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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 Earnings
Diluted earnings per share excluding merger related charges exceed I/B/E/S consensus estimate

NASHVILLE, Tenn., Oct. 17, 2006 - Pinnacle Financial Partners, Inc. (Nasdaq/NGS: PNFP) today reported record earnings and superior credit quality for the quarter ended Sept. 30, 2006. Fully diluted earnings per share of $0.32 for the quarter included the impact of merger related expenses of $0.01 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 $0.33 for the quarter ended Sept. 30, 2006, compared to $0.22 fully diluted earnings per share for the quarter ended Sept. 30, 2005, an increase of 50 percent.

Fully diluted earnings per share of $0.84 for the nine months ended Sept. 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 $0.90 for the nine months ended Sept. 30, 2006, compared to $0.62 fully diluted earnings per share for the nine months ended Sept. 30, 2005, an increase of 45 percent.

THIRD QUARTER 2006 HIGHLIGHTS:

• Record earnings:
• Record net income for the third quarter of 2006 of $5.35 million, up 157 percent from the prior year's third quarter net income of $2.08 million.
• Record diluted earnings per share for the third quarter of 2006 of $0.32, up almost 45 percent from the same quarter last year. Diluted earnings per share exclusive of merger related expenses were $0.33, up 50 percent from the prior year's third quarter diluted earnings per share of $0.22. Fully diluted earnings per share exclusive of merger related charges for the quarter ended Sept. 30, 2006, were $0.33 exceeding the I/B/E/S consensus estimate of $0.32 per fully diluted share.
• Revenue (the sum of net interest income and noninterest income) for the quarter ended Sept. 30, 2006, amounted to $21.58 million, compared to $8.75 million for the same quarter of last year, an increase of 147 percent.
• Return on average tangible stockholders' equity (average stockholders' equity less goodwill and core deposit intangibles) before impact of merger related expense was 18.41 percent for the quarter ended Sept. 30, 2006, compared to 13.23 percent for the same quarter last year.
• Superior credit quality:
• Nonperforming assets were only 0.25 percent of total loans at Sept. 30, 2006.
• Past due loans over 30 days, excluding nonperforming loans, were only 0.69 percent of total loans at Sept. 30, 2006.
• Strong balance sheet growth:
• Loans at Sept. 30, 2006, were $1.405 billion, up 133 percent from the same period last year, reflecting strong organic growth and the impact of the Cavalry merger. Net loans increased by $47 million between the second and third quarters of 2006. Excluding the $551 million in loans added in conjunction with the Cavalry merger on March 15, 2006, net loans have increased $207 million during the first nine months of this year, an increase of 57 percent over the $132 million in combined growth for the two companies the first nine months of 2005 prior to the merger.
• Total deposits at Sept. 30, 2006, were $1.59 billion, up 101 percent from the same period last year. Noninterest bearing demand deposit accounts, which represent 19.3 percent of total deposits, were up 98 percent from the same period last year, reflecting strong organic growth and the impact of the Cavalry merger.
• Subordinated indebtedness of $20.6 million issued in connection with Pinnacle's most recent trust preferred securities offering. The issuance of these securities increased Pinnacle's regulatory capital ratios at Sept. 30, 2006.

"The continued growth and strength of Middle Tennessee's economy, coupled with our ability to attract and retain the best financial professionals in the market, have led to another exceptional quarter of performance," said M. Terry Turner, Pinnacle's president and CEO.

EXTRAORDINARY GROWTH MAKES PINNACLE THE LARGEST NASHVILLE BANK

With its acquisition of Cavalry and dramatic organic loan and deposit growth during the first nine months of 2006, Pinnacle now has $2.052 billion in assets, making the company the largest financial services firm headquartered in Nashville and the second largest headquartered in Tennessee.

"We find that being the largest locally owned firm provides clients an attractive alternative in a market dominated by large regional and national franchises with longstanding market share loss trends. We are confident that our advantages will lead to our continued rapid growth," said Turner.

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 Sept. 30, 2006, was 1.07 percent. Return on average tangible assets (average total assets less goodwill and core deposit intangibles) for the quarter ended Sept. 30, 2006, was 1.15 percent. The return on average tangible assets exclusive of merger related items for the quarter ended June 30, 2006, was 1.18 percent, compared to 0.91 percent for the same quarter last year.
• Return on average stockholders' equity for the quarter ended Sept. 30, 2006, was 8.66 percent. Return on average tangible stockholders' equity (average total stockholders' equity less goodwill and core deposit intangibles) for the quarter ended Sept. 30, 2006, was 17.97 percent. Return on average tangible stockholders' equity exclusive of merger related expenses for the quarter ended Sept. 30, 2006, was 18.41 percent, compared to 13.23 percent for the same quarter last year.

Total assets grew to $2.052 billion as of Sept. 30, 2006, up $1.07 billion or 110 percent from the $979 million reported at Sept. 30, 2005. The $1.07 billion year over year increase in total assets was comprised of $277 million in organic asset growth at Pinnacle, $670 million in assets associated with the acquisition of Cavalry Bancorp and $127 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 Dec. 31, 2005, to 16.1 percent at Sept. 30, 2006.

