UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

              (mark one)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d)

OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number: 000-31225

, Inc.

(Exact name of registrant as specified in its charter)

Tennessee	62-1812853
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

150 Third Avenue South, Suite 900, Nashville, Tennessee	37201
(Address of principal executive offices)	(Zip Code)

(615) 744-3700

 (Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changes since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for shorter period that the registrant was required to submit and post such files).

Yes  x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.  (Check one):

Large Accelerated Filer o	Accelerated Filer x
Non-accelerated Filer  o (do not check if you are a smaller reporting company)	Smaller reporting companyo

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  o No x

As of July 30, 2013 there were 35,105,822 shares of common stock, $1.00 par value per share, issued and outstanding.

Pinnacle Financial Partners, Inc.

Report on Form 10-Q

June 30, 2013

TABLE OF CONTENTS	Page No.
PART I – Financial Information:
Item 1. Consolidated Financial Statements (Unaudited)	3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures about Market Risk	40
Item 4. Controls and Procedures	40
PART II – Other Information:
Item 1. Legal Proceedings	41
Item 1A. Risk Factors	41
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3. Defaults Upon Senior Securities	42
Item 4.  Mine Safety Disclosures	42
Item 5. Other Information	42
Item 6. Exhibits	42
Signatures	43

Page 1

FORWARD-LOOKING STATEMENTS

Certain of the statements in this report 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," "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) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (ii) continuation of the historically low short-term interest rate environment; (iii) the inability of Pinnacle Financial to grow its loan portfolio in the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) effectiveness of Pinnacle Financial's asset management activities in improving, resolving or liquidating lower-quality assets; (vi) increased competition with other financial institutions; (vii) 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; (viii) rapid fluctuations or unanticipated changes in interest rates; (ix) the results of regulatory examinations; (x) the ability to retain large, uninsured deposits with the expiration of the FDIC's transaction account guarantee program; (xi) the development of any new market other than Nashville or Knoxville; (xii) a merger or acquisition; (xiii) any matter that would cause Pinnacle Financial to conclude that there was impairment of any asset, including intangible assets; (xiv) the ability to attract additional financial advisors or to attract customers from other financial institutions; (xv) further deterioration in the valuation of other real estate owned and increased expenses associated therewith; (xvi) inability to comply with regulatory capital requirements, including those resulting from recently adopted changes to capital calculation methodologies and required capital maintenance levels; and, (xvii) 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 22, 2013, Pinnacle Financial's most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 3, 2013, and in Part II, Item 1A. Risk Factors below.  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 release, whether as a result of new information, future events or otherwise.

Page 2

Item 1. Part I.  Financial Information

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30, 2013			December 31, 2012
ASSETS
Cash and noninterest-bearing due from banks	$	70,623,888		$	51,946,542
Interest-bearing due from banks		162,365,672			111,535,083
Federal funds sold and other		8,181,484			1,807,044
Cash and cash equivalents		241,171,044			165,288,669
Securities available-for-sale, at fair value		687,832,401			706,577,806
Securities held-to-maturity (fair value of $39,010,480 and $583,212 at
June 30, 2013 and December 31, 2012, respectively)		40,056,711			574,863
Mortgage loans held-for-sale		27,962,675			41,194,639
Loans		3,925,364,586			3,712,162,430
Less allowance for loan losses		(68,694,868	)		(69,417,437	)
Loans, net		3,856,669,718			3,642,744,993
Premises and equipment, net		75,840,853			75,804,895
Other investments		30,371,218			26,962,890
Accrued interest receivable		15,654,018			14,856,615
Goodwill		243,900,240			244,040,421
Core deposits and other intangible assets		4,334,100			5,103,273
Other real estate owned		15,991,835			18,580,097
Other assets		133,383,112			98,819,455
Total assets	$	5,373,167,925		$	5,040,548,616
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	1,098,887,282		$	985,689,460
Interest-bearing		817,562,583			760,786,247
Savings and money market accounts		1,607,689,457			1,662,256,403
Time		572,438,682			606,455,873
Total deposits		4,096,578,004			4,015,187,983
Securities sold under agreements to repurchase		117,345,727			114,667,475
Federal Home Loan Bank advances		325,762,333			75,850,390
Subordinated debt and other borrowings		99,908,292			106,158,292
Accrued interest payable		1,037,150			1,360,598
Other liabilities		35,967,600			48,252,519
Total liabilities		4,676,599,106			4,361,477,257
Stockholders' equity:
Preferred stock, no par value, 10,000,000 shares authorized;
no shares issued and outstanding		-			-
Common stock, par value $1.00; 90,000,000 shares authorized;
35,073,763 and 34,696,597 shares issued and outstanding
at June 30, 2013 and December 31, 2012, respectively		35,073,763			34,696,597
Additional paid-in capital		545,963,974			543,760,439
Retained earnings		115,145,346			87,386,689
Accumulated other comprehensive income, net of taxes		385,736			13,227,634
Total stockholders' equity		696,568,819			679,071,359
Total liabilities and stockholders' equity	$	5,373,167,925		$	5,040,548,616

See accompanying notes to consolidated financial statements (unaudited).

