, 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)
|
Yes
|
No
|
Yes
|
No
|
Large Accelerated Filer
|
Accelerated Filer
|
|
Non-accelerated Filer
(do not check if you are a smaller reporting company)
|
Smaller reporting company
|
Yes
|
No
|
TABLE OF CONTENTS
|
Page No.
|
4 | |
4 | |
41 | |
61 | |
61 | |
62 | |
62 | |
62 | |
63 | |
63 | |
63 | |
63 | |
64 | |
65 |
June 30, 2016
|
December 31, 2015
|
|||||||
ASSETS
|
||||||||
Cash and noninterest-bearing due from banks
|
$
|
77,817,212
|
$
|
75,078,807
|
||||
Interest-bearing due from banks
|
390,839,578
|
219,202,464
|
||||||
Federal funds sold and other
|
3,124,302
|
26,670,062
|
||||||
Cash and cash equivalents
|
471,781,092
|
320,951,333
|
||||||
Securities available-for-sale, at fair value
|
1,109,221,784
|
935,064,745
|
||||||
Securities held-to-maturity (fair value of $29,092,450 and $31,585,303 at
|
||||||||
June 30, 2016 and December 31, 2015, respectively)
|
28,511,599
|
31,376,840
|
||||||
Consumer mortgage loans held-for-sale
|
53,118,706
|
47,930,253
|
||||||
Commercial mortgage loans held-for-sale
|
9,322,783
|
-
|
||||||
Loans
|
7,091,401,512
|
6,543,235,381
|
||||||
Less allowance for loan losses
|
(61,411,537
|
)
|
(65,432,354
|
)
|
||||
Loans, net
|
7,029,989,975
|
6,477,803,027
|
||||||
Premises and equipment, net
|
78,800,120
|
77,923,607
|
||||||
Equity method investment
|
195,891,508
|
88,880,014
|
||||||
Accrued interest receivable
|
23,432,495
|
21,574,096
|
||||||
Goodwill
|
427,573,930
|
432,232,255
|
||||||
Core deposits and other intangible assets
|
8,820,668
|
10,540,497
|
||||||
Other real estate owned
|
5,005,642
|
5,083,218
|
||||||
Other assets
|
294,197,558
|
265,183,799
|
||||||
Total assets
|
$
|
9,735,667,860
|
$
|
8,714,543,684
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Deposits:
|
||||||||
Noninterest-bearing
|
$
|
2,013,847,185
|
$
|
1,889,865,113
|
||||
Interest-bearing
|
1,316,653,111
|
1,389,548,175
|
||||||
Savings and money market accounts
|
3,237,003,521
|
3,001,950,725
|
||||||
Time
|
725,322,534
|
690,049,795
|
||||||
Total deposits
|
7,292,826,351
|
6,971,413,808
|
||||||
Securities sold under agreements to repurchase
|
73,316,880
|
79,084,298
|
||||||
Federal Home Loan Bank advances
|
783,240,425
|
300,305,226
|
||||||
Subordinated debt and other borrowings
|
229,713,860
|
141,605,504
|
||||||
Accrued interest payable
|
4,067,352
|
2,593,209
|
||||||
Other liabilities
|
90,349,182
|
63,930,339
|
||||||
Total liabilities
|
8,473,514,050
|
7,558,932,384
|
||||||
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;
|
||||||||
42,184,120 and 40,906,064 shares issued and outstanding
|
||||||||
at June 30, 2016 and December 31, 2015, respectively
|
42,184,120
|
40,906,064
|
||||||
Additional paid-in capital
|
889,468,015
|
839,617,050
|
||||||
Retained earnings
|
325,608,051
|
278,573,408
|
||||||
Accumulated other comprehensive income (loss), net of taxes
|
4,893,624
|
(3,485,222
|
)
|
|||||
Total stockholders' equity
|
1,262,153,810
|
1,155,611,300
|
||||||
Total liabilities and stockholders' equity
|
$
|
9,735,667,860
|
$
|
8,714,543,684
|
Three months ended
|
Six months ended
|
|||||||||||||||
June 30, 2016
|
June 30, 2015
|
June 30, 2016
|
June 30, 2015
|
|||||||||||||
Interest income:
|
||||||||||||||||
Loans, including fees
|
$
|
77,043,106
|
$
|
50,325,643
|
$
|
151,447,310
|
$
|
99,792,349
|
||||||||
Securities:
|
||||||||||||||||
Taxable
|
4,571,876
|
3,460,243
|
9,038,710
|
6,904,842
|
||||||||||||
Tax-exempt
|
1,443,017
|
1,400,479
|
2,936,774
|
2,883,786
|
||||||||||||
Federal funds sold and other
|
703,706
|
316,286
|
1,313,293
|
600,264
|
||||||||||||
Total interest income
|
83,761,705
|
55,502,651
|
164,736,087
|
110,181,241
|
||||||||||||
Interest expense:
|
||||||||||||||||
Deposits
|
5,073,567
|
2,592,476
|
9,989,130
|
5,023,218
|
||||||||||||
Securities sold under agreements to repurchase
|
39,532
|
29,371
|
87,582
|
60,288
|
||||||||||||
Federal Home Loan Bank advances and other borrowings
|
3,605,320
|
1,050,119
|
5,713,412
|
1,998,671
|
||||||||||||
Total interest expense
|
8,718,419
|
3,671,966
|
15,790,124
|
7,082,177
|
||||||||||||
Net interest income
|
75,043,286
|
51,830,685
|
148,945,963
|
103,099,064
|
||||||||||||
Provision for loan losses
|
5,280,101
|
1,186,116
|
9,173,671
|
1,501,207
|
||||||||||||
Net interest income after provision for loan losses
|
69,763,185
|
50,644,569
|
139,772,292
|
101,597,857
|
||||||||||||
Noninterest income:
|
||||||||||||||||
Service charges on deposit accounts
|
3,430,391
|
3,075,655
|
6,873,075
|
5,988,204
|
||||||||||||
Investment services
|
2,499,719
|
2,399,054
|
4,845,319
|
4,658,494
|
||||||||||||
Insurance sales commissions
|
1,192,827
|
1,105,783
|
2,898,686
|
2,618,401
|
||||||||||||
Gain on mortgage loans sold, net
|
4,221,301
|
1,652,111
|
7,788,852
|
3,593,365
|
||||||||||||
Investment gains on sales, net
|
-
|
556,014
|
-
|
562,017
|
||||||||||||
Trust fees
|
1,491,955
|
1,230,415
|
3,072,567
|
2,542,400
|
||||||||||||
Income from equity method investment
|
9,644,310
|
4,266,154
|
14,791,834
|
7,467,456
|
||||||||||||
Other noninterest income
|
10,232,433
|
5,733,592
|
18,298,313
|
11,081,743
|
||||||||||||
Total noninterest income
|
32,712,936
|
20,018,778
|
58,568,646
|
38,512,080
|
||||||||||||
Noninterest expense:
|
||||||||||||||||
Salaries and employee benefits
|
34,254,147
|
23,774,558
|
66,771,003
|
47,305,418
|
||||||||||||
Equipment and occupancy
|
8,312,272
|
5,877,971
|
16,442,736
|
11,924,194
|
||||||||||||
Other real estate expense (benefit), net
|
222,473
|
(114,567
|
)
|
334,745
|
280,721
|
|||||||||||
Marketing and other business development
|
1,537,843
|
1,186,165
|
2,801,204
|
2,145,915
|
||||||||||||
Postage and supplies
|
1,049,842
|
731,219
|
2,006,929
|
1,380,470
|
||||||||||||
Amortization of intangibles
|
846,615
|
227,413
|
1,719,830
|
454,827
|
||||||||||||
Merger related expense
|
980,182
|
59,053
|
2,809,654
|
59,053
|
||||||||||||
Other noninterest expense
|
8,727,393
|
5,005,513
|
17,108,362
|
10,027,749
|
||||||||||||
Total noninterest expense
|
55,930,767
|
36,747,325
|
109,994,463
|
73,578,347
|
||||||||||||
Income before income taxes
|
46,545,354
|
33,916,022
|
88,346,475
|
66,531,590
|
||||||||||||
Income tax expense
|
15,758,582
|
11,252,191
|
29,594,439
|
22,025,048
|
||||||||||||
Net income
|
$
|
30,786,772
|
$
|
22,663,831
|
$
|
58,752,036
|
$
|
44,506,542
|
||||||||
Per share information:
|
||||||||||||||||
Basic net income per common share
|
$
|
0.75
|
$
|
0.65
|
$
|
1.44
|
$
|
1.27
|
||||||||
Diluted net income per common share
|
$
|
0.73
|
$
|
0.64
|
$
|
1.42
|
$
|
1.25
|
||||||||
Weighted average shares outstanding:
|
||||||||||||||||
Basic
|
41,274,450
|
35,128,856
|
40,678,669
|
35,085,271
|
||||||||||||
Diluted
|
41,974,483
|
35,554,683
|
41,411,248
|
35,477,098
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Net income
|
$
|
30,786,772
|
$
|
22,663,831
|
$
|
58,752,036
|
$
|
44,506,542
|
||||||||
Other comprehensive income (loss), net of tax:
|
||||||||||||||||
Change in fair value on available-for-sale securities, net of tax
|
3,211,042
|
(4,952,934
|
)
|
9,642,510
|
(3,009,581
|
)
|
||||||||||
Change in fair value of cash flow hedges, net of tax
|
(339,961
|
)
|
(31,598
|
)
|
(1,263,664
|
)
|
(584,425
|
)
|
||||||||
Net gain on sale of investment securities reclassified from other comprehensive income into net income, net of tax
|
-
|
(337,890
|
)
|
-
|
(341,537
|
)
|
||||||||||
Total other comprehensive income (loss), net of tax
|
2,871,081
|
(5,322,422
|
)
|
8,378,846
|
(3,935,543
|
)
|
||||||||||
Total comprehensive income
|
$
|
33,657,853
|
$
|
17,341,409
|
$
|
67,130,882
|
$
|
40,570,999
|
||||||||
Common Stock
|
Additional Paid-in
Capital
|
Retained Earnings
|
Accumulated Other Comp.
