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Announcements:

MEDIA CONTACT: Vicki Kessler 615-320-7532
FINANCIAL CONTACT: Harold Carpenter 615-744-3742
WEBSITE: www.pnfp.com

Pinnacle Financial Reports Record Loan Growth
Diluted earnings per share excluding merger related charges exceed I/B/E/S consensus estimate

NASHVILLE, Tenn., July 18, 2006 - Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today reported record earnings, superior credit quality and record loan growth for the quarter ended June 30, 2006. Fully diluted earnings per share of $0.26 for the quarter included the impact of merger related expenses of $0.04 which were associated with Pinnacle's merger with Cavalry Bancorp that was effective on March 15, 2006. As a result, fully diluted earnings per share exclusive of merger related items were $0.30 for the quarter ended June 30, 2006, compared to $0.21 fully diluted earnings per share for the quarter ended June 30, 2005, an increase of 43 percent.

Fully diluted earnings per share of $0.51 for the six months ended June 30, 2006 included the impact of merger related expenses of $0.06. As a result, fully diluted earnings per share exclusive of merger related items were $0.57 for the six months ended June 30, 2006, compared to $0.40 fully diluted earnings per share for the six months ended June 30, 2005, an increase of 43 percent.

Second Quarter 2006 Highlights:

• Record earnings:
• Record net income for the second quarter of 2006 of $4.32 million, up 121 percent from the prior year's second quarter net income of $1.96 million.
• Record diluted earnings per share for the second quarter of 2006 of $0.26 up almost 24 percent from the same quarter last year. Diluted earnings per share exclusive of merger related expenses were $0.30, up 43 percent from the prior year's second quarter diluted earnings per share of $0.21. Fully diluted earnings per share exclusive of merger related charges for the quarter ended June 30, 2006 were $0.30 exceeding the I/B/E/S consensus estimate of $0.29 per fully diluted share.
• Revenue (the sum of net interest income and noninterest income) for the quarter ended June 30, 2006, amounted to $21.28 million, compared to $8.21 million for the same quarter of last year, an increase of 159 percent.
• Superior credit quality:
• Past due loans over 30 days, excluding nonperforming loans, were only 0.25 percent of total loans June 30, 2006.
• Nonperforming assets were only 0.21 percent of total loans at June 30, 2006.
• Strong balance sheet growth:
• Loans at June 30, 2006 were $1.36 billion, up 144 percent from the same period last year reflecting strong organic growth and the impact of the Cavalry merger. Net loans increased by $123 million between the first and second quarters of 2006, a record for the company.
• Total deposits at June 30, 2006 were $1.56 billion, up 126 percent from the same period last year. Noninterest bearing demand deposit accounts which represent 20 percent of total deposits were up 119 percent from the same period last year reflecting strong organic growth and the impact of the Cavalry merger. At $1.56 billion in deposits, we believe our market share would approximate 6 percent based on June 30, 2005 FDIC market share data of the Nashville-Davidson-Murfreesboro MSA, a substantial increase from the 2.75 percent market share reflected as of June 30, 2005.

Extraordinary Growth Makes Pinnacle the Largest Nashville Bank

With its acquisition and dramatic organic loan and deposit growth during the first half of 2006, Pinnacle now has $1.99 billion in assets making the company the largest financial services firm headquartered in Nashville and the second largest headquartered in Tennessee.

Pinnacle's merger with Cavalry Bancorp was completed on March 15, 2006. Consequently, Pinnacle's balance sheet and statement of income have been impacted by the Cavalry amounts since March 15, 2006.

Financial Performance and Balance Sheet Growth

• Return on average assets for the quarter ended June 30, 2006, was 0.92 percent. Return on average tangible assets (average total assets less goodwill and core deposit intangibles) for the quarter ended June 30, 2006, was 0.98 percent. The return on average tangible assets exclusive of merger related items for the quarter ended June 30, 2006, was 1.11 percent, compared to 0.96 percent for the same quarter last year.
• Return on average stockholders' equity for the quarter ended June 30, 2006, was 7.40 percent. Return on average tangible stockholders' equity (average total stockholders' equity less goodwill and core deposit intangibles) for the quarter ended June 30, 2006, was 16.37 percent. Return on average tangible stockholders' equity exclusive of merger related expenses for the quarter ended June 30, 2006, was 18.49 percent, compared to 13.21 percent for the same quarter last year.

Total assets grew to $1.99 billion as of June 30, 2006, up $1.11 billion or 128 percent from the $872 million reported at June 30, 2005. The $1.11 billion year over year increase in total assets was comprised of $314 million in asset growth at Pinnacle, $670 million in assets associated with the acquisition of Cavalry Bancorp and $129 million in goodwill and core deposit intangibles associated with that acquisition. This rapid asset growth was achieved while reducing the securities to total assets ratio from 27.4 percent at December 31, 2005 to 15.4 percent at June 30, 2006.

"We are extremely pleased with the accelerating growth momentum that we saw during the second quarter of this year compared to the same quarter last year both for the newly combined footprint as a whole and for the former Cavalry footprint on a stand-alone basis. Many institutions experience attrition during this stage of a merger. We actually saw faster loan and deposit growth for the combined firm this year than last," said M. Terry Turner, Pinnacle's president and CEO. "This is a tribute to all of our associates who have worked tirelessly to help existing clients and fellow associates through this transition while continuing to add clients at a dramatic pace. Additionally, we believe the recent announcement of the merger of two large regional bank holding companies in our market will create disruption and turmoil within their customer and employee base, providing us additional significant growth opportunities," he added.