CREDIT QUALITY

• Provision for loan losses was $587,000 for the third quarter of 2006, compared to $366,000 in the third quarter of 2005. During the third quarter of 2006, the firm recorded net charge-offs of $101,000 compared to net recoveries of $206,000 during the same period in 2005.
• Annualized net charge-offs to total loans were 0.05 percent for the nine months ended Sept. 30, 2006.
• Allowance for loan losses represented 1.08 percent of total loans at Sept. 30, 2006, compared to 1.08 percent at June 30, 2006, and 1.21 percent at Dec. 31, 2005.
• Nonperforming assets as a percentage of total loans and other real estate increased to 0.25 percent at Sept. 30, 2006, from 0.01 percent at Sept. 30, 2005.

"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."

REVENUE

• Net interest income for the quarter ended Sept. 30, 2006, was $17.16 million, compared to $7.46 million for the quarter ended Sept. 30, 2005, an increase of 130 percent.
• Net interest margin for the third quarter of 2006 was 3.95 percent, compared to a net interest margin of 4.17 percent reported for the second quarter of 2006 and 3.48 percent for the same period last year.
• Noninterest income for the quarter ended Sept. 30, 2006, was $4.42 million, a 240 percent increase over the $1.30 million recorded during the same quarter in 2005.

"Consistent with our prior guidance of 3.90 percent to 4.10 percent, we anticipated that we would experience compression in our net interest margin in the third quarter," said Harold Carpenter, chief financial officer of Pinnacle Financial Partners. "The slope of the yield curve and our maintaining more liquidity during the third quarter were the primary contributors to our compressed net interest margin. However, even with compression in our net interest margin, we believe we will experience growth in net interest income over the next few quarters based on anticipated loan growth."

"Excluding the loans acquired in connection with the Cavalry acquisition in March, our net organic loan growth for the first nine months of this year has approximated $207 million," Carpenter said. "This amount is consistent with our expectations and represents a 57 percent increase over the combined loan growth of the two companies for the first nine months of 2005, which was also a period of rapid growth for both companies prior to our merger. Our fourth quarter pipeline remains strong and barring any unplanned year-end pay downs, our current projections indicate our net loan growth for the fourth quarter will be consistent with our quarterly run rate of $50 million to $70 million."

Noninterest income during the third quarter of 2006 represented approximately 20.5 percent of total revenues, compared to 14.8 percent for the same quarter in 2005.

NONINTEREST EXPENSE

• Noninterest expense for the quarter ended Sept. 30, 2006, was $13.05 million.
• Merger related expenses incurred during the quarter ended Sept. 30, 2006, were $218,000. These charges consisted of direct and incremental integration costs incurred in connection with the merger. For the nine months ended Sept. 30, 2006, merger related expenses were approximately $1.6 million.
• During the quarter ended Sept. 30, 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 $233,000 on an after-tax basis. For the nine months ended Sept. 30, 2006, the after-tax impact of SFAS No. 123R was approximately $591,000.
• Amortization expense associated with the core deposit intangible recorded in connection with the merger of Cavalry was $535,000 for the three months ended Sept. 30, 2006, and $1.248 million for the nine months ended Sept. 30, 2006.
• The efficiency ratio (noninterest expense divided by net interest income and noninterest income) was 60.5 percent during the third quarter of 2006. The efficiency ratio excluding merger related expenses was 59.5 percent during the third quarter of 2006, compared to 63.1 percent during the third quarter of 2005.

Pinnacle anticipates the opening of its new office in the Donelson area of Davidson County in early 2007. At Sept. 30, 2006, the firm employed 395.5 associates (full-time equivalent). Pinnacle anticipates adding 20 new associates during the fourth quarter of 2006.

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.

Assessing the merger integration, Turner said, "We believe that our integration of Cavalry has been extraordinarily successful based on our four key measures of success:

1. We achieved all major integration milestones on schedule (e.g., system conversions, brand conversions, etc.);
2. We achieved 100 percent of the targeted expense savings;
3. We have seen no degradation in client satisfaction with bank service quality during the entire integration as evidenced by our long-standing client survey methodology; and
4. We have produced greater organic growth in the combined footprint in terms of loan and deposit volumes during the first nine months of 2006 than the two companies were able to produce on a combined basis in the first nine months of 2005."

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 fourth quarter 2006 diluted earnings per share will approximate $0.33 to $0.35. The firm does not anticipate merger-related charges to be significant in the fourth quarter of 2006. Additionally, based on anticipated growth trends and future investments in the franchise, Pinnacle estimates its 2006 earnings will approximate $1.17 to $1.19 per fully diluted share and approximately $1.23 to $1.25 per fully diluted share, exclusive of merger-related expenses. For 2007, Pinnacle continues to estimate 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 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.

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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.