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MEDIA CONTACT: Vicki Kessler 615-320-7532
FINANCIAL CONTACT: Harold Carpenter 615-744-3742
DETAILED FINANCIALS: Form 8K

PINNACLE FINANCIAL’S FULLY DILUTED EARNINGS PER SHARE
INCREASES 26.9% FROM SAME QUARTER LAST YEAR
Annualized loan growth during quarter of 28%

NASHVILLE, Tenn., July 17, 2007 – Pinnacle Financial Partners Inc. (Nasdaq/NGS: PNFP) today reported strong performance, increased loan growth and continued improvement in asset quality for the quarter ended June 30, 2007. Fully diluted earnings per share were $0.33 for the quarter ended June 30, 2007, compared to $0.26 per fully diluted share for the quarter ended June 30, 2006, which included the impact of $0.04 of merger related expenses associated with the Cavalry Bancorp Inc. acquisition consummated on March 15, 2006.

Second Quarter 2007 Highlights:

• Earnings:
• Net income for the second quarter of 2007 was $5.43 million, up 25.5 percent from the prior year’s second quarter net income of $4.32 million.
• Diluted earnings per share for the second quarter of 2007 were $0.33, up 26.9 percent from the same quarter last year.
• Revenue (the sum of net interest income and noninterest income) for the quarter ended June 30, 2007, amounted to $23.21 million, compared to $21.28 million for the same quarter of last year, an increase of 9.1 percent.
• Superior credit quality:
• Annualized net charge-offs as a percentage of average loan volumes were 0.05 percent for the six months ended June 30, 2007.
• Nonperforming assets were only 0.19 percent of total loans and other real estate at June 30, 2007, down from 0.54 percent at Dec. 31, 2006.
• Past due loans over 30 days, excluding nonperforming loans, were only 0.31 percent of total loans and other real estate at June 30, 2007, compared to 0.74 percent of total loans and other real estate at Dec. 31, 2006.
• Strong balance sheet growth:
  • Loans at June 30, 2007, were $1.663 billion, up 22.5 percent from the same period last year, reflecting strong organic growth over the last year. Loans increased by $109 million during the second quarter of 2007, compared to $123 million in organic growth during the same quarter in 2006. Provision for loan losses for the quarter ended June 30, 2007, was $900,000, a decrease of $807,000 from the same quarter in 2006.
  • Total deposits at June 30, 2007, were $1.798 billion, up 15.2 percent from the same period last year.
• Investments in future growth:
• Pinnacle has already hired 11 associates for the denovo expansion to Knoxville that was announced on April 9, 2007. Pinnacle opened a limited service facility in June and expects to open its full-service location in Knoxville during the third quarter.
• The total increase in the associate base during the quarter, including the Knoxville expansion, was 21.5 FTEs (full-time equivalents), or 5.1 percent. Pinnacle plans to add another 33 associates before the end of 2007.

“We are extremely pleased with our performance in the second quarter of 2007, particularly with respect to loan growth which was one of the strongest growth quarters in our history. During the same time, we continued to improve our credit quality measurements,” said M. Terry Turner, Pinnacle’s president and CEO. “We continue to be challenged by the current yield curve, and it is fairly evident that 2007 will be a formidable year for all financial institutions. However, we are confident that we can expand our client base and sustain our record of dramatic growth throughout 2007 due to our ability to increase market share in the Nashville-Davidson-Murfreesboro MSA and our recent entry into the Knoxville MSA.”

Turner said the firm’s recent entry into Knoxville is progressing well. He estimated that the Knoxville expansion impacted the second quarter earnings negatively by approximately $0.02 per fully diluted share.

