Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) announced today
that its subsidiary, Pinnacle Bank, has priced the issuance, through a
private placement, of $60 million in aggregate principal amount of
subordinated notes due 2025 to certain institutional accredited
investors. The subordinated notes will bear a fixed interest rate of
4.875 percent per annum until July 30, 2020, payable semi-annually in
arrears. From July 30, 2020, the subordinated notes will bear a floating
rate of interest equal to 3-Month LIBOR + 3.128 percent per annum until
the notes mature on July 30, 2025, or such earlier redemption date,
payable quarterly in arrears. The notes will be redeemable by Pinnacle
Bank, in whole or in part, on or after July 30, 2020 or upon the
occurrence of certain specified tax events, capital events or investment
company events. The notes will not be subject to redemption at the
option of the holders.
Pinnacle estimates that the net proceeds from the sale of the notes will
be approximately $59.1 million, and the notes are expected to qualify
initially as Tier 2 capital for regulatory purposes. Pinnacle Bank
intends to use the net proceeds in connection with its proposed
acquisitions of Magna Bank in Memphis and CapitalMark Bank and Trust in
Chattanooga and for other general corporate purposes.
In anticipation of the subordinated debt offering, Pinnacle recently
obtained ratings from Kroll Bond Rating Agency (“KBRA”). KBRA has
assigned investment grade ratings of BBB+ and BBB for Pinnacle Financial
Partners’ senior unsecured debt and subordinated debt, respectively, and
A- and BBB+ for Pinnacle Bank’s senior unsecured debt and subordinated
debt, respectively.
This press release does not constitute an offer to sell, or the
solicitation of an offer to buy, any security and shall not constitute
an offer, solicitation or sale in any jurisdiction in which such
offering would be unlawful. The above referenced securities offered and
to be sold by Pinnacle Bank have not been, and will not be, registered
under the Securities Act of 1933, as amended, and may not be offered or
sold absent registration or an exemption from registration thereunder or
under any applicable state securities laws.
FORWARD-LOOKING STATEMENTS
Certain of the statements in this release may constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. The words "expect," "anticipate," "goal," "objective,"
"intend," "plan," "believe," "should," "hope," "seek," "estimate" and
similar expressions are intended to identify such forward-looking
statements, but other statements not based on historical information may
also be considered forward-looking. All forward-looking statements are
subject to risks, uncertainties and other factors that may cause the
actual results, performance or achievements of Pinnacle Financial to
differ materially from any results expressed or implied by such
forward-looking statements. Such risks include, without limitation, (i)
the failure of the closing conditions related to the notes offering to
be satisfied (ii) deterioration in the financial condition of borrowers
resulting in significant increases in loan losses and provisions for
those losses; (iii) continuation of the historically low short-term
interest rate environment; (iv) the inability of Pinnacle Financial to
maintain the historical growth of its loan portfolio; (v) changes in
loan underwriting, credit review or loss reserve policies associated
with economic conditions, examination conclusions, or regulatory
developments; (vi) effectiveness of Pinnacle Financial's asset
management activities in improving, resolving or liquidating
lower-quality assets; (vii) increased competition with other financial
institutions; (viii) greater than anticipated adverse conditions 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; (ix)
rapid fluctuations or unanticipated changes in interest rates on loans
or deposits; (x) the results of regulatory examinations; (xi) the
ability to retain large, uninsured deposits; (xii) the development of
any new market other than Nashville or Knoxville; (xiii) a merger or
acquisition, like the proposed mergers with CapitalMark and Magna; (xiv)
risks of expansion into new geographic or product markets, like the
proposed expansion into the Chattanooga, TN-GA and Memphis, TN-MS-AR
MSAs associated with the proposed mergers with CapitalMark and Magna;
(xv) any matter that would cause Pinnacle Financial to conclude that
there was impairment of any asset, including intangible assets; (xvi)
reduced ability to attract additional financial advisors (or failure of
such advisors to cause their clients to switch to Pinnacle Financial) or
otherwise to attract customers from other financial institutions; (xvii)
further deterioration in the valuation of other real estate owned and
increased expenses associated therewith; (xviii) inability to comply
with regulatory capital requirements, including those resulting from
changes to capital calculation methodologies and required capital
maintenance levels; (xix) risks associated with litigation, including
the applicability of insurance coverage; (xx) the risk that the cost
savings and any revenue synergies from the proposed mergers with
CapitalMark and Magna may not be realized or take longer than
anticipated to be realized; (xxi) disruption from the mergers with
customers, suppliers or employee relationships; (xxii) the occurrence of
any event, change or other circumstances that could give rise to the
termination of the merger agreements that Pinnacle Financial and
Pinnacle Bank have entered into with CapitalMark and Magna; (xxiii) the
risk of successful integration of CapitalMark’s and Magna’s business
with ours; (xxiv) the failure of CapitalMark’s and Magna’s shareholders
to approve the mergers; (xxv) the amount of the costs, fees, expenses
and charges related to the mergers; (xxvi) reputational risk and the
reaction of Pinnacle Financial’s, CapitalMark’s and Magna’s customers to
the proposed mergers; (xxvii) the failure of the closing conditions to
be satisfied; (xxviii) the risk that the integration of CapitalMark’s
and Magna’s operations with Pinnacle Financial’s will be materially
delayed or will be more costly or difficult than expected; (xxix) the
possibility that the mergers may be more expensive to complete than
anticipated, including as a result of unexpected factors or events;
(xxx) the dilution caused by Pinnacle’s issuance of additional shares of
its common stock in the mergers; (xxxi) approval of the declaration of
any dividend by Pinnacle Financial's board of directors; (xxxii) the
vulnerability of our network and online banking portals to unauthorized
access, computer viruses, phishing schemes, spam attacks, human error,
natural disasters, power loss and other security breaches; (xxxiii) the
possibility of increased compliance costs as a result of increased
regulatory oversight, including oversight of companies in which Pinnacle
Financial has significant investments, and the development of additional
banking products for our corporate and consumer clients; and (xxxiv)
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, including implementation of the Dodd-Frank
Wall Street Reform and Consumer Protection Act. A more detailed
description of these and other risks is contained in Pinnacle
Financial's most recent annual report on Form 10-K filed with the
Securities and Exchange Commission on February 25, 2015 and Quarterly
Report on Form 10-Q filed with the Securities and Exchange Commission on
May 8, 2015. Many of such factors are beyond Pinnacle Financial's
ability to control or predict, and readers are cautioned not to put
undue reliance on such forward-looking statements. Pinnacle Financial
disclaims any obligation to update or revise any forward-looking
statements contained in this report, whether as a result of new
information, future events or otherwise.
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