Pinnacle Financial applies for government funds

Pinnacle Financial Partners Inc. said Tuesday it applied to receive up to $95 million as part of the government's $700 billion bank investment program.

The Tennessee bank said it will use the funds to expand its lending operations and also for other potential strategic options.

The government investment, administered by the U.S. Treasury Department, is part of a broader program to invest in banks amid the ongoing credit crisis in an effort to stabilize the financial services sector and spur lending between banks and to consumers and businesses.

Many banks have been hit hard over the past year and a half by a sharp rise in mortgage defaults and a freezing of credit markets. As some financial firms collapsed in recent months, banks shied away from lending to each other and to customers for fear that losses would mount.

The program calls for the U.S. Treasury Department to receive preferred stock and warrants for common shares in return for the investment.

Pinnacle Financial operates banks across Tennessee and has $4.34 billion in assets.

Shares of Pinnacle Financial fell 41 cents to $25.17 in afternoon trading.