Financial Performance and Balance Sheet Growth

• Return on average assets for second quarter 2007 was 0.98 percent compared to 0.92 percent for the second quarter of 2006. Excluding the impact of the Knoxville expansion, return on average assets for the second quarter of 2007 would have approximated 1.05 percent. Return on average tangible assets (average assets less goodwill and core deposit intangibles) for second quarter 2007 was 1.03 percent, compared to 0.99 percent for the same quarter last year.
• Return on average stockholders’ equity for the quarter ended June 30, 2007, was 8.24 percent compared to 7.40 percent for the second quarter of 2006. Excluding the impact of the Knoxville expansion, return on average stockholders’ equity for the second quarter of 2007 would have approximated 8.85 percent. Return on average tangible stockholders’ equity (average stockholders’ equity less goodwill and core deposit intangibles) for the quarter ended June 30, 2007, was 15.65 percent, compared to 16.37 percent for the same quarter last year.

Total assets grew to $2.314 billion as of June 30, 2007, up $329 million or 16.6 percent from the $1.986 billion reported at the same time last year. The securities to total assets ratio decreased from 15.40 percent at June 30, 2006, to 14.68 percent at June 30, 2007.

Credit Quality

• Provision for loan losses was $900,000 for the second quarter of 2007, compared to $1,707,000 in the second quarter of 2006.
• During the second quarter of 2007, the firm recorded net charge-offs of only $317,000, compared to net charge-offs of $441,000 during the same period in 2006. Annualized net charge-offs to total average loans were 0.05 percent for the six months ended June 30, 2007.
• Allowance for loan losses represented 1.04 percent of total loans at June 30, 2007, compared to 1.08 percent a year ago.
• Nonperforming assets as a percentage of total loans and other real estate decreased to 0.19 percent at June 30, 2007, from 0.36 percent at Mar. 31, 2007 and 0.54 percent at Dec. 31, 2006.
• Loan balances, excluding nonperforming loans, with payments past due more than 30 days as a percentage of total loans and other real estate decreased to 0.31 percent at June 30, 2007, from 0.33 percent at Mar. 31, 2007 and 0.74 percent at Dec. 31, 2006.
• The ratio of the allowance for loan losses to nonperforming loans was 726 percent at June 30, 2007 compared to 357 percent at Mar. 31, 2007 and 228 percent at Dec. 31, 2006.

“We believe our record of excellent asset quality since our founding in 2000 is a key predictor of our ability to create long-term shareholder value,” said Turner. “At the end of last year, several of our credit quality measurements, such as the percentage of nonperforming loans, had increased. Our continued improvement and success in this area is attributed to the special attention our lending and credit associates have put on maintaining excellent asset quality.”

Revenue

• Net interest income for second quarter 2007 was $17.66 million, compared to $16.90 million for the same quarter last year, an increase of 4.53 percent.
• Net interest margin for the second quarter of 2007 was 3.58 percent, compared to a net interest margin of 4.17 percent for the same period last year and 3.64 percent reported for the first quarter of 2007.
• Noninterest income for the second quarter 2007 was $5.55 million, a 26.8 percent increase over the $4.38 million recorded during the same quarter in 2006.

“We, like substantially all other commercial banks, continue to see pricing pressure in our market which has led to a six basis point reduction in our net interest margin between the first and second quarters of 2007,” said Harold Carpenter, chief financial officer of Pinnacle Financial Partners. “However, we are particularly pleased with the growth in loan fundings and the high-quality client relationships our financial advisors are bringing to our firm. Unlike many other firms, this growth has allowed us to continue to grow our revenue streams. Our loan pipelines remain strong and, due to our expected loan growth in both Nashville and Knoxville, we believe that we will experience continued growth in our revenue streams for the next few quarters.”

The increase in noninterest income between 2007 and 2006 was due primarily to the extension of the former Cavalry fee businesses across the entire Pinnacle franchise and record investment sales commissions from Pinnacle Asset Management and record gains on the sales of mortgage loans from the firm’s mortgage origination unit. Noninterest income during the second quarter of 2007 represented approximately 23.92 percent of total revenues, compared to 20.60 percent for the same quarter in 2006.

