June 9, 2009)
|
|
$
|
24.01
|
|
|
$
|
13.60
|
|
As of June 9, 2009, there were approximately
4,141 holders of record of our common stock and
approximately 24,075,173 shares of our common stock
outstanding. On June 10, 2009, the closing sale price for
our common stock was $14.36 per share, as reported on the NASDAQ
Global Select Market.
DIVIDEND
POLICY
We have not paid any cash dividends on our common stock since
our inception, and we do not anticipate that we will pay cash
dividends on our common stock in the foreseeable future.
We are a legal entity separate and distinct from Pinnacle
National. Over time, the principal source of our cash flow,
including cash flow to pay dividends to our holders of trust
preferred securities, holders of the Series A preferred
stock we issued to Treasury in connection with the CPP and our
common stock shareholders, will be dividends that Pinnacle
National pays to us as its sole shareholder. Under Tennessee
law, we are not permitted to pay dividends if, after giving
effect to such payment, we would not be able to pay our debts as
they become due in the usual course of business or our total
assets would be less than the sum of our total liabilities plus
any amounts needed to satisfy any preferential rights if we were
dissolving. In addition, in deciding whether or not to declare a
dividend of any particular size, our board of directors must
consider our current and prospective capital, liquidity, and
other needs.
In addition to the limitations on our ability to pay dividends
under Tennessee law, our ability to pay dividends on our common
stock is also limited by our participation in the CPP and by
certain statutory or regulatory limitations. Prior to
December 12, 2011, unless we have redeemed the
Series A preferred stock issued to the Treasury in the CPP
or the Treasury has transferred the Series A preferred
stock to a third party, the consent of the Treasury must be
received before we can declare or pay any cash dividend or make
any distribution on our common stock. Furthermore, if we are not
current in the payment of quarterly dividends on the
Series A preferred stock, we cannot pay dividends on our
common stock.
Statutory and regulatory limitations also apply to Pinnacle
Nationals payment of dividends to us. Pinnacle National is
required by federal law to obtain the prior approval of the OCC
for payments of dividends if the total of all dividends declared
by its board of directors in any year will exceed (1) the
total of Pinnacle
S-19
Nationals net profits for that year, plus
(2) Pinnacle Nationals retained net profits of the
preceding two years, less any required transfers to surplus.
The payment of dividends by Pinnacle National and us may also be
affected by other factors, such as the requirement to maintain
adequate capital above regulatory guidelines. If, in the opinion
of the OCC, Pinnacle National was engaged in or about to engage
in an unsafe or unsound practice, the OCC could require, after
notice and a hearing, that Pinnacle National stop or refrain
from engaging in the practice. The federal banking agencies have
indicated that paying dividends that deplete a depository
institutions capital base to an inadequate level would be
an unsafe and unsound banking practice. Under the Federal
Deposit Insurance Corporation Improvement Act of 1991, a
depository institution may not pay any dividend if payment would
cause it to become undercapitalized or if it already is
undercapitalized. Moreover, the federal agencies have issued
policy statements that provide that bank holding companies and
insured banks should generally only pay dividends out of current
operating earnings.
S-20
DESCRIPTION
OF COMMON STOCK
The following is a description of our common stock and certain
provisions of our amended and restated charter and bylaws and
certain provisions of applicable law. The following is only a
summary and is qualified by applicable law and by the provisions
of our amended and restated charter and bylaws, copies of which
have been filed with the SEC and are also available upon request
from us.
General
The authorized capital stock of Pinnacle Financial consists of
90 million shares of common stock, par value $1.00 per
share, and 10 million shares of preferred stock, no par
value. As of June 9, 2009, 24,075,173 shares of
Pinnacle Financial common stock were outstanding, and
95,000 shares of Fixed Rate Cumulative Perpetual Preferred
Stock, Series A were outstanding. The remaining shares of
preferred stock, other than the shares currently issued as
Series A preferred stock, may be issued in one or more
series with those terms and at those times and for any
consideration as the Pinnacle Financial board of directors
determines. As of June 9, 2009, 2,156,421 shares of
Pinnacle Financial common stock were reserved for issuance upon
the exercise of outstanding stock options under various employee
stock option plans, 345,000 shares were reserved for
issuance upon exercise of warrants issued to Pinnacle
Financials organizers and 534,910 shares were
reserved for issuance upon exercise of the warrant issued to the
Treasury in connection with its acquisition of the Series A
preferred stock.
The outstanding shares of Pinnacle Financial common stock are
fully paid and nonassessable. Holders of Pinnacle Financial
common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the shareholders.
Holders of Pinnacle Financial common stock do not have
pre-emptive rights and are not entitled to cumulative voting
rights with respect to the election of directors. The Pinnacle
Financial common stock is neither redeemable nor convertible
into other securities, and there are no sinking fund provisions
with respect to the common stock.
Subject to the preferences applicable to any shares of Pinnacle
Financial preferred stock outstanding at the time, including the
Series A preferred stock described below, holders of
Pinnacle Financial common stock are entitled to, in the event of
liquidation, share ratably in all assets remaining after payment
of liabilities.
Series A
Preferred Stock
As part of the CPP, we entered into a purchase agreement with
the Treasury pursuant to which we issued and sold to the
Treasury 95,000 shares of our Series A preferred stock
having a liquidation preference of $1,000 per share. We issued
to the Treasury in connection with the Series A preferred
stock transaction a
ten-year
warrant relating to the purchase of up to 534,910 shares of
our common stock at an initial exercise price of $26.64 per
share. Cumulative dividends on the Series A preferred stock
will accrue on the liquidation preference at a rate per annum of
5% for the first five years, and at a rate per annum of 9%
thereafter, but will be paid only if, as, and when declared by
our board of directors. The Series A preferred stock has no
maturity date and ranks senior to our common stock with respect
to the payment of dividends and distributions and amounts
payable upon our liquidation, dissolution, and winding up. The
Series A preferred stock does not have any voting rights
other than with respect to certain limited matters, including
the right (together with all other holders of voting parity
stock) to elect two directors if we fail to pay six quarterly
dividends, the right to vote on matters that could adversely
affect the holders of the Series A preferred stock, and on
certain other matters to the extent required by law. Our ability
to repurchase the Series A preferred stock is subject to
certain limitations set forth in the purchase agreements
relating thereto, including the need to obtain certain
regulatory approvals.
Prior to December 12, 2011, unless we have repurchased the
Series A preferred stock or the Treasury has transferred
the Series A preferred stock to a third party, the consent
of the Treasury will be required for us to declare or pay any
dividend or make any distribution on our common stock or redeem,
purchase or acquire any shares of our common stock or other
equity or capital securities, other than in connection with
benefit plans consistent with past practice and certain other
circumstances specified in the purchase agreement associated
with the issuance of these shares.
S-21
Election
of Directors
Pinnacle Financials amended and restated charter and
bylaws provide that the Pinnacle Financial board of directors is
to be divided into three classes as nearly equal in number as
possible. Directors are elected by classes to three-year terms,
so that approximately one-third of the directors of Pinnacle
Financial are elected at each annual meeting of the
shareholders. In addition, Pinnacle Financials bylaws
provide that the power to increase or decrease the number of
directors and to fill vacancies is vested in the Pinnacle
Financial board of directors. The overall effect of these
provisions may be to prevent a person or entity from seeking to
acquire control of Pinnacle Financial through an increase in the
number of directors on the Pinnacle Financial board of directors
and the election of designated nominees to fill newly created
vacancies.
In the event that Pinnacle Financial fails to pay dividends on
the Series A preferred stock for an aggregate of six
quarterly dividend periods or more (whether or not consecutive),
the authorized number of directors then constituting Pinnacle
Financials board of directors will be increased by two.
Holders of the Series A preferred stock, together with the
holders of any outstanding voting parity stock, voting as a
single class, will be entitled to elect the two additional
members of Pinnacle Financials board of directors,
referred to as the preferred stock directors, at the next annual
meeting (or at a special meeting called for the purpose of
electing the preferred stock directors prior to the next annual
meeting) and at each subsequent annual meeting until all accrued
and unpaid dividends for all past dividend periods have been
paid in full.
Dividends
Holders of Pinnacle Financials common stock are entitled
to receive dividends when, as and if declared by Pinnacle
Financials board of directors out of funds legally
available for dividends. Pinnacle Financial has never declared
or paid any dividends on its common stock. In order to pay any
dividends, Pinnacle Financial will need to receive dividends
from Pinnacle National or have other sources of funds. As a
national bank, Pinnacle National can only pay dividends to
Pinnacle Financial if it has retained earnings for the current
fiscal year and the preceding two fiscal years, and if it has a
positive retained earnings account. At March 31, 2009,
Pinnacle Nationals retained earnings available for
dividends were $55.4 million. In addition, its ability to
pay dividends or otherwise transfer funds to Pinnacle Financial
is subject to various regulatory restrictions. See
Dividend Policy above.
Pursuant to the purchase agreement between Pinnacle Financial
and the Treasury, we agreed that, beginning December 12,
2008, for a period of three years, unless we have redeemed the
Series A preferred stock or the Treasury has transferred
the Series A preferred stock to a third party, the consent
of the Treasury will be required for us to (i) declare or
pay any dividend or make any distribution on our common stock or
(ii) redeem, purchase or acquire any shares of common stock
or other equity or capital securities of Pinnacle Financial, or
any trust preferred securities issued by us or an affiliate of
ours, other than the Series A preferred stock, other than
in connection with benefit plans consistent with past practice
and in certain other circumstances specified in the purchase
agreement.
Pinnacle Financials ability to pay dividends to its
shareholders in the future will depend on its earnings and
financial condition, liquidity and capital requirements, the
general economic and regulatory climate, its ability to service
any equity or debt obligations senior to its common stock and
other factors deemed relevant by Pinnacle Financials board
of directors. Pinnacle Financial currently intends to retain any
future earnings to fund the development and growth of the
companys business. Therefore, Pinnacle Financial does not
anticipate paying any cash dividends on its common stock in the
foreseeable future.
Corporate
Transactions
Pinnacle Financials amended and restated charter, with
exceptions, requires that any merger or similar transaction
involving Pinnacle Financial or any sale or other disposition of
all or substantially all of Pinnacle Financials assets
will require the affirmative vote of a majority of its directors
then in office and the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Pinnacle
Financials stock entitled to vote on the transaction.
However, if Pinnacle Financials board of directors has
approved the particular transaction by the affirmative vote of
two-thirds of the entire board, then the applicable provisions
S-22
of Tennessee law would govern and subject to the terms of the
Series A preferred stock, shareholder approval of the
transaction would require only the affirmative vote of the
holders of a majority of the outstanding shares of Pinnacle
Financials stock entitled to vote on the transaction. Any
amendment of this provision adopted by less than two-thirds of
the entire board of directors would require the affirmative vote
of the holders of at least two-thirds of the outstanding shares
of Pinnacle Financials stock entitled to vote on the
amendment; otherwise, the amendment would only require the
affirmative vote of at least a majority of the outstanding
shares of Pinnacle Financials stock entitled to vote on
the amendment.
Pinnacle Financials charter describes the factors that its
board of directors must consider in evaluating whether an
acquisition proposal made by another party is in Pinnacle
Financials shareholders best interests. The term
acquisition proposal refers to any offer of another
party to:
|
|
|
|
|
make a tender offer or exchange offer for Pinnacle
Financials common stock or any other equity security of
Pinnacle Financial;
|
|
|
|
merge or combine Pinnacle Financial with another
corporation; or
|
|
|
|
purchase or otherwise acquire all or substantially all of the
properties and assets owned by Pinnacle Financial.
|
The board of directors, in evaluating an acquisition proposal,
is required to consider all relevant factors, including:
|
|
|
|
|
the expected social and economic effects of the transaction on
Pinnacle Financials employees, clients and other
constituents, such as its suppliers of goods and services;
|
|
|
|
the payment being offered by the other corporation in relation
to (1) Pinnacle Financials current value at the time
of the proposal as determined in a freely negotiated transaction
and (2) the board of directors estimate of Pinnacle
Financials future value as an independent company at the
time of the proposal; and
|
|
|
|
the expected social and economic effects on the communities
within which Pinnacle Financial operates.
|
Pinnacle Financial has included this provision in its amended
and restated charter because serving its community is one of the
reasons for organizing Pinnacle National. As a result, the board
of directors believes its obligation in evaluating an
acquisition proposal extends beyond evaluating merely the
payment being offered in relation to the market or book value of
the common stock at the time of the proposal.
While the value of what is being offered to shareholders in
exchange for their stock is the main factor when weighing the
benefits of an acquisition proposal, the board believes it is
appropriate also to consider all other relevant factors. For
example, the board will evaluate what is being offered in
relation to the current value of Pinnacle Financial at the time
of the proposal as determined in a freely negotiated transaction
and in relation to the boards estimate of the future value
of Pinnacle Financial as an independent concern at the time of
the proposal. A takeover bid often places the target corporation
virtually in the position of making a forced sale, sometimes
when the market price of its stock may be depressed. The board
believes that frequently the payment offered in such a
situation, even though it may exceed the value at which shares
are then trading, is less than that which could be obtained in a
freely negotiated transaction. In a freely negotiated
transaction, management would have the opportunity to seek a
suitable partner at a time of its choosing and to negotiate for
the most favorable price and terms that would reflect not only
Pinnacle Financials current value, but also its future
value.
One effect of the provision requiring Pinnacle Financials
board of directors to take into account specific factors when
considering an acquisition proposal may be to discourage a
tender offer in advance. Often an offeror consults the board of
a target corporation before or after beginning a tender offer in
an attempt to prevent a contest from developing. In Pinnacle
Financials boards opinion, this provision will
strengthen its position in dealing with any potential offeror
that might attempt to acquire the company through a hostile
tender offer. Another effect of this provision may be to
dissuade shareholders who might be displeased with the
boards response to an acquisition proposal from engaging
Pinnacle Financial in costly litigation.
S-23
The applicable charter provisions would not make an acquisition
proposal regarded by the board as being in Pinnacle
Financials best interests more difficult to accomplish. It
would, however, permit the board to determine that an
acquisition proposal was not in Pinnacle Financials best
interests, and thus to oppose it, on the basis of the various
factors that the board deems relevant. In some cases, opposition
by the board might have the effect of maintaining incumbent
management.
Any amendment of this provision adopted by less than two-thirds
of the entire board of directors would require the affirmative
vote of the holders of at least two-thirds of the outstanding
shares of common stock; otherwise, the amendment would only
require the affirmative vote of at least a majority of the
outstanding shares of common stock.
Pinnacle Financials amended and restated charter provides
that all extraordinary corporate transactions must be approved
by two-thirds of the directors and a majority of the shares
entitled to vote or a majority of the directors and two-thirds
of the shares entitled to vote.
In addition to the provisions described above with respect to
board and shareholder approval required for certain corporate
transactions, for so long as any shares of Series A
preferred stock are outstanding, in addition to any other vote
or consent of shareholders required by law or by Pinnacle
Financials amended and restated charter, the vote or
consent of the holders of at least
662/3%
of the shares of Series A preferred stock at the time
outstanding, voting separately as a single class, is also
necessary for effecting or validating any consummation of a
binding share exchange or reclassification involving the
Series A preferred stock or of a merger or consolidation of
Pinnacle Financial with another entity, unless the shares of
Series A preferred stock remain outstanding following any
such transaction or, if Pinnacle Financial is not the surviving
entity, are converted into or exchanged for preference
securities of the surviving entity and such remaining
outstanding shares of Series A preferred stock or
preference securities have rights, references, privileges and
voting powers that are not materially less favorable than the
rights, preferences, privileges or voting powers of the
Series A preferred stock, taken as a whole.
Anti-Takeover
Statutes
The Tennessee Control Share Acquisition Act generally provides
that, except as stated below, control shares will
not have any voting rights. Control shares are shares acquired
by a person under certain circumstances which, when added to
other shares owned, would give such person effective control
over one-fifth or more, or a majority of all voting power (to
the extent such acquired shares cause such a person to exceed
one-fifth or one-third of all voting power) in the election of a
Tennessee corporations directors. However, voting rights
will be restored to control shares by resolution approved by the
affirmative vote of the holders of a majority of the
corporations voting stock, other than shares held by the
owner of the control shares. If voting rights are granted to
control shares which give the holder a majority of all voting
power in the election of the corporations directors, then
the corporations other shareholders may require the
corporation to redeem their shares at fair value.
The Tennessee Control Share Acquisition Act is not applicable to
Pinnacle Financial because its amended and restated charter does
not contain a specific provision opting in to the
act as is required.
The Tennessee Investor Protection Act, or TIPA, provides that
unless a Tennessee corporations board of directors has
recommended a takeover offer to shareholders, no offeror
beneficially owning 5% or more of any class of equity securities
of the offeree company, any of which was purchased within the
preceding year, may make a takeover offer for any class of
equity security of the offeree company if after completion the
offeror would be a beneficial owner of more than 10% of any
class of outstanding equity securities of the company unless the
offeror, before making such purchase: (1) makes a public
announcement of his or her intention with respect to changing or
influencing the management or control of the offeree company;
(2) makes a full, fair and effective disclosure of such
intention to the person from whom he or she intends to acquire
such securities; and (3) files with the Tennessee
Commissioner of Commerce and Insurance (the
Commissioner) and the offeree company a statement
signifying such intentions and containing such additional
information as may be prescribed by the Commissioner.