Page 3

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2013			2012		2013			2012
Interest income:
Loans, including fees	$	42,149,149		$	39,288,048	$	83,663,362		$	77,925,767
Securities:
Taxable		3,650,766			4,453,956		7,321,700			9,383,240
Tax-exempt		1,483,965			1,647,852		3,140,373			3,350,998
Federal funds sold and other		260,440			563,638		575,212			1,117,577
Total interest income		47,544,320			45,953,494		94,700,647			91,777,582
Interest expense:
Deposits		2,955,985			4,298,849		6,368,381			9,126,325
Securities sold under agreements to repurchase		70,823			115,450		148,639			271,026
Federal Home Loan Bank advances and other borrowings		918,762			1,354,132		1,826,403			2,691,163
Total interest expense		3,945,570			5,768,431		8,343,423			12,088,514
Net interest income		43,598,750			40,185,063		86,357,224			79,689,068
Provision for loan losses		2,774,048			634,072		4,946,452			1,668,317
Net interest income after provision for loan losses		40,824,702			39,550,991		81,410,772			78,020,751
Noninterest income:
Service charges on deposit accounts		2,540,866			2,439,376		5,021,110			4,763,338
Investment services		1,895,398			1,610,883		3,688,038			3,257,661
Insurance sales commissions		1,107,696			1,141,163		2,501,000			2,428,723
Gain on mortgage loans sold, net		1,948,531			1,456,783		3,803,942			2,951,255
(Loss) gain on sale of investment securities, net		(25,241	)		98,917		(25,241	)		212,517
Trust fees		880,204			770,239		1,824,536			1,565,674
Other noninterest income		2,978,266			2,392,485		6,414,691			4,680,016
Total noninterest income		11,325,720			9,909,846		23,228,076			19,859,184
Noninterest expense:
Salaries and employee benefits		20,570,753			19,237,178		40,143,109			39,029,744
Equipment and occupancy		5,204,159			5,053,111		10,317,209			10,061,766
Other real estate expense		1,390,606			3,104,276		2,111,568			7,780,340
Marketing and other business development		987,171			739,774		1,777,842			1,525,099
Postage and supplies		517,667			615,725		1,109,155			1,179,019
Amortization of intangibles		248,186			686,067		769,173			1,372,134
Other noninterest expense		1,943,190			4,479,403		7,073,683			8,787,138
Total noninterest expense		30,861,732			33,915,534		63,301,739			69,735,240
Income before income taxes		21,288,690			15,545,303		41,337,109			28,144,695
Income tax expense		6,978,160			5,105,659		13,578,452			9,340,097
Net income		14,310,530			10,439,644		27,758,657			18,804,598
Preferred stock dividends		-			760,349		-			1,660,868
Accretion on preferred stock discount		-			1,894,525		-			2,153,172
Net income available to common stockholders	$	14,310,530		$	7,784,770	$	27,758,657		$	14,990,558
Per share information:
Basic net income per common share available to common stockholders	$	0.42		$	0.23	$	0.81		$	0.44
Diluted net income per common share available to common stockholders	$	0.42		$	0.23	$	0.81		$	0.44
Weighted average shares outstanding:
Basic		34,172,274			33,885,779		34,080,281			33,848,825
Diluted		34,431,054			34,470,794		34,319,796			34,447,526

See accompanying notes to consolidated financial statements (unaudited).

Page 4

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net income	$	14,310,530		$	7,784,770		$	27,758,657		$	14,990,558
Other comprehensive income, net of tax:
Change in fair value on available-for-sale securities, net of tax		(13,933,693	)		1,066,735			(16,204,604	)		288,357
Increase in fair value of cash flow hedges, net of income tax		3,347,367			-			3,347,367			-
Net gain (loss) on sale of investment securities reclassified from other comprehensive income into net income, net of tax		15,339			(60,112	)		15,339			(129,147	)
Total comprehensive income	$	3,739,543		$	8,791,393		$	14,916,759		$	15,149,768

See accompanying notes to consolidated financial statements (unaudited).

Page 5

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

				Common Stock
	Preferred Stock Amount			Shares			Amount			Common Stock Warrants		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comp. Income, net			Total Stockholders' Equity
Balances, December 31, 2011	$	69,096,828			34,354,960		$	34,354,960		$	3,348,402	$	536,227,537		$	49,783,584		$	17,333,257		$	710,144,568
Exercise of employee common stock
options and related tax benefits		-			213,760			213,760			-		1,150,474			-			-			1,364,234
Repurchase of preferred stock		(71,250,000	)		-			-			-		-			-			-			(71,250,000	)
Issuance of restricted common shares, net
of forfeitures		-			94,110			94,110			-		(94,110	)		-			-			-
Issuance of salary stock units		-			57,508			57,508			-		942,565			-			-			1,000,073
Restricted shares withheld for taxes		-			(44,425	)		(44,425	)		-		(686,321	)		-			-			(730,746	)
Compensation expense for restricted shares		-			-			-			-		1,671,568			-			-			1,671,568
Compensation expense for stock options		-			-			-			-		250,653			-			-			250,653
Accretion on preferred stock discount		2,153,172			-			-			-		-			(2,153,172	)		-			-
Preferred dividends paid		-			-			-			-		-			(2,127,605	)		-			(2,127,605	)
Net income		-			-			-			-		-			18,804,598			-			18,804,598
Other comprehensive income		-			-			-			-		-			-			159,212			159,212
Balances, June 30, 2012	$	-			34,675,913		$	34,675,913		$	3,348,402	$	539,462,366		$	64,307,405		$	17,492,469		$	659,286,555
Balances, December 31, 2012	$	-			34,696,597		$	34,696,597		$	-	$	543,760,439		$	87,386,689		$	13,227,634		$	679,071,359
Exercise of employee common stock
options and related tax benefits		-			123,239			123,239			-		1,282,323			-			-			1,405,562
Issuance of restricted common shares, net
of forfeitures		-			293,441			293,441			-		(293,441	)		-			-			-
Restricted shares withheld for taxes		-			(39,514	)		(39,514	)		-		(781,156	)		-			-			(820,670	)
Compensation expense for restricted shares		-			-			-			-		1,983,339			-			-			1,983,339
Compensation expense for stock options		-			-			-			-		12,470			-			-			12,470
Net income		-			-			-			-		-			27,758,657			-			27,758,657
Other comprehensive loss		-			-			-			-		-			-			(12,841,898	)		(12,841,898	)
Balances, June 30, 2013	$	-			35,073,763		$	35,073,763		$	-	$	545,963,974		$	115,145,346		$	385,736		$	696,568,819

