UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
11-K
FOR
ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND
SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
x
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For
the
fiscal year ended December 31, 2006
OR
o
TRANSITION REPORT PURSUANT TO SECTION 15 (d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For
the
transition period from ________
to
________
Commission
File Number: 000-31225
|
A.
|
Full
title of the plan and the address of the plan, if different from
that of
the issuer named below:
|
Pinnacle
Financial Partners 401(k) Plan
|
B.
|
Name
of the issuer of the securities held pursuant to the plan and the
address
of its principal executive
office:
|
,
INC. |
|
211
Commerce Street, Suite 300, Nashville, Tennessee
|
37201
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Pinnacle
Financial Partners 401(k) Plan
Financial
Statements and Supplemental Schedule
December
31, 2006 and 2005
Table
of Contents
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Page
Number
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1
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Financial
Statements:
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2
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3
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4
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Supplemental
Schedule:
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9
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10
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11
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Report
of Independent Registered Public Accounting
Firm
To
the
Plan Administrator of
the
Pinnacle Financial Partners 401(k) Plan
We
have
audited the accompanying statements of net assets available for benefits
of the
Pinnacle Financial Partners 401(k) Plan (the “Plan”) as of December 31, 2006 and
2005, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements are the responsibility
of
the Plan’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Plan is not required to
have,
nor were we engaged to perform an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate
in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, on
a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the net assets available for benefits of the Plan as of
December 31, 2006 and 2005, and the changes in net assets available for benefits
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
Our
audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule H, Line
4i -
Schedule of Assets (Held at End of Year) is presented for the purpose of
additional analysis and is not a required part of the 2006 basic financial
statements but is supplementary information required by the Department of
Labor
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. This supplemental schedule is the responsibility
of
the Plan’s management. The supplemental schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements
as of
and for the year ended December 31, 2006, and, in our opinion, is fairly
stated
in all material respects in relation to the basic financial statements taken
as
a whole.
/s/
Rayburn, Bates & Fitzgerald, PC
Brentwood,
Tennessee
June
28,
2007
PINNACLE
FINANCIAL PARTNERS 401(k) PLAN
Statements
of Net Assets Available for Benefits
December
31, 2006 and 2005
|
|
2006
|
2005
|
|||||
|
Assets
|
|||||||
|
Investments
(note 4)
|
$
|
23,864,667
|
$
|
5,337,915
|
|||
|
Contributions
Receivable:
|
|||||||
|
Employer
|
39,232
|
7,149
|
|||||
|
Participants
|
60,128
|
18,869
|
|||||
|
99,360
|
26,018
|
||||||
|
Total
assets
|
$
|
23,964,027
|
$
|
5,363,933
|
|||
|
Net
Assets
|
|||||||
|
Net
assets available for benefits
|
$
|
23,964,027
|
$
|
5,363,933
|
|||
See
accompanying notes to financial statements.
PINNACLE
FINANCIAL PARTNERS 401(k) PLAN
Statements
of Changes in Net Assets Available for Benefits
Years
Ended December 31, 2006 and 2005
|
2006
|
2005
|
||||||
|
Additions
to net assets attributed to:
|
|||||||
|
Investment
income:
|
|||||||
|
Net
appreciation in fair value of investments (note 4)
|
$
|
1,318,477
|
$
|
393,197
|
|||
|
Interest
and dividends
|
87,580
|
35,452
|
|||||
|
1,406,057
|
428,649
|
||||||
|
Contributions:
|
|||||||
|
Participants’
|
1,072,464
|
811,657
|
|||||
|
Employer’s
|
529,059
|
257,840
|
|||||
|
1,601,523
|
1,069,497
|
||||||
|
Transfers
into Plan related to merger (note 12):
|
15,777,342
|
-
|
|||||
|
Total
additions
|
18,784,922
|
1,498,146
|
|||||
|
Deductions
from net assets attributed to:
|
|||||||
|
Benefits
paid to participants
|
184,828
|
116,121
|
|||||
|
Total
deductions
|
184,828
|
116,121
|
|||||
|
Net
increase
|
$
|
18,600,094
|
$
|
1,382,025
|
|||
|
Net
assets available for benefits:
|
|||||||
|
Beginning
of year
|
5,363,933
|
3,981,908
|
|||||
|
End
of year
|
$
|
23,964,027
|
$
|
5,363,933
|
|||
See
accompanying notes to financial statements.
PINNACLE
FINANCIAL PARTNERS 401(k) PLAN
Notes
to Financial Statements
December
31, 2006 and 2005
|
(1)
|
Plan
Description:
|
The
following description of the Pinnacle Financial Partners 401(k) Plan (the
Plan)
provides only general information. Participants should refer to the plan
agreement for a more complete description of the Plan's provisions.