S-24
The offeror must provide that any equity securities of an
offeree company deposited or tendered pursuant to a takeover
offer may be withdrawn by an offeree at any time within seven
days from the date the offer has become effective following
filing with the Commissioner and the offeree company and public
announcement of the terms or after 60 days from the date
the offer has become effective. If the takeover offer is for
less than all the outstanding equity securities of any class,
such an offer must also provide for acceptance of securities pro
rata if the number of securities tendered is greater than the
number the offeror has offered to accept and pay for. If such an
offeror varies the terms of the takeover offer before its
expiration date by increasing the consideration offered to
offerees, the offeror must pay the increased consideration for
all equity securities accepted, whether accepted before or after
the variation in the terms of the offer.
The TIPA does not apply to Pinnacle Financial, as it does not
apply to bank holding companies subject to regulation by a
federal agency and does not apply to any offer involving a vote
by holders of equity securities of the offeree company.
The Tennessee Business Combination Act generally prohibits a
business combination by Pinnacle Financial or a
subsidiary with an interested shareholder within
five years after the shareholder becomes an interested
shareholder. Pinnacle Financial or a subsidiary can, however,
enter into a business combination within that period if, before
the interested shareholder became such, Pinnacle
Financials board of directors approved the business
combination or the transaction in which the interested
shareholder became an interested shareholder. After that
five-year moratorium, the business combination with the
interested shareholder can be consummated only if it satisfies
certain fair price criteria or is approved by two-thirds (2/3)
of the other shareholders.
For purposes of the Tennessee Business Combination Act, a
business combination includes mergers, share
exchanges, sales and leases of assets, issuances of securities,
and similar transactions. An interested shareholder
is generally any person or entity that beneficially owns 10% or
more of the voting power of any outstanding class or series of
Pinnacle Financial stock.
Pinnacle Financials charter does not have special
requirements for transactions with interested parties; however,
all business combinations, as defined above, must be approved by
two thirds (2/3) of the directors and a majority of the shares
entitled to vote or a majority of the directors and two thirds
(2/3) of the shares entitled to vote.
The Tennessee Greenmail Act applies to a Tennessee corporation
that has a class of voting stock registered or traded on a
national securities exchange or registered with the SEC pursuant
to Section 12(g) of the Exchange Act. Under the Tennessee
Greenmail Act, Pinnacle Financial may not purchase any of its
shares at a price above the market value of such shares from any
person who holds more than 3% of the class of securities to be
purchased if such person has held such shares for less than two
years, unless the purchase has been approved by the affirmative
vote of a majority of the outstanding shares of each class of
voting stock issued by Pinnacle Financial or Pinnacle Financial
makes an offer, or at least equal value per share, to all
shareholders of such class.
Indemnification
The TBCA provides that a corporation may indemnify any of its
directors and officers against liability incurred in connection
with a proceeding if: (a) such person acted in good faith;
(b) in the case of conduct in an official capacity with the
corporation, he reasonably believed such conduct was in the
corporations best interests; (c) in all other cases,
he reasonably believed that his conduct was at least not opposed
to the best interests of the corporation; and (d) in
connection with any criminal proceeding, such person had no
reasonable cause to believe his conduct was unlawful. In actions
brought by or in the right of the corporation, however, the TBCA
provides that no indemnification may be made if the director or
officer was adjudged to be liable to the corporation. The TBCA
also provides that in connection with any proceeding charging
improper personal benefit to an officer or director, no
indemnification may be made if such officer or director is
adjudged liable on the basis that such personal benefit was
improperly received. In cases where the director or officer is
wholly successful, on the merits or otherwise, in the defense of
any proceeding instigated because of his or her status as a
director or officer of a corporation, the TBCA mandates that the
corporation indemnify
S-25
the director or officer against reasonable expenses incurred in
the proceeding. The TBCA provides that a court of competent
jurisdiction, unless the corporations charter provides
otherwise, upon application, may order that an officer or
director be indemnified for reasonable expenses if, in
consideration of all relevant circumstances, the court
determines that such individual is fairly and reasonably
entitled to indemnification, notwithstanding the fact that
(a) such officer or director was adjudged liable to the
corporation in a proceeding by or in the right of the
corporation; (b) such officer or director was adjudged
liable on the basis that personal benefit was improperly
received by him; or (c) such officer or director breached
his duty of care to the corporation.
Pinnacle Financials amended and restated charter provides
that it will indemnify its directors and officers to the maximum
extent permitted by the TBCA. Pinnacle Financials bylaws
provide that its directors and officers shall be indemnified
against expenses that they actually and reasonably incur if they
are successful on the merits of a claim or proceeding. In
addition, the bylaws provide that Pinnacle Financial will
advance to its directors and officers reasonable expenses of any
claim or proceeding so long as the director or officer furnishes
Pinnacle Financial with (1) a written affirmation of his or
her good faith belief that he or she has met the applicable
standard of conduct and (2) a written statement that he or
she will repay any advances if it is ultimately determined that
he or she is not entitled to indemnification.
When a case or dispute is settled or otherwise not ultimately
determined on its merits, the indemnification provisions provide
that Pinnacle Financial will indemnify its directors and
officers when they meet the applicable standard of conduct. The
applicable standard of conduct is met if the directors or
officer acted in a manner he or she in good faith believed to be
in or not opposed to Pinnacle Financials best interests
and, in the case of a criminal action or proceeding, if the
insider had no reasonable cause to believe his or her conduct
was unlawful. Pinnacle Financials board of directors,
shareholders or independent legal counsel determines whether the
director or officer has met the applicable standard of conduct
in each specific case.
Pinnacle Financials amended and restated charter and
bylaws also provide that the indemnification rights contained
therein do not exclude other indemnification rights to which a
director or officer may be entitled under any bylaw, resolution
or agreement, either specifically or in general terms approved
by the affirmative vote of the holders of a majority of the
shares entitled to vote. Pinnacle Financial can also provide for
greater indemnification than is provided for in the bylaws if
Pinnacle Financial chooses to do so, subject to approval by its
shareholders and the limitations provided in its amended and
restated charter as discussed in the subsequent paragraph.
Pinnacle Financials amended and restated charter
eliminates, with exceptions, the potential personal liability of
a director for monetary damages to Pinnacle Financial and its
shareholders for breach of a duty as a director. There is,
however, no elimination of liability for:
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a breach of the directors duty of loyalty to Pinnacle
Financial or its shareholders;
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an act or omission not in good faith or which involves
intentional misconduct or a knowing violation of law; or
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any payment of a dividend or approval of a stock repurchase that
is illegal under the TBCA.
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Pinnacle Financials amended and restated charter does not
eliminate or limit Pinnacle Financials right or the right
of its shareholders to seek injunctive or other equitable relief
not involving monetary damages.
The indemnification provisions of the bylaws specifically
provide that Pinnacle Financial may purchase and maintain
insurance on behalf of any director or officer against any
liability asserted against and incurred by him or her in his or
her capacity as a director, officer, employee or agent whether
or not Pinnacle Financial would have had the power to indemnify
against such liability.
Listing
Agent
Registrar and Transfer Company serves as the registrar and
transfer agent for our common stock.
S-26
CERTAIN
U.S. FEDERAL INCOME TAX CONSEQUENCES TO
NON-U.S.
HOLDERS OF COMMON STOCK
The following is a summary of certain U.S. federal income
tax consequences of the purchase, ownership, and disposition of
common stock by a
non-U.S. holder
(as defined below) that acquires our common stock in this
offering and holds it as a capital asset. This discussion is
based upon the Internal Revenue Code of 1986, as amended, which
we refer to as the Code, effective U.S. Treasury
regulations, and judicial decisions and administrative
interpretations thereof, all as of the date hereof and all of
which are subject to change, possibly with retroactive effect.
The foregoing are subject to differing interpretations which
could affect the tax consequences described herein. This
discussion does not address all aspects of U.S. federal
income taxation that may be applicable to investors in light of
their particular circumstances, or to investors subject to
special treatment under U.S. federal income tax laws, such
as financial institutions, insurance companies, tax-exempt
organizations, entities that are treated as partnerships for
U.S. federal income tax purposes, dealers in securities or
currencies, expatriates, persons deemed to sell common stock
under the constructive sale provisions of the Code, and persons
that hold common stock as part of a straddle, hedge, conversion
transaction, or other integrated investment. Furthermore, this
discussion does not address any U.S. federal gift tax laws
or any state, local or foreign tax laws.
You
are urged to consult your tax advisors regarding the
U.S. federal, state, local, and foreign income and other
tax consequences of the purchase, ownership, and disposition of
our common stock.
For purposes of this summary, you are a
non-U.S. holder
if you are a beneficial owner of common stock that, for
U.S. federal income tax purposes, is not:
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an individual that is a citizen or resident of the United States;
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a corporation, other entity treated as a corporation for
U.S. federal income tax purposes, or partnership that is
created or organized under the laws of the United States, any
state thereof, or the District of Columbia;
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an estate the income of which is subject to U.S. federal
income taxation regardless of its source; or
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a trust, provided that, (1) a court within the United
States is able to exercise primary supervision over its
administration or one or more United States persons (as defined
in the Code) have the authority to control all substantial
decisions of that trust, or (2) the trust has made an
election under the applicable Treasury regulations to be treated
as a United States person.
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If a partnership (including any entity or arrangement treated as
a partnership for U.S. federal income tax purposes) owns
our common stock, the U.S. federal income tax treatment of
a partner in the partnership generally will depend upon the
status of the partner and the activities of the partnership.
Partners in a partnership that owns our common stock should
consult their tax advisors as to the particular
U.S. federal income tax consequences applicable to them.
Distributions
In general, any distributions we make to a non-U.S. holder with
respect to its shares of our common stock will constitute a
dividend for U.S. federal income tax purposes to the extent of
our current or accumulated earnings and profits as determined
for U.S. federal income tax purposes. Any distribution not
constituting a dividend will be treated first as reducing the
adjusted basis in the non-U.S. holders shares of our
common stock and, to the extent it exceeds the adjusted basis in
the non-U.S. holders shares of our common stock, as gain
from the sale or exchange of such stock.
Except as described below, if you are a
non-U.S. holder
of common stock, distributions made to you out of our current or
accumulated earnings and profits (as determined for
U.S. federal income tax purposes) are subject to
withholding of U.S. federal income tax at a 30% rate or at
a lower rate if you are eligible for the benefits of an income
tax treaty that provides for a lower rate. Even if you are
eligible for a lower treaty rate,
S-27
we and other payors will generally be required to withhold at a
30% rate (rather than the lower treaty rate), unless you have
furnished to us or another payor:
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a valid Internal Revenue Service
Form W-8BEN
or an acceptable substitute form upon which you certify, under
penalties of perjury, your status as (or, in the case of a
United States alien holder that is a partnership or an estate or
trust, such forms certifying the status of each partner in the
partnership or beneficiary of the estate or trust as) a
non-United
States person and your entitlement to the lower treaty rate with
respect to such payments; or
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in the case of payments made outside the United States to an
offshore account (generally, an account maintained by you at an
office or branch of a bank or other financial institution at any
location outside the United States), other documentary evidence
establishing your entitlement to the lower treaty rate in
accordance with U.S. Treasury regulations.
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Special certification and other requirements apply to certain
non-U.S. holders
that are pass-through entities rather than corporations or
individuals.
If you are eligible for a reduced rate of United States
withholding tax under a tax treaty, you may obtain a refund of
any amounts withheld in excess of that rate by filing a refund
claim with the United States Internal Revenue Service.
If dividends paid to you are effectively connected
with your conduct of a trade or business within the United
States, and you have not claimed the dividends are eligible for
any treaty benefits as income that is not attributable to a
permanent establishment that you maintain in the United States,
we and other payors generally are not required to withhold tax
from the dividends, provided that you have furnished to us or
another payor a valid Internal Revenue Service
Form W-8ECI
or an acceptable substitute form upon which you certify, under
penalties of perjury, that you are a
non-United
States person, and the dividends are effectively connected with
your conduct of a trade or business within the United States and
are includible in your gross income. Effectively
connected dividends are taxed at rates applicable to
United States citizens, resident aliens, and domestic United
States corporations on a net income basis. If you are a
corporate
non-U.S. holder,
effectively connected dividends that you receive
may, under certain circumstances, be subject to an additional
branch profits tax at a 30% rate or at a lower rate
if you are eligible for the benefits of an income tax treaty
that provides for a lower rate.
Disposition
of Common Stock
If you are a
non-U.S. holder,
you generally will not be subject to U.S. federal income
tax on gain from U.S. sources that you recognize on a
disposition of our common stock unless:
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the gain is effectively connected with your conduct
of a trade or business in the United States, and the gain is
attributable to a permanent establishment that you maintain in
the United States, if that is required by an applicable income
tax treaty as a condition for subjecting you to United States
taxation on a net income basis;
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you are an individual, you hold our common stock as a capital
asset, and you are present in the United States for 183 or
more days in the taxable year of the disposition; or
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we are or have been a United States real property holding
corporation for U.S. federal income tax purposes.
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Effectively connected gains are taxed at rates
applicable to United States citizens, resident aliens, and
domestic United States corporations on a net income tax basis.
If you are a corporate
non-U.S. holder,
effectively connected gains that you recognize may
also, under certain circumstances, be subject to an additional
branch profits tax at a 30% rate or at a lower rate
if you are eligible for the benefits of an income tax treaty
that provides for a lower rate.
An individual
non-U.S. holder
described in the second bullet point above will only be subject
to U.S. federal income tax on the gain from the sale of our
common stock to the extent such gain is deemed to
S-28
be from U.S. sources, which will generally only be the case
where the individuals tax home is in the
United States. An individuals tax home is generally
considered to be located at the individuals regular or
principal (if more than one regular) place of business. If the
individual has no regular or principal place of business because
of the nature of the business, or because the individual is not
engaged in carrying on any trade or business, then the
individuals tax home is his regular place of abode. If an
individual
non-U.S. holder
is described in the second bullet point above, and the
individual
non-U.S. holders
tax home is in the United States, then the
non-U.S. holder
may be subject to a flat 30% tax on the gain derived from the
disposition, which gain may be offset by U.S. source
capital losses.
We believe we currently are not, and we do not anticipate
becoming, a United States real property holding
corporation for U.S. federal income tax purposes.
Federal
Estate Taxes
Common stock held by a
non-U.S. holder
at the time of death generally will be included in the
holders gross estate for United States federal estate tax
purposes, unless an applicable estate tax treaty provides
otherwise.
Information
Reporting and Backup Withholding
We must report annually to the Internal Revenue Service and to
each
non-U.S. holder
the amount of dividends paid to such holder and the tax withheld
with respect to such dividends, regardless of whether
withholding was required. Copies of the information returns
reporting such dividends and withholding may also be made
available to the tax authorities in the country in which the
non-U.S. holder
resides under the provisions of an applicable income tax treaty.
A
non-U.S. holder
will be subject to backup withholding for dividends paid to such
holder unless such holder certifies under penalty of perjury
that it is a
non-U.S. holder
(and the payor does not have actual knowledge or reason to know
that such holder is a United States person as defined under the
Code), or such holder otherwise establishes an exemption.
Information reporting and, depending on the circumstances,
backup withholding will apply to the proceeds of a sale of our
common stock within the United States or conducted through
certain United States-related financial intermediaries,
unless the beneficial owner certifies under penalty of perjury
that it is a
non-U.S. holder
(and the payor does not have actual knowledge or reason to know
that the beneficial owner is a United States person as defined
under the Code), or such owner otherwise establishes an
exemption.
Any amounts withheld under the backup withholding rules may be
allowed as a refund or a credit against a
non-U.S. holders
U.S. federal income tax liability provided the required
information is furnished to the Internal Revenue Service.
CERTAIN
ERISA CONSIDERATIONS
This section is specifically relevant to you if you propose
to invest in the common stock described in this prospectus
supplement on behalf of an employee benefit plan which is
subject to the U.S. Employee Retirement Income Security Act
of 1974, as amended, which we refer to as ERISA, or
Section 4975 of the Code or on behalf of any other entity
the assets of which are plan assets under ERISA,
which we refer to individually as a Plan and collectively as
Plans. If you are proposing to invest in the common stock on
behalf of a Plan, you should consult your legal counsel before
making such investment. This section also may be relevant to you
if you are proposing to invest in the common stock described in
this prospectus supplement on behalf of an employee benefit plan
which is subject to laws which have a similar purpose or effect
as the fiduciary responsibility or prohibited transaction
provisions of ERISA or Section 4975 of the Code, which we
refer to as Similar Laws, in which event you also should consult
your legal counsel before making such investment.
Unless otherwise indicated in the applicable prospectus
supplement, our common stock may, subject to certain legal
restrictions, be held by (1) pension, profit sharing, and
other employee benefit plans which are subject to Title I
of ERISA, (2) Plans, accounts, and other arrangements that
are subject to Section 4975 of the
S-29
Code, or provisions under Similar Laws, and (3) entities
whose underlying assets are considered to include plan
assets of any such Plans, accounts, or arrangement.
Section 406 of ERISA and Section 4975 of the Code
prohibit Plans from engaging in specified transactions involving
plan assets with persons who are parties in
interest under ERISA or disqualified persons
under the Code with respect to such pension, profit sharing, or
other employee benefit plans that are subject to
Section 406 of ERISA and Section 4975 of the Code. A
violation of these prohibited transaction rules may result in an
excise tax or other liabilities under ERISA
and/or
Section 4975 of the Code for such persons, unless exemptive
relief is available under an applicable statutory or
administrative exemption. A fiduciary of any such Plan, account,
or arrangement must determine that the purchase and holding of
an interest in our common stock is consistent with its fiduciary
duties and will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code, or a violation under any
applicable Similar Laws.
S-30
UNDERWRITING
Under the terms and subject to the conditions contained in an
underwriting agreement dated June 11, 2009, the
underwriters named below, for whom Raymond James &
Associates, Inc. is acting as representative, have severally
agreed to purchase, and we have agreed to sell to them, the
number of shares of our common stock set forth opposite their
names below:
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Underwriters
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Number of Shares
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Raymond James & Associates, Inc.