See accompanying notes to consolidated financial statements (unaudited).

Page 6

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six months ended June 30,
	2013			2012
Operating activities:
Net income	$	27,758,657		$	18,804,598
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization/accretion of premium/discount on securities		2,373,927			3,879,647
Depreciation and amortization		4,622,942			4,923,028
Provision for loan losses		4,946,452			1,668,317
Gain on mortgage loans sold, net		(3,803,942	)		(2,951,255	)
Loss (gain) on sale of investment securities, net		25,241			(212,517	)
Stock-based compensation expense		1,995,809			2,922,294
Deferred tax benefit		67,794			1,664,563
Losses on dispositions of other real estate and other investments		1,877,964			7,222,829
Excess tax benefit from stock compensation		(140,181	)		(11,243	)
Mortgage loans held for sale:
Loans originated		(226,714,093	)		(222,373,087	)
Loans sold		243,750,000			224,388,000
Decrease in other assets		10,576,616			18,852,041
Decrease in other liabilities		(12,608,365	)		(2,652,747	)
Net cash provided by operating activities		54,728,821			56,124,468
Investing activities:
Activities in securities available-for-sale:
Purchases		(128,922,089	)		(37,244,793	)
Sales		1,213,584			32,632,321
Maturities, prepayments and calls		77,932,668			106,431,284
Activities in securities held-to-maturity:
Purchases		(2,045,030	)		-
Maturities, prepayments and calls		2,325,000			1,575,000
Increase in loans, net		(221,126,597	)		(166,516,932	)
Purchases of software, premises and equipment		(3,388,292	)		(1,940,817	)
Purchase of bank owned life insurance		(30,000,000	)		-
Increase in other investments		(3,325,587	)		(1,149,065	)
Net cash used in investing activities		(307,336,343	)		(66,213,002	)
Financing activities:
Net increase in deposits		81,390,021			55,480,883
Net increase (decrease) in securities sold under agreements to repurchase		2,678,252			(3,968,857	)
Advances from Federal Home Loan Bank:
Issuances		324,038,282			285,000,000
Payments/maturities		(74,091,731	)		(240,035,833	)
(Decrease) increase in other borrowings		(6,250,000	)		25,000,000
Exercise of common stock options and stock appreciation rights		584,892			633,487
Excess tax benefit from stock compensation		140,181			11,243
Preferred dividends paid		-			(2,127,605	)
Repurchase of preferred shares outstanding		-			(71,250,000	)
Net cash provided by financing activities		328,489,897			48,743,318
Net increase in cash and cash equivalents		75,882,375			165,288,669
Cash and cash equivalents, beginning of period		165,288,669			172,163,040
Cash and cash equivalents, end of period	$	241,171,044		$	210,817,824

See accompanying notes to consolidated financial statements (unaudited).

Page 7

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1.  Summary of Significant Accounting Policies

Nature of Business — Pinnacle Financial Partners, Inc. (Pinnacle Financial) is a bank holding company whose primary business is conducted by its wholly-owned subsidiary, Pinnacle Bank. Pinnacle Bank is a commercial bank headquartered in Nashville, Tennessee. Pinnacle Bank provides a full range of banking services in its primary market areas of the Nashville-Davidson-Murfreesboro-Franklin, Tennessee and Knoxville, Tennessee Metropolitan Statistical Areas.

Basis of Presentation — The accompanying unaudited consolidated financial statements have been prepared in accordance with instructions to Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles (U.S. GAAP).  All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods covered by the report have been included.  The accompanying unaudited consolidated financial statements should be read in conjunction with the Pinnacle Financial consolidated financial statements and related notes appearing in the 2012 Annual Report previously filed on Form 10-K.

These consolidated financial statements include the accounts of Pinnacle Financial and its wholly-owned subsidiaries. PNFP Statutory Trust I, PNFP Statutory Trust II, PNFP Statutory Trust III and PNFP Statutory Trust IV are affiliates of Pinnacle Financial and are included in these consolidated financial statements pursuant to the equity method of accounting. Significant intercompany transactions and accounts are eliminated in consolidation.

Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for loan losses, any potential impairment of intangible assets, including goodwill and the valuation of deferred tax assets, other real estate owned, and our investment portfolio, including other-than-temporary impairment. These financial statements should be read in conjunction with Pinnacle Financial's Annual Report on Form 10-K for the year ended December 31, 2012. There have been no significant changes to Pinnacle Financial's significant accounting policies as disclosed in Pinnacle Financial's Annual Report on Form 10-K for the year ended December 31, 2012.