Income, net
|
Total Stockholders' Equity
|
||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
Balance at December 31, 2014
|
35,732,483
|
$
|
35,732,483
|
$
|
561,431,449
|
$
|
201,371,081
|
$
|
4,158,368
|
$
|
802,693,381
|
|||||||||||||
Exercise of employee common stock
|
||||||||||||||||||||||||
options and related tax benefits
|
152,544
|
152,544
|
4,144,437
|
-
|
-
|
4,296,981
|
||||||||||||||||||
Common dividends paid
|
-
|
-
|
-
|
(8,633,757
|
)
|
-
|
(8,633,757
|
)
|
||||||||||||||||
Issuance of restricted common shares,
|
||||||||||||||||||||||||
net of forfeitures
|
150,259
|
150,259
|
(150,259
|
)
|
-
|
-
|
-
|
|||||||||||||||||
Restricted shares withheld for taxes and related tax benefit
|
(57,299
|
)
|
(57,299
|
)
|
(841,791
|
)
|
-
|
-
|
(899,090
|
)
|
||||||||||||||
Compensation expense for restricted shares
|
-
|
-
|
3,361,547
|
-
|
-
|
3,361,547
|
||||||||||||||||||
Net income
|
-
|
-
|
-
|
44,506,542
|
-
|
44,506,542
|
||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
(3,935,543
|
)
|
(3,935,543
|
)
|
||||||||||||||||
Balance at June 30, 2015
|
35,977,987
|
$
|
35,977,987
|
$
|
567,945,383
|
$
|
237,243,866
|
$
|
222,825
|
$
|
841,390,061
|
|||||||||||||
Balance at December 31, 2015
|
40,906,064
|
$
|
40,906,064
|
$
|
839,617,050
|
$
|
278,573,408
|
$
|
(3,485,222
|
)
|
$
|
1,155,611,300
|
||||||||||||
Exercise of employee common stock
|
||||||||||||||||||||||||
options and related tax benefits
|
332,094
|
332,094
|
6,798,402
|
-
|
-
|
7,130,496
|
||||||||||||||||||
Common dividends paid
|
-
|
-
|
-
|
(11,717,393
|
)
|
(11,717,393
|
)
|
|||||||||||||||||
Issuance of restricted common shares,
|
||||||||||||||||||||||||
net of forfeitures
|
141,331
|
141,331
|
(141,331
|
)
|
-
|
-
|
-
|
|||||||||||||||||
Common stock issued in conjunction with Bankers Healthcare Group investment, net of issuance costs
|
860,470
|
860,470
|
38,827,126
|
-
|
-
|
39,687,596
|
||||||||||||||||||
Restricted shares withheld for taxes and related tax benefit
|
(55,839
|
)
|
(55,839
|
)
|
(878,179
|
)
|
-
|
-
|
(934,018
|
)
|
||||||||||||||
Compensation expense for restricted shares
|
-
|
-
|
5,244,947
|
-
|
-
|
5,244,947
|
||||||||||||||||||
Net income
|
-
|
-
|
-
|
58,752,036
|
-
|
58,752,036
|
||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
8,378,846
|
8,378,846
|
||||||||||||||||||
Balance at June 30, 2016
|
42,184,120
|
$
|
42,184,120
|
$
|
889,468,015
|
$
|
325,608,051
|
$
|
4,893,624
|
$
|
1,262,153,810
|
Six months ended
June 30,
|
||||||||
2016
|
2015
|
|||||||
Operating activities:
|
||||||||
Net income
|
$
|
58,752,036
|
$
|
44,506,542
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Net amortization/accretion of premium/discount on securities
|
2,940,923
|
2,436,636
|
||||||
Depreciation, amortization, and accretion
|
1,220,878
|
4,318,556
|
||||||
Provision for loan losses
|
9,173,671
|
1,501,207
|
||||||
Gain on mortgage loans sold, net
|
(7,788,852
|
)
|
(3,593,365
|
)
|
||||
Gain on sale of investment securities
|
-
|
(562,017
|
)
|
|||||
Stock-based compensation expense
|
5,244,947
|
3,361,547
|
||||||
Deferred tax expense
|
1,750,526
|
613,022
|
||||||
Losses on dispositions of other real estate and other investments
|
218,568
|
241,254
|
||||||
Income from equity method investment
|
(14,791,834
|
)
|
(7,467,456
|
)
|
||||
Excess tax benefit from stock compensation
|
(2,422,226
|
)
|
(1,398,876
|
)
|
||||
Gain on other loans sold, net
|
(548,560
|
)
|
-
|
|||||
Other loans held for sale:
|
||||||||
Loans originated
|
(30,854,000
|
)
|
-
|
|||||
Loans sold
|
22,079,777
|
-
|
||||||
Mortgage loans held for sale:
|
||||||||
Loans originated
|
(195,638,601
|
)
|
(222,301,417
|
)
|
||||
Loans sold
|
198,239,000
|
208,391,000
|
||||||
Decrease (increase) in other assets
|
(18,585,336
|
)
|
5,668,214
|
|||||
Increase (decrease) in other liabilities
|
30,286,044
|
(6,601,764
|
)
|
|||||
Net cash provided by operating activities
|
59,276,961
|
29,113,083
|
||||||
Investing activities:
|
||||||||
Activities in securities available-for-sale:
|
||||||||
Purchases
|
(265,495,464
|
)
|
(180,352,200
|
)
|
||||
Sales
|
-
|
33,290,733
|
||||||
Maturities, prepayments and calls
|
104,509,440
|
65,886,600
|
||||||
Activities in securities held-to-maturity:
|
||||||||
Purchases
|
(560,000
|
)
|
(1,550,995
|
)
|
||||
Maturities, prepayments and calls
|
3,170,000
|
5,935,000
|
||||||
Increase in loans, net
|
(559,866,109
|
)
|
(247,698,663
|
)
|
||||
Purchases of software, premises and equipment
|
(6,700,278
|
)
|
(6,455,257
|
)
|
||||
Proceeds from sales of software, premises and equipment
|
1,949,036
|
654,069
|
||||||
Proceeds from sale of other real estate
|
2,323,953
|
-
|
||||||
Increase in equity method investment
|
(74,100,000
|
)
|
(75,425,530
|
)
|
||||
Dividends received from equity method investment
|
21,824,256
|
-
|
||||||
Increase in other investments
|
(16,944,435
|
)
|
(720,972
|
)
|
||||
Net cash used in investing activities
|
(789,889,601
|
)
|
(406,437,215
|
)
|
||||
Financing activities:
|
||||||||
Net increase in deposits
|
321,819,132
|
211,006,014
|
||||||
Net decrease in securities sold under agreements to repurchase
|
(5,767,418
|
)
|
(32,446,182
|
)
|
||||
Advances from Federal Home Loan Bank:
|
||||||||
Issuances
|
1,528,000,000
|
1,740,000,000
|
||||||
Payments/maturities
|
(1,045,064,801
|
)
|
(1,490,108,767
|
)
|
||||
Increase in other borrowings
|
87,976,401
|
37,750,000
|
||||||
Exercise of common stock options and stock appreciation rights,
|
||||||||
net of repurchase of restricted shares
|
3,774,252
|
3,397,891
|
||||||
Excess tax benefit from stock compensation
|
2,422,226
|
1,398,876
|
||||||
Common stock dividends paid
|
(11,717,393
|
)
|
(8,633,757
|
)
|
||||
Net cash provided by financing activities
|
881,442,399
|
462,364,075
|
||||||
Net decrease in cash and cash equivalents
|
150,829,759
|
85,039,943
|
||||||
Cash and cash equivalents, beginning of period
|
320,951,333
|
187,907,510
|
||||||
Cash and cash equivalents, end of period
|
$
|
471,781,092
|
$
|
272,947,453
|
For the six months ended
|
||||||||
June 30, 2016
|
June 30, 2015
|
|||||||
Cash Transactions:
|
||||||||
Interest paid
|
$
|
14,722,572
|
$
|
7,099,390
|
||||
Income taxes paid, net
|
22,364,686
|
17,847,500
|
||||||
Noncash Transactions:
|
||||||||
Loans charged-off to the allowance for loan losses
|
16,372,819
|
6,098,606
|
||||||
Loans foreclosed upon and transferred to other real estate owned
|
2,464,945
|
252,896
|
||||||
Loans foreclosed upon and transferred to other assets
|
1,673,946
|
3,478,159
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Basic net income per share calculation:
|
||||||||||||||||
Numerator - Net income
|
$
|
30,786,772
|
$
|
22,663,831
|
$
|
58,752,036
|
$
|
44,506,542
|
||||||||
Denominator - Average common shares outstanding
|
41,274,450
|
35,128,856
|
40,678,669
|
35,085,271
|
||||||||||||
Basic net income per share
|
$
|
0.75
|
$
|
0.65
|
$
|
1.44
|
$
|
1.27
|
||||||||
Diluted net income per share calculation:
|
||||||||||||||||
Numerator – Net income
|
$
|
30,786,772
|
$
|
22,663,831
|
$
|
58,752,036
|
$
|
44,506,542
|
||||||||
Denominator - Average common shares outstanding
|
41,274,450
|
35,128,856
|
40,678,669
|
35,085,271
|
||||||||||||
Dilutive shares (1)
|
700,033
|
425,827
|
732,579
|
391,827
|
||||||||||||
Average diluted common shares outstanding
|
41,974,483
|
35,554,683
|
41,411,248
|
35,477,098
|
||||||||||||
Diluted net income per share
|
$
|
0.73
|
$
|
0.64
|
$
|
1.42
|
$
|
1.25
|
(1)
|
Approximately 518,152 restricted share units are not included in the weighted-average shares outstanding as they are deemed to be contingently issuable. Additionally, for the periods ending June 30, 2016 and 2015, there were no share based awards excluded from the diluted earnings per share computation because they were deemed anti-dilutive.
|
Number of Shares
|
Amount
|
|||||||
Equity consideration:
|
||||||||
Common stock issued
|
3,306,184
|
$
|
175,525
|
|||||
Fair value of stock options assumed
|
30,430
|
|||||||
Total equity consideration
|
$
|
205,955
|
||||||
Non-equity consideration - Cash
|
19,675
|
|||||||
Total consideration paid
|
$
|
225,630
|
||||||
Allocation of total consideration paid:
|
||||||||
Fair value of net assets assumed including estimated identifiable intangible assets
|
$
|
73,186
|
||||||
Goodwill
|
152,444
|
|||||||
$
|
225,630
|
Number of Shares
|
Amount
|
|||||||
Equity consideration:
|
||||||||
Common stock issued
|
1,371,717
|
$
|
63,538
|
|||||
Total equity consideration
|
$
|
63,538
|
||||||
Non-equity consideration:
|
||||||||
Cash paid to redeem common stock
|
$
|
19,453
|
||||||
Cash paid to exchange outstanding stock options
|
847
|
|||||||
Total consideration paid
|
$
|
83,838
|
||||||
Allocation of total consideration paid:
|
||||||||
Fair value of net assets assumed including estimated identifiable intangible assets
|
$
|
50,514
|
||||||
Goodwill
|
33,324
|
|||||||
$
|
83,838
|
As of July 31, 2015
|
|||||||||||||
CapitalMark Historical Cost Basis
|
Fair Value Adjustments
|
As Recorded by Pinnacle Financial
|
|||||||||||
Assets
|
|||||||||||||
Cash and cash equivalents
|
$
|
28,021
|
$
|
-
|
$
|
28,021
|
|||||||
Investment securities(1)
|
150,799
|
(399
|
)
|
150,400
|
|||||||||
Loans(2)
|
880,115
|
(22,600
|
)
|
(6)
|
857,515
|
||||||||
Mortgage loans held for sale
|
1,791
|
-
|
1,791
|
||||||||||
Other real estate owned
|
1,728
|
-
|
1,728
|
||||||||||
Core deposit intangible(3)
|
-
|
6,193
|
6,193
|
||||||||||
Other assets(6)(7)
|
43,526
|
6,046
|
49,572
|
||||||||||
Total Assets
|
$
|
1,105,980
|
$
|
(10,760
|
)
|
$
|
1,095,220
|
||||||
Liabilities
|
|||||||||||||
Interest-bearing deposits(4)
|
$
|
758,492
|
$
|
891
|
$
|
759,383
|
|||||||
Non-interest bearing deposits
|
193,798
|
-
|
193,798
|
||||||||||
Borrowings(5)
|
32,874
|
228
|
33,102
|
||||||||||
Other liabilities
|
35,751
|
-
|
35,751
|
||||||||||
Total Liabilities
|
$
|
1,020,915
|
$
|
1,119
|
$
|
1,022,034
|
|||||||
Net Assets Acquired
|
$
|
85,065
|
$
|
(11,879
|
)
|
$
|
73,186
|
(1)
|
The amount represents the adjustment of the book value of CapitalMark's investment securities to their estimated fair value on the date of acquisition.
|
(2)
|
The amount represents the adjustment of the net book value of CapitalMark's loans to their estimated fair value based on current interest rates and expected cash flows, which includes estimates of expected credit losses inherent in the portfolio.
|
(3)
|
The amount represents the fair value of the core deposit intangible asset representing the intangible value of the deposit base created in the acquisition.
|
(4)
|
The adjustment is necessary because the weighted average interest rate of CapitalMark's deposits exceeded the cost of similar funding at the time of acquisition. The fair value adjustment will be amortized to reduce future interest expense over the life of the portfolio.
|
(5)
|
The adjustment is necessary because the weighted average interest rate of CapitalMark's FHLB advances exceeded the cost of similar funding at the time of acquisition. The fair value adjustment will be amortized to reduce future interest expense over the life of the portfolio.
|
(6)
|
During 2016, an additional adjustment of $400,000 to goodwill was made to reduce the value of an acquired investment to zero after determining the investment was worthless. Further a reduction in the loan fair value adjustment was recorded upon the receipt of the final loan mark valuation in the amount of $206,000.
|
(7)
|
The amount represents the deferred tax asset recognized on the fair value adjustment of CapitalMark's acquired assets and assumed liabilities as well as the fair value adjustment on premises and equipment, and was increased by $6.3 million during the second quarter of 2016 as a result of the completion of the 2015 tax return.
|
As of September 1, 2015
|
||||||||||||||
Magna Historical Cost Basis
|
Preliminary Fair Value Adjustments
|
As Recorded by Pinnacle Financial
|
||||||||||||
Assets
|
||||||||||||||
Cash and cash equivalents
|
$
|
17,832
|
$
|
-
|
$
|
17,832
|
||||||||
Investment securities(1)
|
60,018
|
(280
|
)
|
59,738
|
||||||||||
Loans(2)
|
453,108
|
(10,760
|
)
|
(8)
|
442,348
|
|||||||||
Mortgage loans held for sale
|
18,886
|
-
|
18,886
|
|||||||||||
Other real estate owned(3)
|
1,471
|
139
|
1,610
|
|||||||||||
Core deposit intangible(4)
|
-
|
3,170
|
3,170
|
|||||||||||
Other assets(5)
|
31,057
|
3,976
|
35,033
|
|||||||||||
Total Assets
|
$
|
582,372
|
$
|
(3,755
|
)
|
$
|
578,617
|
|||||||
Liabilities
|
||||||||||||||
Interest-bearing deposits(6)
|
$
|
402,535
|
$
|
1,268
|
$
|
403,803
|
||||||||
Non-interest bearing deposits
|
48,851
|
-
|
48,851
|
|||||||||||
Borrowings(7)
|
46,900
|
506
|
47,406
|
|||||||||||
Other liabilities
|
28,043
|
-
|
28,043
|
|||||||||||
Total Liabilities
|
$
|
526,329
|
$
|
1,774
|
$
|
528,103
|
||||||||
Net Assets Acquired
|
$
|
56,043
|
$
|
(5,529
|
)
|
$
|
50,514
|
(1)
|
The amount represents the adjustment of the book value of Magna's investment securities to their estimated fair value on the date of acquisition.
|
(2)
|
The amount represents the adjustment of the net book value of Magna's loans to their estimated fair value based on current interest rates and expected cash flows, which includes estimates of expected credit losses inherent in the portfolio.
|
(3)
|
The amount represents the adjustment to the book value of Magna's OREO to fair value on the date of acquisition.
|
(4)
|
The amount represents the fair value of the core deposit intangible asset representing the intangible value of the deposit base created in the acquisition.
|
(5)
|
The amount represents the deferred tax asset recognized on the fair value adjustment of Magna's acquired assets and assumed liabilities as well as the fair value adjustment for the mortgage servicing right and property and equipment. The value of the deferred tax asset was decreased by $1.9 million as a result of the completion of the 2015 tax return.
|
(6)
|
The adjustment is necessary because the weighted average interest rate of Magna's deposits exceeded the cost of similar funding at the time of acquisition. The fair value adjustment will be amortized to reduce future interest expense over the life of the portfolio.
|
(7)
|
The adjustment is necessary because the weighted average interest rate of Magna's FHLB advances exceeded the cost of similar funding at the time of acquisition. The fair value adjustment will be amortized to reduce future interest expense over the life of the portfolio.
|
(8)
|
A reduction in the loan fair value adjustment was recorded upon receipt of the final loan mark valuation in the amount of $426,000.
