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

Pinnacle Financial Reports Record Earnings
Net loan growth of $93 million in fourth quarter of 2006

NASHVILLE, Tenn., Jan. 18, 2007 - Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today reported record earnings and strong loan growth for the quarter ended Dec. 31, 2006. Fully diluted earnings per share were $0.34 for the quarter ended Dec. 31, 2006, compared to $0.24 fully diluted earnings per share for the quarter ended Dec. 31, 2005, an increase of 42 percent.

Fully diluted earnings per share of $1.18 for the twelve months ended Dec. 31, 2006, included the impact of merger related expenses of $0.07 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 $1.25 for the twelve months ended Dec. 31, 2006, compared to $0.85 fully diluted earnings per share for the twelve months ended Dec. 31, 2005, an increase of 47 percent.

• Record earnings:
• Net income for the fourth quarter of 2006 of $5.65 million, up 152 percent from the prior year's fourth quarter net income of $2.24 million.
• Diluted earnings per share for the fourth quarter of 2006 of $0.34, up almost 42 percent from the same quarter last year.
• Revenue (the sum of net interest income and noninterest income) for the quarter ended Dec. 31, 2006, amounted to $22.33 million, compared to $9.79 million for the same quarter of last year, an increase of 128 percent.
• Superior credit quality:
• Net charge-offs as a percentage of average loan volumes were 0.05 percent for the year ended Dec. 31, 2006.
• Nonperforming assets were only 0.54 percent of total loans at Dec. 31, 2006. Past due loans over 30 days, excluding nonperforming loans, were 0.74 percent of total loans at Dec. 31, 2006.
• Strong balance sheet growth:
• Loans at Dec. 31, 2006, were $1.498 billion, up 131 percent from the same period last year, reflecting strong organic growth and the impact of the Cavalry merger. Excluding the $551 million in loans added in conjunction with the Cavalry merger on March 15, 2006, net loans increased $300 million during 2006 with $93 million of that amount occurring in the fourth quarter of 2006. Provision for loan losses for the quarter ended Dec. 31, 2006, was $1.1 million, an increase of $350,000 from the same quarter in 2005 and was $3.7 million for the year ended Dec. 31, 2006 an increase of $1.58 million from that for all of 2005.
• Total deposits at Dec. 31, 2006, were $1.622 billion, up 100 percent from the same period last year. Noninterest bearing demand deposit accounts, which represent 18.6 percent of total deposits, were up 93 percent from the same period last year, reflecting strong organic growth and the impact of the Cavalry merger.

"We are very pleased with our performance in the fourth quarter of 2006, particularly earnings and loan growth," said M. Terry Turner, Pinnacle's president and CEO. "The exceptional earnings growth during the fourth quarter resulted in our ability to support the increased provision expense incurred in connection with this dramatic loan growth."

EXTRAORDINARY GROWTH MAKES PINNACLE THE LARGEST NASHVILLE BANK

With its acquisition of Cavalry and dramatic organic loan and deposit growth during 2006, Pinnacle now has $2.142 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 was completed on March 15, 2006. Consequently, Pinnacle's balance sheet and statement of income have reflected the Cavalry amounts since March 15, 2006.

FINANCIAL PERFORMANCE AND BALANCE SHEET GROWTH

• Return on average assets for the quarter ended Dec. 31, 2006, was 1.07 percent. Return on average tangible assets (average assets less goodwill and core deposit intangibles) exclusive of merger related items for the quarter ended Dec. 31, 2006, was 1.14 percent, compared to 0.90 percent for the same quarter last year.
• Return on average stockholders' equity for the quarter ended Dec. 31, 2006, was 8.83 percent. Return on average tangible stockholders' equity (average stockholders' equity less goodwill and core deposit intangibles) exclusive of merger related expenses for the quarter ended Dec. 31, 2006, was 17.69 percent, compared to 14.05 percent for the same quarter last year.

Total assets grew to $2.142 billion as of Dec. 31, 2006, up $1.13 billion or 111 percent from the $1.017 billion reported at Dec. 31, 2005. The $1.13 billion year over year increase in total assets was comprised of $328 million in organic asset growth at Pinnacle, $797 million in assets associated with the acquisition of Cavalry Bancorp, including $127 million in goodwill and core deposit intangibles. This rapid asset growth was achieved while reducing the securities to total assets ratio from 27.4 percent at Dec. 31, 2005, to 16.2 percent at Dec. 31, 2006.

CREDIT QUALITY

• Provision for loan losses was $1,051,000 for the fourth quarter of 2006, compared to $702,000 in the fourth quarter of 2005. Contributing to the increased provision expense between the two periods was the $93 million in loan growth during the fourth quarter of 2006, compared to $44 million in growth during the same quarter in 2005.
• During the fourth quarter of 2006, the firm recorded net charge-offs of $105,000, compared to net charge-offs of $76,000 during the same period in 2005. Annualized net charge-offs to total average loans were 0.05 percent for the year ended Dec. 31, 2006, compared to net recoveries to total average loans of 0.01 percent in 2005.
• Allowance for loan losses represented 1.08 percent of total loans at Dec. 31, 2006, compared to 1.08 percent at Sept. 30, 2006 and 1.21 percent at Dec. 31, 2005.
• Nonperforming assets as a percentage of total loans and other real estate increased to 0.54 percent at Dec. 31, 2006, from 0.07 percent at Dec. 31, 2005.