Recently Adopted Accounting Pronouncements — In February 2013, the FASB issued Accounting Standards Update 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" which provides disclosure guidance on amounts reclassified out of AOCI by component.  The adoption did not have any impact on our financial position or results of operations but has impacted our financial statement disclosure. As shown on the statement of other comprehensive income for the three and six months ended June 30, 2013, Pinnacle Financial reclassified approximately $15,000 of net losses out of other comprehensive income into gain (loss) on the sale of investment securities, net compared to reclassifications of net gains for the three and six months ended June 30, 2012, of approximately $60,000, and $129,000, respectively, net of tax.

Cash Flow Information — Supplemental cash flow information addressing certain cash and noncash transactions for each of the six months ended June 30, 2013 and 2012 was as follows:

	For the six months ended June 30,
	2013		2012
Cash Transactions:
Interest paid	$	8,701,479	$	12,717,236
Income taxes paid, net		15,600,009		(1,474,106	)
Noncash Transactions:
Loans charged-off to the allowance for loan losses		11,377,491		8,774,855
Loans foreclosed upon and transferred to other real estate owned		1,780,131		7,103,792
Available-for-sale securities transferred to held-to-maturity portfolio		39,959,647		-

Income Per Common Share — Basic net income per common share available to common stockholders (EPS) is computed by dividing net income available to common stockholders by the weighted average common shares outstanding for the period.  For the three and six months ended June 30, 2012, weighted average common shares outstanding also include salary stock units issued to the named executive officers.  Diluted EPS reflects the dilution that could occur if securities or other contracts to issue common stock were exercised or converted.  The difference between basic and diluted weighted average shares outstanding is attributable to common stock options, common stock appreciation rights, warrants and restricted shares with time-based vesting criteria. The dilutive effect of outstanding options, common stock appreciation rights, warrants and restricted shares with time-based vesting criteria is reflected in diluted EPS by application of the treasury stock method.

For the three and six months ended June 30, 2013,  there were 258,780 and 239,515 shares associated with dilutive stock options, stock appreciation rights and restricted shares with time-based vesting criteria that were included in the net income per share calculation.  For the three and six months ended June 30, 2012, there were 585,015 and 598,701 shares associated with dilutive stock options, stock appreciation rights, warrants and time-based restricted shares with time-based vesting criteria outstanding to purchase common shares that were included in the net income per share calculation.

Page 8

The following is a summary of the basic and diluted net income per share calculations for the three and six months ended June 30, 2013 and 2012:

	For the three months ended June 30,				For the six months ended June 30,
	2013		2012		2013		2012
Basic net income per share calculation:
Numerator - Net income available to common stockholders	$	14,310,530	$	7,784,770	$	27,758,657	$	14,990,558
Denominator - Average common shares outstanding		34,172,274		33,885,779		34,080,281		33,848,825
Basic net income per share available to common stockholders	$	0.42	$	0.23	$	0.81	$	0.44
Diluted net income per share calculation:
Numerator – Net income available to common stockholders	$	14,310,530	$	7,784,770	$	27,758,657	$	14,990,558
Denominator - Average common shares outstanding		34,172,274		33,885,779		34,080,281		33,848,825
Dilutive shares contingently issuable		258,780		585,015		239,515		598,701
Average diluted common shares outstanding		34,431,054		34,470,794		34,319,796		34,447,526
Diluted net income per share available to common stockholders	$	0.42	$	0.23	$	0.81	$	0.44

Note 2. Participation in U.S. Treasury Capital Purchase Program (CPP)

On December 12, 2008, Pinnacle Financial issued 95,000 shares of preferred stock to the U.S. Treasury (the Treasury) for $95 million pursuant to the CPP.  For the time the CPP preferred stock was outstanding, the CPP preferred stock was non-voting, other than having class voting rights on certain matters, and paid cumulative dividends quarterly at a rate of 5% per annum. Pinnacle Financial redeemed the preferred shares issued to the Treasury under the CPP in two transactions.   During the fourth quarter of 2011, Pinnacle Financial redeemed 23,750 of the preferred shares in a transaction totaling approximately $23.9 million, including accrued but unpaid dividends of $142,000.  During the second quarter of 2012, Pinnacle Financial completed the redemption of the remaining 71,250 preferred shares outstanding in a transaction totaling $71.6 million which included accrued but unpaid dividends of $346,000.  Concurrently, Pinnacle Financial accelerated the accretion of the remaining preferred stock discount of approximately $1.7 million during the second quarter of 2012.

Additionally, Pinnacle Financial issued warrants to purchase 534,910 shares of common stock to the Treasury as a condition to its participation in the CPP. The warrants had an exercise price of $26.64 each, were immediately exercisable and expired 10 years from the date of issuance. On June 16, 2009, Pinnacle Financial completed the sale of 8,855,000 shares of its common stock in a public offering, resulting in net proceeds to Pinnacle Financial of approximately $109 million. As a result, and pursuant to the terms of the warrants, the number of shares issuable upon exercise of the warrants was reduced by 50%, or 267,455 shares. During the third quarter of 2012, Pinnacle Financial repurchased all of the remaining outstanding warrants held by the Treasury for $755,000.