|
Banker's Healthcare Group
|
||||||||
($ in thousands)
|
||||||||
As of
|
||||||||
June 30, 2016
|
December 31, 2015
|
|||||||
Assets
|
$
|
186,535
|
220,578
|
|||||
Liabilities
|
127,852
|
137,147
|
||||||
Membership interests
|
58,683
|
83,431
|
||||||
Total liabilities and membership
|
$
|
186,535
|
220,578
|
For the three months ended June 30,
|
For the six months ended June 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Revenues
|
$
|
39,330
|
$
|
34,649
|
$
|
70,618
|
$
|
61,694
|
||||||||
Net income, pre-tax
|
$
|
21,439
|
$
|
21,592
|
$
|
33,593
|
$
|
35,976
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
June 30, 2016:
|
||||||||||||||||
Securities available-for-sale:
|
||||||||||||||||
U.S. Treasury securities
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
U.S. government agency securities
|
97,458
|
69
|
1,080
|
96,447
|
||||||||||||
Mortgage-backed agency securities
|
758,714
|
14,042
|
806
|
771,950
|
||||||||||||
State and municipal securities
|
159,890
|
9,200
|
13
|
169,077
|
||||||||||||
Asset-backed securities
|
68,404
|
2
|
1,062
|
67,344
|
||||||||||||
Corporate notes and other
|
4,273
|
136
|
6
|
4,403
|
||||||||||||
$
|
1,088,739
|
$
|
23,449
|
$
|
2,967
|
$
|
1,109,221
|
|||||||||
Securities held-to-maturity:
|
||||||||||||||||
State and municipal securities
|
$
|
28,512
|
$
|
581
|
$
|
-
|
$
|
29,093
|
||||||||
$
|
28,512
|
$
|
581
|
$
|
-
|
$
|
29,093
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
December 31, 2015:
|
||||||||||||||||
Securities available-for-sale:
|
||||||||||||||||
U.S. Treasury securities
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
U.S. government agency securities
|
131,499
|
3
|
3,309
|
128,193
|
||||||||||||
Mortgage-backed agency securities
|
581,998
|
5,948
|
5,030
|
582,916
|
||||||||||||
State and municipal securities
|
158,072
|
7,094
|
124
|
165,042
|
||||||||||||
Asset-backed securities
|
49,598
|
8
|
805
|
48,801
|
||||||||||||
Corporate notes and other
|
9,541
|
589
|
17
|
10,113
|
||||||||||||
$
|
930,708
|
$
|
13,642
|
9,285
|
$
|
935,065
|
||||||||||
Securities held-to-maturity:
|
||||||||||||||||
State and municipal securities
|
$
|
31,377
|
$
|
257
|
$
|
48
|
$
|
31,586
|
||||||||
$
|
31,377
|
$
|
257
|
$
|
48
|
$
|
31,586
|
Available-for-sale
|
Held-to-maturity
|
|||||||||||||||
June 30, 2016:
|
Amortized
Cost
|
Fair
Value
|
Amortized Cost
|
Fair
Value
|
||||||||||||
Due in one year or less
|
$
|
3,295
|
$
|
3,311
|
$
|
1,237
|
$
|
1,239
|
||||||||
Due in one year to five years
|
30,553
|
32,539
|
9,522
|
9,624
|
||||||||||||
Due in five years to ten years
|
164,910
|
170,595
|
11,296
|
11,621
|
||||||||||||
Due after ten years
|
62,863
|
63,482
|
6,457
|
6,609
|
||||||||||||
Mortgage-backed securities
|
758,714
|
771,950
|
-
|
-
|
||||||||||||
Asset-backed securities
|
68,404
|
67,344
|
-
|
-
|
||||||||||||
$
|
1,088,739
|
$
|
1,109,221
|
$
|
28,512
|
$
|
29,093
|
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, 2016
|
||||||||||||||||||||||||
U.S. Treasury securities
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||
U.S. government agency securities
|
8,841
|
509
|
12,116
|
571
|
20,957
|
1,080
|
||||||||||||||||||
Mortgage-backed securities
|
67,682
|
279
|
41,087
|
527
|
108,769
|
806
|
||||||||||||||||||
State and municipal securities
|
2,607
|
12
|
412
|
1
|
3,019
|
13
|
||||||||||||||||||
Asset-backed securities
|
38,787
|
409
|
25,554
|
653
|
64,341
|
1,062
|
||||||||||||||||||
Corporate notes
|
997
|
6
|
-
|
-
|
997
|
6
|
||||||||||||||||||
Total temporarily-impaired securities
|
$
|
118,914
|
$
|
1,215
|
$
|
79,169
|
$
|
1,752
|
$
|
198,083
|
$
|
2,967
|
||||||||||||
At December 31, 2015
|
||||||||||||||||||||||||
U.S. Treasury securities
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||
U.S. government agency securities
|
61,903
|
1,702
|
65,538
|
1,607
|
127,441
|
3,309
|
||||||||||||||||||
Mortgage-backed securities
|
338,230
|
2,789
|
103,003
|
2,241
|
441,233
|
5,030
|
||||||||||||||||||
State and municipal securities
|
6,509
|
38
|
6,135
|
134
|
12,644
|
172
|
||||||||||||||||||
Asset-backed securities
|
41,466
|
798
|
3,539
|
7
|
45,005
|
805
|
||||||||||||||||||
Corporate notes
|
2,554
|
17
|
-
|
-
|
2,554
|
17
|
||||||||||||||||||
Total temporarily-impaired securities
|
$
|
450,662
|
$
|
5,344
|
$
|
178,215
|
$
|
3,989
|
$
|
628,877
|
$
|
9,333
|
·
|
Commercial real-estate mortgage loans. Commercial real-estate mortgage loans are categorized as such based on investor exposures where repayment is largely dependent upon the operation, refinance, or sale of the underlying real estate. Commercial real-estate mortgage also includes owner occupied commercial real estate which shares a similar risk profile to Pinnacle Financial's commercial and industrial products.
|
·
|
Consumer real-estate mortgage loans. Consumer real-estate mortgage consists primarily of loans secured by 1-4 residential properties including home equity lines of credit.
|
·
|
Construction and land development loans. Construction and land development loans include loans where the repayment is dependent on the successful operation of the related real estate project. Construction and land development loans include 1-4 family construction projects and commercial construction endeavors such as warehouses, apartments, office and retail space and land acquisition and development.
|
·
|
Commercial and industrial loans. Commercial and industrial loans include loans to business enterprises issued for commercial, industrial and/or other professional purposes.
|
·
|
Consumer and other loans. Consumer and other loans include all loans issued to individuals not included in the consumer real-estate mortgage classification. Examples of consumer and other loans are automobile loans, credit cards and loans to finance education, among others.
|
|
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.
|
Commercial real estate - mortgage
|
Consumer real estate - mortgage
|
Construction and land development
|
Commercial and
industrial
|
Consumer
and other
|
Total
|
||||||||||||||
June 30, 2016
|
|||||||||||||||||||
Accruing loans
|
|||||||||||||||||||
Pass
|
$
|
2,423,496
|
$
|
1,046,149
|
$
|
798,597
|
$
|
2,402,831
|
$
|
244,199
|
$
|
6,915,272
|
|||||||
Special Mention
|
13,781
|
1,869
|
3,896
|
14,835
|
-
|
34,381
|
|||||||||||||
Substandard (1)
|
24,538
|
10,134
|
7,073
|
56,291
|
67
|
98,103
|
|||||||||||||
Total
|
2,461,815
|
1,058,152
|
809,566
|
2,473,957
|
244,266
|
7,047,756
|
|||||||||||||
Impaired loans
|
|||||||||||||||||||
Nonaccrual loans(2)
|
|||||||||||||||||||
Substandard-nonaccrual
|
5,184
|
7,016
|
7,112
|
11,827
|
2,556
|
33,695
|
|||||||||||||
Doubtful-nonaccrual
|
-
|
-
|
-
|
90
|
-
|
90
|
|||||||||||||
Total nonaccrual loans
|
5,184
|
7,016
|
7,112
|
11,917
|
2,556
|
33,785
|
|||||||||||||
Troubled debt restructurings(3)
|
|||||||||||||||||||
Pass
|
220
|
1,377
|
3
|
335
|
44
|
1,979
|
|||||||||||||
Special Mention
|
-
|
245
|
-
|
-
|
-
|
245
|
|||||||||||||
Substandard
|
-
|
1,830
|
-
|
5,807
|
-
|
7,637
|
|||||||||||||
Total troubled debt restructurings
|
220
|
3,452
|
3
|
6,142
|
44
|
9,861
|
|||||||||||||
Total impaired loans
|
5,404
|
10,468
|
7,115
|
18,059
|
2,600
|
43,646
|
|||||||||||||
Total loans
|
$
|
2,467,219
|
$
|
1,068,620
|
$
|
816,681
|
$
|
2,492,016
|
$
|
246,866
|
$
|
7,091,402
|
|
|
|
|
|
|
||||||||||||||
December 31, 2015
|
|||||||||||||||||||
Accruing loans
|
|||||||||||||||||||
Pass
|
$
|
2,217,639
|
$
|
1,020,239
|
$
|
732,662
|
$
|
2,143,006
|
$
|
239,874
|
$
|
6,353,420
|
|||||||
Special Mention
|
18,162
|
1,894
|
1,133
|
26,037
|
118
|
47,344
|
|||||||||||||
Substandard (1)
|
33,638
|
11,346
|
6,295
|
53,671
|
74
|
105,024
|
|||||||||||||
Total
|
2,269,439
|
1,033,479
|
740,090
|
2,222,714
|
240,066
|
6,505,788
|
|||||||||||||
Impaired loans
|
|||||||||||||||||||
Nonaccrual loans(2)
|
|||||||||||||||||||
Substandard-nonaccrual
|
5,819
|
9,344
|
7,607
|
1,591
|
4,902
|
29,263
|
|||||||||||||
Doubtful-nonaccrual
|
2
|
2
|
-
|
92
|
-
|
96
|
|||||||||||||
Total nonaccrual loans
|
5,821
|
9,346
|
7,607
|
1,683
|
4,902
|
29,359
|
|||||||||||||
Troubled debt restructurings(3)
|
|||||||||||||||||||
Pass
|
223
|
409
|
-
|
553
|
28
|
1,213
|
|||||||||||||
Special Mention
|
-
|
422
|
-
|
-
|
-
|
422
|
|||||||||||||
Substandard
|
-
|
2,861
|
-
|
3,592
|
-
|
6,453
|
|||||||||||||
Total troubled debt restructurings
|
223
|
3,692
|
-
|
4,145
|
28
|
8,088
|
|||||||||||||
Total impaired loans
|
6,044
|
13,038
|
7,607
|
5,828
|
4,930
|
37,447
|
|||||||||||||
Total loans
|
$
|
2,275,483
|
$
|
1,046,517
|
$
|
747,697
|
$
|
2,228,542
|
$
|
244,996
|
$
|
6,543,235
|
(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 nonaccrual loans and troubled debt restructurings. Potential problem loans, which are not included in nonaccrual loans, amounted to approximately $98.1 million at June 30, 2016, compared to $105.0 million at December 31, 2015.
|
(2)
|
Included in nonaccrual loans at June 30, 2016 and December 31, 2015 are $9.8 million and $12.1 million, respectively, in purchase credit impaired loans acquired with deteriorated credit quality.
|
(3)
|
Troubled debt restructurings are presented as an impaired loan; however, they continue to accrue interest at contractual rates.
|
At June 30, 2016
|
At December 31, 2015
|
|||||||||||||||||||||||
Recorded investment
|
Unpaid principal balances(1)
|
Related allowance(2)
|
Recorded investment |
Unpaid principal balances (1)
|
Related allowance(2)
|
|||||||||||||||||||
Collateral dependent nonaccrual loans:
|
||||||||||||||||||||||||
Commercial real estate – mortgage
|
$
|
3,848
|
$
|
4,571
|
$
|
-
|
$
|
4,411
|
$ | 5,659 | $ | - | ||||||||||||
Consumer real estate – mortgage
|
4,059
|
4,585
|
-
|
5,596 | 6,242 | - | ||||||||||||||||||
Construction and land development
|
7,055
|
7,797
|
-
|
7,531 | 7,883 | - | ||||||||||||||||||
Commercial and industrial
|
11,408
|
13,319
|
-
|
1,420 | 3,151 | - | ||||||||||||||||||
Consumer and other
|
382
|
406
|
-
|
- | - | - | ||||||||||||||||||
Total
|
$
|
26,752
|
$
|
30,678
|
$
|
-
|
$
|
18,958
|
$ | 22,935 | $ | - | ||||||||||||
Cash flow dependent nonaccrual loans:
|
||||||||||||||||||||||||
Commercial real estate – mortgage
|
$
|
1,336
|
$
|
1,344
|
$
|
172
|
$
|
1,410
|
$ | 1,661 | $ | 20 | ||||||||||||
Consumer real estate – mortgage
|
2,957
|
2,914
|
249
|
3,750 | 4,098 | 616 | ||||||||||||||||||
Construction and land development
|
56
|
63
|
224
|
76 | 125 | 12 | ||||||||||||||||||
Commercial and industrial
|
510
|
515
|
701
|
263 | 281 | 19 | ||||||||||||||||||
Consumer and other
|
2,174
|
2,429
|
134
|
4,902 | 5,341 | 3,002 | ||||||||||||||||||
Total
|
$
|
7,033
|
$
|
7,265
|
$
|
1,480
|
$
|
10,401
|
$ | 11,506 | $ | 3,669 | ||||||||||||
Total nonaccrual loans
|
$
|
33,785
|
$
|
37,943
|
$
|
1,480
|
$
|
29,359
|
$ | 34,441 | $ | 3,669 |
|
For the three months ended
June 30,
|
For the six months ended
June 30,
|
|||||||||||||||||||||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||||||||||||||||||||||
Average recorded investment
|
Interest income recognized
|
Average recorded investment
|
Interest income recognized
|
Average recorded investment
|
Interest income recognized
|
Average recorded investment
|
Interest income recognized
|
||||||||||||||||||||||||
Collateral dependent nonaccrual loans:
|
|||||||||||||||||||||||||||||||
Commercial real estate – mortgage
|
$
|
3,845 |
$
|
- |
$
|
3,205 |
$
|
53 |
$
|
3,474 |
$
|
- |
$
|
3,148 |
$
|
53 | |||||||||||||||
Consumer real estate – mortgage
|
4,125 | - | 611 | - | 4,140 | - | 617 | - | |||||||||||||||||||||||
Construction and land development
|
7,125 | 41 | 3,219 | 46 | 7,293 | 88 | 3,277 | 130 | |||||||||||||||||||||||
Commercial and industrial
|
12,107 | - | 918 | - | 11,928 | - | 932 | - | |||||||||||||||||||||||
Consumer and other
|
383 | - | - | - | 385 | - | - | - | |||||||||||||||||||||||
Total
|
$
|
27,585 |
$
|
41 |
$
|
7,953 |
$
|
99 |
$
|
27,220 |
$
|
88 |
$
|
7,974 |
$
|
183 | |||||||||||||||
Cash flow dependent nonaccrual loans:
|
|||||||||||||||||||||||||||||||
Commercial real estate – mortgage
|
$
|
1,352 |
$
|
- |
$
|
1,804 |
$
|
- |
$
|
725 |
$
|
- |
$
|
1,824 |
$
|
- | |||||||||||||||
Consumer real estate – mortgage
|
3,163 | - | 3,982 | - | 3,181 | - | 4,037 | - | |||||||||||||||||||||||
Construction and land development
|
130 | - | 296 | - | 134 | - | 299 | - | |||||||||||||||||||||||
Commercial and industrial
|
1,838 | - | 193 | - | 2,396 | - | 204 | - | |||||||||||||||||||||||
Consumer and other
|
2,936 | - | 3,020 | - | 2,973 | - | 3,003 | - | |||||||||||||||||||||||
Total
|
$
|
9,419 |
$
|
- |
$
|
9,295 |
$
|
- |
$
|
9,409 |
$
|
- |
$
|
9,367 |
$
|
- | |||||||||||||||
Total nonaccrual loans
|
$
|
37,004 |
$
|
41 |
$
|
17,248 |
$
|
99 |
$
|
36,629 |
$
|
88 |
$
|
17,341 |
$
|
183 |
(1)
|
Unpaid principal balance presented net of fair value adjustments recorded in conjunction with purchase accounting.
