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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
Assets grow to $727 million and earnings per share are $0.61

NASHVILLE, Tenn., Jan. 18, 2005 - Pinnacle Financial Partners Inc. (Nasdaq: PNFP) today reported another record year in earnings. The company reported net income for the year ended December 31, 2004, of $5,319,000, or $0.61 per diluted share, an increase of 91 percent when compared to Pinnacle's net income of $2,555,000, or $0.32 per diluted share for the year ended December 31, 2003. The company also reported net income of $1,689,000, or $0.18 per diluted share, for the quarter ended December 31, 2004, an increase of 64 percent when compared to Pinnacle's net income of $858,000, or $0.11 per diluted share for the same quarter last year.

Return on average assets for the quarter ended December 31, 2004, was 0.95 percent compared to 0.75 percent for the same quarter last year. Return on average stockholders' equity for the quarter ended December 31, 2004, was 11.61 percent compared to 10.02 percent for the same quarter last year. The firm's efficiency ratio (noninterest expense divided by net interest income and noninterest income) improved to 55.7 percent during the fourth quarter of 2004 compared to 67.9 percent during the fourth quarter of 2003.

Total assets grew to $727 million as of December 31, 2004, up $229 million or 46 percent from the $498 million reported at December 31, 2003. Loans as of December 31, 2004, were $472 million, or 59 percent higher than the $297 million reported at December 31, 2003. Total deposits increased to $571 million at December 31, 2004, or 46 percent higher than the $391 million reported at December 31, 2003.

"We are very pleased with our earnings performance for 2004," said M. Terry Turner, President and CEO of Pinnacle Financial Partners. "We also experienced extraordinary growth in loans, deposits and total assets which escalated throughout 2004 and should provide great momentum for 2005."

Net interest income for the year ended December 31, 2004, was $20.3 million compared to $12.9 million for the same period in 2003. Net interest income for the quarter ended December 31, 2004, was $6.3 million compared to $3.9 million for the quarter ended December 31, 2003. The net interest margin for the fourth quarter of 2004 was 3.78 percent, which was higher than the net interest margin of 3.62 percent reported during the third quarter in 2004. The percentage of daily floating rate loans to total loans was 55.1 percent at December 31, 2004, compared to 55.8 percent at September 30, 2004, and 52.7 percent at December 31, 2003.

The provision for loan losses was $2,948,000 for the year ended December 31, 2004 compared to $1,157,000 for the year ended December 31, 2003. The provision for loan losses was $1,134,000 for the fourth quarter of 2004 compared to $204,000 in the fourth quarter in 2003. The provision for loan losses was significantly higher in 2004 due to loan growth in 2004 of $175 million compared to loan growth of $87 million in 2003. Additionally, the company recorded net charge-offs of $1,016,000 in 2004 compared to net charge-offs of $115,000 during 2003. The allowance for loan losses represented 1.20 percent of total loans at December 31, 2004. Net charge-offs to average loans for 2004 amounted to 0.27 percent for the year ended December 31, 2004 compared to 0.05 percent for the year ended December 31, 2003. Nonaccrual loans as a percentage of total loans decreased to 0.12 percent at December 31, 2004 from 0.13 percent at December 31, 2003.

"During the fourth quarter of 2004, we recorded partial charge-offs for two commercial loans," said Mr. Turner. "The combined charge-offs amounted to $884,000. These actions resulted in an increase in our net charge-off ratio for 2004 but also resulted in reductions in the level of nonperforming loans, the ratio of nonperforming assets to total loans, the percentage of loans past due 30 days or more and the percentage of criticized/classified loans to total loans."

Noninterest income for the year ended December 31, 2004, was $5.5 million compared to $3.3 million during the same period in 2003. Noninterest income for the quarter ended December 31, 2004, was $1,386,000 compared to $924,000 during the same quarter in 2003. These increases were due to the further development of Pinnacle's mortgage origination unit, gains recognized on the sale of loans, increased service charges due to more deposit accounts and increased investment services income from Pinnacle Asset Management. For the quarter ended December 31, 2004, noninterest income represented approximately 18.0 percent of total revenues (the sum of net interest income and noninterest income), compared to 19.2 percent for the same quarter in 2003.