Note 3.  Securities

The amortized cost and fair value of securities available-for-sale and held-to-maturity at June 30, 2013 and December 31, 2012 are summarized as follows (in thousands):

	June 30, 2013
	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities available-for-sale:
U.S. Treasury securities		$	4,998		$	-		$	-		$	4,998
U.S. government agency securities			139,602			11			9,999			129,614
Mortgage-backed securities			383,634			9,938			6,299			387,273
State and municipal securities			131,716			6,903			745			137,874
Asset-backed securities			17,426			-			112			17,314
Corporate notes and other			9,631			1,136			8			10,759
		$	687,007		$	17,988		$	17,163		$	687,832
Securities held-to-maturity:
State and municipal securities		$	40,057		$	4		$	1,051		$	39,010
		$	40,057		$	4		$	1,051		$	39,010
	December 31, 2012
	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities available-for-sale:
U.S. Treasury securities		$	-		$	-		$	-		$	-
U.S. government agency securities			110,817			49			414			110,452
Mortgage-backed securities			360,504			15,770			623			375,651
State and municipal securities			177,364			14,489			126			191,727
Asset-backed securities			17,361			-			9			17,352
Corporate notes and other			9,881			1,519			4			11,396
		$	675,927		$	31,827			1,176		$	706,578
Securities held-to-maturity:
State and municipal securities		$	575		$	8		$	-		$	583
		$	575		$	8		$	-		$	583

Page 9

At June 30, 2013, approximately $643.6 million of securities within Pinnacle Financial's investment portfolio were either pledged to secure public funds and other deposits or securities sold under agreements to repurchase.

During the first quarter of 2013, approximately $40.0 million of available-for-sale securities were transferred to the held-to-maturity portfolio. The transfers of debt securities into the held-to-maturity category from the available-for-sale category were made at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer was retained in other comprehensive income and in the carrying value of the held-to-maturity securities. Such amounts will be amortized to interest income over the remaining life of the securities.

The amortized cost and fair value of debt securities as of June 30, 2013 by contractual maturity are shown below. Actual maturities may differ from contractual maturities of mortgage- and asset-backed securities since the mortgages and assets underlying the securities may be called or prepaid with or without penalty. Therefore, these securities are not included in the maturity categories in the following summary (in thousands):

	June 30, 2013
	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	8,453	$	8,471	$	736	$	735
Due in one year to five years		26,983		27,553		12,414		12,276
Due in five years to ten years		142,827		143,297		16,011		15,553
Due after ten years		107,684		103,924		10,896		10,446
Mortgage-backed securities		383,634		387,273		-		-
Asset-backed securities		17,426		17,314		-		-
	$	687,007	$	687,832	$	40,057	$	39,010

At June 30, 2013 and December 31, 2012, the following investments had unrealized losses. The information below classifies these investments according to the term of the unrealized losses of less than twelve months or twelve months or longer (in thousands):

	Investments with an Unrealized Loss of less than 12 months				Investments with an Unrealized Loss of 12 months or longer				Total Investments with an Unrealized Loss
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
At June 30, 2013:
U.S. Treasury securities	$	-	$	-	$	-	$	-	$	-	$	-
U.S. government agency securities		132,918		9,999		-		-		132,918		9,999
Mortgage-backed securities		146,214		6,299		-		-		146,214		6,299
State and municipal securities		47,838		1,796		-		-		47,838		1,796
Asset-backed securities		17,314		112		-		-		17,314		112
Corporate notes		807		8		-		-		807		8
Total temporarily-impaired securities	$	345,091	$	18,214	$	-	$	-	$	345,091	$	18,214
At December 31, 2012:
U.S. Treasury securities	$	-	$	-	$	-	$	-	$	-	$	-
U.S. government agency securities		78,899		414		-		-		78,899		414
Mortgage-backed securities		40,988		623		-		-		40,988		623
State and municipal securities		5,179		126		-		-		5,179		126
Asset-backed securities		17,353		9		-		-		17,353		9
Corporate notes		162		4		-		-		162		4
Total temporarily-impaired securities	$	142,581	$	1,176	$	-	$	-	$	142,581	$	1,176

The applicable dates for determining when securities are in an unrealized loss position are June 30, 2013 and December 31, 2012. As such, it is possible that a security had a market value that exceeded its amortized cost on other days during the past twelve-month periods ended June 30, 2013 and December 31, 2012, but is in the "Investments with an Unrealized Loss of less than 12 months" category above.

Page 10

As shown in the tables above, at June 30, 2013, Pinnacle Financial had approximately $18.2 million in unrealized losses on $345.1 million of securities. Any unrealized losses associated with these investment securities are driven by changes in interest rates and are not due to the credit quality of the securities.  These securities will continue to be monitored as a part of our ongoing impairment analysis, but are expected to perform even if the rating agencies reduce the credit rating of the bond issuers. Management evaluates the financial performance of the issuers on a quarterly basis to determine if it is probable that the issuers can make all contractual principal and interest payments.  Because Pinnacle Financial currently does not intend to sell those securities that have an unrealized loss at June 30, 2013, and it is not more-likely-than-not that Pinnacle Financial will be required to sell the securities before recovery of their amortized cost bases, which may be maturity, Pinnacle Financial does not consider these securities to be other-than-temporarily impaired at June 30, 2013.