|
(2)
|
Collateral dependent loans are typically charged-off to their net realizable value and no specific allowance is carried related to those loans.
|
Gross Contractual Receivable
|
Accretable Yield
|
Nonaccretable Yield
|
Carrying Value
|
|||||||||||||
December 31, 2015
|
$
|
16,274
|
$
|
-
|
$
|
(4,143
|
)
|
$
|
12,131
|
|||||||
Year-to-date settlements
|
(3,063
|
)
|
-
|
668
|
(2,395
|
)
|
||||||||||
Additional fundings
|
122
|
-
|
-
|
122
|
||||||||||||
June 30, 2016
|
$
|
13,333
|
$
|
-
|
$
|
(3,475
|
)
|
$
|
9,858
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||||||||||
2016
|
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
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Commercial and industrial
|
-
|
-
|
-
|
1
|
2,321
|
1,536
|
||||||||||||||||||
Consumer and other
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
-
|
$
|
-
|
$
|
-
|
1
|
$
|
2,321
|
$
|
1,536
|
|||||||||||||||
2015
|
||||||||||||||||||||||||
Commercial real estate – mortgage
|
-
|
$
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||
Consumer real estate – mortgage
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Construction and land development
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Commercial and industrial
|
-
|
-
|
-
|
1
|
434
|
337
|
||||||||||||||||||
Consumer and other
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
-
|
$
|
-
|
$
|
-
|
1
|
$
|
434
|
$
|
337
|
June 30, 2016
|
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
|
$
|
629
|
$
|
-
|
$
|
629
|
$
|
4,663
|
$
|
1,114,819
|
$
|
1,120,111
|
||||||||||||
All other
|
386
|
-
|
386
|
521
|
1,346,201
|
1,347,108
|
||||||||||||||||||
Consumer real estate – mortgage
|
5,476
|
1,046
|
6,522
|
7,016
|
1,055,082
|
1,068,620
|
||||||||||||||||||
Construction and land development
|
8,199
|
-
|
8,199
|
7,112
|
801,370
|
816,681
|
||||||||||||||||||
Commercial and industrial
|
1,166
|
-
|
1,166
|
11,917
|
2,478,933
|
2,492,016
|
||||||||||||||||||
Consumer and other
|
6,252
|
577
|
6,829
|
2,556
|
237,481
|
246,866
|
||||||||||||||||||
$
|
22,108
|
$
|
1,623
|
$
|
23,731
|
$
|
33,785
|
$
|
7,033,886
|
$
|
7,091,402
|
December 31, 2015
|
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
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
5,103
|
$
|
1,078,394
|
$
|
1,083,497
|
||||||||||||
All other
|
-
|
-
|
-
|
718
|
1,191,268
|
1,191,986
|
||||||||||||||||||
Consumer real estate – mortgage
|
6,380
|
1,396
|
7,776
|
9,346
|
1,029,395
|
1,046,517
|
||||||||||||||||||
Construction and land development
|
309
|
-
|
309
|
7,607
|
739,781
|
747,697
|
||||||||||||||||||
Commercial and industrial
|
4,798
|
-
|
4,798
|
1,683
|
2,222,061
|
2,228,542
|
||||||||||||||||||
Consumer and other
|
6,721
|
373
|
7,094
|
4,902
|
233,000
|
244,996
|
||||||||||||||||||
$
|
18,208
|
$
|
1,769
|
$
|
19,977
|
$
|
29,359
|
$
|
6,493,899
|
$
|
6,543,235
|
(1)
|
Approximately $23.7 million and $19.0 million of nonaccrual loans as of June 30, 2016 and December 31, 2015, respectively, were performing pursuant to their contractual terms at those dates.
|
Impaired Loans
|
||||||||||||||||||||||||||||||||
Accruing Loans
|
Nonaccrual Loans
|
Troubled Debt Restructurings(1)
|
Total Allowance
for Loan Losses
|
|||||||||||||||||||||||||||||
June 30, 2016
|
December 31, 2015
|
June 30, 2016
|
December 31, 2015
|
June 30, 2016
|
December 31, 2015
|
June 30, 2016
|
December 31, 2015
|
|||||||||||||||||||||||||
Commercial real estate –mortgage
|
$
|
13,613
|
$
|
15,452
|
$
|
4
|
$
|
20
|
$
|
48
|
$
|
41
|
$
|
13,665
|
$
|
15,513
|
||||||||||||||||
Consumer real estate – mortgage
|
6,012
|
6,109
|
131
|
616
|
397
|
495
|
6,540
|
7,220
|
||||||||||||||||||||||||
Construction and land development
|
3,920
|
2,891
|
2
|
12
|
1
|
-
|
3,923
|
2,903
|
||||||||||||||||||||||||
Commercial and industrial
|
23,268
|
22,669
|
138
|
19
|
1,684
|
955
|
25,090
|
23,643
|
||||||||||||||||||||||||
Consumer and other
|
9,923
|
12,609
|
1,205
|
3,002
|
10
|
5
|
11,138
|
15,616
|
||||||||||||||||||||||||
Unallocated
|
-
|
-
|
-
|
-
|
-
|
-
|
1,056
|
537
|
||||||||||||||||||||||||
$
|
56,736
|
$
|
59,730
|
$
|
1,480
|
$
|
3,669
|
$
|
2,140
|
$
|
1,496
|
$
|
61,412
|
$
|
65,432
|
(1)
|
Troubled debt restructurings of $9.9 million and $8.1 million as of both June 30, 2016 and December 31, 2015, respectively, are classified as impaired loans pursuant to U.S. GAAP; however, these loans continue to accrue interest at contractual rates.
|
Commercial real estate –
mortgage
|
Consumer real estate – mortgage
|
Construction and land development
|
Commercial and
industrial
|
Consumer and
other
|
Unallocated
|
Total
|
||||||||||||||||
Allowance for Loan Losses:
|
||||||||||||||||||||||
Balance at December 31, 2014
|
$
|
22,202
|
$
|
5,424
|
$
|
5,724
|
$
|
29,167
|
$
|
1,570
|
$
|
3,272
|
$
|
67,359
|
||||||||
Charged-off loans
|
(384
|
)
|
(365
|
)
|
(190
|
)
|
(2,207
|
)
|
(18,002
|
)
|
-
|
(21,148
|
)
|
|||||||||
Recovery of previously charged-off loans
|
85
|
874
|
1,479
|
1,730
|
5,865
|
-
|
10,033
|
|||||||||||||||
Provision for loan losses
|
(6,390
|
)
|
1,287
|
(4,110
|
)
|
(5,047
|
)
|
26,183
|
(2,735
|
)
|
9,188
|
|||||||||||
Balance at December 31, 2015
|
$
|
15,513
|
$
|
7,220
|
$
|
2,903
|
$
|
23,643
|
$
|
15,616
|
$
|
537
|
$
|
65,432
|
||||||||
Collectively evaluated for impairment
|
$
|
15,452
|
$
|
6,109
|
$
|
2,891
|
$
|
22,669
|
$
|
12,609
|
$
|
59,730
|
||||||||||
Individually evaluated for impairment
|
61
|
1,111
|
12
|
974
|
3,007
|
5,165
|
||||||||||||||||
Loans acquired with deteriorated credit quality
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||
Balance at December 31, 2015
|
$
|
15,513
|
$
|
7,220
|
$
|
2,903
|
$
|
23,643
|
$
|
15,616
|
$
|
65,432
|
||||||||||
Loans:
|
||||||||||||||||||||||
Collectively evaluated for impairment
|
$
|
2,269,439
|
$
|
1,033,479
|
$
|
740,090
|
$
|
2,222,714
|
$
|
240,066
|
$
|
6,505,788
|
||||||||||
Individually evaluated for impairment
|
2,420
|
8,986
|
3,689
|
5,288
|
4,930
|
25,313
|
||||||||||||||||
Loans acquired with deteriorated credit quality
|
3,624
|
4,052
|
3,918
|
540
|
-
|
12,134
|
||||||||||||||||
Balance at December 31, 2015
|
$
|
2,275,483
|
$
|
1,046,517
|
$
|
747,697
|
$
|
2,228,542
|
$
|
244,996
|
$
|
6,543,235
|
|
|
|
|
|
|
|
||||||||||||||||
Allowance for Loan Losses:
|
||||||||||||||||||||||
Balance at December 31, 2015
|
$
|
15,513
|
$
|
7,220
|
$
|
2,903
|
$
|
23,643
|
$
|
15,616
|
$
|
537
|
$
|
65,432
|
||||||||
Charged-off loans
|
(196
|
)
|
(379
|
)
|
-
|
(2,243
|
)
|
(13,555
|
)
|
-
|
(16,373
|
)
|
||||||||||
Recovery of previously charged-off loans
|
193
|
156
|
106
|
1,615
|
1,109
|
-
|
3,179
|
|||||||||||||||
Provision for loan losses
|
(1,845
|
)
|
(457
|
) |
914
|
2,075
|
|
7,968
|
519
|
9,174
|
||||||||||||
Balance at June 30, 2016
|
$
|
13,665
|
$
|
6,540
|
$
|
3,923
|
$
|
25,090
|
$
|
11,138
|
$
|
1,056
|
$
|
61,412
|
||||||||
Collectively evaluated for impairment
|
$
|
13,613
|
$
|
6,012
|
$
|
3,920
|
$
|
23,268
|
$
|
9,923
|
$
|
56,736
|
||||||||||
Individually evaluated for impairment
|
52
|
528
|
3
|
1,822
|
1,215
|
3,620
|
||||||||||||||||
Loans acquired with deteriorated credit quality
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||
Balance at June 30, 2016
|
$
|
13,665
|
$
|
6,540
|
$
|
3,923
|
$
|
25,090
|
$
|
11,138
|
$
|
61,412
|
||||||||||
Loans:
|
||||||||||||||||||||||
Collectively evaluated for impairment
|
$
|
2,461,815
|
$
|
1,058,152
|
$
|
809,566
|
$
|
2,473,957
|
$
|
244,266
|
$
|
7,047,756
|
||||||||||
Individually evaluated for impairment
|
1,922
|
8,068
|
4,129
|
17,483
|
2,219
|
33,821
|
||||||||||||||||
Loans acquired with deteriorated credit quality
|
3,482
|
2,400
|
2,986
|
576
|
381
|
9,825
|
||||||||||||||||
Balance at June 30, 2016
|
$
|
2,467,219
|
$
|
1,068,620
|
$
|
816,681
|
$
|
2,492,016
|
$
|
246,866
|
$
|
7,091,402
|
at June 30, 2016
|
||||||||||||||||
Outstanding Principal Balances
|
Unfunded Commitments
|
Total exposure
|
Total Exposure at
December 31, 2015
|
|||||||||||||
Lessors of nonresidential buildings
|
$
|
945,924
|
$
|
274,357
|
$
|
1,220,281
|
$
|
1,078,211
|
||||||||
Lessors of residential buildings
|
432,711
|
189,627
|
622,338
|
500,266
|
|
Three months ended
June 30,
|
Six months ended
June 30,
|
||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Beginning of period
|
$
|
196
|
$
|
391
|
$
|
196
|
$
|
391
|
||||||||
Increases due to tax positions taken during the current year
|
-
|
-
|
-
|
-
|
||||||||||||
Increases due to tax positions taken during a prior year
|
-
|
-
|
-
|
-
|
||||||||||||
Decreases due to the lapse of the statute of limitations during the current year
|
-
|
-
|
-
|
-
|
||||||||||||
Decreases due to settlements with the taxing authorities during the current year
|
-
|
-
|
-
|
-
|
||||||||||||
Balance at June 30,
|
$
|
196
|
$
|
391
|
$
|
196
|
$
|
391
|
Number
|
Weighted-Average
Exercise
Price
|
Weighted- Average
Contractual Remaining Term
(in years)
|
Aggregate Intrinsic
Value
(000's)
|
|||||||||||||
Outstanding at December 31, 2015
|
1,251,601
|
$
|
21.23
|
2.54
|
$
|
37,714
|
(1)
|
|||||||||
Granted
|
-
|
|||||||||||||||
Exercised
|
(331,865
|
)
|
||||||||||||||
Stock appreciation rights exercised
|
(510
|
)
|
||||||||||||||
Forfeited
|
-
|
|||||||||||||||
Outstanding at June 30, 2016
|
919,226
|
$
|
21.60
|
2.59
|
$
|
25,049
|
(2)
|
|||||||||
Options exercisable at June 30, 2016
|
919,226
|
$
|
21.60
|
2.59
|
$
|
25,049
|
(2)
|
(1)
|
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted closing price of Pinnacle Financial common stock of $51.36 per common share at December 31, 2015 for the 1,251,601 options and stock appreciation rights that were in-the-money at December 31, 2015.