General:
The Plan
is a defined contribution plan covering all employees of Pinnacle Financial
Partners, Inc. (the Sponsor) and subsidiaries who are employed during such
plan
year and are age twenty-one or older. The Plan is subject to the provisions
of
the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions:
Each
year, participants may contribute up to 15% of pretax annual compensation
up to
the maximum amount allowed by the Internal Revenue Service, as defined in
the
Plan. Participants may also contribute amounts representing distributions
from
other qualified defined benefit or defined contribution plans. Participants
direct the investment of their contributions into various investment options
offered by the Plan. The Plan currently offers mutual funds and a unitized
stock
fund, comprised of Pinnacle Financial Partners, Inc.’s common
stock.
The
Sponsor contributes 100% of the first 4% of base compensation that a participant
contributes to the Plan. For 2005, the Sponsor contributed 50% of the first
6%
of base compensation that a participant contributed to the Plan. Additionally,
the Sponsor may elect to make a discretionary contribution to the Plan.
Participants who are not employed on the last working day of a plan year
are
generally not eligible for the Sponsor’s discretionary contribution to the Plan.
As of December 31, 2006 and 2005, no discretionary contribution was made
to the
Plan by the Sponsor. The employer's contributions are invested according
to the
investment options chosen by the participant.
Participant
Accounts:
Each
participant's account is credited with the participant's contribution and
allocations of the Sponsor's contribution and Plan earnings. Allocations
are
based on participant account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
Vesting:
Vesting
in participants' and the Sponsor's contributions plus earnings thereon is
immediate.
Participant
Loans:
A
participant may receive a loan based on the loan program set forth by the
Plan.
Active participants may borrow up to 50% of the vested portion of their
accounts, subject to a $50,000 maximum. Loans are collateralized by participant
accounts. Loans are repaid through payroll deductions over a maximum of five
(5)
years, unless the loan is for a primary residence, for which an extended
term
may be obtained. Current loans bear interest at rates between 4.00% and
8.25%.
PINNACLE
FINANCIAL PARTNERS 401(k) PLAN
Notes
to Financial Statements
December
31, 2006 and 2005
|
(1)
|
Plan
Description:
(Continued)
|
Cash
Equivalents: The
Plan
considers cash and demand and time deposits with maturities of three months
or
less as cash equivalents.
Operating
Expenses:
Operating and administrative expenses incurred by the Plan are absorbed by
the
Sponsor.
Payment
of Benefits:
On
termination of service due to death, disability or retirement, a participant
may
elect to receive either a lump-sum amount equal to the value of the
participant's vested interest in his or her account, annual installments,
or an
annuity. For termination of service due to other reasons, a participant may
receive the value of the vested interest in his or her account as a lump-sum
distribution.
|
(2)
|
Summary
of Significant Accounting Policies:
|
Basis
of Accounting:
The
financial statements of the Plan are prepared using the accrual method of
accounting.
Estimates:
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires the Plan
administrator to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results may differ from those
estimates.
Investment
Valuation and Income Recognition:
The
Plan’s investments are stated at fair value, except for participant loans and
the Federated Capital Preservation Fund. For investments stated at fair value,
if available, quoted market prices are used to value investments. The amounts
for securities that have no quoted market price represent estimated fair
value.
Many factors are considered in arriving at fair value. Shares of mutual funds
are valued at quoted market prices which represent the net asset value of
shares
held by the Plan. Participant loans are stated at cost, which approximates
fair
value. The Federated Capital Preservation Fund is comprised of investment
contracts valued at contract value as estimated by the trustee. As described
in
Financial Accounting Standards Board Staff Position, FSP AAG INV-1 and SOP
94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by
Certain Investment Companies Subject to the AICPA Investment Company Guide
And
Defined-Contribution Health and Welfare and Pension Plans (the FSP), investment
contracts held by a defined-contribution plan are required to be reported
at
fair value. The Plan adopted FSP AAG INV-1 in 2006. The adoption did not
have a
material effect on the Plan’s financial statements as interest rates are
adjusted to market periodically. Accordingly, contract value, which represents
net contributions plus interest at the contract rate, approximates fair value.
The contracts are fully benefit-responsive.
PINNACLE
FINANCIAL PARTNERS 401(k) PLAN
Notes
to Financial Statements
December
31, 2006 and 2005
|
(2)
|
Summary
of Significant Accounting Policies:
(Continued)
|
Purchases
and sales of securities are recorded on a trade-date basis. Dividends are
recorded on the ex-dividend date. Interest income is recorded on the accrual
basis.