Periodically, available-for-sale securities may be sold or the composition of the portfolio realigned to improve yields, quality or marketability, or to implement changes in investment or asset/liability strategy, including maintaining collateral requirements and raising funds for liquidity purposes. Additionally, if an available-for-sale security loses its investment grade, tax-exempt status, the underlying credit support is terminated or collection otherwise becomes uncertain based on factors known to management, Pinnacle Financial will consider selling the security, but will review each security on a case-by-case basis as these factors become known. Available-for-sale securities of $1.2 million were sold during the quarter ended June 30, 2013.

The carrying values of Pinnacle Financial's investment securities could decline in the future if the financial condition of issuers deteriorates and management determines it is probable that Pinnacle Financial will not recover the entire amortized cost bases of the securities.  As a result, there is a risk that other-than-temporary impairment charges may occur in the future.

Note 4.  Loans and Allowance for Loan Losses

For financial reporting purposes, Pinnacle Financial classifies its loan portfolio based on the underlying collateral utilized to secure each loan. This classification is consistent with those utilized in the Quarterly Report of Condition and Income filed with the Federal Deposit Insurance Corporation (FDIC).

Commercial loans receive risk ratings by the assigned financial advisor subject to validation by Pinnacle Financial's independent loan review department.  Risk ratings are categorized as pass, special mention, substandard, substandard-nonaccrual or doubtful-nonaccrual.  Pinnacle Financial believes that its categories follow those used by Pinnacle Bank's primary regulators.  At June 30, 2013, approximately 76% of our loan portfolio was analyzed as a commercial loan type with a specifically assigned risk rating in the allowance for loan loss assessment.  Consumer loans and small business loans are generally not assigned an individual risk rating but are evaluated as either accrual or nonaccrual based on the performance of the individual loans.  However, certain consumer real estate-mortgage loans and certain consumer and other loans receive a specific risk rating due to the loan proceeds being used for commercial purposes even though the collateral may be of a consumer loan nature.

Risk ratings are subject to continual review by the loan officer. At least annually, our credit policy requires that every risk rated loan of $500,000 or more be subject to a formal credit risk review process. Each loan grade is also subject to review by our independent loan review department, which reviews a significant portion of our risk rated portfolio annually.  Included in the coverage are independent loan reviews of loans in targeted higher-risk portfolio segments.

The following table presents our loan balances by primary loan classification and the amount within each risk rating category. Pass rated loans include all credits other than those included in special mention, substandard, substandard-nonaccrual and doubtful-nonaccrual which are defined as follows:

• Special mention loans have potential weaknesses that deserve management's close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in Pinnacle Financial's credit position at some future date.

• Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any.  Assets so classified must have a well-defined weakness or weaknesses that jeopardize collection of the debt.  Substandard loans are characterized by the distinct possibility that Pinnacle Financial will sustain some loss if the deficiencies are not corrected.

• Substandard-nonaccrual loans are substandard loans that have been placed on nonaccrual status.

• Doubtful-nonaccrual loans have all the characteristics of substandard-nonaccrual loans with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Page 11

The following table outlines the amount of each loan classification categorized into each risk rating category as of June 30, 2013 and December 31, 2012 (in thousands):

June 30, 2013	Commercial real estate - mortgage		Consumer real estate - mortgage		Construction and land development		Commercial and industrial		Consumer and other		Total
Accruing loans
Pass	$	1,238,668	$	671,079	$	249,392	$	1,451,678	$	116,086	$	3,726,903
Special Mention		14,325		2,711		35,715		22,251		-		75,002
Substandard (1)		29,381		15,108		11,963		26,021		-		82,473
Total		1,282,374		688,898		297,070		1,499,950		116,086		3,884,378
Impaired loans
Nonaccrual loans
Substandard-nonaccrual		12,513		4,581		1,320		2,088		59		20,561
Doubtful-nonaccrual		-		-		-		-		-		-
Total nonaccrual loans		12,513		4,581		1,320		2,088		59		20,561
Troubled debt restructurings(2)
Pass		312		2,762		119		376		262		3,831
Special Mention		-		-		-		-		-		-
Substandard		13,674		1,249		-		1,672		-		16,595
Total troubled debt restructurings		13,986		4,011		119		2,048		262		20,426
Total impaired loans		26,499		8,592		1,439		4,136		321		40,987
Total loans	$	1,308,873	$	697,490	$	298,509	$	1,504,086	$	116,407	$	3,925,365

December 31, 2012	Commercial real estate - mortgage		Consumer real estate - mortgage		Construction and land development		Commercial and industrial		Consumer and other		Total
Accruing loans
Pass	$	1,093,628	$	649,571	$	259,878	$	1,390,207	$	93,712	$	3,486,996
Special Mention		12,670		4,242		29,472		23,133		-		69,517
Substandard (1)		42,343		13,896		19,622		29,513		-		105,374
Total		1,148,641		667,709		308,972		1,442,853		93,712		3,661,887
Impaired loans
Nonaccrual loans
Substandard-nonaccrual		9,290		5,877		4,509		3,035		79		22,790
Doubtful-nonaccrual		1		29		-		3		-		33
Total nonaccrual loans		9,291		5,906		4,509		3,038		79		22,823
Troubled debt restructurings(2)
Pass		4,705		3,623		71		502		119		9,020
Special Mention		-		-		-		-		-		-
Substandard		15,559		2,688		-		185		-		18,432
Total troubled debt restructurings		20,264		6,311		71		687		119		27,452
Total impaired loans		29,555		12,217		4,580		3,725		198		50,275
Total loans	$	1,178,196	$	679,926	$	313,552	$	1,446,578	$	93,910	$	3,712,162

(1) Potential problem loans represent those loans with a well-defined weakness and where information about possible credit problems of borrowers has caused management to have doubts about the borrower's ability to comply with present repayment terms. This definition is believed to be substantially consistent with the standards established by Pinnacle Bank's primary regulators for loans classified as substandard, excluding the impact of substandard nonaccrual loans and substandard troubled debt restructurings. Potential problem loans, which are not included in nonaccrual loans, amounted to approximately $82.5 million at June 30, 2013, compared to $105.4 million at December 31, 2012.