|
(2)
|
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted closing price of Pinnacle Financial common stock of $48.85 per common share at June 30, 2016 for the 919,226 options and stock appreciation rights that were in-the-money at June 30, 2016.
|
(3)
|
510 SARS were converted into 229 common shares upon exercise.
|
Grant
Year
|
Group(1)
|
Vesting
Period in years
|
Shares
awarded
|
Restrictions Lapsed and shares released to participants
|
Shares Forfeited by participants(5)
|
Shares Unvested
|
Time Based Awards
|
||||||
2016
|
Associates(2)
|
5
|
96,294
|
166
|
2,413
|
93,715
|
Performance Based Awards
|
||||||
2016
|
Leadership team(3)
|
-(3)
|
43,694
|
-
|
-
|
43,694
|
Outside Director Awards(4)
|
||||||
2016
|
Outside directors
|
1
|
16,604
|
-
|
1,186
|
15,418
|
(1)
|
Groups include employees (referred to as associates above), the leadership team which includes our named executive officers and other key senior leadership members, and outside directors. When the restricted shares are awarded, a participant receives voting rights and forfeitable dividend rights with respect to the shares, but is not able to transfer the shares until the restrictions have lapsed. Once the restrictions lapse, the participant is taxed on the value of the award and may elect to sell some shares to pay the applicable income taxes associated with the award. For time-based restricted share awards, dividends paid on shares for which the forfeiture restrictions do not lapse will be recouped by Pinnacle Financial at the time of termination. For performance-based awards, dividends are placed into escrow until the forfeiture restrictions on such shares lapse.
|
(2)
|
The forfeiture restrictions on these restricted share awards lapse in equal annual installments on the anniversary date of the grant.
|
(3)
|
Reflects conversion of restricted share units issued in prior years to restricted share awards. The forfeiture restrictions on these restricted share awards lapse in separate equal installments should Pinnacle Financial achieve certain soundness targets over each year of the subsequent vesting period. Half of the awards include a four year vesting period while the remainder include a three year vesting period.
|
(4)
|
Restricted share awards are issued to the outside members of the board of directors in accordance with their board compensation plan. Restrictions lapse on February 28, 2017 based on each individual board member meeting their attendance goals for the various board and board committee meetings to which each member was scheduled to attend.
|
(5)
|
These shares represent forfeitures resulting from recipients whose employment terminated during the year-to-date period ended June 30, 2016. Any dividends paid on shares for which the forfeiture restrictions do not lapse will be recouped by Pinnacle Financial at the time of termination.
|
Number
|
Grant Date
Weighted-Average
Cost
|
|||||||
Unvested at December 31, 2015
|
866,314
|
$
|
31.39
|
|||||
Shares awarded
|
112,898
|
|||||||
Conversion of restricted share units to restricted share awards
|
43,694
|
|||||||
Restrictions lapsed and shares released to associates/directors
|
(203,588
|
)
|
||||||
Shares forfeited(1)
|
(15,261
|
)
|
||||||
Unvested at June 30, 2016
|
804,057
|
$
|
36.02
|
(1)
|
Represents shares forfeited due to employee termination and/or retirement. No shares were forfeited due to failure to meet performance targets.
|
Units Awarded
|
|||||||||||||||||||||
Grant year
|
Named Executive Officers (NEOs)(1)
|
Leadership Team other than NEOs
|
Applicable Performance Periods associated with each tranche (fiscal year)
|
Service period per tranch
(in years)
|
Holding period per tranche
(in years)
|
Shares settled into RSAs as of period end(2)
|
|||||||||||||||
2016
|
73,474-110,223
|
26,683
|
2016
|
2
|
3
|
N/A
|
|||||||||||||||
2017
|
2
|
2
|
N/A
|
||||||||||||||||||
2018
|
2
|
1
|
N/A
|
||||||||||||||||||
2015
|
58,200-101,850
|
28,378
|
2015
|
2
|
3
|
N/A
|
|||||||||||||||
2016
|
2
|
2
|
N/A
|
||||||||||||||||||
2017
|
2
|
1
|
N/A
|
||||||||||||||||||
2014(3)
|
58,404-102,209
|
29,087
|
2014
|
5
|
N/A
|
21,856
|
|||||||||||||||
2014
|
4
|
N/A
|
21,856
|
||||||||||||||||||
2015
|
4
|
N/A
|
21,847
|
||||||||||||||||||
2015
|
3
|
N/A
|
21,847
|
||||||||||||||||||
2016
|
3
|
N/A
|
|||||||||||||||||||
2016
|
2
|
N/A
|
(1)
|
The named executive officers are awarded a range of awards that may be earned based on attainment of goals at a target level of performance to the maximum level of performance.
|
(2)
|
Restricted stock unit awards granted in 2016 and 2015 will be earned and settled in shares of Pinnacle Financial common stock.
|
(3)
|
Restrictions on half of the shares previously converted to RSAs will lapse commensurate with the filing of the Form 10-K for the year ended December 31, 2017 and 2018, respectively.
|
Actual
|
Minimum Capital
Requirement
|
Minimum
To Be Well-Capitalized
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
At June 30, 2016
|
||||||||||||||||||||||||
Total capital to risk weighted assets:
|
||||||||||||||||||||||||
Pinnacle Financial
|
$
|
951,868
|
11.1
|
%
|
$
|
688,798
|
8.0
|
%
|
$
|
860,997
|
10.0
|
%
|
||||||||||||
Pinnacle Bank
|
$
|
910,455
|
10.6
|
%
|
$
|
686,692
|
8.0
|
%
|
$
|
858,364
|
10.0
|
%
|
||||||||||||
Tier I capital to risk weighted assets:
|
||||||||||||||||||||||||
Pinnacle Financial
|
$
|
761,868
|
8.8
|
%
|
$
|
516,598
|
6.0
|
%
|
$
|
688,798
|
8.0
|
%
|
||||||||||||
Pinnacle Bank
|
$
|
720,456
|
8.4
|
%
|
$
|
515,019
|
6.0
|
%
|
$
|
686,692
|
8.0
|
%
|
||||||||||||
Common equity Tier I capital to risk weighted assets
|
||||||||||||||||||||||||
Pinnacle Financial
|
$
|
681,746
|
7.9
|
%
|
$
|
387,449
|
4.5
|
%
|
$
|
559,648
|
6.5
|
%
|
||||||||||||
Pinnacle Bank
|
$
|
720,333
|
8.4
|
%
|
$
|
386,264
|
4.5
|
%
|
$
|
557,937
|
6.5
|
%
|
||||||||||||
Tier I capital to average assets (*):
|
||||||||||||||||||||||||
Pinnacle Financial
|
$
|
761,868
|
8.7
|
%
|
$
|
348,653
|
4.0
|
%
|
N/A
|
N/A
|
||||||||||||||
Pinnacle Bank
|
$
|
720,456
|
8.3
|
%
|
$
|
347,549
|
4.0
|
%
|
$
|
434,436
|
5.0
|
%
|
June 30, 2016
|
December 31, 2015
|
|||||||||||||||
Notional
Amount
|
Estimated
Fair Value
|
Notional
Amount
|
Estimated Fair Value
|
|||||||||||||
Interest rate swap agreements:
|
||||||||||||||||
Pay fixed / receive variable swaps
|
$
|
577,923
|
$
|
37,589
|
$
|
396,112
|
$
|
16,130
|
||||||||
Pay variable / receive fixed swaps
|
577,923
|
(37,880
|
)
|
396,112
|
(16,329
|
)
|
||||||||||
Total
|
$
|
1,155,846
|
$
|
(291
|
)
|
$
|
792,224
|
$
|
(199
|
)
|
June 30, 2016
|
December 31, 2015
|
||||||||||||||||||||||||
Forecasted
Notional
Amount
|
Receive Rate
|
Pay
Rate
|
Term(1)
|
Asset/
(Liabilities)
|
Unrealized Loss in Accumulated Other Comprehensive Income
|
Asset/ (Liabilities)
|
Unrealized Loss in Accumulated Other Comprehensive Income
|
||||||||||||||||||
Interest Rate Swap
|
$
|
33,000
|
3 month LIBOR
|
2.265
|
%
|
April 2016- April 2020
|
(1,785
|
)
|
(1,085
|
)
|
(784
|
)
|
(476
|
)
|
|||||||||||
Interest Rate Swap
|
33,000
|
3 month LIBOR
|
2.646
|
%
|
April 2016- April 2022
|
(3,051
|
)
|
(1,854
|
)
|
(1,478
|
)
|
(898
|
)
|
||||||||||||
Interest Rate Swap
|
33,000
|
3 month LIBOR
|
2.523
|
%
|
Oct. 2016- Oct. 2020
|
(2,048
|
)
|
(1,245
|
)
|
(908
|
)
|
(552
|
)
|
||||||||||||
Interest Rate Swap
|
33,000
|
3 month LIBOR
|
2.992
|
%
|
Oct. 2017- Oct. 2021
|
(2,466
|
)
|
(1,499
|
)
|
(1,112
|
)
|
(676
|
)
|
||||||||||||
Interest Rate Swap
|
34,000
|
3 month LIBOR
|
3.118
|
%
|
April 2018- July 2022
|
(2,626
|
)
|
(1,596
|
)
|
(1,170
|
)
|
(711
|
)
|
||||||||||||
Interest Rate Swap
|
34,000
|
3 month LIBOR
|
3.158
|
%
|
July 2018- Oct. 2022
|
(2,611
|
)
|
(1,587
|
)
|
(1,158
|
)
|
(704
|
)
|
||||||||||||
$
|
200,000
|
(14,587
|
)
|
(8,866
|
)
|
(6,610
|
)
|
(4,017
|
)
|
June 30, 2016
|
December 31, 2015
|
|||||||||||||||||||||||
Forecasted
Notional
Amount
|
Receive
Rate
|
Pay
Rate
|
Term(2)
|
Asset/
(Liabilities)
|
Unrealized Gain in Accumulated Other Comprehensive Income
|
Asset/ (Liabilities)
|
Unrealized Gain (Loss) in Accumulated Other Comprehensive Income
|
|||||||||||||||||
Interest Rate Swap
|
$
|
27,500
|
2.090
|
%
|
1 month LIBOR
|
July 2014 - July 2021
|
1,553
|
944
|
663
|
403
|
||||||||||||||
Interest Rate Swap
|
25,000
|
2.270
|
%
|
1 month LIBOR
|
July 2014 - July 2022
|
2,178
|
1,324
|
968
|
588
|
|||||||||||||||
Interest Rate Swap
|
27,500
|
2.420
|
%
|
1 month LIBOR
|
July 2014 - July 2023
|
2,859
|
1,737
|
1,320
|
802
|
|||||||||||||||
Interest Rate Swap
|
30,000
|
2.500
|
%
|
1 month LIBOR
|
July 2014 - July 2024
|
2,964
|
1,801
|
1,333
|
810
|
|||||||||||||||
Interest Rate Swap
|
-
|
1.048
|
%
|
1 month LIBOR
|
August 2015 - August 2018
|
-
|
-
|
(46
|
)
|
(28
|
)
|
|||||||||||||
Interest Rate Swap
|
-
|
1.281
|
%
|
1 month LIBOR
|
August 2015 - August 2019
|
-
|
-
|
(34
|
)
|
(21
|
)
|
|||||||||||||
Interest Rate Swap
|
15,000
|
1.470
|
%
|
1 month LIBOR
|
August 2015 - August 2020
|
448
|
272
|
(14
|
)
|
(9
|
)
|
|||||||||||||
$
|
125,000
|
10,002
|
6,078
|
4,190
|
2,545
|
|
Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
|
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
|
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
June 30, 2016
|
Total carrying value in the consolidated balance sheet
|
Quoted market prices in an active market
(Level 1)
|
Models with significant observable market parameters
(Level 2)
|
Models with significant unobservable market parameters
(Level 3)
|
||||||||||||
Investment securities available-for-sale:
|
||||||||||||||||
U.S. treasury securities
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
U.S. government agency securities
|
96,447
|
-
|
96,447
|
-
|
||||||||||||
Mortgage-backed securities
|
771,950
|
-
|
771,950
|
-
|
||||||||||||
State and municipal securities
|
169,077
|
-
|
169,077
|
-
|
||||||||||||
Agency-backed securities
|
67,344
|
-
|
67,344
|
-
|
||||||||||||
Corporate notes and other
|
4,403
|
-
|
4,403
|
-
|
||||||||||||
Total investment securities available-for-sale
|
$
|
1,109,221
|
$
|
-
|
$
|
1,109,221
|
$
|
-
|
||||||||
Other investments
|
10,381
|
-
|
-
|
10,381
|
||||||||||||
Other assets
|
36,893
|
-
|
36,893
|
-
|
||||||||||||
Total assets at fair value
|
$
|
1,156,495
|
$
|
-
|
$
|
1,146,114
|
$
|
10,381
|
||||||||
Other liabilities
|
$
|
38,983
|
$
|
-
|
$
|
38,983
|
$
|
-
|
||||||||
Total liabilities at fair value
|
$
|
38,983
|
$
|
-
|
$
|
38,983
|
$
|
-
|
||||||||
December 31, 2015
|
||||||||||||||||
Investment securities available-for-sale:
|
||||||||||||||||
U.S. treasury securities
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