Noninterest expense for the year ended December 31, 2004, was $15.3 million compared to $11.0 million for the same period in 2003, an increase of 38 percent. Noninterest expense for the quarter ended December 31, 2004, was $4.3 million compared to $3.3 million for the same quarter in 2003. When compared to the third quarter of 2004, noninterest expenses were $263,000 higher in the fourth quarter of 2004. This increase from the third quarter to fourth quarter is attributable to increased occupancy and equipment expenses and increased legal, accounting and consulting costs. Compensation expenses were $2.4 million in the fourth quarter of 2004 compared to $2.5 million for the third quarter of 2004, a reduction of $149,000.

Compensation expenses were less in the fourth quarter of 2004 as compared to the third quarter of 2004 due to reduced costs associated with the firm's annual cash incentive plan. Virtually all associates participate in the annual cash incentive plan and awards from the plan were based on 2004 year-end results. Pinnacle has and will continue to increase expense levels over time in order to capitalize on current and future market opportunities and to provide the necessary infrastructure to support our growth.

OTHER 2004 HIGHLIGHTS

• Pinnacle currently has 123 associates with 87 working in client contact areas and 36 in operational and corporate areas, an increase of 33 employees since December 31, 2003. Approximately 34 associate additions are currently planned for 2005 with 22 to be in customer contact areas.
• During the third quarter of 2004, the firm successfully completed its second follow-on stock offering, issuing 977,500 common shares at $20 per share. The offering resulted in net proceeds of $17.2 million in additional capital to support the future growth of the firm.
• Pinnacle was named by the Nashville Business Journal as the "Best Place to Work" among Middle Tennessee's large companies. This is the second year for Pinnacle to receive top honors in the annual awards program.
• Today, Pinnacle opened its seventh office, located in Franklin, Tenn., which is the county seat of Williamson County. The Franklin office is the firm's third office in Williamson County, which has the highest per capita income and one of the highest growth rates of all Tennessee counties.
• The firm opened its sixth office, located in the West End area of Nashville, during the third quarter of 2004. This office is located adjacent to Vanderbilt University and is in close proximity to Nashville's medical community, including several prominent hospitals and medical office facilities. Pinnacle has also created a financial services unit focused on medical practices. This new unit is based in its West End location with five associates focused on serving this particular business sector.
• Pinnacle has completed negotiations on the site for its eighth office to be located in the Hendersonville, Tenn., area, northeast of Nashville's central business district. The firm anticipates this office to be open in mid-2005. Additionally, the firm is considering a ninth location to be opened in late 2005 in the Nashville MSA. Pinnacle expects to add another two offices in the Nashville MSA in 2006, which would bring the company's total number of offices to 11.

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 2005 diluted earnings per share will approximate $0.17 to $0.19. Pinnacle estimates diluted earnings per share for the year ending Dec. 31, 2005, to be $0.82 to $0.88. Additionally, Pinnacle is estimating that its ending total asset balances will approximate $900 million by the end of 2005 as a result of continued organic growth. 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 franchise, 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. Additionally, the estimates are inclusive of anticipated compensation expenses in the third and fourth quarters of 2005 related to the expensing of stock options that have been and may be granted to employees under the firm's broad-based stock option plans. Pinnacle estimates that the anticipated compensation expense attributable to the expensing of stock options will approximate $0.02 to $0.03 per fully diluted share in the last six months of 2005.

Pinnacle Financial Partners, the largest financial services firm headquartered in Nashville, provides a full range of banking, investment and insurance products and services targeted at small- to mid-sized businesses and their owners/operators. A number of Pinnacle's senior financial advisors provide comprehensive wealth management services to help clients increase, protect and distribute their assets.

Pinnacle opened its first office in October 2000 in Commerce Center in Downtown Nashville. Since then the firm has added Nashville offices in the Rivergate, Green Hills and West End areas and offices in Brentwood, Cool Springs and Franklin areas of Williamson County.

Additional information concerning Pinnacle can be accessed at www.mypinnacle.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 (the "Securities Act"). 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) increased competition with other financial institutions, (iii) lack of sustained growth in the economy in the Nashville, Tennessee area, (iv) rapid fluctuations or unanticipated changes in interest rates, (v) the inability of Pinnacle to satisfy regulatory requirements for its expansion plans, (vi) the inability of Pinnacle to execute its branch expansion plans and (i) 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-KSB. 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.