(2) Troubled debt restructurings are presented as an impaired loan; however, they continue to accrue interest at contractual rates.

At June 30, 2013 and December 31, 2012, all loans classified as nonaccrual were deemed to be impaired. The principal balances of these nonaccrual loans amounted to $20.6 million and $22.8 million at June 30, 2013 and December 31, 2012, respectively, and are included in the table above.  For the six months ended June 30, 2013, the average balance of nonaccrual loans was $22.3 million as compared to $38.4 million for the twelve months ended December 31, 2012.  At the date such loans were placed on nonaccrual status, Pinnacle Financial reversed all previously accrued interest income against current year earnings.  Had these nonaccrual loans been on accruing status, interest income would have been higher by $573,000, for the six months ended June 30, 2013 and by $618,000, for the six months ended June 30, 2012.

Page 12

The following table details the recorded investment, unpaid principal balance and related allowance and average recorded investment of our nonaccrual loans at June 30, 2013 and December 31, 2012 by loan classification and the amount of interest income recognized on a cash basis throughout the fiscal year-to-date period then ended, respectively, on these loans that remain on the balance sheets (in thousands):

	At June 30, 2013						For the six months ended June 30, 2013
	Recorded investment		Unpaid principal balance		Related allowance(1)		Average recorded investment		Interest income recognized
Collateral dependent nonaccrual loans:
Commercial real estate – mortgage	$	12,034	$	13,267	$	-	$	12,592	$	-
Consumer real estate – mortgage		2,419		2,425		-		2,615		-
Construction and land development		978		1,946		-		1,690		-
Commercial and industrial		1,592		1,712		-		1,653		-
Consumer and other		-		-		-		-		-
Total	$	17,023	$	19,350	$	-	$	18,550	$	-
Cash flow dependent nonaccrual loans:
Commercial real estate – mortgage	$	484	$	547	$	157	$	486	$	-
Consumer real estate – mortgage		2,160		2,369		699		2,276		-
Construction and land development		340		380		110		341		-
Commercial and industrial		495		856		66		545		-
Consumer and other		59		61		19		60		-
Total	$	3,538	$	4,213	$	1,051	$	3,708	$	-
Total nonaccrual loans	$	20,561	$	23,563	$	1,051	$	22,258	$	-

	At December 31, 2012						For the year ended December 31, 2012
	Recorded investment		Unpaid principal balance		Related allowance(1)		Average recorded investment		Interest income recognized
Collateral dependent nonaccrual loans:
Commercial real estate – mortgage	$	8,740	$	11,187	$	-	$	11,194	$	-
Consumer real estate – mortgage		3,641		6,394		-		6,394		-
Construction and land development		1,546		2,062		-		2,063		-
Commercial and industrial		1,547		1,761		-		1,896		-
Consumer and other		-		-		-		-		-
Total	$	15,474	$	21,404	$	-	$	21,547	$	-
Cash flow dependent nonaccrual loans:
Commercial real estate – mortgage	$	551	$	1,841	$	154	$	3,228	$	-
Consumer real estate – mortgage		2,265		4,473		573		5,828		-
Construction and land development		2,963		4,701		201		5,102		-
Commercial and industrial		1,491		2,459		814		2,528		-
Consumer and other		79		179		22		180		-
Total	$	7,349	$	13,653	$	1,764	$	16,866	$	-
Total nonaccrual loans	$	22,823	$	35,057	$	1,764	$	38,413	$	-

(1) Collateral dependent loans are typically charged-off to their net realizable value pursuant to requirements of our primary regulators and no specific allowance is carried related to those loans.

Pinnacle Financial's policy is that once a loan is placed on nonaccrual status each subsequent payment is reviewed on a case-by-case basis to determine if the payment should be applied to interest or principal pursuant to regulatory guidelines. Pinnacle Financial recognized no interest income from cash payments received on nonaccrual loans during the three and six months ended June 30, 2013 or during the year ended December 31, 2012.

Impaired loans also include loans that Pinnacle Bank has elected to formally restructure when, due to the weakening credit status of a borrower, the restructuring may facilitate a repayment plan that seeks to minimize the potential losses that Pinnacle Bank may otherwise incur.  If on nonaccrual status as of the date of restructuring, the loans are included in nonaccrual loans. Loans that have been restructured that were performing as of the restructure date and continue to perform in accordance with the restructured terms are reported separately as troubled debt restructurings.