U.S. government agency securities
|
128,193
|
-
|
128,193
|
-
|
||||||||||||
Mortgage-backed securities
|
582,916
|
-
|
582,916
|
-
|
||||||||||||
State and municipal securities
|
165,042
|
-
|
165,042
|
-
|
||||||||||||
Agency-backed securities
|
48,801
|
-
|
48,801
|
-
|
||||||||||||
Corporate notes and other
|
10,113
|
-
|
10,113
|
-
|
||||||||||||
Total investment securities available-for-sale
|
935,065
|
-
|
935,065
|
-
|
||||||||||||
Other investments
|
9,764
|
-
|
-
|
9,764
|
||||||||||||
Other assets
|
15,147
|
-
|
15,147
|
-
|
||||||||||||
Total assets at fair value
|
$
|
959,976
|
$
|
-
|
$
|
950,212
|
$
|
9,764
|
||||||||
Other liabilities
|
$
|
16,568
|
$
|
-
|
$
|
16,568
|
$
|
-
|
||||||||
Total liabilities at fair value
|
$
|
16,568
|
$
|
-
|
$
|
16,568
|
$
|
-
|
June 30, 2016
|
Total carrying value in the consolidated balance sheet
|
Quoted market prices in an active market
(Level 1)
|
Models with significant observable market parameters
(Level 2)
|
Models with significant unobservable market
parameters
(Level 3)
|
Total
losses for the year-to-date period then ended
|
|||||||||||||||
Other real estate owned
|
$
|
5,006
|
$
|
-
|
$
|
-
|
$
|
5,006
|
$ | (219 | ) | |||||||||
Collateral dependent nonaccrual loans, net
|
26,752
|
-
|
-
|
26,752
|
(2,804 | ) | ||||||||||||||
Total
|
$
|
31,758
|
$
|
-
|
$
|
-
|
$
|
31,758
|
$
|
(3,023
|
) | |||||||||
December 31, 2015
|
||||||||||||||||||||
Other real estate owned
|
$
|
5,083
|
$
|
-
|
$
|
-
|
$
|
5,083
|
$
|
(41
|
)
|
|||||||||
Collateral dependent nonaccrual loans, net
|
18,958
|
-
|
-
|
18,958
|
(2,637
|
)
|
||||||||||||||
Total
|
$
|
24,041
|
$
|
-
|
$
|
-
|
$
|
24,041
|
$
|
(2,678
|
)
|
For the six months ended June 30,
|
||||||||||||||||
2016
|
2015
|
|||||||||||||||
Other assets
|
Other liabilities
|
Other assets
|
Other liabilities
|
|||||||||||||
Fair value, January 1
|
$
|
9,764
|
$
|
-
|
$
|
8,004
|
$
|
-
|
||||||||
Total realized gains included in income
|
336
|
-
|
173
|
-
|
||||||||||||
Change in unrealized gains/losses included in other comprehensive income for assets and liabilities still held at period end
|
-
|
-
|
-
|
-
|
||||||||||||
Purchases
|
571
|
-
|
548
|
-
|
||||||||||||
Issuances
|
-
|
-
|
-
|
-
|
||||||||||||
Settlements
|
(290
|
)
|
-
|
(563
|
)
|
-
|
||||||||||
Transfers out of Level 3
|
-
|
-
|
-
|
-
|
||||||||||||
Fair value, June 30
|
10,381
|
-
|
8,162
|
-
|
||||||||||||
Total realized gains included in income related to financial assets and liabilities still on the consolidated balance sheet at June 30
|
$
|
336
|
$
|
-
|
$
|
173
|
$
|
-
|
(in thousands)
June 30, 2016
|
Carrying/
Notional
Amount
|
Estimated
Fair Value(1)
|
Quoted market prices in an active market
(Level 1)
|
Models with significant observable market parameters
(Level 2)
|
Models with significant unobservable market
parameters
(Level 3)
|
|||||||||||||||
Financial assets:
|
||||||||||||||||||||
Securities held-to-maturity
|
$
|
28,512
|
$
|
29,093
|
$
|
-
|
$
|
29,093
|
$
|
-
|
||||||||||
Loans, net
|
7,029,990
|
6,972,722
|
-
|
-
|
6,972,722
|
|||||||||||||||
Mortgage loans held-for-sale
|
53,119
|
54,335
|
-
|
54,335
|
-
|
|||||||||||||||
Loans held-for-sale
|
9,323
|
9,531
|
-
|
9,531
|
-
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits and securities sold under
|
||||||||||||||||||||
agreements to repurchase
|
7,366,143
|
7,054,670
|
-
|
-
|
7,054,670
|
|||||||||||||||
Federal Home Loan Bank advances
|
783,240
|
783,733
|
-
|
-
|
783,733
|
|||||||||||||||
Subordinated debt and other borrowings
|
229,714
|
211,594
|
-
|
-
|
211,594
|
|||||||||||||||
Off-balance sheet instruments:
|
||||||||||||||||||||
Commitments to extend credit (2)
|
2,548,355
|
700
|
-
|
-
|
700
|
|||||||||||||||
Standby letters of credit (3)
|
101,845
|
486
|
-
|
-
|
486
|
|||||||||||||||
December 31, 2015
|
||||||||||||||||||||
Financial assets:
|
||||||||||||||||||||
Securities held-to-maturity
|
$
|
31,377
|
$
|
31,586
|
$
|
-
|
$
|
31,586
|
$
|
-
|
||||||||||
Loans, net
|
6,477,803
|
6,379,153
|
-
|
-
|
6,379,153
|
|||||||||||||||
Mortgage loans held for sale
|
47,930
|
48,365
|
-
|
48,365
|
-
|
|||||||||||||||
Financial liabilities:
|
||||||||||||||||||||
Deposits and securities sold under
|
||||||||||||||||||||
agreements to repurchase
|
7,050,498
|
6,562,509
|
-
|
-
|
6,562,509
|
|||||||||||||||
Federal Home Loan Bank advances
|
300,305
|
299,214
|
-
|
-
|
299,214
|
|||||||||||||||
Subordinated debt and other borrowings
|
141,606
|
131,494
|
-
|
-
|
131,494
|
|||||||||||||||
Off-balance sheet instruments:
|
||||||||||||||||||||
Commitments to extend credit (2)
|
2,218,784
|
1,017
|
-
|
-
|
1,017
|
|||||||||||||||
Standby letters of credit (3)
|
93,534
|
354
|
-
|
-
|
354
|
|||||||||||||||
(1)
|
Estimated fair values are consistent with an exit-price concept. The assumptions used to estimate the fair values are intended to approximate those that a market-participant would realize in a hypothetical orderly transaction.
|
(2)
|
At the end of each quarter, Pinnacle Financial evaluates the inherent risks of the outstanding off-balance sheet commitments. In making this evaluation, Pinnacle Financial evaluates the credit worthiness of the borrower, the collateral supporting the commitments and any other factors similar to those used to evaluate the inherent risks of our loan portfolio. Additionally, Pinnacle Financial evaluates the probability that the outstanding commitment will eventually become a funded loan. As a result, at June 30, 2016 and December 31, 2015, Pinnacle Financial included in other liabilities $700,000 and $1.0 million, respectively, representing the inherent risks associated with these off-balance sheet commitments.
|
(3)
|
At June 30, 2016 and December 31, 2015, the fair value of Pinnacle Financial's standby letters of credit was $486,000 and $354,000, respectively. This amount represents the unamortized fee associated with these standby letters of credit and is included in the consolidated balance sheet of Pinnacle Financial and is believed to approximate fair value. This fair value will decrease over time as the existing standby letters of credit approach their expiration dates.
|
Three months ended
|
2016 - 2015
|
Six months ended
|
2016-2015
|
|||||||||||||||||||||
June 30,
|
Percent
|
June 30,
|
Percent
|
|||||||||||||||||||||
2016
|
2015
|
Increase
|
2016
|
2015
|
Increase
|
|||||||||||||||||||
Interest income
|
$
|
83,762
|
$
|
55,503
|
50.9
|
%
|
$
|
164,736
|
$
|
110,181
|
49.5
|
%
|
||||||||||||
Interest expense
|
8,718
|
3,672
|
137.4
|
%
|
15,790
|
7,082
|
123.0
|
%
|
||||||||||||||||
Net interest income
|
75,044
|
51,831
|
44.8
|
%
|
148,946
|
103,099
|
44.5
|
%
|
||||||||||||||||
Provision for loan losses
|
5,280
|
1,186
|
345.2
|
%
|
9,174
|
1,501
|
511.1
|
%
|
||||||||||||||||
Net interest income after provision for loan losses
|
69,764
|
50,645
|
37.8
|
%
|
139,772
|
101,598
|
37.6
|
%
|
||||||||||||||||
Noninterest income
|
32,713
|
20,019
|
63.4
|
%
|
58,569
|
38,512
|
52.1
|
%
|
||||||||||||||||
Noninterest expense
|
55,931
|
36,747
|
52.2
|
%
|
109,994
|
73,578
|
49.5
|
%
|
||||||||||||||||
Net income before income taxes
|
46,546
|
33,916
|
37.2
|
%
|
88,346
|
66,532
|
32.8
|
%
|
||||||||||||||||
Income tax expense
|
15,759
|
11,252
|
40.0
|
%
|
29,594
|
22,025
|
34.4
|
%
|
||||||||||||||||
Net income
|
$
|
30,787
|
$
|
22,664
|
35.8
|
%
|
$
|
58,752
|
$
|
44,507
|
32.0
|
%
|
||||||||||||
-
|
-
|
-
|
||||||||||||||||||||||
Basic net income per common share
|
$
|
$0.75
|
$
|
$0.65
|
15.4
|
%
|
$
|
$1.44
|
$
|
$1.27
|
13.4
|
%
|
||||||||||||
Diluted net income per common share
|
$
|
$0.73
|
$
|
$0.64
|
14.1
|
%
|
$
|
$1.42
|
$
|
$1.25
|
13.6
|
%
|
Three Months Ended
June 30, 2016
|
Three Months Ended
June 30, 2015
|
|||||||||||||||||||||||
|
Average Balances
|
Interest
|
Rates/ Yields
|
Average
Balances
|
Interest
|
Rates/ Yields
|
||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loans (1,2)
|
$
|
6,997,592
|
$
|
77,043
|
4.53
|
%
|
$
|
4,736,818
|
$
|
50,326
|
4.27
|
%
|
||||||||||||
Securities:
|
||||||||||||||||||||||||
Taxable
|
880,976
|
4,572
|
2.09
|
%
|
681,829
|
3,460
|
2.04
|
%
|
||||||||||||||||
Tax-exempt (2)
|
183,084
|
1,443
|
4.25
|
%
|
154,596
|
1,400
|
4.86
|
%
|
||||||||||||||||
Federal funds sold and other
|
301,005
|
704
|
0.94
|
%
|
191,271
|
316
|
0.66
|
%
|
||||||||||||||||
Total interest-earning assets
|
8,362,657
|
$
|
83,762
|
4.06
|
%
|
5,764,514
|
$
|
55,502
|
3.91
|
%
|
||||||||||||||
Nonearning assets
|
||||||||||||||||||||||||
Intangible assets
|
440,504
|
245,964
|
||||||||||||||||||||||
Other nonearning assets
|
502,780
|
309,234
|
||||||||||||||||||||||
Total assets
|
$
|
9,305,941
|
$
|
6,319,712
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Interest-bearing deposits:
|
||||||||||||||||||||||||
Interest checking
|
$
|
1,352,898
|
$
|
904
|
0.27
|
%
|
$
|
1,074,853
|
$
|
532
|
0.20
|
%
|
||||||||||||
Savings and money market
|
3,085,734
|
3,019
|
0.39
|
%
|
1,951,863
|
1,488
|
0.31
|
%
|
||||||||||||||||
Time
|
651,194
|
1,151
|
0.71
|
%
|
420,514
|
572
|
0.55
|
%
|
||||||||||||||||
Total interest-bearing deposits
|
5,089,826
|
5,074
|
0.40
|
%
|
3,447,230
|
2,592
|
0.30
|
%
|
||||||||||||||||
Securities sold under agreements to repurchase
|
65,121
|
40
|
0.24
|
%
|
61,355
|
29
|
0.19
|
%
|
||||||||||||||||
Federal Home Loan Bank advances
|
653,750
|
1,256
|
0.77
|
%
|
388,963
|
224
|
0.23
|
%
|
||||||||||||||||
Subordinated debt and other borrowings
|
225,240
|
2,348
|
4.19
|
%
|
135,884
|
826
|
2.44
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
6,033,937
|
8,718
|
0.58
|
%
|
4,033,432
|
3,671
|
0.37
|
%
|
||||||||||||||||
Noninterest-bearing deposits
|
2,003,523
|
-
|
-
|
1,437,276
|
-
|
-
|
||||||||||||||||||
Total deposits and interest-bearing liabilities
|
8,037,460
|
$
|
8,718
|
0.44
|
%
|
5,470,708
|
$
|
3,671
|
0.27
|
%
|
||||||||||||||
Other liabilities
|
20,719
|
12,213
|
||||||||||||||||||||||
Stockholders' equity
|
1,247,762
|
836,791
|
||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$
|
9,305,941
|
$
|
6,319,712
|
||||||||||||||||||||
Net interest income
|
$
|
75,044
|
$
|
51,831
|
||||||||||||||||||||
Net interest spread (3)
|
3.48
|
%
|
3.54
|
%
|
||||||||||||||||||||
Net interest margin (4)
|
3.72
|
%
|
3.65
|
%
|
1.
|
Average balances of nonaccrual loans are included in the above amounts.
|
2.
|
Yields based on the carrying value of those tax exempt instruments are shown on a fully tax equivalent basis.
|
3.
|
Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the three months ended June 30, 2016 would have been 3.62% compared to a net interest spread of 3.64% for the three months ended June 30, 2015.
|
4.