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5,775,000
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Sandler ONeill & Partners, L.P.
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770,000
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SunTrust Robinson Humphrey, Inc.
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770,000
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Wunderlich Securities, Inc.
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385,000
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Total
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7,700,000
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The underwriters are offering the shares of common stock subject
to their acceptance of the shares from us and subject to prior
sale. The underwriting agreement provides that the obligation of
the underwriters to purchase and accept delivery of the common
stock offered by this prospectus supplement are subject to
approval by its counsel of legal matters and to certain other
conditions set forth in the underwriting agreement. The
underwriters are obligated to purchase and accept delivery of
all of the shares of common stock offered by this prospectus
supplement, if any are purchased, other than those covered by
the option to purchase additional shares described below.
Option to
Purchase Additional Shares
We have granted the underwriters an option, exercisable within
30 days after the date of this prospectus supplement, to
purchase from time to time up to an aggregate of 1,155,000
additional shares of common stock, at the same price per share
as they are paying for the shares shown in the table above. If
the underwriters exercise their option to purchase any of the
additional 1,155,000 shares, each underwriter, subject to
certain conditions, will become obligated to purchase a number
of additional shares proportionate to that underwriters
initial purchase commitment as indicated in the table above. If
purchased, these additional shares will be sold by the
underwriters on the same terms as those on which the shares
offered by this prospectus supplement are being sold.
Commission
and Discounts
The underwriters propose to offer the common stock directly to
the public at the public offering price indicated on the cover
page of this prospectus supplement and to various dealers at
that price less a concession not to exceed $0.38 per share.
After this offering, the public offering price, concession and
reallowance to dealers may be reduced by the underwriters. No
reduction will change the amount of proceeds to be received by
us as indicated on the cover page of this prospectus supplement.
The shares of common stock are offered by the underwriters as
stated in this prospectus supplement, subject to receipt and
acceptance by them and subject to their right to reject any
order in whole or in part.
The following table summarizes the underwriting compensation to
be paid to the underwriters by us. These amounts assume both no
exercise and full exercise of the underwriters option to
purchase additional shares. We estimate that the total expenses
payable by us in connection with this offering, other than the
underwriting discount referred to below, will be approximately
$300,000.
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Per Share
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Without Option
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With Option
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Underwriting discount payable by us
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$
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0.65
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$
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5,005,000
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$
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5,755,750
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S-31
Indemnification
We have agreed to indemnify the underwriters against various
liabilities, including certain liabilities under the Securities
Act, and the Exchange Act, or to contribute to payments the
underwriters may be required to make because of any of those
liabilities.
Purchases
by Directors and Officers
At our request, the underwriters have reserved up to 5% of the
shares of our common stock offered by this prospectus supplement
for sale to our directors, officers, employees, business
associates and related persons at the public offering price set
forth on the cover page of this prospectus supplement. These
persons must commit to purchase from an underwriter or selected
dealer at the same time as the general public. The number of
shares available for sale to the general public will be reduced
to the extent these persons purchase the reserved shares. Any
reserved shares purchased by our directors or executive officers
will be subject to the
lock-up
agreements described below. We are not making loans to these
persons to purchase such shares.
Lock-up
Agreements
Subject to specified exceptions, each of our directors and our
executive officers have agreed for a period of 90 days
after the date of this prospectus supplement, not to directly or
indirectly: (1) offer, sell, contract to sell, pledge,
grant any option to purchase or otherwise dispose of any stock,
options, warrants or other securities of the Company, or any
securities convertible into or exercisable or exchangeable for,
or any rights to purchase or otherwise acquire, any stock,
options, warrants or other securities of the Company held or
deemed to be beneficially owned by the person or entity without
the prior written consent of Raymond James &
Associates, Inc. or (2) exercise or seek to exercise or
effectuate in any manner any rights of any nature that the
person or the entity has or may have hereafter to require us to
register under the Securities Act, the sale, transfer or other
disposition of any of the securities held or deemed to be
beneficially owned by the person or entity, or to otherwise
participate as a selling securityholder in any manner in any
registration by us under the Securities Act.
In addition we have agreed that for 90 days after the date
of this prospectus, we will not directly or indirectly without
the prior written consent of Raymond James &
Associates, Inc.: (1) offer for sale, sell, pledge or
otherwise dispose (or enter into any transaction or device that
is designed to, or reasonably could be expected to, result in
the disposition by any person within the 90-day restricted
period) of any shares of common stock or securities convertible
into or exchangeable for common stock, or sell or grant options,
rights or warrants with respect to any shares of our common
stock or securities convertible into or exchangeable for our
common stock, (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any
of the economic benefits or risks of ownership of such shares of
common stock whether any transaction described in
clause (1) or (2) above is settled by delivery of
common stock or other securities, in cash or otherwise,
(3) file or cause to be filed a registration statement,
with respect to the registration of any shares of common stock
or securities convertible, exercisable or exchangeable into our
common stock or any other securities, or (4) publicly
disclose the intention to do any of the foregoing. The
restrictions contained in the preceding sentence shall not apply
to (a) the shares of common stock being sold under this
prospectus supplement; (b) the issuance of shares of our common
stock or options to purchase our common stock pursuant to
existing employee benefit plans; (c) the conversion or exchange
of currently outstanding convertible or exchangeable securities;
or (d) the establishment of a trading plan pursuant to
Rule 10b5-1
under the Exchange Act, for the transfer of shares of common
stock, provided that such plan does not provide for the transfer
of common stock during the
90-day
restricted period.
The 90-day
lock-up
periods described in the preceding paragraphs will automatically
be extended if (1) during the last 17 days of the
90-day
lock-up
periods, we issue an earnings release or material news or a
material event relating to us occurs, or (2) prior to the
expiration of the
lock-up
periods, we announce that we will release earnings results
during the
16-day
period beginning on the last day of the
lock-up
periods, then the
lock-up
periods shall automatically be extended and the restrictions
described above shall continue to apply until the expiration of
the 18-day
period beginning on the issuance of the earnings release or the
S-32
announcement of the material news or the occurrence of the
material event, as applicable, unless
Raymond James & Associates, Inc. waives, in
writing, such extension. Raymond James & Associates,
Inc. may release any of the securities subject to these
lock-up
agreements at any time without notice.
Price
Stabilization, Short Positions and Penalty Bids
Until this offering is completed, rules of the SEC may limit the
ability of the underwriters and certain selling group members to
bid for and purchase shares of our common stock. As an exception
to these rules, the underwriters may engage in certain
transactions that stabilize the price of our common stock. These
transactions may include short sales, stabilizing transactions,
purchases to cover positions created by short sales and passive
market making. A short sale is covered if the short position is
no greater than the number of shares available for purchase by
the underwriters under the option to purchase additional shares.
The underwriters can close out a covered short sale by
exercising the option to purchase additional shares or
purchasing shares in the open market. In determining the source
of shares to close out a covered short sale, the underwriters
will consider, among other things, the open market price of
shares compared to the price available under the option to
purchase additional shares. The underwriters may also sell
shares in excess of the option to purchase additional shares,
creating a naked short position. The underwriters must close out
any naked short position by purchasing shares in the open
market. A naked short position is more likely to be created if
the underwriters are concerned that there may be downward
pressure on the price of the common stock in the open market
after pricing that could adversely affect investors who purchase
in the offering. As an additional means of facilitating the
offering, the underwriters may bid for, and purchase, shares of
common stock in the open market to stabilize the price of the
common stock. The underwriting syndicate may also reclaim
selling concessions allowed to an underwriter or a dealer for
distributing the common stock in the offering, if the syndicate
repurchases previously distributed common stock to cover
syndicate short positions or to stabilize the price of the
common stock. These activities may raise or maintain the market
price of the common stock above independent market levels or
prevent or retard a decline in the market price of the common
stock.
In connection with this transaction, the underwriters may engage
in passive market making transactions in the common stock on the
NASDAQ Global Select Market, prior to the pricing and completion
of this offering. Passive market making is permitted by SEC
Regulation M and consists of displaying bids on the NASDAQ
Global Select Market no higher than the bid prices of
independent market makers and making purchases at prices no
higher than these independent bids and effected in response to
order flow. Net purchases by a passive market maker on each day
are limited to a specified percentage of the passive market
makers average daily trading volume in the common stock
during a specified period and must be discontinued when such
limit is reached. Passive market making may cause the price of
the common stock to be higher than the price that otherwise
would exist in the open market in the absence of such
transactions.
The underwriters also may impose a penalty bid. This occurs when
a particular underwriter repays to the other underwriter a
portion of the underwriting discount received by it because the
representatives have repurchased shares sold by or for the
account of such underwriter in stabilizing or short covering
transactions.
These activities by the underwriters may stabilize, maintain or
otherwise affect the market price of our common stock. As a
result the price of our common stock may be higher than the
price that otherwise might exist in the open market. The
underwriters are not required to engage in these activities. If
these activities are commenced, they may be discontinued by the
underwriters without notice at any time. These transactions may
be effected on the NASDAQ Global Select Market or otherwise.
Electronic
Distribution
A prospectus supplement in electronic format may be made
available on websites or through other online services
maintained by the underwriters of the offering, or by its
affiliates. Other than the prospectus supplement in electronic
format, the information on the underwriters websites and
any information contained in any other website maintained by the
underwriters is not part of the prospectus supplement or the
registration
S-33
statement of which this prospectus supplement forms a part, has
not been approved
and/or
endorsed by us or the underwriters in their capacity as
underwriters and should not be relied upon by investors.
Listing
Our common stock is listed on the NASDAQ Global Select Market
under the symbol PNFP.
Selling
Restrictions
Public
Offer Selling Restrictions Under the Prospectus
Directive
In relation to each member state of the European Economic Area
that has implemented the Prospectus Directive (each, a relevant
member state), with effect from and including the date on which
the Prospectus Directive is implemented in that relevant member
state (the relevant implementation date), an offer of securities
described in this prospectus supplement and the accompanying
prospectus may not be made to the public in that relevant member
state other than:
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to any legal entity that is authorized or regulated to operate
in the financial markets, or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
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to any legal entity that has two or more of (1) an average
of at least 250 employees during the last financial year,
(2) a total balance sheet of more than 43,000,000 and
(3) an annual net turnover of more than 50,000,000,
as shown in its last annual or consolidated accounts;
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to fewer than 100 natural or legal persons (other than qualified
investors as defined in the Prospectus Directive), subject to
obtaining the prior consent of the representative; or
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in any other circumstances that do not require the publication
of a prospectus pursuant to Article 3 of the Prospectus
Directive,
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provided that no such offer of securities shall require us or
any underwriter to publish a prospectus supplement pursuant to
Article 3 of the Prospectus Directive.
For purposes of this provision, the expression of an offer
to securities to the public in any relevant member state
means the communication in any form and by any means of
sufficient information on the terms of the offer and the
securities to be offered so as to enable an investor to decide
to purchase or subscribe the securities, as the expression may
be varied in that member state by any measure implementing the
Prospectus Directive in that member state, and the expression
Prospectus Directive means Directive 2003/71/EC and
includes any relevant implementing measure in each relevant
member state.
The sellers of the securities have not authorized and do not
authorize the making of any offer of securities through any
financial intermediary on their behalf, other than offers made
by the underwriters with a view to the final placement of the
securities as contemplated in this prospectus supplement and the
accompanying prospectus. Accordingly, no purchaser of the
securities, other than the underwriters, is authorized to make
any further offer of the securities on behalf of the sellers of
the securities or the underwriters.
United
Kingdom
This prospectus supplement and the accompanying prospectus are
only being distributed to, and are only directed at, persons in
the United Kingdom that are qualified investors within the
meaning of Article (2)(1)(e) of the Prospectus Directive
(Qualified Investors) that are also
(i) investment professionals falling under
Article 19(5) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005 (the Order) or
(ii) high net worth entities, and other persons to whom it
may lawfully be communicated, falling within
Article 49(2)(a) to (d) of the Order (all such persons
together being referred to as relevant persons).
This prospectus supplement and the accompanying prospectus and
their contents are confidential and should not be distributed,
published or reproduced (in whole or in part) or disclosed by
recipients to any other persons in the United Kingdom. Any
person in the United Kingdom that is not a relevant person
should not act or rely on this prospectus supplement and the
accompanying prospectus or any of their contents.
S-34
Affiliations
Each of the underwriters and their affiliates have provided, and
may in the future provide, various investment banking, financial
advisory and other financial services to us and our affiliates
for which they have received, and in the future may receive,
advisory or transaction fees, as applicable, plus
out-of-pocket
expenses of the nature and in amounts customary in the industry
for these financial services. Pinnacle National contracts with
Raymond James Financial Services, Inc., an independent
contractor brokerage affiliate of Raymond James Financial, Inc.,
to offer and sell various securities and other financial
products to the public from Pinnacle Nationals locations.
We expect to continue to use Raymond James &
Associates, Inc. and it affiliates for various services in the
future.
EXPERTS
The consolidated financial statements of Pinnacle Financial as
of December 31, 2008 and 2007, and for each of the years in
the three-year period ended December 31, 2008 and
managements assessment of the effectiveness of internal
control over financial reporting as of December 31, 2008
have been incorporated by reference herein and in the
registration statement in reliance upon the reports of KPMG LLP,
independent registered public accounting firm, incorporated by
reference herein, and upon the authority of said firm as experts
in accounting and auditing.
The audit report covering the December 31, 2008
consolidated financial statements refers to a change in
accounting for split dollar life insurance arrangements in 2008
and a change in accounting for uncertainty in income taxes in
2007.
LEGAL
MATTERS
The validity of the shares of common stock offered hereby will
be passed upon for us by Bass, Berry & Sims PLC,
Nashville, Tennessee. Morrison & Foerster LLP, New
York, New York will pass upon certain legal matters for the
underwriters in connection with this offering.
WHERE YOU
CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on
Form S-3
under the Securities Act of 1933 for the securities being
offered under this prospectus supplement. This prospectus
supplement, which is part of that registration statement,
contains descriptions of certain agreements or documents that
are exhibits to the registration statement. The statements as to
the contents of such exhibits, however, are brief descriptions
and are not necessarily complete, and each statement is
qualified in all respects by reference to such agreement or
document. In addition, we file annual, quarterly and other
reports, proxy statements and other information with the SEC.
Our current SEC filings and the registration statement and
accompanying exhibits may be inspected without charge at the
public reference facilities of the SEC located at
100 F Street, N. E., Washington, D.C. 20549.
You may obtain copies of this information at prescribed rates.
The SEC also maintains a website that contains reports, proxy
statements, registration statements and other information,
including our filings with the SEC. The SEC website address is
www.sec.gov. You may call the SEC at
1-800-SEC-0330
to obtain further information on the operations of the public
reference room. We make available free of charge through our web
site our annual report on
Form 10-K,
quarterly reports on
Form 10-Q,
current reports on
Form 8-K,
proxy statement on Schedule 14A and all amendments to those
reports as soon as reasonably practicable after such material is
electronically filed with or furnished to the SEC. Our website
address is www.pnfp.com. Please note that our website address is
provided as an inactive textual reference only. Information
contained on or accessible through our website is not part of
this prospectus supplement or the accompanying prospectus, and
is therefore not incorporated by reference unless such
information is otherwise specifically referenced elsewhere in
this prospectus supplement or the accompanying prospectus.
S-35
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to incorporate by reference
certain information that we file with the SEC into this
prospectus supplement. By incorporating by reference, we can
disclose important information to you by referring you to
another document we have filed separately with the SEC. The
information incorporated by reference is deemed to be part of
this prospectus supplement, except for information incorporated
by reference that is superseded by information contained in this
prospectus supplement or any document we subsequently file with
the SEC that is incorporated or deemed to be incorporated by
reference into this prospectus supplement. Likewise, any
statement in this prospectus supplement or any document which is
incorporated or deemed to be incorporated by reference herein
will be deemed to have been modified or superseded to the extent
that any statement contained in any document that we
subsequently file with the SEC that is incorporated or deemed to
be incorporated by reference herein modifies or supersedes that
statement. This prospectus supplement incorporates by reference
the documents listed below and any future filings we make with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act, after the filing of this prospectus supplement and
prior to the sale of all the securities covered by this
prospectus supplement.
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Our annual report on
Form 10-K
for the fiscal year ended December 31, 2008.
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Our quarterly report on
Form 10-Q
for the quarter ended March 31, 2009.
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Our current reports on
Form 8-K
dated January 6, 2009, March 6, 2009, April 27,
2009, May 19, 2009, June 2, 2009 and June 10,
2009.
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The description of our common stock, par value $1.00 per share,
contained in our Registration Statement on
Form 8-A/A
filed with the SEC and dated January 12, 2009, including
all amendments and reports filed for purposes of updating such
description.
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Any documents we file with the SEC pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the filing of this prospectus supplement and before the
termination of the offering of the securities offered hereby.
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Notwithstanding the foregoing, information furnished under
Items 2.02 and 7.01 of any current report on
Form 8-K,
including the related exhibits, is not incorporated by reference
in this prospectus supplement.
You may request a copy of these documents, which will be
provided to you at no cost, by writing or telephoning us using
the following contact information:
Pinnacle Financial Partners, Inc.
The Commerce Center
211 Commerce Street, Suite 300
Nashville, Tennessee 37201
Attention: Investor Relations
Telephone:
(615) 744-3700
S-36
PROSPECTUS
$150,000,000
PINNACLE FINANCIAL PARTNERS,
INC.