Revenue

• Net interest income for the quarter ended June 30, 2006 was $16.90 million compared to $6.80 million for the quarter ended June 30, 2005, an increase of 149 percent.
• Net interest margin for the second quarter of 2006 was 4.17 percent, compared to a net interest margin of 3.65 percent reported for the first quarter of 2006 and 3.57 percent for the same period last year.
• Percentage of daily floating rate loans to total loans was 47.0 percent at June 30, 2006.
• Noninterest income for the quarter ended June 30, 2006 was $4.38 million, a 210 percent increase over the $1.41 million recorded during the same quarter in 2005.

"As anticipated, the Cavalry merger did expand our net interest margin, however, the yield curve continues to present challenges for us as we seek ways to expand our margins," said Harold Carpenter, chief financial officer of Pinnacle Financial Partners. "Based on our current models, we believe our net interest margin for the third quarter of 2006 should be within a range of 3.90 percent to 4.10 percent."

"Our net loan growth was approximately $123 million during the second quarter of 2006 which represents an annualized growth rate of 40 percent," Carpenter said. "Market acceptance for Pinnacle in Murfreesboro has been outstanding as our Murfreesboro associates produced more business during the first half of 2006 than during the same time period in 2005. We anticipate continued dramatic loan growth which we believe will result in increased revenues despite what continues to be a challenging rate environment."

At June 30, 2006, the ratio of investment securities to total assets declined to 15.4 percent from the 26.1 percent reported a year ago. Pinnacle anticipates that this ratio will approximate 15.0 to 18.0 percent during 2006.

Noninterest income during the first quarter of 2006 represented approximately 20.6 percent of total revenues, compared to 17.2 percent for the same quarter in 2005.

Noninterest Expense

• Noninterest expense for the quarter ended June 30, 2006, was $13.11 million.
• Merger related charges incurred during the quarter ended June 30, 2006, were $921,000. These charges consisted of direct and incremental integration costs incurred in connection with the merger.
• During the quarter ended June 30, 2006, Pinnacle recognized compensation related to the expensing of stock options in accordance with Statement of Financial Accounting Standards No. 123R of approximately $211,000 on an after-tax basis.
• The efficiency ratio (noninterest expense divided by net interest income and noninterest income) was 61.6 percent during the second quarter of 2006. The efficiency ratio excluding merger related expenses was 57.3 percent during the second quarter of 2006, compared to 60.4 percent during the second quarter of 2005.

Pinnacle anticipates the opening of its new office in the Donelson area of Davidson County in late fourth quarter of 2006. At June 30, 2006, the firm employed 359 associates (full-time equivalent) and anticipates hiring 40 additional associates before the end of this year. Pinnacle anticipates that approximately 65 percent of these new associates will be in customer contact roles.

Credit Quality

• Provision for loan losses was $1.71 million for the second quarter of 2006, compared to $483,000 in the second quarter in 2005. During the second quarter of 2006, the firm recorded net charge-offs of $441,000 compared to $22,000 during the same period in 2005. One commercial loan accounted for substantially all of the net charge-off activity for the second quarter of 2006.
• Annualized net charge-offs to total loans were 0.07 percent for the six months ended June 30, 2006.
• Allowance for loan losses represented 1.08 percent of total loans at June 30, 2006, compared to1.08 percent at March 31, 2006 and 1.21 percent at Dec. 31, 2005.
• Nonperforming assets as a percentage of total loans and other real estate increased to 0.21 percent at June 30, 2006 from 0.11 percent at June 30, 2005.

The reduction in the percentage of allowance for loan losses to total loans was attributable to the Cavalry acquisition. At June 30, 2006, Pinnacle assessed its allowance for loan losses using an assessment methodology for Pinnacle and a separate methodology for the former Cavalry franchise, the Cavalry methodology being consistent with Cavalry's past practice. In view of the acquisition, Pinnacle management is currently evaluating what changes should be made to the process by which the firm determines its consolidated allowance for loan losses. Pinnacle expects to implement any such changes prior to the end of the third quarter of 2006.

"We remain extremely pleased with the credit quality of our firm," said Turner. "Both Pinnacle and Cavalry have had excellent asset quality indicators for quite some time. We continue to believe that our asset quality is a key predictor of our ability to create long-term shareholder value."

Progress of the Cavalry Integration

On Oct. 3, 2005, Pinnacle reported that the firm had entered into a definitive agreement to acquire the common stock of Cavalry Bancorp, a one-bank holding company in Murfreesboro, Tenn. During December 2005, the shareholders of both Pinnacle and Cavalry voted to approve the merger. During the first quarter of 2006, all regulatory approvals were obtained and the merger was consummated on March 15, 2006.

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, Pinnacle estimates its third quarter 2006 diluted earnings per share will approximate $0.31 to $0.32 and approximately $0.31 to $0.33 per share, exclusive of merger-related expenses. Additionally, based on anticipated growth trends and future investments in the franchise, Pinnacle estimates its 2006 earnings will approximate $1.14 to $1.18 per fully diluted share and approximately $1.21 to $1.26 per fully diluted share, exclusive of merger-related expenses. For 2007, Pinnacle estimates that its earnings will approximate $1.50 to $1.57 per fully diluted share.

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 involving the development of any market other than the current Nashville-Davidson -Murfreesboro MSA, 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, the largest financial services firm headquartered in Nashville 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 seven other offices on a denovo basis and acquired Cavalry Bancorp with its nine offices bringing the total number of offices to 17 in the most attractive trade areas in the Nashville-Davidson-Murfreesboro MSA.

Additional information concerning Pinnacle can be accessed at www.pnfp.com.

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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, (iii) increased competition with other financial institutions, (iv) lack of sustained growth in the economy in the Nashville-Davidson-Murfreesboro 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, (viii) the inability of Pinnacle to successfully integrate the former Cavalry Bancorp's operations with Pinnacle's and (ix) 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.