|
Net interest margin is the result of annualized net interest income calculated on a tax-equivalent basis divided by average interest-earning assets for the period.
|
Six Months Ended
June 30, 2016
|
Six Months Ended
June 30, 2015
|
|||||||||||||||||||||||
Average Balances
|
Interest
|
Rates/ Yields
|
Average
Balances
|
Interest
|
Rates/ Yields
|
|||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Loans (1,2)
|
$
|
6,869,823
|
$
|
151,447
|
4.51
|
%
|
$
|
4,681,194
|
$
|
99,792
|
4.31
|
%
|
||||||||||||
Securities:
|
||||||||||||||||||||||||
Taxable
|
845,945
|
9,039
|
2.15
|
%
|
654,011
|
6,905
|
2.13
|
%
|
||||||||||||||||
Tax-exempt (2)
|
182,923
|
2,937
|
4.33
|
%
|
158,609
|
2,884
|
4.90
|
%
|
||||||||||||||||
Federal funds sold and other
|
291,782
|
1,313
|
0.91
|
%
|
179,703
|
601
|
0.67
|
%
|
||||||||||||||||
Total interest-earning assets
|
8,190,473
|
$
|
164,736
|
4.08
|
%
|
5,673,517
|
$
|
110,182
|
3.96
|
%
|
||||||||||||||
Nonearning assets
|
||||||||||||||||||||||||
Intangible assets
|
440,485
|
246,138
|
||||||||||||||||||||||
Other nonearning assets
|
447,996
|
292,065
|
||||||||||||||||||||||
Total assets
|
$
|
9,078,954
|
$
|
6,211,720
|
||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Interest-bearing deposits:
|
||||||||||||||||||||||||
Interest checking
|
$
|
1,378,931
|
$
|
1,835
|
0.27
|
%
|
$
|
1,052,405
|
$
|
1,005
|
0.19
|
%
|
||||||||||||
Savings and money market
|
3,041,660
|
5,972
|
0.39
|
%
|
1,973,818
|
2,898
|
0.30
|
%
|
||||||||||||||||
Time
|
662,788
|
2,182
|
0.66
|
%
|
422,057
|
1,121
|
0.54
|
%
|
||||||||||||||||
Total interest-bearing deposits
|
5,083,379
|
9,989
|
0.40
|
%
|
3,448,280
|
5,024
|
0.29
|
%
|
||||||||||||||||
Securities sold under agreements to repurchase
|
67,125
|
88
|
0.26
|
%
|
63,916
|
60
|
0.19
|
%
|
||||||||||||||||
Federal Home Loan Bank advances
|
518,440
|
1,792
|
0.70
|
%
|
339,763
|
444
|
0.26
|
%
|
||||||||||||||||
Subordinated debt and other borrowings
|
193,904
|
3,921
|
4.07
|
%
|
128,499
|
1,555
|
2.44
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
5,862,848
|
15,790
|
0.54
|
%
|
3,980,458
|
7,083
|
0.36
|
%
|
||||||||||||||||
Noninterest-bearing deposits
|
1,981,803
|
-
|
-
|
1,390,201
|
-
|
-
|
||||||||||||||||||
Total deposits and interest-bearing liabilities
|
7,844,651
|
$
|
15,790
|
0.40
|
%
|
5,370,659
|
$
|
7,083
|
0.27
|
%
|
||||||||||||||
Other liabilities
|
16,346
|
14,754
|
||||||||||||||||||||||
Stockholders' equity
|
1,217,957
|
826,307
|
||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$
|
9,078,954
|
$
|
6,211,720
|
||||||||||||||||||||
Net interest income
|
$
|
148,946
|
$
|
103,099
|
||||||||||||||||||||
Net interest spread (3)
|
3.53
|
%
|
3.60
|
%
|
||||||||||||||||||||
Net interest margin (4)
|
3.75
|
%
|
3.71
|
%
|
1.
|
Average balances of nonaccrual loans are included in the above amounts.
|
2.
|
Yields based on the carrying value of those tax exempt instruments are shown on a fully tax equivalent basis.
|
3.
|
Yields realized on interest-bearing assets less the rates paid on interest-bearing liabilities. The net interest spread calculation excludes the impact of demand deposits. Had the impact of demand deposits been included, the net interest spread for the six months ended June 30, 2016 would have been 3.67% compared to a net interest spread of 3.70% for the six months ended June 30, 2015.
|
4.
|
Net interest margin is the result of annualized net interest income calculated on a tax-equivalent basis divided by average interest-earning assets for the period.
|
Three months ended
|
2016-2015
|
Six months ended
|
2016-2015
|
|||||||||||||||||||||
June 30,
|
Percent
|
June 30,
|
Percent
|
|||||||||||||||||||||
2016
|
2015
|
Increase
(Decrease)
|
2016
|
2015
|
Increase
(Decrease)
|
|||||||||||||||||||
Noninterest income:
|
||||||||||||||||||||||||
Service charges on deposit accounts
|
$
|
3,430
|
$
|
3,076
|
11.5
|
%
|
$
|
6,873
|
$
|
5,988
|
14.8
|
%
|
||||||||||||
Investment services
|
2,500
|
2,399
|
4.2
|
%
|
4,845
|
4,658
|
4.0
|
%
|
||||||||||||||||
Insurance sales commissions
|
1,193
|
1,106
|
7.9
|
%
|
2,899
|
2,618
|
10.7
|
%
|
||||||||||||||||
Gains on mortgage loans sold, net
|
4,221
|
1,652
|
155.5
|
%
|
7,789
|
3,593
|
116.8
|
%
|
||||||||||||||||
Gain on sale of investment securities, net
|
-
|
556
|
(100.0
|
%)
|
-
|
562
|
(100.0
|
%)
|
||||||||||||||||
Trust fees
|
1,492
|
1,230
|
21.3
|
%
|
3,073
|
2,542
|
20.9
|
%
|
||||||||||||||||
Income from equity method investment
|
9,644
|
4,266
|
126.1
|
%
|
14,792
|
7,467
|
98.1
|
%
|
||||||||||||||||
Other noninterest income:
|
|
|
|
|
||||||||||||||||||||
Interchange and other consumer fees
|
5,768
|
3,893
|
48.2
|
%
|
11,587
|
7,692
|
50.6
|
%
|
||||||||||||||||
Bank-owned life insurance
|
878
|
573
|
53.2
|
%
|
1,641
|
1,173
|
39.9
|
%
|
||||||||||||||||
Loan swap fees
|
1,780
|
611
|
191.3
|
%
|
2,511
|
1,093
|
129.7
|
%
|
||||||||||||||||
Other noninterest income
|
1,807
|
657
|
174.9
|
%
|
2,559
|
1,126
|
127.3
|
%
|
||||||||||||||||
Total other noninterest income
|
10,233
|
5,734
|
78.5
|
%
|
18,298
|
11,084
|
65.1
|
%
|
||||||||||||||||
Total noninterest income
|
$
|
32,713
|
$
|
20,019
|
63.4
|
%
|
$
|
58,569
|
38,512
|
52.1
|
%
|
Three months ended
June 30,
|
2016-2015
Percent
|
Six months ended
June 30,
|
2016-2015
Percent
|
|||||||||||||||||||||
2016
|
2015
|
Increase
|
2016
|
2015
|
Increase
|
|||||||||||||||||||
Noninterest expense:
|
||||||||||||||||||||||||
Salaries and employee benefits:
|
||||||||||||||||||||||||
Salaries
|
$
|
19,393
|
$
|
13,468
|
44.0
|
%
|
$
|
38,598
|
$
|
26,292
|
46.8
|
%
|
||||||||||||
Commissions
|
1,487
|
1,383
|
7.5
|
%
|
2,919
|
2,771
|
5.3
|
%
|
||||||||||||||||
Cash and equity incentives
|
7,916
|
5,308
|
49.1
|
%
|
13,764
|
10,787
|
27.6
|
%
|
||||||||||||||||
Employee benefits and other
|
5,458
|
3,616
|
50.9
|
%
|
11,490
|
7,455
|
54.1
|
%
|
||||||||||||||||
Total salaries and employee benefits
|
34,254
|
23,775
|
44.1
|
%
|
66,771
|
47,305
|
41.1
|
%
|
||||||||||||||||
Equipment and occupancy
|
8,312
|
5,878
|
41.4
|
%
|
16,442
|
11,924
|
37.9
|
%
|
||||||||||||||||
Other real estate expense (benefit), net
|
222
|
(115
|
)
|
294.2
|
%
|
335
|
281
|
19.2
|
%
|
|||||||||||||||
Marketing and business development
|
1,538
|
1,186
|
29.6
|
%
|
2,801
|
2,146
|
30.5
|
%
|
||||||||||||||||
Postage and supplies
|
1,050
|
731
|
43.6
|
%
|
2,007
|
1,380
|
45.4
|
%
|
||||||||||||||||
Amortization of intangibles
|
847
|
227
|
272.3
|
%
|
1,720
|
455
|
278.1
|
%
|
||||||||||||||||
Merger related expense
|
980
|
59
|
|
NM |
2,810
|
59
|
|
NM | ||||||||||||||||
Other noninterest expense
|
8,728
|
5,006
|
74.4
|
%
|
17,108
|
10,028
|
70.6
|
%
|
||||||||||||||||
Total noninterest expense
|
$
|
55,931
|
36,747
|
52.2
|
%
|
$
|
109,994
|
$
|
73,578
|
49.5
|
%
|
|
Year Acquired |
Initial Valuation
(in millions)
|
Amortizable Life (in years)
|
||||||
Core Deposit Intangible:
|
|
||||||||
Mid-America
|
2007
|
$
|
9.5
|
10
|
|||||
CapitalMark
|
2015
|
6.2
|
7
|
||||||
Magna
|
2015
|
3.2
|
6
|
||||||
Book of Business Intangibles:
|
|
||||||||
Miller Loughry Beach
|
2008
|
1.3
|
20
|
||||||
CapitalMark Trust Department
|
2015
|
0.3
|
16
|
|
June 30, 2016
|
December 31, 2015
|
||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
Commercial real estate – mortgage
|
$
|
2,467,219
|
34.8
|
%
|
$
|
2,275,483
|
34.8
|
%
|
||||||||
Consumer real estate – mortgage
|
1,068,620
|
15.1
|
%
|
1,046,517
|
16.0
|
%
|
||||||||||
Construction and land development
|
816,681
|
11.5
|
%
|
747,697
|
11.4
|
%
|
||||||||||
Commercial and industrial
|
2,492,016
|
35.1
|
%
|
2,228,542
|
34.1
|
%
|
||||||||||
Consumer and other
|
246,866
|
3.5
|
%
|
244,996
|
3.7
|
%
|
||||||||||
Total loans
|
$
|
7,091,402
|
100.0
|
%
|
$
|
6,543,235
|
100.0
|
%
|
Amounts at June 30, 2016
|
Percentage
|
|||||||||||||||
|
Fixed
|
Variable
|
At June 30,
|
|||||||||||||
|
Rates
|
Rates
|
Totals
|
2016
|
||||||||||||
Based on contractual maturity:
|
||||||||||||||||
Due within one year
|
$
|
335,262
|
$
|
1,182,726
|
$
|
1,517,988
|
21.4
|
%
|
||||||||
Due in one year to five years
|
1,741,940
|
1,440,904
|
3,182,844
|
44.9
|
%
|
|||||||||||
Due after five years
|
922,273
|
1,468,297
|
2,390,570
|
33.7
|
%
|
|||||||||||
Totals
|
$
|
2,999,475
|
$
|
4,091,927
|
$
|
7,091,402
|
100.0
|
%
|
||||||||
Based on contractual repricing dates:
|
||||||||||||||||
Daily floating rate (*)
|
$
|
-
|
$
|
1,704,152
|
$
|
1,704,152
|
24.0
|
%
|
||||||||
Due within one year
|
335,262
|
2,047,589
|
2,382,851
|
33.6
|
%
|
|||||||||||
Due in one year to five years
|
1,741,940
|
291,269
|
2,033,209
|
28.7
|
%
|
|||||||||||
Due after five years
|
922,273
|
48,917
|
971,190
|
13.7
|
%
|
|||||||||||
Totals
|
$
|
2,999,475
|
$
|
4,091,927
|
$
|
7,091,402
|
100.0
|
%
|
June 30,
|
December 31,
|
|||||||
Accruing loans past due 30 to 89 days:
|
2016
|
2015
|
||||||
Commercial real estate – mortgage
|
$
|
1,015
|
$
|
-
|
||||
Consumer real estate – mortgage
|
5,476
|
6,380
|
||||||
Construction and land development
|
8,199
|
309
|
||||||
Commercial and industrial
|
1,166
|
4,798
|
||||||
Consumer and other
|
6,252
|
6,721
|
||||||
Total accruing loans past due 30 to 89 days
|
$
|
22,108
|
$
|
18,208
|
||||
Accruing loans past due 90 days or more:
|
||||||||
Commercial real estate – mortgage
|
$
|
-
|
$
|
-
|
||||
Consumer real estate – mortgage
|
1,046
|
1,396
|
||||||
Construction and land development
|
-
|
-
|
||||||
Commercial and industrial
|
-
|
-
|
||||||
Consumer and other
|
577
|
373
|
||||||
Total accruing loans past due 90 days or more
|
$
|
1,623
|
$
|
1,769
|
||||
Ratios:
|
||||||||
Accruing loans past due 30 to 89 days as a percentage of total loans
|
0.31
|
%
|
0.28
|
%
|
||||
Accruing loans past due 90 days or more as a percentage of total loans
|
0.02
|
%
|
0.03
|
%
|
||||
Total accruing loans in past due status as a percentage of total loans
|
0.33
|
%
|
0.31
|
%
|
|
June 30, 2016
|
December 31, 2015
|
||||||||||||||
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||
Commercial real estate - mortgage
|
$
|
13,665
|
34.8
|
%
|
$
|
15,513
|
34.8
|
%
|
||||||||
Consumer real estate - mortgage
|
6,540
|
15.1
|
%
|
7,220
|
16.0
|
%
|
||||||||||
Construction and land development
|
3,923
|
11.5
|
%
|
2,903
|
11.4
|
%
|
||||||||||
Commercial and industrial
|
25,090
|
35.1
|
%
|
23,643
|
34.1
|
%
|
||||||||||
Consumer and other
|
11,138
|
3.5
|
%
|
15,616
|
3.7
|
%
|
||||||||||
Unallocated
|
1,056
|
NA
|
537
|
NA
|
||||||||||||
Total allowance for loan losses
|
$
|
61,412
|
100.0
|
%
|
$
|
65,432
|
100.0
|
%
|
Six months ended
June 30, 2016
|
Year ended
December 31, 2015
|
|||||||
Balance at beginning of period
|
$
|
65,432
|
$
|
67,359
|
||||
Provision for loan losses
|
9,174
|
9,188
|
||||||
Charged-off loans:
|
|
|
||||||
Commercial real estate – mortgage
|
(196
|
)
|
(384
|
)
|
||||
Consumer real estate – mortgage
|
(379
|
)
|
(365
|
)
|
||||
Construction and land development
|
-
|
(190
|
)
|
|||||
Commercial and industrial
|
(2,243
|
)
|
(2,207
|
)
|
||||
Consumer and other loans
|
(13,555
|
)
|
(18,002
|
)
|
||||
Total charged-off loans
|
(16,373
|
)
|
(21,148
|
)
|
||||
Recoveries of previously charged-off loans:
|
|
|
||||||
Commercial real estate – mortgage
|
193
|
85
|
||||||
Consumer real estate – mortgage
|
156
|
874
|
||||||
Construction and land development
|
106
|
1,479
|
||||||
Commercial and industrial
|
1,615
|
1,730
|
||||||
Consumer and other loans
|
1,109
|
5,865
|
||||||
Total recoveries of previously charged-off loans
|
3,179
|
10,033
|
||||||
Net charge-offs
|
(13,194
|
)
|
(11,115
|
)
|
||||
Balance at end of period
|
$
|
61,412
|
$
|
65,432
|
||||
Ratio of allowance for loan losses to total loans outstanding at end of period
|
0.87
|
%
|
1.00
|
%
|
||||
Ratio of net charge-offs to average total loans outstanding for the period (1)
|
0.39
|
%
|
0.21
|
%
|
(1)
|
Net charge-offs for the year-to-date period ended June 30, 2016 have been annualized.