Common Stock
Preferred Stock
Warrants
Debt Securities
Depositary Shares
Units
Pinnacle Financial Partners, Inc. may offer, issue and sell from
time to time, together or separately, in one or more offerings
any combination of (i) our common stock, (ii) our
preferred stock, which we may issue in one or more series,
(iii) warrants, (iv) senior or subordinated debt
securities, (v) depositary shares and (vi) units, up
to a maximum aggregate offering price of $150,000,000. The debt
securities may consist of debentures, notes, or other types of
debt. The debt securities, preferred stock and warrants may be
convertible, exercisable or exchangeable for common or preferred
stock or other securities of ours. The preferred stock may be
represented by depositary shares. The units may consist of any
combination of the securities listed above.
We may offer and sell these securities in amounts, at prices and
on terms determined at the time of the offering.
We will provide the specific terms of these securities in
supplements to this prospectus. You should read this prospectus
and the accompanying prospectus supplement, as well as the
documents incorporated or deemed incorporated by reference in
this prospectus, carefully before you make your investment
decision. Our common stock is listed on the NASDAQ Global Select
Market and trades on that exchange under the symbol
PNFP. On May 28, 2009, the closing price of our
common stock on the NASDAQ Global Select Market was $14.25 per
share. You are urged to obtain current market quotations of the
common stock. Each prospectus supplement will indicate if the
securities offered thereby will be listed on any securities
exchange.
This prospectus may not be used to sell securities unless
accompanied by a prospectus supplement.
We may offer to sell these securities on a continuous or delayed
basis, through agents, dealers or underwriters, or directly to
purchasers. The prospectus supplement for each offering of
securities will describe in detail the plan of distribution for
that offering. If our agents or any dealers or underwriters are
involved in the sale of the securities, the applicable
prospectus supplement will set forth the names of the agents,
dealers or underwriters and any applicable commissions or
discounts. Our net proceeds from the sale of securities will
also be set forth in the applicable prospectus supplement. For
general information about the distribution of securities
offered, please see Plan of Distribution in this
prospectus.
Investing in our securities involves risks. You should
carefully consider the risk factors referred to on page 3
of this prospectus and set forth in the documents incorporated
or deemed incorporated by reference herein before making any
decision to invest in our securities.
Neither the Securities and Exchange Commission nor any state
securities commission or regulatory body has approved or
disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a
criminal offense.
The securities are not savings accounts, deposits or
obligations of any bank and are not insured by the Federal
Deposit Insurance Corporation or any other governmental
agency.
The date of this prospectus is June 4, 2009.
TABLE OF
CONTENTS
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ABOUT
THIS PROSPECTUS
This prospectus is a part of a registration statement that we
filed with the Securities and Exchange Commission, or the SEC,
utilizing a shelf registration process. Under this
shelf registration process, we, and certain holders of our
securities, may, from time to time, sell any combination of the
securities described in this prospectus in one or more offerings.
The registration statement containing this prospectus, including
the exhibits to the registration statement, provides additional
information about us and the securities offered under this
prospectus. The registration statement, including the exhibits
and the documents incorporated or deemed incorporated herein by
reference, can be read on the SEC website or at the SEC offices
mentioned under the heading Where You Can Find More
Information.
Each time we sell securities pursuant to this prospectus, we
will provide a prospectus supplement containing specific
information about the terms of a particular offering by us. The
prospectus supplement may add, update or change information in
this prospectus. If the information in the prospectus is
inconsistent with a prospectus supplement, you should rely on
the information in that prospectus supplement. You should read
both this prospectus and, if applicable, any prospectus
supplement. See Where You Can Find More Information
for more information.
We have not authorized any dealer, salesman or other person to
give any information or to make any representation other than
those contained or incorporated by reference in this prospectus
or any prospectus supplement. You must not rely upon any
information or representation not contained or incorporated by
reference in this prospectus or any prospectus supplement. This
prospectus and any prospectus supplement do not constitute an
offer to sell or the solicitation of an offer to buy any
securities other than the registered securities to which they
relate, nor do this prospectus and any prospectus supplement
constitute an offer to sell or the solicitation of an offer to
buy securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such
jurisdiction. You should not assume that the information
contained in this prospectus or any prospectus supplement is
accurate on any date subsequent to the date set forth on the
front of such document or that any information we have
incorporated by reference is correct on any date subsequent to
the date of the document incorporated by reference, even though
this prospectus and any prospectus supplement is delivered or
securities are sold on a later date.
Unless this prospectus indicates otherwise or the context
otherwise requires, the terms we, our,
us, Pinnacle Financial or the
Company as used in this prospectus refer to Pinnacle
Financial Partners, Inc. and its subsidiaries, including
Pinnacle National Bank, which we sometimes refer to as
Pinnacle National, the bank, our
bank subsidiary or our bank, except that
such terms refer to only Pinnacle Financial and not its
subsidiaries in the sections entitled Description of
Common Stock, Description of Preferred Stock,
Description of Warrants, Description of Debt
Securities, Description of Depositary Shares,
and Description of Units.
PINNACLE
FINANCIAL PARTNERS, INC.
We are the second-largest bank holding company headquartered in
Tennessee, with approximately $5.0 billion in assets as of
March 31, 2009. Incorporated on February 28, 2000,
Pinnacle Financial is the parent of Pinnacle National Bank and
owns 100% of the capital stock of Pinnacle National Bank. The
primary business of Pinnacle Financial is operating Pinnacle
National. As of March 31, 2009, we had total deposits of
approximately $3.8 billion and shareholders equity of
approximately $631.6 million.
As a bank holding company, we are subject to regulation by the
Board of Governors of the Federal Reserve System, or the Federal
Reserve Board. We are required to file reports with the Federal
Reserve Board and are subject to regular examinations by that
agency.
Our principal executive offices are located at 211 Commerce
Street, Suite 300, Nashville, Tennessee 37201 and our
telephone number at these offices is
(615) 744-3700.
Our internet address is www.pnfp.com.
1
Please note that our website is provided as an inactive textual
reference and the information on our website is not incorporated
by reference in this prospectus.
PINNACLE
NATIONAL BANK
Our bank, Pinnacle National, is a national bank organized under
the laws of the United States. At March 31, 2009, the bank
was the second largest bank, based on asset size, headquartered
in Tennessee, with approximately $5.0 billion in assets.
Pinnacle National operates as an urban community bank serving
the Nashville-Davidson-Murfreesboro-Franklin MSA, which we refer
to as the Nashville MSA, and the Knoxville MSA. As an urban
community bank, Pinnacle National provides the personalized
service most often associated with small community banks, while
offering the sophisticated products and services, such as
investments and treasury management, often associated with
larger financial institutions. Pinnacle Nationals
principal business is to originate loans and fund such loans
with customers deposits obtained through its banking
clients. Our bank also offers investment, trust and insurance
services. We contract with Raymond James Financial Service,
Inc., or RJFS, a registered broker-dealer and investment
adviser, to offer and sell various securities and other
financial products to the public from our banks locations.
Pinnacle National also maintains a trust department which
provides fiduciary and investment management services for
individual and institutional clients. Account types include
personal trust, endowments, foundations, individual retirement
accounts, pensions and custody. We have also established
Pinnacle Advisory Services, Inc., a registered investment
advisor, to provide investment advisory services to our clients.
Additionally, Miller Loughry Beach Insurance and Services, Inc.,
a wholly-owned subsidiary of Pinnacle National, provides
insurance products, particularly in the property and casualty
area, to our clients. We derive income principally from interest
charged on loans, and to a lesser extent, from fees received in
connection with the sale and servicing of loans, deposit
services, insurance commissions and interest earned and gains
realized on the sale of investments. The banks principal
expenses are interest expense on deposits and borrowings,
operating expenses, provisions for loan losses and income tax
expenses.
As of March 31, 2009, Pinnacle National had 33 banking
offices located throughout the Nashville and Knoxville MSAs and
employed 736 full-time equivalent associates.
Pinnacle Nationals deposits are insured by the Federal
Deposit Insurance Corporation, or FDIC, up to applicable limits.
Our competitors include larger, multi-state banks, commercial
banks, savings and loan associations, consumer and commercial
finance companies, credit unions and other financial services
companies.
Our bank is subject to comprehensive regulation, examination and
supervision by the Office of the Comptroller of the Currency and
the FDIC.
RATIOS OF
EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth our consolidated ratio of
earnings to fixed charges and our consolidated ratio of earnings
to combined fixed charges and preferred stock dividends. Before
we issued the Fixed Rate Cumulative Perpetual Preferred Stock,
Series A, no par value, which is referred to as the
Series A preferred stock in this prospectus, to the United
States Treasury Department on December 12, 2008, no shares
of our preferred stock were outstanding.
Ratio of
Earnings to Fixed Charges
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Three Months Ended
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Years Ended December 31,
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March 31, 2009
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2008
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2007
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2006
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2005
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2004
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Excluding interest on deposits
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1.97
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3.91
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3.44
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4.03
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4.14
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5.73
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Including interest on deposits
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1.14
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1.47
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1.44
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1.54
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1.65
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2.01
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2
Ratio of
Earnings to Combined Fixed Charges and Preferred Stock
Dividends
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Three Months Ended
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Years Ended December 31,
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March 31, 2009
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2008
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2007
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2005
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Excluding interest on deposits
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1.62
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3.84
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3.44
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4.03
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4.14
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5.73
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Including interest on deposits
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1.13
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1.47
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1.44
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1.54
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1.65
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2.01
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RISK
FACTORS
An investment in our securities involves significant risks.
You should read and carefully consider the risks and
uncertainties and the risk factors set forth in our Annual
Report on
Form 10-K
for the year ended December 31, 2008, which is incorporated
by reference in this prospectus, and in the documents and
reports we file with the SEC after the date of this prospectus
which are incorporated by reference into this prospectus, as
well as any risks described in any applicable prospectus
supplement, before you make an investment decision regarding the
securities. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also affect
our business operations.
FORWARD-LOOKING
STATEMENTS
This prospectus contains forward-looking statements within the
meaning of Section 27A of the Securities Act and
Section 21E of the Securities Exchange Act of 1934. The
words expect, anticipate,
intend, consider, plan,
believe, seek, should,
estimate, and similar expressions are intended to
identify such forward-looking statements, but other statements
may constitute forward-looking statements. These statements
should be considered subject to various risks and uncertainties,
and are made based upon managements belief as well as
assumptions made by, and information currently available to,
management pursuant to safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Pinnacle
Financials actual results may differ materially from the
results anticipated in forward-looking statements due to a
variety of factors including, without limitation those described
above under Risk Factors, and (i) deterioration
in the financial condition of borrowers resulting in significant
increases in loan losses and provisions for those losses,
(ii) greater than anticipated deterioration in the economy
in the Nashville and Knoxville, Tennessee areas, particularly in
commercial and residential real estate markets, (iii) rapid
fluctuations or unanticipated changes in interest rates,
(iv) reduced ability to expand because of capital
constraints or regulatory policies, (v) changes in state or
federal legislation or regulations applicable to financial
service providers, including banks, (vi) increased
competition with other financial institutions and (vii) the
impact of governmental restrictions on entities participating in
the United States Treasury Departments Capital Purchase
Program. Many of these risks factors are beyond our ability to
control or predict, and you are cautioned not to put undue
reliance on such forward-looking statements. Pinnacle Financial
does not intend to update or reissue any forward-looking
statements contained in this report as a result of new
information or other circumstances that may become known to
Pinnacle Financial.
USE OF
PROCEEDS
Unless otherwise provided in the applicable prospectus
supplement to this prospectus used to offer specific securities,
we expect to use the net proceeds from any offering of
securities by us for general corporate purposes, which may
include acquisitions, capital expenditures, investments, and the
repayment, redemption or refinancing of all or a portion of any
indebtedness or other securities outstanding at a particular
time. Pending the application of the net proceeds, we expect to
invest the proceeds in short-term, interest-bearing instruments
or other investment-grade securities.
WHERE YOU
CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on
Form S-3
under the Securities Act of 1933 for the securities being
offered under this prospectus. This prospectus, which is part of
the registration statement, does
3
not contain all of the information set forth in the registration
statement and accompanying exhibits. This prospectus contains
descriptions of certain agreements or documents that are
exhibits to the registration statement. The statements as to the
contents of such exhibits, however, are brief descriptions and
are not necessarily complete, and each statement is qualified in
all respects by reference to such agreement or document. In
addition, we file annual, quarterly and other reports, proxy
statements and other information with the SEC. Our current SEC
filings and the registration statement and accompanying exhibits
may be inspected without charge at the public reference
facilities of the SEC located at 100 F Street, N. E.,
Washington, D.C. 20549. You may obtain copies of this
information at prescribed rates. The SEC also maintains a
website that contains reports, proxy statements, registration
statements and other information, including our filings with the
SEC. The SEC website address is www.sec.gov. You may call the
SEC at
1-800-SEC-0330
to obtain further information on the operations of the public
reference room. We make available free of charge through our web
site our Annual Report on
Form 10-K,
Quarterly Reports on
Form 10-Q,
Current Reports on
Form 8-K,
Proxy Statement on Schedule 14A and all amendments to those
reports as soon as reasonably practicable after such material is
electronically filed with or furnished to the SEC. Our website
address is www.pnfp.com. Please note that our website address is
provided as an inactive textual reference only. Information
contained on or accessible through our website is not part of
this prospectus or the prospectus supplement, and is therefore
not incorporated by reference unless such information is
otherwise specifically referenced elsewhere in this prospectus
or the prospectus supplement.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to incorporate by reference
certain information that we file with the SEC into this
prospectus. By incorporating by reference, we can disclose
important information to you by referring you to another
document we have filed separately with the SEC. The information
incorporated by reference is deemed to be part of this
prospectus, except for information incorporated by reference
that is superseded by information contained in this prospectus
or any document we subsequently file with the SEC that is
incorporated or deemed to be incorporated by reference into this
prospectus. Likewise, any statement in this prospectus or any
document which is incorporated or deemed to be incorporated by
reference herein will be deemed to have been modified or
superseded to the extent that any statement contained in any
document that we subsequently file with the SEC that is
incorporated or deemed to be incorporated by reference herein
modifies or supersedes that statement. This prospectus
incorporates by reference the documents listed below and any
future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, after
the filing of this prospectus and prior to the sale of all the
securities covered by this prospectus.
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Our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2008.
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Our Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2009.
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Our Current Reports on
Form 8-K
dated January 6, 2009, March 6, 2009, April 27,
2009 and May 19, 2009.
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The description of our common stock, par value $1.00 per share,
contained in our Registration Statement on
Form 8-A/A
filed with the SEC and dated January 12, 2009, including
all amendments and reports filed for purposes of updating such
description.
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Any documents we file with the SEC pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 after the filing of this prospectus and
before the termination of the offering of the securities offered
hereby.
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Notwithstanding the foregoing, information furnished under
Items 2.02 and 7.01 of any Current Report on
Form 8-K,
including the related exhibits, is not incorporated by reference
in this prospectus.
4
You may request a copy of these documents, which will be
provided to you at no cost, by writing or telephoning us using
the following contact information:
Pinnacle
Financial Partners, Inc.
The Commerce Center
211 Commerce Street, Suite 300
Nashville, Tennessee 37201
Attention: Investor Relations
Telephone:
(615) 744-3700
DESCRIPTIONS
OF SECURITIES WE MAY OFFER
This prospectus contains summary descriptions of the common
stock, preferred stock, warrants, debt securities, depositary
shares and units that we may offer and sell from time to time.
We may issue the debt securities as exchangeable
and/or
convertible debt securities exchangeable for or convertible into
shares of common stock or preferred stock. The preferred stock
may also be exchangeable for
and/or
convertible into shares of common stock or another series of
preferred stock. When one or more of these securities are
offered in the future, a prospectus supplement will explain the
particular terms of the securities and the extent to which these
general provisions may apply. These summary descriptions and any
summary descriptions in the applicable prospectus supplement do
not purport to be complete descriptions of the terms and
conditions of each security and are qualified in their entirety
by reference to Pinnacle Financials amended and restated
charter and bylaws, the Tennessee Business Corporation Act and
any other documents referenced in such summary descriptions and
from which such summary descriptions are derived. If any
particular terms of a security described in the applicable
prospectus supplement differ from any of the terms described
herein, then the terms described herein will be deemed
superseded by the terms set forth in that prospectus supplement.
We may issue securities in book-entry form through one or more
depositaries, such as The Depository Trust Company,
Euroclear or Clearstream, named in the applicable prospectus
supplement. Each sale of a security in book-entry form will
settle in immediately available funds through the applicable
depositary, unless otherwise stated. We will issue the
securities only in registered form, without coupons, although we
may issue the securities in bearer form if so specified in the
applicable prospectus supplement. If any securities are to be
listed or quoted on a securities exchange or quotation system,
the applicable prospectus supplement will say so.
DESCRIPTION
OF COMMON STOCK
The following is a description of our common stock and certain
provisions of our amended and restated charter and bylaws and
certain provisions of applicable law. The following is only a
summary and is qualified by applicable law and by the provisions
of our amended and restated charter and bylaws, copies of which
have been filed with the SEC and are also available upon request
from us. You should read the prospectus supplement, which will
contain additional information and which may update or change
some of the information below.
General
The authorized capital stock of Pinnacle Financial consists of
90 million shares of common stock, par value $1.00 per
share, and 10 million shares of preferred stock, no par
value. As of May 19, 2009, 24,061,494 shares of
Pinnacle Financial common stock were outstanding, and
95,000 shares of Fixed Rate Cumulative Perpetual Preferred
Stock, Series A were outstanding. The remaining shares of
preferred stock, other than the shares currently issued as
Series A preferred stock, may be issued in one or more
series with those terms and at those times and for any
consideration as the Pinnacle Financial board of directors
determines.