"We believe our track record of excellent asset quality is a key predictor of our ability to create long-term shareholder value," said Turner. "It is reassuring to note that both Pinnacle and Cavalry have had excellent asset quality indicators for quite some time. Asset quality will always remain a high priority at Pinnacle."

REVENUE

• Net interest income for the quarter ended Dec. 31, 2006, was $17.39 million, compared to $8.29 million for the quarter ended Dec. 31, 2005, an increase of 110 percent.
• Net interest margin for the fourth quarter of 2006 was 3.74 percent, compared to a net interest margin of 3.95 percent reported for the third quarter of 2006 and 3.58 percent for the same period last year.
• Noninterest income for the quarter ended Dec. 31, 2006, was $4.93 million, a 228 percent increase over the $1.50 million recorded during the same quarter in 2005.

"We anticipated that we would experience compression in our margins during the fourth quarter," said Harold Carpenter, chief financial officer of Pinnacle Financial Partners. "Although the slope of the yield curve remains a challenge; our current forecasting models are predicting stable to perhaps a slight compression in our net interest margin over the next few quarters. Our loan pipelines remain strong and, due to our expected loan growth, we believe that we will experience continued growth in our net interest income for the next few quarters."

Noninterest income during the fourth quarter of 2006 represented approximately 22.1 percent of total revenues, compared to 15.30 percent for the same quarter in 2005. The increase in noninterest income between 2006 and 2005 was due primarily to the fee businesses acquired with the Cavalry merger, including insurance and trust. Included in the noninterest income for the fourth quarter of 2006 was approximately $224,000 in gains recognized on the sale of commercial loan participations, compared to $31,000 during the third quarter of 2006.

NONINTEREST EXPENSE

• Noninterest expense for the quarter ended Dec. 31, 2006, was $13.1 million.
• Merger related expenses incurred during the quarter ended Dec. 31, 2006, were $53,000. These charges consisted of direct and incremental integration costs incurred in connection with the merger. For the year ended Dec. 31, 2006, merger related expenses were approximately $1.64 million.
• Compensation expense increased to $8.15 million during the fourth quarter of 2006, compared to $3.64 million in the fourth quarter of 2005 and $7.58 million during the third quarter of 2006. At Dec. 31, 2006, the firm employed 404 associates (full-time equivalent), an increase of 45 associates in the last six months of 2006. Pinnacle anticipates adding 47 new associates during 2007 with 25 of these positions assigned to customer contact roles.
• During the quarter ended Dec. 31, 2006, 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 $244,000 on an after-tax basis. For the year ended Dec. 31, 2006, the after-tax impact of SFAS No. 123R was approximately $844,000.
• Amortization expense associated with the core deposit intangible recorded in connection with the merger of Cavalry was $535,000 for the three months ended Dec. 31, 2006, and $1.78 million for the year ended Dec. 31, 2006.
• The efficiency ratio (noninterest expense divided by net interest income and noninterest income) was 58.8 percent during the fourth quarter of 2006, compared to 61.0 percent during the fourth quarter of 2005.

OTHER DEVELOPMENTS

"The last twelve months have been a rewarding time for our firm, our associates and our shareholders, particularly the addition of new talent and resources from the Cavalry merger and the very successful integration of the two institutions," said Turner. "The strength of 2006 along with the great momentum we already have going into 2007 put Pinnacle in the best position in the market to capitalize on the rapidly growing opportunities in Middle Tennessee."

• During the third quarter of 2006, Pinnacle concluded the offering of $20 million in trust preferred securities to provide regulatory capital to support Pinnacle's continued rapid growth.
• Pinnacle was named as the "Best Place to Work" among Middle Tennessee's large companies. This marks the fourth consecutive year Pinnacle received top honors in the annual Nashville Business Journal award program.
• Pinnacle selected its 18th office location in the Donelson area of Davidson County. The new office is nearing completion of construction and will open in February 2007.
• Pinnacle conducted an extensive search for a new state-of-the-art on-line banking platform, relying heavily on client feedback from a number of focus groups. Pinnacle anticipates this new platform to be available during the first half of 2007.
• Pinnacle has been selected as a semi-finalist for the Better Business Bureau International Torch Award for Marketplace Ethics in Williamson County.

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 first quarter 2007 diluted earnings per share will approximate $0.33 to $0.36. The firm does not anticipate any merger related charges associated with the Cavalry transaction to be incurred during 2007. Additionally, based on anticipated growth trends and future investments in the franchise, Pinnacle continues to estimate that its earnings will approximate $1.50 to $1.57 per fully diluted share for the year ended Dec. 31, 2007.

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, 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 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 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.