Payment
of Benefits:
Benefits
are recorded when paid.
|
(3)
|
Administration
of Plan Assets:
|
The
Plan's assets are held by the Trustee of the Plan. Contributions are held
and
managed by the Trustee, which invests cash received, interest and dividend
income, and makes distributions to participants. Certain administrative
functions are performed by officers or employees of the Sponsor. No such
officer
or employee receives compensation from the Plan.
|
(4)
|
Investments:
|
Investments
are comprised of the following as of December 31, 2006 and 2005:
|
2006
|
2005
|
||||||
|
Cash
equivalents
|
$
|
3,285,157
|
$
|
186,535
|
|||
|
Mutual
funds
|
1,675,143
|
1,154,700
|
|||||
|
Collective
investment fund
|
110,674
|
-
|
|||||
|
Pinnacle
Financial Partners Unitized Stock Fund
|
18,720,937
|
3,912,389
|
|||||
|
Participant
loans
|
72,756
|
84,291
|
|||||
| $ |
23,864,667
|
$
|
5,337,915
|
||||
Participant
loans are secured by a participant’s vested account balance. The outstanding
loan amounts cannot exceed 50% of the participants’ vested account
value.
The
following presents the investments that represent 5% or more of the Plan's
net
assets as of December 31, 2006 and 2005:
|
2006
|
2005
|
||||||
|
Pinnacle
Financial Partners Unitized Stock Fund, 834,622 and 226,093 units,
respectively
|
$
|
18,720,937
|
$
|
3,912,389
|
|||
| MG Trust Contribution Account, 2,903,407 and 0 units, repectively | 2,903,407 | - | |||||
| $ | 21,624,344 | $ | 3,912,389 | ||||
During
2006 and 2005, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value by
$1,318,477 and $393,197, respectively, as follows:
|
2006
|
2005
|
||||||
|
Pinnacle
Financial Partners Unitized Stock Fund
|
$
|
1,226,584
|
$
|
309,009
|
|||
|
Mutual
funds
|
91,893
|
84,188
|
|||||
|
$
|
1,318,477
|
$
|
393,197
|
||||
PINNACLE
FINANCIAL PARTNERS 401(k) PLAN
Notes
to Financial Statements
December
31, 2006 and 2005
|
(5)
|
Related
Party Transactions:
|
At
December 31, 2006 and 2005, the Plan owned respectively, 834,622 and 226,093
units of the Pinnacle Financial Partners Unitized Stock Fund, which invests
in
Pinnacle Financial Partners, Inc. common stock, in addition to investments
in
short-term money market investments. The fair value of the fund at December
31,
2006 and 2005 was $18,720,937 and $3,912,389, respectively.
Also,
certain Plan investments are shares of mutual funds managed by Oppenheimer.
Oppenheimer was the trustee as defined by the Plan and, therefore, the
transactions qualify as party-in-interest transactions.
|
(6)
|
Reconciliation
of Form 5500 to Financial Statements:
|
The
following is a reconciliation of net assets available for benefits at December
31, 2006 and 2005 to Schedule H of Form 5500:
|
2006
|
2005
|
||||||
|
Net
assets available for benefits
|
$
|
23,964,027
|
$
|
5,363,933
|
|||
|
Employer
and participant contributions receivable
|
(99,360
|
)
|
(26,018
|
)
|
|||
|
Net
assets available for benefits on Schedule H of Form 5500
|
$
|
23,864,667
|
$
|
5,337,915
|
|||
The
following is a reconciliation of the increase in net assets available for
benefits for the years ended December 31, 2006 and 2005 to Schedule H of
Form
5500:
|
2006
|
2005
|
||||||
|
Increase
in net assets available for benefits
|
$
|
18,600,094
|
$
|
1,382,025
|
|||
|
Change
in employer and participant contributions receivable
|
(73,342
|
)
|
3,780
|
||||
|
Increase
in net assets available for benefits on Schedule H of Form
5500
|
$
|
18,526,752
|
$
|
1,385,805
|
|||
|
(7)
|
Tax
Status
|
The
“Basic Plan Document” was developed by the Plan’s Trustee and submitted to the
Internal Revenue Service (Service) for qualifications as a “prototype” plan. In
its letter dated April 22, 2005, the Service opined that the form of this
prototype plan is acceptable under Internal Revenue Code Section 401 for
use by
employers for the benefit of their employees. Although a determination letter
has not been requested specifically for this Plan, the Plan’s Trustees believe
that the Plan is currently designed and being operated in compliance with
the
applicable requirements of the Internal Revenue Code.