The outstanding shares of Pinnacle Financial common stock are
fully paid and nonassessable. Holders of Pinnacle Financial
common stock are entitled to one vote for each share held of
record on all matters
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submitted to a vote of the shareholders. Holders of Pinnacle
Financial common stock do not have pre-emptive rights and are
not entitled to cumulative voting rights with respect to the
election of directors. The Pinnacle Financial common stock is
neither redeemable nor convertible into other securities, and
there are no sinking fund provisions with respect to the common
stock.
Subject to the preferences applicable to any shares of Pinnacle
Financial preferred stock outstanding at the time, including the
Series A preferred stock, holders of Pinnacle Financial
common stock are entitled to, in the event of liquidation, share
ratably in all assets remaining after payment of liabilities.
Election
of Directors
Pinnacle Financials amended and restated charter and
bylaws provide that the Pinnacle Financial board of directors is
to be divided into three classes as nearly equal in number as
possible. Directors are elected by classes to three-year terms,
so that approximately one-third of the directors of Pinnacle
Financial are elected at each annual meeting of the
shareholders. In addition, Pinnacle Financials bylaws
provide that the power to increase or decrease the number of
directors and to fill vacancies is vested in the Pinnacle
Financial board of directors. The overall effect of these
provisions may be to prevent a person or entity from seeking to
acquire control of Pinnacle Financial through an increase in the
number of directors on the Pinnacle Financial board of directors
and the election of designated nominees to fill newly created
vacancies.
In the event that Pinnacle Financial fails to pay dividends on
the Series A preferred stock for an aggregate of six
quarterly dividend periods or more (whether or not consecutive),
the authorized number of directors then constituting Pinnacle
Financials board of directors will be increased by two.
Holders of the Series A preferred stock, together with the
holders of any outstanding parity stock with like voting rights,
referred to as voting parity stock, voting as a single class,
will be entitled to elect the two additional members of Pinnacle
Financials board of directors, referred to as the
preferred stock directors, at the next annual meeting (or at a
special meeting called for the purpose of electing the preferred
stock directors prior to the next annual meeting) and at each
subsequent annual meeting until all accrued and unpaid dividends
for all past dividend periods have been paid in full.
Dividends
Holders of Pinnacle Financials common stock are entitled
to receive dividends when, as and if declared by Pinnacle
Financials board of directors out of funds legally
available for dividends. Pinnacle Financial has never declared
or paid any dividends on its common stock. In order to pay any
dividends, Pinnacle Financial will need to receive dividends
from Pinnacle National or have other sources of funds. As a
national bank, Pinnacle National can only pay dividends to
Pinnacle Financial if it has retained earnings for the current
fiscal year and the preceding two fiscal years, and if it has a
positive retained earnings account. At March 31, 2009,
Pinnacle Nationals retained earnings available for
dividends were $55.4 million. In addition, its ability to
pay dividends or otherwise transfer funds to Pinnacle Financial
is subject to various regulatory restrictions.
Pursuant to the purchase agreement between Pinnacle Financial
and the Treasury, we agreed that, beginning December 12,
2008, for a period of three years, unless we have redeemed the
Series A preferred stock or the Treasury has transferred
the Series A preferred stock to a third party, the consent
of the Treasury will be required for us to (i) declare or
pay any dividend or make any distribution on our common stock or
(ii) redeem, purchase or acquire any shares of common stock
or other equity or capital securities of Pinnacle Financial, or
any trust preferred securities issued by us or an affiliate of
ours, other than the Series A preferred stock, other than
in connection with benefit plans consistent with past practice
and in certain other circumstances specified in the purchase
agreement.
Pinnacle Financials ability to pay dividends to its
shareholders in the future will depend on its earnings and
financial condition, liquidity and capital requirements, the
general economic and regulatory climate, its ability to service
any equity or debt obligations senior to its common stock and
other factors deemed relevant by Pinnacle Financials board
of directors. Pinnacle Financial currently intends to retain any
future earnings to fund the development and growth of the
companys business. Therefore, Pinnacle Financial does not
anticipate paying any cash dividends on its common stock in the
foreseeable future.
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Corporate
Transactions
Pinnacle Financials amended and restated charter, with
exceptions, requires that any merger or similar transaction
involving Pinnacle Financial or any sale or other disposition of
all or substantially all of Pinnacle Financials assets
will require the affirmative vote of a majority of its directors
then in office and the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Pinnacle
Financials stock entitled to vote on the transaction.
However, if Pinnacle Financials board of directors has
approved the particular transaction by the affirmative vote of
two-thirds of the entire board, then the applicable provisions
of Tennessee law would govern and subject to the terms of the
Series A preferred stock, shareholder approval of the
transaction would require only the affirmative vote of the
holders of a majority of the outstanding shares of Pinnacle
Financials stock entitled to vote on the transaction. Any
amendment of this provision adopted by less than two-thirds of
the entire board of directors would require the affirmative vote
of the holders of at least two-thirds of the outstanding shares
of Pinnacle Financials stock entitled to vote on the
amendment; otherwise, the amendment would only require the
affirmative vote of at least a majority of the outstanding
shares of Pinnacle Financials stock entitled to vote on
the amendment.
Pinnacle Financials charter describes the factors that its
board of directors must consider in evaluating whether an
acquisition proposal made by another party is in Pinnacle
Financials shareholders best interests. The term
acquisition proposal refers to any offer of another
party to:
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make a tender offer or exchange offer for Pinnacle
Financials common stock or any other equity security of
Pinnacle Financial;
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merge or combine Pinnacle Financial with another
corporation; or
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purchase or otherwise acquire all or substantially all of the
properties and assets owned by Pinnacle Financial.
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The board of directors, in evaluating an acquisition proposal,
is required to consider all relevant factors, including:
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the expected social and economic effects of the transaction on
Pinnacle Financials employees, clients and other
constituents, such as its suppliers of goods and services;
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the payment being offered by the other corporation in relation
to (1) Pinnacle Financials current value at the time
of the proposal as determined in a freely negotiated transaction
and (2) the board of directors estimate of Pinnacle
Financials future value as an independent company at the
time of the proposal; and
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the expected social and economic effects on the communities
within which Pinnacle Financial operates.
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Pinnacle Financial has included this provision in its amended
and restated charter because serving its community is one of the
reasons for organizing Pinnacle National. As a result, the board
of directors believes its obligation in evaluating an
acquisition proposal extends beyond evaluating merely the
payment being offered in relation to the market or book value of
the common stock at the time of the proposal.
While the value of what is being offered to shareholders in
exchange for their stock is the main factor when weighing the
benefits of an acquisition proposal, the board believes it is
appropriate also to consider all other relevant factors. For
example, the board will evaluate what is being offered in
relation to the current value of Pinnacle Financial at the time
of the proposal as determined in a freely negotiated transaction
and in relation to the boards estimate of the future value
of Pinnacle Financial as an independent concern at the time of
the proposal. A takeover bid often places the target corporation
virtually in the position of making a forced sale, sometimes
when the market price of its stock may be depressed. The board
believes that frequently the payment offered in such a
situation, even though it may exceed the value at which shares
are then trading, is less than that which could be obtained in a
freely negotiated transaction. In a freely negotiated
transaction, management would have the opportunity to seek a
suitable partner at a time of its choosing and to negotiate for
the most favorable price and terms that would reflect not only
Pinnacle Financials current value, but also its future
value.
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One effect of the provision requiring Pinnacle Financials
board of directors to take into account specific factors when
considering an acquisition proposal may be to discourage a
tender offer in advance. Often an offeror consults the board of
a target corporation before or after beginning a tender offer in
an attempt to prevent a contest from developing. In Pinnacle
Financials boards opinion, this provision will
strengthen its position in dealing with any potential offeror
that might attempt to acquire the company through a hostile
tender offer. Another effect of this provision may be to
dissuade shareholders who might be displeased with the
boards response to an acquisition proposal from engaging
Pinnacle Financial in costly litigation.
The applicable charter provisions would not make an acquisition
proposal regarded by the board as being in Pinnacle
Financials best interests more difficult to accomplish. It
would, however, permit the board to determine that an
acquisition proposal was not in Pinnacle Financials best
interests, and thus to oppose it, on the basis of the various
factors that the board deems relevant. In some cases, opposition
by the board might have the effect of maintaining incumbent
management.
Any amendment of this provision adopted by less than two-thirds
of the entire board of directors would require the affirmative
vote of the holders of at least two-thirds of the outstanding
shares of common stock; otherwise, the amendment would only
require the affirmative vote of at least a majority of the
outstanding shares of common stock.
Pinnacle Financials amended and restated charter provides
that all extraordinary corporate transactions must be approved
by two-thirds of the directors and a majority of the shares
entitled to vote or a majority of the directors and two-thirds
of the shares entitled to vote.
In addition to the provisions described above with respect to
board and shareholder approval required for certain corporate
transactions, for so long as any shares of Series A
preferred stock are outstanding, in addition to any other vote
or consent of shareholders required by law or by Pinnacle
Financials amended and restated charter, the vote or
consent of the holders of at least
662/3%
of the shares of Series A preferred stock at the time
outstanding, voting separately as a single class, is also
necessary for effecting or validating any consummation of a
binding share exchange or reclassification involving the
Series A preferred stock or of a merger or consolidation of
Pinnacle Financial with another entity, unless the shares of
Series A preferred stock remain outstanding following any
such transaction or, if Pinnacle Financial is not the surviving
entity, are converted into or exchanged for preference
securities of the surviving entity and such remaining
outstanding shares of Series A preferred stock or
preference securities have rights, references, privileges and
voting powers that are not materially less favorable than the
rights, preferences, privileges or voting powers of the
Series A preferred stock, taken as a whole.
Anti-Takeover
Statutes
The Tennessee Control Share Acquisition Act generally provides
that, except as stated below, control shares will
not have any voting rights. Control shares are shares acquired
by a person under certain circumstances which, when added to
other shares owned, would give such person effective control
over one-fifth or more, or a majority of all voting power (to
the extent such acquired shares cause such a person to exceed
one-fifth or one-third of all voting power) in the election of a
Tennessee corporations directors. However, voting rights
will be restored to control shares by resolution approved by the
affirmative vote of the holders of a majority of the
corporations voting stock, other than shares held by the
owner of the control shares. If voting rights are granted to
control shares which give the holder a majority of all voting
power in the election of the corporations directors, then
the corporations other shareholders may require the
corporation to redeem their shares at fair value.
The Tennessee Control Share Acquisition Act is not applicable to
Pinnacle Financial because its amended and restated charter does
not contain a specific provision opting in to the
act as is required.
The Tennessee Investor Protection Act, or TIPA, provides that
unless a Tennessee corporations board of directors has
recommended a takeover offer to shareholders, no offeror
beneficially owning 5% or more of any class of equity securities
of the offeree company, any of which was purchased within the
preceding year, may make a takeover offer for any class of
equity security of the offeree company if after completion the
offeror
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would be a beneficial owner of more than 10% of any class of
outstanding equity securities of the company unless the offeror,
before making such purchase: (1) makes a public
announcement of his or her intention with respect to changing or
influencing the management or control of the offeree company;
(2) makes a full, fair and effective disclosure of such
intention to the person from whom he or she intends to acquire
such securities; and (3) files with the Tennessee
Commissioner of Commerce and Insurance (the
Commissioner) and the offeree company a statement
signifying such intentions and containing such additional
information as may be prescribed by the Commissioner.
The offeror must provide that any equity securities of an
offeree company deposited or tendered pursuant to a takeover
offer may be withdrawn by an offeree at any time within seven
days from the date the offer has become effective following
filing with the Commissioner and the offeree company and public
announcement of the terms or after 60 days from the date
the offer has become effective. If the takeover offer is for
less than all the outstanding equity securities of any class,
such an offer must also provide for acceptance of securities pro
rata if the number of securities tendered is greater than the
number the offeror has offered to accept and pay for. If such an
offeror varies the terms of the takeover offer before its
expiration date by increasing the consideration offered to
offerees, the offeror must pay the increased consideration for
all equity securities accepted, whether accepted before or after
the variation in the terms of the offer.
The TIPA does not apply to Pinnacle Financial, as it does not
apply to bank holding companies subject to regulation by a
federal agency and does not apply to any offer involving a vote
by holders of equity securities of the offeree company.
The Tennessee Business Combination Act generally prohibits a
business combination by Pinnacle Financial or a
subsidiary with an interested shareholder within
five years after the shareholder becomes an interested
shareholder. Pinnacle Financial or a subsidiary can, however,
enter into a business combination within that period if, before
the interested shareholder became such, Pinnacle
Financials board of directors approved the business
combination or the transaction in which the interested
shareholder became an interested shareholder. After that
five-year moratorium, the business combination with the
interested shareholder can be consummated only if it satisfies
certain fair price criteria or is approved by two-thirds (2/3)
of the other shareholders.
For purposes of the Tennessee Business Combination Act, a
business combination includes mergers, share
exchanges, sales and leases of assets, issuances of securities,
and similar transactions. An interested shareholder
is generally any person or entity that beneficially owns 10% or
more of the voting power of any outstanding class or series of
Pinnacle Financial stock.
Pinnacle Financials charter does not have special
requirements for transactions with interested parties; however,
all business combinations, as defined above, must be approved by
two thirds (2/3) of the directors and a majority of the shares
entitled to vote or a majority of the directors and two thirds
(2/3) of the shares entitled to vote.
The Tennessee Greenmail Act applies to a Tennessee corporation
that has a class of voting stock registered or traded on a
national securities exchange or registered with the SEC pursuant
to Section 12(g) of the Exchange Act. Under the Tennessee
Greenmail Act, Pinnacle Financial may not purchase any of its
shares at a price above the market value of such shares from any
person who holds more than 3% of the class of securities to be
purchased if such person has held such shares for less than two
years, unless the purchase has been approved by the affirmative
vote of a majority of the outstanding shares of each class of
voting stock issued by Pinnacle Financial or Pinnacle Financial
makes an offer, or at least equal value per share, to all
shareholders of such class.
Indemnification
The TBCA provides that a corporation may indemnify any of its
directors and officers against liability incurred in connection
with a proceeding if: (a) such person acted in good faith;
(b) in the case of conduct in an official capacity with the
corporation, he reasonably believed such conduct was in the
corporations best interests; (c) in all other cases,
he reasonably believed that his conduct was at least not opposed
to the best
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interests of the corporation; and (d) in connection with
any criminal proceeding, such person had no reasonable cause to
believe his conduct was unlawful. In actions brought by or in
the right of the corporation, however, the TBCA provides that no
indemnification may be made if the director or officer was
adjudged to be liable to the corporation. The TBCA also provides
that in connection with any proceeding charging improper
personal benefit to an officer or director, no indemnification
may be made if such officer or director is adjudged liable on
the basis that such personal benefit was improperly received. In
cases where the director or officer is wholly successful, on the
merits or otherwise, in the defense of any proceeding instigated
because of his or her status as a director or officer of a
corporation, the TBCA mandates that the corporation indemnify
the director or officer against reasonable expenses incurred in
the proceeding. The TBCA provides that a court of competent
jurisdiction, unless the corporations charter provides
otherwise, upon application, may order that an officer or
director be indemnified for reasonable expenses if, in
consideration of all relevant circumstances, the court
determines that such individual is fairly and reasonably
entitled to indemnification, notwithstanding the fact that
(a) such officer or director was adjudged liable to the
corporation in a proceeding by or in the right of the
corporation; (b) such officer or director was adjudged
liable on the basis that personal benefit was improperly
received by him; or (c) such officer or director breached
his duty of care to the corporation.
Pinnacle Financials amended and restated charter provides
that it will indemnify its directors and officers to the maximum
extent permitted by the TBCA. Pinnacle Financials bylaws
provide that its directors and officers shall be indemnified
against expenses that they actually and reasonably incur if they
are successful on the merits of a claim or proceeding. In
addition, the bylaws provide that Pinnacle Financial will
advance to its directors and officers reasonable expenses of any
claim or proceeding so long as the director or officer furnishes
Pinnacle Financial with (1) a written affirmation of his or
her good faith belief that he or she has met the applicable
standard of conduct and (2) a written statement that he or
she will repay any advances if it is ultimately determined that
he or she is not entitled to indemnification.
When a case or dispute is settled or otherwise not ultimately
determined on its merits, the indemnification provisions provide
that Pinnacle Financial will indemnify its directors and
officers when they meet the applicable standard of conduct. The
applicable standard of conduct is met if the directors or
officer acted in a manner he or she in good faith believed to be
in or not opposed to Pinnacle Financials best interests
and, in the case of a criminal action or proceeding, if the
insider had no reasonable cause to believe his or her conduct
was unlawful. Pinnacle Financials board of directors,
shareholders or independent legal counsel determines whether the
director or officer has met the applicable standard of conduct
in each specific case.
Pinnacle Financials amended and restated charter and
bylaws also provide that the indemnification rights contained
therein do not exclude other indemnification rights to which a
director or officer may be entitled under any bylaw, resolution
or agreement, either specifically or in general terms approved
by the affirmative vote of the holders of a majority of the
shares entitled to vote. Pinnacle Financial can also provide for
greater indemnification than is provided for in the bylaws if
Pinnacle Financial chooses to do so, subject to approval by its
shareholders and the limitations provided in its amended and
restated charter as discussed in the subsequent paragraph.
Pinnacle Financials amended and restated charter
eliminates, with exceptions, the potential personal liability of
a director for monetary damages to Pinnacle Financial and its
shareholders for breach of a duty as a director. There is,
however, no elimination of liability for:
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a breach of the directors duty of loyalty to Pinnacle
Financial or its shareholders;
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an act or omission not in good faith or which involves
intentional misconduct or a knowing violation of law; or
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any payment of a dividend or approval of a stock repurchase that
is illegal under the TBCA.