|
June 30, 2016
|
December 31, 2015
|
|
Weighted average life
|
4.0 years
|
4.90 years
|
Effective duration
|
2.38%
|
3.04%
|
Weighted average coupon
|
2.97%
|
3.04%
|
Tax equivalent yield
|
2.49%
|
2.45%
|
|
June 30,
|
December 31,
|
||||||||||||||
|
2016
|
Percent
|
2015
|
Percent
|
||||||||||||
Core funding:
|
||||||||||||||||
Noninterest-bearing deposit accounts
|
$
|
2,013,847
|
24.0
|
%
|
$
|
1,889,865
|
25.2
|
%
|
||||||||
Interest-bearing demand accounts
|
1,284,593
|
15.3
|
%
|
1,355,405
|
18.1
|
%
|
||||||||||
Savings and money market accounts
|
2,843,895
|
33.9
|
%
|
2,683,046
|
35.8
|
%
|
||||||||||
Time deposit accounts less than $250,000
|
448,727
|
5.4
|
%
|
404,494
|
5.4
|
%
|
||||||||||
Total core funding
|
6,591,062
|
78.7
|
%
|
6,332,810
|
84.5
|
%
|
||||||||||
Non-core funding:
|
||||||||||||||||
Relationship based non-core funding:
|
||||||||||||||||
Reciprocating NOW deposits (1)
|
32,060
|
0.4
|
%
|
34,144
|
0.5
|
%
|
||||||||||
Reciprocating money market accounts (1)
|
393,108
|
4.7
|
%
|
318,905
|
4.3
|
%
|
||||||||||
Reciprocating time deposits
|
11,571
|
0.1
|
%
|
50,203
|
0.7
|
%
|
||||||||||
Other time deposits
|
150,298
|
1.8
|
%
|
228,064
|
3.0
|
%
|
||||||||||
Securities sold under agreements to repurchase
|
73,317
|
0.9
|
%
|
79,084
|
1.1
|
%
|
||||||||||
Total relationship based non-core funding
|
660,354
|
7.9
|
%
|
710,400
|
9.5
|
%
|
||||||||||
Wholesale funding:
|
||||||||||||||||
Brokered deposits
|
114,727
|
1.4
|
%
|
7,288
|
0.1
|
%
|
||||||||||
Federal Home Loan Bank advances
|
783,240
|
9.4
|
%
|
300,305
|
4.0
|
%
|
||||||||||
Subordinated debt - Pinnacle Bank
|
147,238
|
1.8
|
%
|
60,000
|
0.8
|
%
|
||||||||||
Subordinated debt- Pinnacle Financial
|
82,476
|
1.0
|
%
|
82,476
|
1.1
|
%
|
||||||||||
Total wholesale funding
|
1,127,681
|
13.5
|
%
|
450,069
|
6.0
|
%
|
||||||||||
Total non-core funding
|
1,788,035
|
21.3
|
%
|
1,160,469
|
15.5
|
%
|
||||||||||
Totals
|
$
|
8,379,097
|
100.0
|
%
|
$
|
7,493,279
|
100.0
|
%
|
Balances
|
Weighted Avg. Rate
|
|||||||
Denominations less than $100,000
|
||||||||
Three months or less
|
$
|
43,616
|
0.58
|
%
|
||||
Over three but less than six months
|
38,968
|
1.61
|
%
|
|||||
Over six but less than twelve months
|
61,991
|
1.80
|
%
|
|||||
Over twelve months
|
46,963
|
2.99
|
%
|
|||||
$
|
191,538
|
1.78
|
%
|
|||||
Denominations $100,000 and greater
|
||||||||
Three months or less
|
$
|
132,676
|
0.57
|
%
|
||||
Over three but less than six months
|
157,658
|
0.72
|
%
|
|||||
Over six but less than twelve months
|
129,400
|
0.78
|
%
|
|||||
Over twelve months
|
114,051
|
0.54
|
%
|
|||||
$
|
533,785
|
0.66
|
%
|
|||||
Totals
|
$
|
725,323
|
0.95
|
%
|
|
Date
Established
|
Maturity
|
Common Securities
|
Subordinated Debentures
|
Floating Interest Rate
|
Interest Rate at June 30, 2016
|
|||||||||
Trust I
|
December 29, 2003
|
December 30, 2033
|
$
|
310,000
|
$
|
10,000,000
|
Libor + 2.80%
|
3.46
|
%
|
||||||
Trust II
|
September 15, 2005
|
September 30, 2035
|
619,000
|
20,000,000
|
Libor + 1.40%
|
2.03
|
%
|
||||||||
Trust III
|
September 7, 2006
|
September 30, 2036
|
619,000
|
20,000,000
|
Libor + 1.65%
|
2.28
|
%
|
||||||||
Trust IV
|
October 31, 2007
|
September 30, 2037
|
928,000
|
30,000,000
|
Libor + 2.85%
|
3.50
|
%
|
·
|
+/- 10.0% for a gradual change of 400 points; +/-20.0% for an instantaneous change of 400 basis points
|
·
|
+/- 7.5% for a gradual change of 300 points; +/- 15.0% for an instantaneous change of 300 basis points
|
·
|
+/- 5.0% for a gradual change of 200 points; +/- 10.0% for an instantaneous change of 200 basis points
|
·
|
+/- 2.5% for a gradual change of 100 points; +/- 5.0% for an instantaneous change of 100 basis points
|
·
|
+/- 400 basis point change in interest rates, EVE shall not decrease by more than 40 percent
|
·
|
+/- 300 basis point change in interest rates, EVE shall not decrease by more than 30 percent
|
·
|
+/- 200 basis point change in interest rates, EVE shall not decrease by more than 20 percent
|
·
|
+/- 100 basis point change in interest rates, EVE shall not decrease by more than 10 percent
|
·
|
Reduced our exposure to fixed rate investment securities in relation to total assets from approximately 23% as of December 31, 2010 to a current position of approximately 12% of total assets. This reduction should assist us in becoming more asset sensitive over time.
|
·
|
Executed a series of cash flow hedges involving approximately $200 million in FHLB borrowings at pre-established fixed rates. Fixed rate liabilities also provide for a more asset sensitive balance sheet.
|
·
|
Participated in interest rate swaps whereby our customers pay a fixed rate which we remit to our counterparty while we receive in return a floating rate on these commercial loans. These loans amounted to approximately $578.0 million at June 30, 2016. Floating rate loans promote an asset sensitive balance sheet.
|
·
|
Reduced the amount of "in the money" rate floors attached to floating and variable rate commercial loans from $1.100 billion at December 31, 2013 to $627.0 million as of June 30, 2016 thus promoting a more asset sensitive balance sheet over time.
|
·
|
Reduced the difference between the weighted average floor rate on floating and variable rate commercial loans and the weighted average contract rate on these type of loans from 0.81% at December 31, 2015 to 0.80% at June 30, 2016. This reduction results in requiring a lesser increase in shorter-term rates for the floors to be overcome, thus making these loans with rate floors more asset sensitive over time.
|
Scheduled
Maturities
|
Amount
|
Interest Rates(1)
|
||||||
2016
|
$
|
650,000
|
0.56
|
%
|
||||
2017
|
133,000
|
0.76
|
%
|
|||||
2018
|
3
|
2.00
|
%
|
|||||
2019
|
-
|
0.00
|
%
|
|||||
2020
|
209
|
2.25
|
%
|
|||||
Thereafter
|
28
|
2.75
|
%
|
|||||
Total
|
$
|
783,240
|
||||||
Weighted average interest rate
|
0.59
|
%
|
Period
|
Total Number of Shares Repurchased (1)
|
Average Price Paid Per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs
|
||||||||||||
April 1, 2016 to April 30, 2016
|
620
|
$
|
50.17
|
-
|
-
|
|||||||||||
May 1, 2016 to May 31, 2016
|
3,107
|
48.17
|
-
|
-
|
||||||||||||
June 1, 2016 to June 30, 2016
|
122
|
49.66
|
-
|
-
|
||||||||||||
Total
|
3,849
|
$
|
48.51
|
-
|
-
|
(1)
|
During the quarter ended June 30, 2016, 13,745 shares of restricted stock previously awarded to certain of our associates vested. We withheld 3,849 shares to satisfy tax withholding requirements associated with the vesting of these restricted shares.
|
2.1
|
Agreement and Plan of Merger by and between Pinnacle Financial Partners, Inc. and Avenue Financial Holdings, Inc., dated as of January 28, 2016 (schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulations S-K will be furnished supplementally to the Securities and Exchange Commission upon request) (incorporated by reference to the Registrant's Current Report on Form 8-K filed on January 29, 2016).
|
4.1
|
Form of Certificate for Avenue Financial Holdings, Inc. Fixed/Floating Rate Subordinated Note due December 29, 2024 (incorporated by reference to the Registrant's Current Report on Form 8-K filed on July 7, 2016)
|
10.1
|
Employment Agreement, effective July 1, 2016, by and among Pinnacle Financial Partners, Inc. and Ronald L. Samuels (incorporated by reference to the Registrant's Current Report on Form 8-K filed on July 7, 2016)
|
10.2
|
Form of Pinnacle Financial Partners, Inc. 2016 Restricted Stock Award Agreement (incorporated by reference to the Registrant's Current Report on Form 8-K filed on July 7, 2016)
|
10.3
|
Supplemental Executive Retirement Plan Agreement between Avenue Bank and Ronald Samuels, dated October 26, 2007 (incorporated by reference to the Registrant's Current Report on Form 8-K filed on July 7, 2016)
|
31.1
|
Certification pursuant to Rule 13a-14(a)/15d-14(a)
|
31.2
|
Certification pursuant to Rule 13a-14(a)/15d-14(a)
|
32.1
|
Certification pursuant to 18 USC Section 1350 – Sarbanes-Oxley Act of 2002
|
32.2
|
Certification pursuant to 18 USC Section 1350 – Sarbanes-Oxley Act of 2002
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Schema Document
|
101.CAL
|
XBRL Calculation Linkbase Document
|
101.LAB
|
XBRL Label Linkbase Document
|
101.PRE
|
XBRL Presentation Linkbase Document
|
101.DEF
|
XBRL Definition Linkbase Document
|
PINNACLE FINANCIAL PARTNERS, INC.
|
||
August 5, 2016
|
/s/ M. Terry Turner
|
|
M. Terry Turner
|
||
President and Chief Executive Officer
|
August 5, 2016
|
/s/ Harold R. Carpenter
|
|
Harold R. Carpenter
|
||
Chief Financial Officer
|
1. | I have reviewed this quarterly report on Form 10-Q of Pinnacle Financial Partners, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
August 5, 2016
|
Signature:
|
/s/ M. Terry Turner
|
|
|
M. Terry Turner
|
|
|
President and Chief Executive Officer
|
|
|
Pinnacle Financial Partners, Inc.
|
1. | I have reviewed this quarterly report on Form 10-Q of Pinnacle Financial Partners, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
August 5, 2016 |
Signature:
|
/s/ Harold R. Carpenter
|
|
|
Harold R. Carpenter
|
|
|
Chief Financial Officer
|
|
|
Pinnacle Financial Partners, Inc.
|
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 5, 2016
|
|
/s/ M. Terry Turner
|
|
|
M. Terry Turner
|
|
|
President and Chief Executive Officer
|
|
|
Pinnacle Financial Partners, Inc.
|
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 5, 2016
|
|
/s/ Harold R. Carpenter
|
|
|
Harold R. Carpenter
|
|
|
Chief Financial Officer
|
|
|
Pinnacle Financial Partners, Inc.
|
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