1115055--2/28/2007--PINNACLE_FINANCIAL_PARTNERS

related topics

{loan, real, estate}

{condition, economic, financial}

{loss, insurance, financial}

{provision, law, control}

{stock, price, share}

{control, financial, internal}

{personnel, key, retain}

{competitive, industry, competition}

{product, market, service}

{acquisition, growth, future}

{regulation, government, change}

We are geographically concentrated in the Nashville, Tennessee MSA, and changes in local economic conditions impact our profitability. Our continued growth may require the need for additional capital and further regulatory approvals which, if not obtained, could adversely impact our profitability and implementation of our current business plan. We have a concentration of credit exposure to borrowers in certain industries and we also target small to medium-sized businesses. With its acquisition of Cavalry, Pinnacle Financial significantly increased its real estate construction and development loans, which have a greater credit risk than residential mortgage loans. If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings will decrease. Fluctuations in interest rates could reduce our profitability. We have a concentration of credit exposure to borrowers in certain industries and we also target small to medium-sized businesses. With its acquisition of Cavalry, Pinnacle Financial significantly increased its real estate construction and development loans, which have a greater credit risk than residential mortgage loans. If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings will decrease. Fluctuations in interest rates could reduce our profitability. Fluctuations in interest rates could reduce our profitability. Loss of our senior executive officers or other key employees could impair our relationship with our customers and adversely affect our business. Competition with other banking institutions could adversely affect our profitability. We may issue additional common stock or other equity securities in the future which could dilute the ownership interest of existing shareholders. Even though our common stock is currently traded on the Nasdaq Stock Market s Global Select Market, it has less liquidity than the average stock quoted on a national securities exchange. If a change in control or change in management is delayed or prevented, the market price of our common stock could be negatively affected. Holders of Pinnacle Financial's junior subordinated debentures have rights that are senior to those of Pinnacle Financial's common shareholders. The amount of common stock owned by, and other compensation arrangements with, our officers and directors may make it more difficult to obtain shareholder approval of potential takeovers that they oppose. Our business is dependent on technology, and an inability to invest in technological improvements may adversely affect our results of operations and financial condition. Our internal control over financial reporting may have weaknesses or inadequacies that may be material. We are subject to various statutes and regulations that may limit our ability to take certain actions.

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1115055--2/28/2007--PINNACLE_FINANCIAL_PARTNERS_INC