At June 30, 2013 and December 31, 2012, there were $20.4 million and $27.5 million, respectively, of troubled debt restructurings that were performing as of their restructure date and which were accruing interest. These troubled debt restructurings are considered impaired loans pursuant to U.S. GAAP. Troubled commercial loans are restructured by specialists within our Special Assets Group, and all restructurings are approved by committees and credit officers separate and apart from the normal loan approval process.  These specialists are charged with reducing Pinnacle Financial's overall risk and exposure to loss in the event of a restructuring by obtaining some or all of the following:  improved documentation, additional guaranties, increase in curtailments, reduction in collateral release terms, additional collateral or other similar strategies.

Page 13

The following table outlines the amount of each troubled debt restructuring categorized by loan classification made during the three and six months ended June 30, 2013 and 2012 (dollars in thousands):

	Three months ended June 30, 2013						Six months ended June 30, 2013
	Number of contracts		Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment, net of related allowance		Number of contracts		Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment, net of related allowance
Commercial real estate – mortgage		-	$	-	$	-		-	$	-	$	-
Consumer real estate – mortgage		-		-		-		1		428		355
Construction and land development		1		51		44		1		51		44
Commercial and industrial		1		1,500		1,290		1		1,500		1,290
Consumer and other		-		-		-		1		193		164
		2	$	1,551	$	1,334		4	$	2,172	$	1,853

	Three months ended June 30, 2012						Six months ended June 30, 2012
	Number of contracts		Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment, net of related allowance		Number of contracts		Pre Modification Outstanding Recorded Investment		Post Modification Outstanding Recorded Investment, net of related allowance
Commercial real estate – mortgage		9	$	19,040	$	16,283		9	$	19,040	$	16,283
Consumer real estate – mortgage		14		5,702		4,970		15		6,045		5,258
Construction and land development		2		734		407		2		434		407
Commercial and industrial		12		947		814		13		983		846
Consumer and other		3		124		107		3		124		107
		40	$	26,547	$	22,581		42	$	26,626	$	22,901

There were no troubled debt restructurings that defaulted during the three month periods ended June 30, 2013 or 2012.  During the six months ended June 30, 2013, two consumer real estate loans totaling $1.0 million which were previously classified as troubled debt restructurings subsequently defaulted due to their lack of performance. During the six months ended June 30, 2012, four commercial loans totaling $194,000 and two consumer loans totaling $154,000 which were previously classified as troubled debt restructurings defaulted due to their lack of performance. A default is defined as an occurrence which violates the terms of the receivable's contract.

In addition to the loan metrics above, Pinnacle Financial analyzes its commercial loan portfolio to determine if a concentration of credit risk exists to any industry.  Pinnacle Financial utilizes broadly accepted industry classification systems in order to classify borrowers into various industry classifications.  Pinnacle Financial has a credit exposure (loans outstanding plus unfunded lines of credit) exceeding 25% of Pinnacle Bank's total risk-based capital to borrowers in the following industries at June 30, 2013 with the comparative exposures for December 31, 2012 (in thousands):

	At June 30, 2013
	Outstanding Principal Balances		Unfunded Commitments		Total exposure		Total Exposure at December 31, 2012
Lessors of nonresidential buildings	$	431,666	$	42,692	$	474,358	$	440,237
Lessors of residential buildings		222,869		23,778		246,647		215,899
Land subdividers		79,644		14,085		93,729		108,283

Page 14

The table below presents past due balances at June 30, 2013 and December 31, 2012, by loan classification and segment allocated between accruing and nonaccrual status (in thousands):

June 30, 2013	30-89 days past due and accruing		90 days or more past due and accruing		Total past due and accruing		Nonaccrual(1)		Current and accruing		Total Loans
Commercial real estate:
Owner-occupied	$	2,882	$	-	$	2,882	$	8,232	$	636,005	$	647,119
All other		-		-		-		4,281		657,468		661,749
Consumer real estate – mortgage		6,267		747		7,014		4,581		685,897		697,492
Construction and land development		1,817		-		1,817		1,320		295,373		298,510
Commercial and industrial		2,769		-		2,769		2,088		1,499,231		1,504,088
Consumer and other		1,019		-		1,019		59		115,329		116,407
	$	14,754	$	747	$	15,501	$	20,561	$	3,889,303	$	3,925,365

December 31, 2012	30-89 days past due and accruing		90 days or more past due and accruing		Total past due and accruing		Nonaccrual(1)		Current and accruing		Total Loans
Commercial real estate:
Owner-occupied	$	462	$	-	$	462	$	8,091	$	585,848	$	594,401
All other		41		-		41		1,200		582,554		583,795
Consumer real estate – mortgage		3,870		-		3,870		5,906		670,150		679,926
Construction and land development		3,511		-		3,511		4,509		305,532		313,552
Commercial and industrial		2,549		-		2,549		3,038		1,440,991		1,446,578
Consumer and other		444		-		444		79		93,387		93,910
	$	10,877	$	-	$	10,877	$	22,823	$	3,678,462	$	3,712,162

(1) Approximately $10.6 million and $9.4 million of nonaccrual loans as of June 30, 2013 and December 31, 2012, respectively, are currently performing pursuant to their contractual terms.

The following table shows the allowance allocation by loan classification and accrual status atJune 30, 2013 and December 31, 2012 (in thousands):

		Impaired Loans
Accruing Loans		Nonaccrual Loans		Troubled Debt Restructurings(1)	Total Allowance for Loan Losses
June 30, 2013	December 31, 2012	June 30, 2013	December 31, 2012