PINNACLE
FINANCIAL PARTNERS 401(k) PLAN
Notes
to Financial Statements
December
31, 2006 and 2005
|
(8)
|
Plan
Termination:
|
The
Sponsor reserves the right to terminate the Plan at any time, subject to
the
provisions of ERISA. Upon such termination of the Plan, the interest of each
participant in the trust fund will be distributed to such participant or
his or
her beneficiary at the time prescribed by the Plan terms and the Internal
Revenue Code. Upon termination of the Plan, the Trustee shall pay all
liabilities and expenses of the trust.
|
(9)
|
Risks
and Uncertainties:
|
The
Plan
provides for various investment options in several investment securities
and
instruments. Investment securities are exposed to various risks, such as
interest rate, market and credit risks. Due to the level of risk associated
with
certain investment securities and the level of uncertainty related to changes
in
the value of investment securities, it is at least reasonably possible that
changes in risks and values in the near term would materially affect
participants’ account balances and the amounts reported in the statement of net
assets available for benefits and the statement of changes in net assets
available for benefits.
|
(10)
|
Concentration:
|
At
December 31, 2006 and 2005, approximately 76% and 65% respectively, of Plan
assets were invested in Pinnacle Financial Partners, Inc. common stock. A
significant change in the stock price would have a significant effect on
the
financial statements.
|
(11)
|
Net
Assets:
|
Net
assets available for benefits at December 31, 2006 and 2005, include $1,374,681
and $159,727, respectively, of vested benefits allocated to the accounts
of
participants who as of December 31, 2006 and 2005, had terminated employment
with the Sponsor or a Subsidiary Affiliate thereof.
|
(12)
|
Transfers
into Plan Related to Merger:
|
On
March
15, 2006, the Sponsor acquired Cavalry Bancorp, Inc. During the Plan year
ended
December 31, 2006, the Sponsor elected to terminate the Cavalry Banking 401(k)
Savings Plan and transfer the holdings into the Plan. The termination and
transfer occurred on December 29, 2006.
FEIN:
62-1812853
Plan
#:
001
PINNACLE
FINANCIAL PARTNERS 401(k) PLAN
Schedule
H, line 4(i) - Schedule of Assets (Held at End of Year)
December
31, 2006
|
(a)
|
(b)
Identity
of Issue, Borrower, Lessor, or Similar Party
|
(c)
Description
of Investment Including Maturity Date, Rate of Interest, Collateral,
Par,
or Maturity Value
|
(e)
Current
Value
|
|||
|
Investments:
|
||||||
|
*
|
Pinnacle
Financial Partners Unitized Stock Fund:
|
|||||
|
Pinnacle
Financial Partners, Inc.
|
549,039
shares of common stock
|
$
18,117,511
|
||||
|
MGTrust
FBO United Premier Cash Money Market
|
603,426.150
units
|
603,426
|
||||
|
Pinnacle
Participant Directed Fund:
|
||||||
|
MG
Trust Contribution Account
|
2,903,407.080
units
|
2,903,407
|
||||
|
American
Funds Growth Fund of America R3
|
5,339.169
units
|
173,256
|
||||
|
Federated
Capital Preservation Fund
|
11,067.359
units
|
110,674
|
||||
|
Franklin
Income Fund A
|
69,664.579
units
|
185,308
|
||||
|
Jennison
20/20 Focus Fund Class A
|
21,341.133
units
|
342,312
|
||||
|
Munder
Mid-Cap Core Growth A
|
8,041.666
units
|
202,167
|
||||
|
*
|
Oppenheimer
Cash Reserves A
|
381,750.010
units
|
381,750
|
|||
|
*
|
Oppenheimer
Champion Income Fund A
|
43.673
units
|
416
|
|||
|
*
|
Oppenheimer
Global Opportunities Fund A
|
15,299.938
units
|
549,727
|
|||
|
*
|
Oppenheimer
Main Street Small Cap Fund A
|
3,599.244
units
|
79,579
|
|||
|
*
|
Oppenheimer
Strategic Income Fund A
|
12,350.593
units
|
52,984
|
|||
|
*
|
Oppenheimer
Value Fund A
|
3,444.854
units
|
89,394
|
|||
|
23,791,911
|
||||||
|
*
|
Participant
loans
|
Notes,
interest rates 4% - 8.25%, due 3/15/2007 - 1/30/2021
|
72,756
|
|||
|
Total
|
$
23,864,667
|
*
Party-in-interest to the Plan
PINNACLE
FINANCIAL PARTNERS 401(k) PLAN
EXHIBIT
INDEX
|
Exhibit
No.
|
Description
|
|
Consent
of Independent Registered Public Accounting
Firm
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the administrator
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
PINNACLE
FINANCIAL PARTNERS 401(K) PLAN
|
||
|
/s/
Harold R. Carpenter
|
||
|
Harold
R. Carpenter
|
||
|
June
29, 2007
|
Chief
Financial Officer
|
11