Noninterest Expense

• Noninterest expense for the quarter ended June 30, 2007, was $14.48 million compared to $13.12 million in the first quarter of 2007 and $13.11 million in the second quarter of 2006. The firm noted that approximately $466,000 of noninterest expense was directly associated with the Knoxville expansion during the quarter.
• Compensation expense increased to $8.79 million during the second quarter of 2007, compared to $8.27 million in the first quarter of 2007 and $7.29 million during the second quarter of 2006. At June 30, 2007, the firm employed 441 associates (full-time equivalent), an increase of 37 associates, or 9.2 percent since the end of 2006.
• During the second quarter 2007 Pinnacle recognized compensation expense related to the expensing of stock options in accordance with Statement of Financial Accounting Standards No. 123R (“SFAS No. 123R”) of approximately $305,000 on an after-tax basis.
• The efficiency ratio (noninterest expense divided by net interest income and noninterest income) was 62.4 percent during the second quarter of 2007, compared to 61.6 percent during the second quarter of 2006.

The firm noted that linked quarter expense growth between the first and second quarters of 2007 was primarily attributable to the Knoxville expansion, the increased number of associates, increasing variable costs associated with the dramatic growth of the firm and the opening of the Donelson office in March of 2007.

Investment Outlook

Management has developed several financial forecast scenarios for the next several quarters. Based on anticipated growth trends and future investments in the franchise, including the impact of the Knoxville expansion, Pinnacle estimates its third quarter 2007 diluted earnings per share will approximate $0.33 to $0.36, which includes approximately $0.04 dilution attributable to the Knoxville expansion. Additionally, based on anticipated growth trends and future investments in the franchise, Pinnacle estimates that its earnings will approximate $1.39 to $1.45 per fully diluted share for the year ended Dec. 31, 2007, which includes approximately $0.08 dilution attributable to the Knoxville expansion.

As noted previously, management has developed several scenarios under which these estimates can be achieved and believes these estimates to be reasonable based on these scenarios. However, unanticipated events or developments including the execution of any initiative which could include the development of any markets other than metropolitan Nashville or Knoxville, any merger or acquisition, the opportunity to hire more seasoned professionals than anticipated or the ability to grow loans significantly in excess of the levels contemplated may cause the actual results of Pinnacle to differ materially from these estimates.

Pinnacle Financial Partners provides a full range of banking, investment and insurance products and services designed for small- to mid-sized businesses and their owners, real estate professionals and individuals interested in a deep relationship with their financial institution. Pinnacle provides financial planning services and comprehensive wealth management services to help clients increase, protect and distribute their assets. The firm also has a well-established expertise in commercial real estate.

Pinnacle opened its first office in October 2000. Since then the firm has added eight other offices on a denovo basis and acquired Cavalry Bancorp with its nine offices, bringing the total number of offices to 18 in the most attractive trade areas in the Nashville-Davidson-Murfreesboro MSA. The firm plans to open two offices in Knoxville this year, with another three by the end of 2010. Last week construction began on a premier new office building in downtown Nashville named “The Pinnacle at Symphony Place.” When completed in 2010, Pinnacle will move its corporate functions and a full-service office to this new building.

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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," "intend," "plan," "believe," "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 facts that may cause the actual results, performance or achievements of Pinnacle to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, without limitation, (i) unanticipated deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses, (ii) the inability of Pinnacle to continue to grow its loan portfolio at historic rates in the Nashville-Davidson-Murfreesboro MSA or projected rates in the Knoxville MSA, (iii) increased competition with other financial institutions, (iv) lack of sustained growth in the economy in the Nashville-Davidson-Murfreesboro MSA and the Knoxville MSA, (v) rapid fluctuations or unanticipated changes in interest rates, (vi) the inability of Pinnacle to satisfy regulatory requirements for its expansion plans, (vii) the inability of Pinnacle to execute its expansion plans and (viii) changes in the legislative and regulatory environment. A more detailed description of these and other risks is contained in Pinnacle's most recent annual report on Form 10-K. Many of such factors are beyond Pinnacle's ability to control or predict, and readers are cautioned not to put undue reliance on such forward-looking statements. Pinnacle disclaims any obligation to update or revise any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.