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Pinnacle Financials amended and restated charter does not
eliminate or limit Pinnacle Financials right or the right
of its shareholders to seek injunctive or other equitable relief
not involving monetary damages.
The indemnification provisions of the bylaws specifically
provide that Pinnacle Financial may purchase and maintain
insurance on behalf of any director or officer against any
liability asserted against and incurred
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by him or her in his or her capacity as a director, officer,
employee or agent whether or not Pinnacle Financial would have
had the power to indemnify against such liability.
Transfer
Agent
Registrar and Transfer Company serves as the registrar and
transfer agent for our common stock.
DESCRIPTION
OF PREFERRED STOCK
We summarize below some of the provisions that will apply to the
preferred stock unless the applicable prospectus supplement
provides otherwise. This summary may not contain all information
that is important to you. The complete terms of the preferred
stock will be contained in the prospectus supplement. You should
read the prospectus supplement, which will contain additional
information and which may update or change some of the
information below.
General
We have authority to issue 10 million shares of preferred
stock. As of May 19, 2009, 95,000 shares of our
preferred stock were outstanding, all of which are shares of our
Fixed Rate Cumulative Perpetual Preferred Stock, Series A.
Our board of directors has the authority, without further action
by the shareholders, to issue preferred stock in one or more
series and to fix the number of shares, dividend rights,
conversion rights, voting rights, redemption rights, liquidation
preferences, sinking funds, and any other rights, preferences,
privileges and restrictions applicable to each such series of
preferred stock.
Prior to the issuance of a new series of preferred stock, we
will amend our amended and restated charter, designating the
stock of that series and the terms of that series. Each series
of preferred stock that we issue will constitute a separate
class of stock. The issuance of any preferred stock could
adversely affect the rights of the holders of common stock and,
therefore, reduce the value of the common stock. The ability of
our board of directors to issue preferred stock could
discourage, delay or prevent a takeover or other corporate
action.
The terms of any particular series of preferred stock will be
described in the prospectus supplement relating to that
particular series of preferred stock, including, where
applicable:
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the designation, stated value and liquidation preference of such
preferred stock and the amount of stock offered;
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the offering price;
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the dividend rate or rates (or method of calculation), the date
or dates from which dividends shall accrue, and whether such
dividends shall be cumulative or noncumulative and, if
cumulative, the dates from which dividends shall commence to
cumulate;
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any redemption or sinking fund provisions;
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the amount that shares of such series shall be entitled to
receive in the event of our liquidation, dissolution or
winding-up;
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the terms and conditions, if any, on which shares of such series
shall be convertible or exchangeable for shares of our stock of
any other class or classes, or other series of the same class;
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the voting rights, if any, of shares of such series;
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the status as to reissuance or sale of shares of such series
redeemed, purchased or otherwise reacquired, or surrendered to
us on conversion or exchange;
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the conditions and restrictions, if any, on the payment of
dividends or on the making of other distributions on, or the
purchase, redemption or other acquisition by us or any
subsidiary, of the
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common stock or of any other class of our shares ranking junior
to the shares of such series as to dividends or upon
liquidation;
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the conditions and restrictions, if any, on the creation of
indebtedness of us or of any subsidiary, or on the issuance of
any additional stock ranking on a parity with or prior to the
shares of such series as to dividends or upon
liquidation; and
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any additional dividend, liquidation, redemption, sinking or
retirement fund and other rights, preferences, privileges,
limitations and restrictions of such preferred stock.
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The description of the terms of a particular series of preferred
stock in the applicable prospectus supplement will not be
complete. You should refer to the applicable amendment to our
amended and restated charter for complete information regarding
a series of preferred stock.
The preferred stock will, when issued against payment of the
consideration payable therefor, be fully paid and nonassessable.
Unless otherwise specified in the applicable prospectus
supplement, each series of preferred stock will, upon issuance,
rank senior to the common stock and on a parity in all respects
with each other outstanding series of preferred stock. The
rights of the holders of our preferred stock will be subordinate
to that of our general creditors.
DESCRIPTION
OF WARRANTS
We summarize below some of the provisions that will apply to the
warrants unless the applicable prospectus supplement provides
otherwise. This summary may not contain all information that is
important to you. The complete terms of the warrants will be
contained in the applicable warrant certificate and warrant
agreement. These documents have been or will be included or
incorporated by reference as exhibits to the registration
statement of which this prospectus is a part. You should read
the warrant certificate and the warrant agreement. You should
also read the prospectus supplement, which will contain
additional information and which may update or change some of
the information below.
General
We may issue, together with other securities or separately,
warrants to purchase debt securities, common stock, preferred
stock or other securities. We may issue the warrants under
warrant agreements to be entered into between us and a bank or
trust company, as warrant agent, all as set forth in the
applicable prospectus supplement. The warrant agent would act
solely as our agent in connection with the warrants of the
series being offered and would not assume any obligation or
relationship of agency or trust for or with any holders or
beneficial owners of warrants.
The applicable prospectus supplement will describe the following
terms, where applicable, of warrants in respect of which this
prospectus is being delivered:
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the title of the warrants;
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the designation, amount and terms of the securities for which
the warrants are exercisable and the procedures and conditions
relating to the exercise of such warrants;
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the designation and terms of the other securities, if any, with
which the warrants are to be issued and the number of warrants
issued with each such security;
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the price or prices at which the warrants will be issued;
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the aggregate number of warrants;
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any provisions for adjustment of the number or amount of
securities receivable upon exercise of the warrants or the
exercise price of the warrants;
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the price or prices at which the securities purchasable upon
exercise of the warrants may be purchased;
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if applicable, the date on and after which the warrants and the
securities purchasable upon exercise of the warrants will be
separately transferable;
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if applicable, a discussion of the material U.S. federal
income tax considerations applicable to the warrants;
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any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the
warrants;
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the date on which the right to exercise the warrants shall
commence and the date on which the right shall expire;
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if applicable, the maximum or minimum number of warrants which
may be exercised at any time;
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the identity of the warrant agent;
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any mandatory or optional redemption provision;
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whether the warrants are to be issued in registered or bearer
form;
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whether the warrants are extendible and the period or periods of
such extendibility;
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information with respect to book-entry procedures, if
any; and
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any other terms of the warrants.
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Before exercising their warrants, holders of warrants will not
have any of the rights of holders of the securities purchasable
upon such exercise, including the right to receive dividends, if
any, or payments upon our liquidation, dissolution or
winding-up
or to exercise voting rights, if any.
Exercise
of Warrants
Each warrant will entitle the holder thereof to purchase the
amount of such principal amounts of debt securities or such
number of shares of common stock or preferred stock or other
securities at the exercise price as will in each case be set
forth in, or be determinable as set forth in, the applicable
prospectus supplement. Warrants may be exercised at any time up
to the close of business on the expiration date set forth in the
applicable prospectus supplement. After the close of business on
the expiration date, unexercised warrants will become void.
Warrants may be exercised as set forth in the applicable
prospectus supplement relating to the warrants offered thereby.
Upon receipt of payment and the warrant certificate properly
completed and duly executed at the corporate trust office of the
warrant agent or any other office indicated in the applicable
prospectus supplement, we will, as soon as practicable, forward
the purchased securities. If less than all of the warrants
represented by the warrant certificate are exercised, a new
warrant certificate will be issued for the remaining warrants.
Enforceability
of Rights of Holders of Warrants
Each warrant agent will act solely as our agent under the
applicable warrant agreement and will not assume any obligation
or relationship of agency or trust with any holder of any
warrant. A single bank or trust company may act as warrant agent
for more than one issue of warrants. A warrant agent will have
no duty or responsibility in case of any default by us under the
applicable warrant agreement or warrant, including any duty or
responsibility to initiate any proceedings at law or otherwise,
or to make any demand upon us. Any holder of a warrant may,
without the consent of the related warrant agent or the holder
of any other warrant, enforce by appropriate legal action its
right to exercise, and receive the securities purchasable upon
exercise of, that holders warrant(s).
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Modification
of the Warrant Agreement
The warrant agreement will permit us and the warrant agent,
without the consent of the warrant holders, to supplement or
amend the agreement in the following circumstances:
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to cure any ambiguity;
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to correct or supplement any provision which may be defective or
inconsistent with any other provisions; or
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to add new provisions regarding matters or questions that we and
the warrant agent may deem necessary or desirable and which do
not adversely affect the interests of the warrant holders.
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DESCRIPTION
OF DEBT SECURITIES
We summarize below some of the provisions that will apply to the
debt securities unless the applicable prospectus supplement
provides otherwise. This summary may not contain all information
that is important to you. The complete terms of the debt
securities will be contained in the applicable notes. The notes
will be included or incorporated by reference as exhibits to the
registration statement of which this prospectus is a part. You
should read the provisions of the notes. You should also read
the prospectus supplement, which will contain additional
information and which may update or change some of the
information below.
General
This prospectus describes certain general terms and provisions
of the debt securities. The debt securities will be issued under
an indenture between us and a trustee to be designated prior to
the issuance of the debt securities. When we offer to sell a
particular series of debt securities, we will describe the
specific terms for the securities in a supplement to this
prospectus. The prospectus supplement will also indicate whether
the general terms and provisions described in this prospectus
apply to a particular series of debt securities.
We may issue, from time to time, debt securities, in one or more
series, that will consist of either our senior debt
(senior debt securities), our senior subordinated
debt (senior subordinated debt securities), our
subordinated debt (subordinated debt securities) or
our junior subordinated debt (junior subordinated debt
securities and, together with the senior subordinated debt
securities and the subordinated debt securities, the
subordinated securities). Debt securities, whether
senior, senior subordinated, subordinated or junior
subordinated, may be issued as convertible debt securities or
exchangeable debt securities.
We have summarized herein certain terms and provisions of the
form of indenture (the indenture). The summary is
not complete and is qualified in its entirety by reference to
the actual text of the indenture. The indenture is incorporated
by reference as an exhibit to the registration statement of
which this prospectus is a part. You should read the indenture
for the provisions which may be important to you. The indenture
is subject to and governed by the Trust Indenture Act of
1939, as amended.
The indenture does not limit the amount of debt securities which
we may issue. We may issue debt securities up to an aggregate
principal amount as we may authorize from time to time which
securities may be in any currency or currency unit designated by
us. The terms of each series of debt securities will be
established by or pursuant to (a) a supplemental indenture,
(b) a resolution of our board of directors, or (c) an
officers certificate pursuant to authority granted under a
resolution of our board of directors. The prospectus supplement
will describe the terms of any debt securities being offered,
including:
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the title of the debt securities;
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the limit, if any, upon the aggregate principal amount or issue
price of the securities of a series;
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ranking of the specific series of debt securities relative to
other outstanding indebtedness, including subsidiaries
debt;
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the price or prices at which the debt securities will be issued;
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the designation, aggregate principal amount and authorized
denominations;
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the issue date or dates of the series and the maturity date of
the series;
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whether the securities will be issued at par or at a premium
over or a discount from their face amount;
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the interest rate, if any, and the method for calculating the
interest rate and basis upon which interest shall be calculated;
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the right, if any, to extend interest payment periods and the
duration of the extension;
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the interest payment dates and the record dates for the interest
payments;
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any mandatory or optional redemption terms or prepayment,
conversion, sinking fund or exchangeability or convertibility
provisions;
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the currency of denomination of the securities;
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the place where we will pay principal, premium, if any, and
interest, if any, and the place where the debt securities may be
presented for transfer;
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if payments of principal of, premium, if any, or interest, if
any, on the debt securities will be made in one or more
currencies or currency units other than that or those in which
the debt securities are denominated, the manner in which the
exchange rate with respect to these payments will be determined;
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if other than denominations of $1,000 or multiples of $1,000,
the denominations the debt securities will be issued in;
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whether the debt securities will be issued in the form of global
securities or certificates;
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the applicability of and additional provisions, if any, relating
to the defeasance of the debt securities;
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the portion of principal amount of the debt securities payable
upon declaration of acceleration of the maturity date, if other
than the principal amount;
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the currency or currencies, if other than the currency of the
United States, in which principal and interest will be paid;
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the dates on which premium, if any, will be paid;
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any addition to or change in the Events of Default
described in this prospectus or in the indenture with respect to
the debt securities and any change in the acceleration
provisions described in this prospectus or in the indenture with
respect to the debt securities;
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any addition to or change in the covenants described in the
prospectus or in the indenture with respect to the debt
securities;
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our right, if any, to defer payment of interest and the maximum
length of this deferral period; and
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other specific terms, including any additional events of default
or covenants.
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We may issue debt securities at a discount below their stated
principal amount. Even if we do not issue the debt securities
below their stated principal amount, for United States federal
income tax purposes the debt securities may be deemed to have
been issued with a discount because of certain interest payment
characteristics. We will describe in any applicable prospectus
supplement the United States federal income tax considerations
applicable to debt securities issued at a discount or deemed to
be issued at a discount, and will describe any special United
States federal income tax considerations that may be applicable
to the particular debt securities.
We may structure one or more series of subordinated securities
so that they qualify as capital under federal regulations
applicable to bank holding companies. We may adopt this
structure whether or not those regulations may be applicable to
us at the time of issuance.
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The debt securities will represent our general unsecured
obligations. We are a non-operating holding company and almost
all of the operating assets of us and our consolidated
subsidiaries are owned by our subsidiaries. We rely primarily on
dividends from such subsidiaries to meet our obligations. We are
a legal entity separate and distinct from our banking and
non-banking affiliates. The principal sources of our income are
dividends and interest from our bank, Pinnacle National.
Pinnacle National is subject to restrictions imposed by federal
law on any extensions of credit to, and certain other
transactions with, us and certain other affiliates, and on
investments in stock or other securities thereof. In addition,
payment of dividends to us by Pinnacle National is subject to
ongoing review by banking regulators. Because we are a holding
company, our right to participate in any distribution of assets
of any subsidiary upon the subsidiarys liquidation or
reorganization or otherwise is subject to the prior claims of
creditors of the subsidiary, except to the extent we may
ourselves be recognized as a creditor of that subsidiary.
Accordingly, the debt securities will be effectively
subordinated to all existing and future liabilities, including
deposits, of our subsidiaries, and holders of the debt
securities should look only to our assets for payments on the
debt securities. The indenture does not limit the incurrence or
issuance of our secured or unsecured debt including senior
indebtedness.
Senior
Debt
Senior debt securities will rank equally and pari passu with all
of our other unsecured and unsubordinated debt from time to time
outstanding.
Subordinated
Debt
The indenture does not limit our ability to issue subordinated
debt securities. Any subordination provisions of a particular
series of debt securities will be set forth in the supplemental
indenture, board resolution or officers certificate
related to that series of debt securities and will be described
in the relevant prospectus supplement.
If this prospectus is being delivered in connection with a
series of subordinated debt securities, the accompanying
prospectus supplement or the information incorporated by
reference in this prospectus will set forth the approximate
amount of senior indebtedness outstanding as of the end of the
most recent fiscal quarter.
Conversion
or Exchange Rights
Debt securities may be convertible into or exchangeable for our
other securities or property. The terms and conditions of
conversion or exchange will be set forth in the supplemental
indenture, board resolution or officers certificate
related to that series of debt securities and will be described
in the relevant prospectus supplement. The terms will include,
among others, the following:
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the conversion or exchange price;
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the conversion or exchange period;
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provisions regarding the ability of us or the holder to convert
or exchange the debt securities;
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events requiring adjustment to the conversion or exchange
price; and
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provisions affecting conversion or exchange in the event of our
redemption of the debt securities.
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Merger,
Consolidation or Sale of Assets
The indenture prohibits us from merging into or consolidating
with any other person or selling, leasing or conveying
substantially all of our assets and the assets of our
subsidiaries, taken as a whole, to any person, unless:
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either we are the continuing corporation or the successor
corporation or the person which acquires by sale, lease or
conveyance substantially all our or our subsidiaries
assets is a corporation organized under the laws of the United
States, any state thereof, or the District of Columbia, and
expressly assumes the due and punctual payment of the principal
of, and premium, if any, and interest, if any, on
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all the debt securities and the due performance of every
covenant of the indenture to be performed or observed by us, by
supplemental indenture satisfactory to the trustee, executed and
delivered to the trustee by such corporation;
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immediately after giving effect to such transactions, no Event
of Default described under the caption Events of Default
and Remedies below or event which, after notice or lapse
of time or both would become an Event of Default, has happened
and is continuing; and
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we have delivered to the trustee an officers certificate
and an opinion of counsel each stating that such transaction and
such supplemental indenture comply with the indenture provisions
relating to merger, consolidation and sale of assets.
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Upon any consolidation or merger with or into any other person
or any sale, conveyance, lease, or other transfer of all or
substantially all of our or our subsidiaries assets to any
person, the successor person shall succeed, and be substituted
for, us under the indenture and each series of outstanding debt
securities, and we shall be relieved of all obligations under
the indenture and each series of outstanding debt securities to
the extent we were the predecessor person.
Events of
Default and Remedies
When we use the term Event of Default in the
indenture with respect to the debt securities of any series, we
mean:
(1) default in paying interest on the debt securities when
it becomes due and the default continues for a period of
30 days or more;
(2) default in paying principal, or premium, if any, on the
debt securities when due;
(3) default is made in the payment of any sinking or
purchase fund or analogous obligation when the same becomes due,
and such default continues for 30 days or more;
(4) default in the performance, or breach, of any covenant
or warranty in the indenture (other than defaults specified in
clause (1), (2) or (3) above) and the default or
breach continues for a period of 60 days or more after we
receive written notice of such default from the trustee or we
and the trustee receive notice from the holders of at least 25%
in aggregate principal amount of the outstanding debt securities
of the series;
(5) certain events of bankruptcy, insolvency,
reorganization, administration or similar proceedings with
respect to us have occurred; and
(6) any other Events of Default provided with respect to
debt securities of that series that is set forth in the
applicable prospectus supplement accompanying this prospectus.
No Event of Default with respect to a particular series of debt
securities (except as to certain events of bankruptcy,
insolvency or reorganization) necessarily constitutes an Event
of Default with respect to any other series of debt securities.
The occurrence of certain Events of Default or an acceleration
under the indenture may constitute an event of default under
certain of our other indebtedness outstanding from time to time.
Unless otherwise provided by the terms of an applicable series
of debt securities, if an Event of Default under the indenture
occurs with respect to the debt securities of any series and is
continuing, then the trustee or the holders of not less than 51%
of the aggregate principal amount of the outstanding debt
securities of that series may by written notice require us to
repay immediately the entire principal amount of the outstanding
debt securities of that series (or such lesser amount as may be
provided in the terms of the securities), together with all
accrued and unpaid interest and premium, if any. In the case of
an Event of Default resulting from certain events of bankruptcy,
insolvency or reorganization, the principal (or such specified
amount) of and accrued and unpaid interest, if any, on all
outstanding debt securities will become and be immediately due
and payable without any declaration or other act on the part of
the trustee or any holder of outstanding debt securities. We
refer you to the prospectus supplement relating to any series of
debt securities that are discount securities for the particular
provisions relating to acceleration of a portion of the
principal amount of such discount securities upon the occurrence
of an Event of Default.
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After a declaration of acceleration, the holders of a majority
in aggregate principal amount of outstanding debt securities of
any series may rescind this accelerated payment requirement if
all existing Events of Default, except for nonpayment of the
principal on the debt securities of that series that has become
due solely as a result of the accelerated payment requirement,
have been cured or waived and if the rescission of acceleration
would not conflict with any judgment or decree. The holders of a
majority in aggregate principal amount of the outstanding debt
securities of any series also have the right to waive past
defaults, except a default in paying principal or interest on
any outstanding debt security, or in respect of a covenant or a
provision that cannot be modified or amended without the consent
of all holders of the debt securities of that series.
No holder of any debt security may seek to institute a
proceeding with respect to the indenture unless such holder has
previously given written notice to the trustee of a continuing
Event of Default, the holders of not less than 51% in aggregate
principal amount of the outstanding debt securities of the
series have made a written request to the trustee to institute
proceedings in respect of the Event of Default, the holder or
holders have offered reasonable indemnity to the trustee and the
trustee has failed to institute such proceeding within
60 days after it received this notice. In addition, within
this 60-day
period the trustee must not have received directions
inconsistent with this written request by holders of a majority
in aggregate principal amount of the outstanding debt securities
of that series. These limitations do not apply, however, to a
suit instituted by a holder of a debt security for the
enforcement of the payment of principal, interest or any premium
on or after the due dates for such payment.
During the existence of an Event of Default actually known to a
responsible officer of the trustee, the trustee is required to
exercise the rights and powers vested in it under the indenture
and use the same degree of care and skill in its exercise as a
prudent person would under the circumstances in the conduct of
that persons own affairs. If an Event of Default has
occurred and is continuing, the trustee is not under any
obligation to exercise any of its rights or powers at the
request or direction of any of the holders unless the holders
have offered to the trustee security or indemnity reasonably
satisfactory to the trustee. Subject to certain provisions, the
holders of a majority in aggregate principal amount of the
outstanding debt securities of any series have the right to
direct the time, method and place of conducting any proceeding
for any remedy available to the trustee, or exercising any
trust, or power conferred on the trustee.
The trustee will, within 90 days after receiving notice of
any default, give notice of the default to the holders of the
debt securities of that series, unless the default was already
cured or waived. Unless there is a default in paying principal,
interest or any premium when due, the trustee can withhold
giving notice to the holders if it determines in good faith that
the withholding of notice is in the interest of the holders. In
the case of a default specified in clause (4) above
describing Events of Default, no notice of default to the
holders of the debt securities of that series will be given
until 60 days after the occurrence of the event of default.
The indenture requires us, within 120 days after the end of
our fiscal year, to furnish to the trustee a statement as to
compliance with the indenture. The indenture provides that the
trustee may withhold notice to the holders of debt securities of
any series of any Event of Default (except in payment on any
debt securities of that series) with respect to debt securities
of that series if it in good faith determines that withholding
notice is in the interest of the holders of those debt
securities.
Modification
and Waiver
The indenture may be amended or modified without the consent of
any holder of debt securities in order to:
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evidence a successor to the trustee;
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cure ambiguities, defects or inconsistencies;
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provide for the assumption of our obligations in the case of a
merger or consolidation or transfer of all or substantially all
of our assets that complies with the covenant described under
Merger, Consolidation or Sale of Assets;
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make any change that would provide any additional rights or
benefits to the holders of the debt securities of a series;
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add guarantors or co-obligors with respect to the debt
securities of any series;
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secure the debt securities of a series;
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establish the form or forms of debt securities of any series;
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add additional Events of Default with respect to the debt
securities of any series;
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add additional provisions as may be expressly permitted by the
Trust Indenture Act;
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maintain the qualification of the indenture under the
Trust Indenture Act; or
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make any change that does not adversely affect in any material
respect the interests of any holder.
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Other amendments and modifications of the indenture or the debt
securities issued may be made with the consent of the holders of
not less than a majority in aggregate principal amount of the
outstanding debt securities of each series affected by the
amendment or modification. However, no modification or amendment
may, without the consent of the holder of each outstanding debt
security affected:
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change the maturity date or the stated payment date of any
payment of premium or interest payable on the debt securities;
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reduce the principal amount, or extend the fixed maturity, of
the debt securities;
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change the method of computing the amount of principal or any
interest of any debt security;
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change or waive the redemption or repayment provisions of the
debt securities;
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change the currency in which principal, any premium or interest
is paid or the place of payment;
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reduce the percentage in principal amount outstanding of debt
securities of any series which must consent to an amendment,
supplement or waiver or consent to take any action;
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impair the right to institute suit for the enforcement of any
payment on the debt securities;
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waive a payment default with respect to the debt securities;
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reduce the interest rate or extend the time for payment of
interest on the debt securities;
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adversely affect the ranking or priority of the debt securities
of any series; or
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release any guarantor or co-obligor from any of its obligations
under its guarantee or the indenture, except in compliance with
the terms of the indenture.
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Satisfaction,
Discharge and Covenant Defeasance
We may terminate our obligations under the indenture with
respect to the outstanding debt securities of any series, when:
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all debt securities of any series issued that have been
authenticated and delivered have been delivered to the trustee
for cancellation; or
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all the debt securities of any series issued that have not been
delivered to the trustee for cancellation have become due and
payable, will become due and payable within one year, or are to
be called for redemption within one year and we have made
arrangements satisfactory to the trustee for the giving of
notice of redemption by such trustee in our name and at our
expense, and in each case, we have irrevocably deposited or
caused to be deposited with the trustee sufficient funds to pay
and discharge the entire indebtedness on the series of debt
securities; and
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we have paid or caused to be paid all other sums then due and
payable under the indenture; and
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we have delivered to the trustee an officers certificate
and an opinion of counsel, each stating that all conditions
precedent under the indenture relating to the satisfaction and
discharge of the indenture have been complied with.
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We may elect to have our obligations under the indenture
discharged with respect to the outstanding debt securities of
any series (legal defeasance). Legal defeasance
means that we will be deemed to have paid and discharged the
entire indebtedness represented by the outstanding debt
securities of such series under the indenture, except for:
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the rights of holders of the debt securities to receive
principal, interest and any premium when due;
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our obligations with respect to the debt securities concerning
issuing temporary debt securities, registration of transfer of
debt securities, mutilated, destroyed, lost or stolen debt
securities and the maintenance of an office or agency for
payment for security payments held in trust;
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the rights, powers, trusts, duties and immunities of the
trustee; and
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the defeasance provisions of the indenture.
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In addition, we may elect to have our obligations released with
respect to certain covenants in the indenture (covenant
defeasance). If we so elect, any failure to comply with
these obligations will not constitute a default or an event of
default with respect to the debt securities of any series. In
the event covenant defeasance occurs, certain events, not
including non-payment, bankruptcy and insolvency events,
described under Events of Default and Remedies will
no longer constitute an event of default for that series.
In order to exercise either legal defeasance or covenant
defeasance with respect to outstanding debt securities of any
series:
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we must irrevocably have deposited or caused to be deposited
with the trustee as trust funds for the purpose of making the
following payments, specifically pledged as security for, and
dedicated solely to the benefits of the holders of the debt
securities of a series:
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money in an amount; or
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U.S. government obligations (or equivalent government
obligations in the case of debt securities denominated in other
than U.S. dollars or a specified currency) that will
provide, not later than one day before the due date of any
payment, money in an amount; or
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a combination of money and U.S. government obligations (or
equivalent government obligations, as applicable),
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in each case sufficient, in the written opinion (with respect to
U.S. or equivalent government obligations or a combination
of money and U.S. or equivalent government obligations, as
applicable) of a nationally recognized firm of independent
public accountants to pay and discharge, and which shall be
applied by the trustee to pay and discharge, all of the
principal (including mandatory sinking fund payments), interest
and any premium at due date or maturity;
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in the case of legal defeasance, we have delivered to the
trustee an opinion of counsel stating that, under then
applicable Federal income tax law, the holders of the debt
securities of that series will not recognize income, gain or
loss for Federal income tax purposes as a result of the deposit,
defeasance and discharge to be effected and will be subject to
the same Federal income tax as would be the case if the deposit,
defeasance and discharge did not occur;
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in the case of covenant defeasance, we have delivered to the
trustee an opinion of counsel to the effect that the holders of
the debt securities of that series will not recognize income,
gain or loss for Federal income tax purposes as a result of the
deposit and covenant defeasance to be effected and will be
subject to the same Federal income tax as would be the case if
the deposit and covenant defeasance did not occur;
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no event of default or default with respect to the outstanding
debt securities of that series has occurred and is continuing at
the time of such deposit after giving effect to the deposit or,
in the case of legal defeasance, no default relating to
bankruptcy or insolvency has occurred and is continuing at any
time on or before the 91st day after the date of such
deposit, it being understood that this condition is not deemed
satisfied until after the 91st day;
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the legal defeasance or covenant defeasance will not cause the
trustee to have a conflicting interest within the meaning of the
Trust Indenture Act, assuming all debt securities of a
series were in default within the meaning of such Act;
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the legal defeasance or covenant defeasance will not result in a
breach or violation of, or constitute a default under, any other
agreement or instrument to which we are a party;
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if prior to the stated maturity date, notice shall have been
given in accordance with the provisions of the indenture;
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the legal defeasance or covenant defeasance will not result in
the trust arising from such deposit constituting an investment
company within the meaning of the Investment Company Act of
1940, as amended, unless the trust is registered under such Act
or exempt from registration; and
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we have delivered to the trustee an officers certificate
and an opinion of counsel stating that all conditions precedent
with respect to the defeasance or covenant defeasance have been
complied with.
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Covenants
We will set forth in the applicable prospectus supplement any
restrictive covenants applicable to any issue of debt securities.
Paying
Agent and Registrar
The trustee will initially act as paying agent and registrar for
all debt securities. We may change the paying agent or registrar
for any series of debt securities without prior notice, and we
or any of our subsidiaries may act as paying agent or registrar.
Forms of
Securities
Each debt security will be represented either by a certificate
issued in definitive form to a particular investor or by one or
more global securities representing the entire issuance of the
series of debt securities. Certificated securities will be
issued in definitive form and global securities will be issued
in registered form. Definitive securities name you or your
nominee as the owner of the security, and in order to transfer
or exchange these securities or to receive payments other than
interest or other interim payments, you or your nominee must
physically deliver the securities to the trustee, registrar,
paying agent or other agent, as applicable. Global securities
name a depositary or its nominee as the owner of the debt
securities represented by these global securities. The
depositary maintains a computerized system that will reflect
each investors beneficial ownership of the securities
through an account maintained by the investor with its
broker/dealer, bank, trust company or other representative, as
we explain more fully below.
Global
Securities
We may issue the registered debt securities in the form of one
or more fully registered global securities that will be
deposited with a depositary or its custodian identified in the
applicable prospectus supplement and registered in the name of
that depositary or its nominee. In those cases, one or more
registered global securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate
principal or face amount of the securities to be represented by
registered global securities. Unless and until it is exchanged
in whole for securities in definitive registered form, a
registered global security may not be transferred except as a
whole by and among the depositary for the registered global
security, the nominees of the depositary or any successors of
the depositary or those nominees.
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If not described below, any specific terms of the depositary
arrangement with respect to any securities to be represented by
a registered global security will be described in the prospectus
supplement relating to those securities. We anticipate that the
following provisions will apply to all depositary arrangements.
Ownership of beneficial interests in a registered global
security will be limited to persons, called participants, that
have accounts with the depositary or persons that may hold
interests through participants. Upon the issuance of a
registered global security, the depositary will credit, on its
book-entry registration and transfer system, the
participants accounts with the respective principal or
face amounts of the securities beneficially owned by the
participants. Any dealers, underwriters or agents participating
in the distribution of the securities will designate the
accounts to be credited. Ownership of beneficial interests in a
registered global security will be shown on, and the transfer of
ownership interests will be effected only through, records
maintained by the depositary, with respect to interests of
participants, and on the records of participants, with respect
to interests of persons holding through participants. The laws
of some states may require that some purchasers of securities
take physical delivery of these securities in definitive form.
These laws may impair your ability to own, transfer or pledge
beneficial interests in registered global securities.
So long as the depositary, or its nominee, is the registered
owner of a registered global security, that depositary or its
nominee, as the case may be, will be considered the sole owner
or holder of the securities represented by the registered global
security for all purposes under the indenture. Except as
described below, owners of beneficial interests in a registered
global security will not be entitled to have the securities
represented by the registered global security registered in
their names, will not receive or be entitled to receive physical
delivery of the securities in definitive form and will not be
considered the owners or holders of the securities under the
indenture. Accordingly, each person owning a beneficial interest
in a registered global security must rely on the procedures of
the depositary for that registered global security and, if that
person is not a participant, on the procedures of the
participant through which the person owns its interest, to
exercise any rights of a holder under the indenture. We
understand that under existing industry practices, if we request
any action of holders or if an owner of a beneficial interest in
a registered global security desires to give or take any action
that a holder is entitled to give or take under the indenture,
the depositary for the registered global security would
authorize the participants holding the relevant beneficial
interests to give or take that action, and the participants
would authorize beneficial owners owning through them to give or
take that action or would otherwise act upon the instructions of
beneficial owners holding through them.
Principal, premium, if any, and interest payments on debt
securities represented by a registered global security
registered in the name of a depositary or its nominee will be
made to the depositary or its nominee, as the case may be, as
the registered owner of the registered global security. Neither
we nor the trustee or any other agent of ours or the trustee
will have any responsibility or liability for any aspect of the
records relating to payments made on account of beneficial
ownership interests in the registered global security or for
maintaining, supervising or reviewing any records relating to
those beneficial ownership interests.
We expect that the depositary for any of the securities
represented by a registered global security, upon receipt of any
payment of principal, premium, interest or other distribution of
underlying securities or other property to holders on that
registered global security, will immediately credit
participants accounts in amounts proportionate to their
respective beneficial interests in that registered global
security as shown on the records of the depositary. We also
expect that payments by participants to owners of beneficial
interests in a registered global security held through
participants will be governed by standing customer instructions
and customary practices, as is now the case with the securities
held for the accounts of customers in bearer form or registered
in street name, and will be the responsibility of
those participants.
If the depositary for any of these securities represented by a
registered global security is at any time unwilling or unable to
continue as depositary or ceases to be a clearing agency
registered under the Exchange Act, and a successor depositary
registered as a clearing agency under the Exchange Act is not
appointed by us within 90 days, we will issue securities in
definitive form in exchange for the registered global security
that had been held by the depositary. Any securities issued in
definitive form in exchange for a registered global security
will be registered in the name or names that the depositary
gives to the trustee or other relevant agent of ours or theirs.
It is expected that the depositarys instructions will be
based upon directions received by the
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depositary from participants with respect to ownership of
beneficial interests in the registered global security that had
been held by the depositary.
Unless we state otherwise in a prospectus supplement, the
Depository Trust Company (DTC) will act as
depositary for each series of debt securities issued as global
securities. DTC has advised us that DTC is a limited-purpose
trust company created to hold securities for its participating
organizations (collectively, the Participants) and
to facilitate the clearance and settlement of transactions in
those securities between Participants through electronic
book-entry changes in accounts of its Participants. The
Participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other
organizations. Access to DTCs system is also available to
other entities such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly
(collectively, the Indirect Participants). Persons
who are not Participants may beneficially own securities held by
or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interests in, and transfers
of ownership interests in, each security held by or on behalf of
DTC are recorded on the records of the Participants and the
Indirect Participants.
Governing
Law
The indenture and each series of debt securities are governed
by, and construed in accordance with, the laws of the State of
New York.
DESCRIPTION
OF DEPOSITARY SHARES
We summarize below some of the provisions that will apply to
depositary shares unless the applicable prospectus supplement
provides otherwise. This summary may not contain all information
that is important to you. The complete terms of the depositary
shares will be contained in the depositary agreement and
depositary receipt applicable to any depositary shares. These
documents have been or will be included or incorporated by
reference as exhibits to the registration statement of which
this prospectus is a part. You should read the depositary
agreement and the depositary receipt. You should also read the
prospectus supplement, which will contain additional information
and which may update or change some of the information below.
General
We may offer fractional shares of preferred stock, rather than
full shares of preferred stock. If we do so, we may issue
receipts for depositary shares that each represent a fraction of
a share of a particular series of preferred stock. The
prospectus supplement will indicate that fraction. The shares of
preferred stock represented by depositary shares will be
deposited under a depositary agreement between us and a bank or
trust company that meets certain requirements and is selected by
us, which we refer to as the bank depositary. Each
owner of a depositary share will be entitled to all the rights
and preferences of the preferred stock represented by the
depositary share. The depositary shares will be evidenced by
depositary receipts issued pursuant to the depositary agreement.
Depositary receipts will be distributed to those persons
purchasing the fractional shares of preferred stock in
accordance with the terms of the offering.
The following summary description of certain common provisions
of a depositary agreement and the related depositary receipts
and any summary description of the depositary agreement and
depositary receipts in the applicable prospectus supplement do
not purport to be complete and are qualified in their entirety
by reference to all of the provisions of such depositary
agreement and depositary receipts. The forms of the depositary
agreement and the depositary receipts relating to any particular
issue of depositary shares will be filed with the SEC each time
we issue depositary shares, and you should read those documents
for provisions that may be important to you.
Dividends
and Other Distributions
If we pay a cash distribution or dividend on a series of
preferred stock represented by depositary shares, the bank
depositary will distribute such dividends to the record holders
of such depositary shares. If the
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distributions are in property other than cash, the bank
depositary will distribute the property to the record holders of
the depositary shares. However, if the bank depositary
determines that it is not feasible to make the distribution of
property, the bank depositary may, with our approval, sell such
property and distribute the net proceeds from such sale to the
record holders of the depositary shares.
Redemption
of Depositary Shares
If we redeem a series of preferred stock represented by
depositary shares, the bank depositary will redeem the
depositary shares from the proceeds received by the bank
depositary in connection with the redemption. The redemption
price per depositary share will equal the applicable fraction of
the redemption price per share of the preferred stock. If fewer
than all the depositary shares are redeemed, the depositary
shares to be redeemed will be selected by lot or pro rata as the
bank depositary may determine.
Voting
the Preferred Stock
Upon receipt of notice of any meeting at which the holders of
the preferred stock represented by depositary shares are
entitled to vote, the bank depositary will mail the notice to
the record holders of the depositary shares relating to such
preferred stock. Each record holder of these depositary shares
on the record date, which will be the same date as the record
date for the preferred stock, may instruct the bank depositary
as to how to vote the preferred stock represented by such
holders depositary shares. The bank depositary will
endeavor, insofar as practicable, to vote the amount of the
preferred stock represented by such depositary shares in
accordance with such instructions, and we will take all action
that the bank depositary deems necessary in order to enable the
bank depositary to do so. The bank depositary will abstain from
voting shares of the preferred stock to the extent it does not
receive specific instructions from the holders of depositary
shares representing such preferred stock.
Amendment
and Termination of the Depositary Agreement
Unless otherwise provided in the applicable prospectus
supplement or required by law, the form of depositary receipt
evidencing the depositary shares and any provision of the
depositary agreement may be amended by agreement between the
bank depositary and us. The depositary agreement may be
terminated by the bank depositary or us only if:
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all outstanding depositary shares have been redeemed, or
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there has been a final distribution in respect of the preferred
stock in connection with any liquidation, dissolution or winding
up of our company, and such distribution has been distributed to
the holders of depositary receipts.
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Charges
of Bank Depositary
We will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary
arrangements. We will pay charges of the bank depositary in
connection with the initial deposit of the preferred stock and
any redemption of the preferred stock. Holders of depositary
receipts will pay other transfer and other taxes and
governmental charges and any other charges, including a fee for
the withdrawal of shares of preferred stock upon surrender of
depositary receipts, as are expressly provided in the depositary
agreement for their accounts.
Withdrawal
of Preferred Stock
Except as may be provided otherwise in the applicable prospectus
supplement, upon surrender of depositary receipts at the
principal office of the bank depositary, subject to the terms of
the depositary agreement, the owner of the depositary shares may
demand delivery of the number of whole shares of preferred stock
and all money and other property, if any, represented by those
depositary shares. Partial shares of preferred stock will not be
issued. If the depositary receipts delivered by the holder
evidence a number of depositary shares in excess of the number
of depositary shares representing the number of whole shares of
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preferred stock to be withdrawn, the bank depositary will
deliver to such holder at the same time a new depositary receipt
evidencing the excess number of depositary shares. Holders of
preferred stock thus withdrawn may not thereafter deposit those
shares under the depositary agreement or receive depositary
receipts evidencing depositary shares therefor.
Miscellaneous
The bank depositary will forward to holders of depositary
receipts all reports and communications from us that are
delivered to the bank depositary and that we are required to
furnish to the holders of the preferred stock.
Neither the bank depositary nor we will be liable if we are
prevented or delayed by law or any circumstance beyond our
control in performing our obligations under the depositary
agreement. The obligations of the bank depositary and us under
the depositary agreement will be limited to performance in good
faith of our duties thereunder, and we will not be obligated to
prosecute or defend any legal proceeding in respect of any
depositary shares or preferred stock unless satisfactory
indemnity is furnished. We may rely upon written advice of
counsel or accountants, or upon information provided by persons
presenting preferred stock for deposit, holders of depositary
receipts or other persons believed to be competent and on
documents believed to be genuine.
Resignation
and Removal of Bank Depositary
The bank depositary may resign at any time by delivering to us
notice of its election to do so, and we may at any time remove
the bank depositary. Any such resignation or removal will take
effect upon the appointment of a successor bank depositary and
its acceptance of such appointment. The successor bank
depositary must be appointed within 60 days after delivery
of the notice of resignation or removal and must be a bank or
trust company meeting the requirements of the depositary
agreement.
DESCRIPTION
OF UNITS
We may issue units comprised of one or more of the other
securities described in this prospectus in any combination. Each
unit will be issued so that the holder of the unit is also the
holder of each security included in the unit. Thus, the holder
of a unit will have the rights and obligations of a holder of
each included security. The unit agreement under which a unit is
issued may provide that the securities included in the unit may
not be held or transferred separately, at any time or at any
time before a specified date. The applicable prospectus
supplement may describe:
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the designation and terms of the units and of the securities
comprising the units, including whether and under what
circumstances those securities may be held or transferred
separately;
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any provisions for the issuance, payment, settlement, transfer
or exchange of the units or of the securities comprising the
units;
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the terms of the unit agreement governing the units;
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United States federal income tax considerations relevant to the
units; and
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whether the units will be issued in fully registered global form.
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This summary of certain general terms of units and any summary
description of units in the applicable prospectus supplement do
not purport to be complete and are qualified in their entirety
by reference to all provisions of the applicable unit agreement
and, if applicable, collateral arrangements and depositary
arrangements relating to such units. The forms of the unit
agreements and other documents relating to a particular issue of
units will be filed with the SEC each time we issue units, and
you should read those documents for provisions that may be
important to you.
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PLAN OF
DISTRIBUTION
Initial
Offering and Sale of Securities
Unless otherwise set forth in a prospectus supplement
accompanying this prospectus, we may sell the securities being
offered hereby, from time to time, by one or more of the
following methods:
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to or through underwriting syndicates represented by managing
underwriters;
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through one or more underwriters without a syndicate for them to
offer and sell to the public;
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through dealers or agents; and
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to investors directly in negotiated sales or in competitively
bid transactions.
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Offerings of securities covered by this prospectus also may be
made into an existing trading market for those securities in
transactions at other than a fixed price, either:
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on or through the facilities of the NASDAQ or any other
securities exchange or quotation or trading service on which
those securities may be listed, quoted, or traded at the time of
sale; and/or
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to or through a market maker otherwise than on the securities
exchanges or quotation or trading services set forth above.
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Those at-the-market offerings, if any, will be conducted by
underwriters acting as principal or agent of Pinnacle Financial.
The prospectus supplement with respect to the offered securities
will set forth the terms of the offering of the offered
securities, including:
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the name or names of any underwriters, dealers or agents;
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the purchase price of the offered securities and the proceeds to
us from such sale;
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any underwriting discounts and commissions or agency fees and
other items constituting underwriters or agents
compensation;
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any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers; and
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any securities exchange on which such offered securities may be
listed.
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Any underwriter, agent or dealer involved in the offer and sale
of any series of the securities will be named in the prospectus
supplement.
The distribution of the securities may be effected from time to
time in one or more transactions:
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at fixed prices, which may be changed;
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at market prices prevailing at the time of the sale;
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at varying prices determined at the time of sale; or
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at negotiated prices.
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Each prospectus supplement will set forth the manner and terms
of an offering of securities including:
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whether that offering is being made to underwriters or through
agents or directly;
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the rules and procedures for any auction or bidding process, if
used;
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the securities purchase price or initial public offering
price; and
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the proceeds we anticipate from the sale of the securities.
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Sales
Through Underwriters
If underwriters are used in the sale of some or all of the
securities covered by this prospectus, the underwriters will
acquire the securities for their own account. The underwriters
may resell the securities, either directly to the public or to
securities dealers, at various times in one or more
transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the
time of sale. The obligations of the underwriters to purchase
the securities will be subject to certain conditions. Unless
indicated otherwise in a prospectus supplement, the underwriters
will be obligated to purchase all the securities of the series
offered if any of the securities are purchased.
Any initial public offering price and any concessions allowed or
reallowed to dealers may be changed intermittently.
Sales
Through Agents
Unless otherwise indicated in the applicable prospectus
supplement, when securities are sold through an agent, the
designated agent will agree, for the period of its appointment
as agent, to use its best efforts to sell the securities for our
account and will receive commissions from us as will be set
forth in the applicable prospectus supplement.
Securities bought in accordance with a redemption or repayment
under their terms also may be offered and sold, if so indicated
in the applicable prospectus supplement, in connection with a
remarketing by one or more firms acting as principals for their
own accounts or as agents for us. Any remarketing firm will be
identified and the terms of its agreement, if any, with us and
its compensation will be described in the prospectus supplement.
Remarketing firms may be deemed to be underwriters in connection
with the securities remarketed by them.
If so indicated in the applicable prospectus supplement, we may
authorize agents, underwriters or dealers to solicit offers by
certain specified institutions to purchase securities at a price
set forth in the prospectus supplement pursuant to delayed
delivery contracts providing for payment and delivery on a
future date specified in the prospectus supplement. These
contracts will be subject only to those conditions set forth in
the applicable prospectus supplement, and the prospectus
supplement will set forth the commissions payable for
solicitation of these contracts.
Direct
Sales
We may also sell offered securities directly to institutional
investors or others. In this case, no underwriters or agents
would be involved. The terms of such sales will be described in
the applicable prospectus supplement.
General
Information
Broker-dealers, agents or underwriters may receive compensation
in the form of discounts, concessions or commissions from us
and/or the
purchasers of securities for whom such broker-dealers, agents or
underwriters may act as agents or to whom they sell as
principal, or both (this compensation to a particular
broker-dealer might be in excess of customary commissions).
Underwriters, dealers and agents that participate in any
distribution of the offered securities may be deemed
underwriters within the meaning of the Securities
Act, so any discounts or commissions they receive in connection
with the distribution may be deemed to be underwriting
compensation. Those underwriters and agents may be entitled,
under their agreements with us, to indemnification by us against
certain civil liabilities, including liabilities under the
Securities Act, or to contribution by us to payments that they
may be required to make in respect of those civil liabilities.
Various of those underwriters or agents may be customers of,
engage in transactions with, or perform services for, us or our
affiliates in the ordinary course of business. We will identify
any underwriters or agents, and describe their compensation, in
a prospectus supplement. Any institutional investors or others
that purchase offered securities directly, and then resell the
securities, may be deemed to be underwriters, and any discounts
or commissions received by them from us and any profit on the
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resale of the securities by them may be deemed to be
underwriting discounts and commissions under the Securities Act.
We will file a supplement to this prospectus, if required,
pursuant to Rule 424(b) under the Securities Act, if we
enter into any material arrangement with a broker, dealer, agent
or underwriter for the sale of securities through a block trade,
special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer. Such
prospectus supplement will disclose:
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the name of any participating broker, dealer, agent or
underwriter;
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the number and type of securities involved;
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the price at which such securities were sold;
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any securities exchanges on which such securities may be listed;
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the commissions paid or discounts or concessions allowed to any
such broker, dealer, agent or underwriter where
applicable; and
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other facts material to the transaction.
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In order to facilitate the offering of certain securities under
this prospectus or an applicable prospectus supplement, certain
persons participating in the offering of those securities may
engage in transactions that stabilize, maintain or otherwise
affect the price of those securities during and after the
offering of those securities. Specifically, if the applicable
prospectus supplement permits, the underwriters of those
securities may over-allot or otherwise create a short position
in those securities for their own account by selling more of
those securities than have been sold to them by us and may elect
to cover any such short position by purchasing those securities
in the open market.
In addition, the underwriters may stabilize or maintain the
price of those securities by bidding for or purchasing those
securities in the open market and may impose penalty bids, under
which selling concessions allowed to syndicate members or other
broker-dealers participating in the offering are reclaimed if
securities previously distributed in the offering are
repurchased in connection with stabilization transactions or
otherwise. The effect of these transactions may be to stabilize
or maintain the market price of the securities at a level above
that which might otherwise prevail in the open market. The
imposition of a penalty bid may also affect the price of
securities to the extent that it discourages resales of the
securities. No representation is made as to the magnitude or
effect of any such stabilization or other transactions. Such
transactions, if commenced, may be discontinued at any time.
In order to comply with the securities laws of certain states,
if applicable, the securities must be sold in such jurisdictions
only through registered or licensed brokers or dealers. In
addition, in certain states the securities may not be sold
unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Rule 15c6-1
under the Securities Exchange Act of 1934 generally requires
that trades in the secondary market settle in three business
days, unless the parties to any such trade expressly agree
otherwise. Your prospectus supplement may provide that the
original issue date for your securities may be more than three
scheduled business days after the trade date for your
securities. Accordingly, in such a case, if you wish to trade
securities on any date prior to the third business day before
the original issue date for your securities, you will be
required, by virtue of the fact that your securities initially
are expected to settle in more than three scheduled business
days after the trade date for your securities, to make
alternative settlement arrangements to prevent a failed
settlement.
This prospectus, the applicable prospectus supplement and any
applicable pricing supplement in electronic format may be made
available on the Internet sites of, or through other online
services maintained by, us
and/or one
or more of the agents
and/or
dealers participating in an offering of securities, or by their
affiliates. In those cases, prospective investors may be able to
view offering terms online and, depending upon the particular
agent or dealer, prospective investors may be allowed to place
orders online.
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Other than this prospectus, the applicable prospectus supplement
and any applicable pricing supplement in electronic format, the
information on our or any agents or dealers website
and any information contained in any other website maintained by
any agent or dealer:
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is not part of this prospectus, the applicable prospectus
supplement and any applicable pricing supplement or the
Registration Statement of which they form a part;
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has not been approved or endorsed by us or by any agent or
dealer in its capacity as an agent or dealer, except, in each
case, with respect to the respective website maintained by such
entity; and
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should not be relied upon by investors.
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There can be no assurance that we will sell all or any of the
securities offered by this prospectus.
This prospectus may also be used in connection with any issuance
of common stock or preferred stock upon exercise of a warrant if
such issuance is not exempt from the registration requirements
of the Securities Act.
In addition, we may issue the securities as a dividend or
distribution or in a subscription rights offering to our
existing security holders. In some cases, we or dealers acting
with us or on our behalf may also purchase securities and
reoffer them to the public by one or more of the methods
described above. This prospectus may be used in connection with
any offering of our securities through any of these methods or
other methods described in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements of Pinnacle Financial as
of December 31, 2008 and 2007, and for each of the years in
the three-year period ended December 31, 2008, and
managements assessment of the effectiveness of internal
control over financial reporting as of December 31, 2008
have been incorporated by reference herein and in the
registration statement in reliance upon the reports of KPMG LLP,
independent registered public accounting firm, incorporated by
reference herein, and upon the authority of said firm as experts
in accounting and auditing.
The audit report covering the December 31, 2008
consolidated financial statements refers to a change in
accounting for split dollar life insurance arrangements in 2008
and a change in accounting for uncertainty in income taxes in
2007.
LEGAL
MATTERS
Unless otherwise indicated in the applicable prospectus
supplement, the validity of the securities offered hereby will
be passed upon for us by Bass, Berry & Sims PLC,
Nashville, Tennessee. If the validity of the securities offered
hereby in connection with offerings made pursuant to this
prospectus are passed upon by counsel for the underwriters,
dealers or agents, if any, such counsel will be named in the
prospectus supplement relating to such offering.
29
TABLE OF
CONTENTS
PROSPECTUS
SUPPLEMENT
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Page
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S-1
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S-7
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S-17
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S-18
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S-19
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S-19
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S-21
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S-27
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S-29
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S-31
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S-35
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S-35
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S-35
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S-36
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PROSPECTUS
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1
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1
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2
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2
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3
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3
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3
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3
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4
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5
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5
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11
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12
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14
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23
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25
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26
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29
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29
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7,700,000 Shares
Common Stock
PROSPECTUS SUPPLEMENT
RAYMOND JAMES
SANDLER ONEILL +
PARTNERS, L.P.
SUNTRUST ROBINSON
HUMPHREY
WUNDERLICH SECURITIES,
INC.
June 11, 2009