QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 |
(Exact name of registrant as specified in its charter) | ||||||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Trading Symbol | Name of Exchange on which Registered | ||||||
TABLE OF CONTENTS | Page No. | ||||
Item 1. | Part I. Financial Information |
(dollars in thousands, except per share data) | June 30, 2020 | December 31, 2019 | |||||||||
ASSETS | |||||||||||
Cash and noninterest-bearing due from banks | $ | $ | |||||||||
Restricted cash | |||||||||||
Interest-bearing due from banks | |||||||||||
Federal funds sold and other | |||||||||||
Cash and cash equivalents | |||||||||||
Securities available-for-sale, at fair value | |||||||||||
Securities held-to-maturity (fair value of $1.1 billion, net of allowance for credit losses of $188 at June 30, 2020 and fair value of $201.2 million at Dec. 31, 2019, respectively) | |||||||||||
Consumer loans held-for-sale | |||||||||||
Commercial loans held-for-sale | |||||||||||
Loans | |||||||||||
Less allowance for credit losses | ( | ( | |||||||||
Loans, net | |||||||||||
Premises and equipment, net | |||||||||||
Equity method investment | |||||||||||
Accrued interest receivable | |||||||||||
Goodwill | |||||||||||
Core deposits and other intangible assets | |||||||||||
Other real estate owned | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Deposits: | |||||||||||
Noninterest-bearing | $ | $ | |||||||||
Interest-bearing | |||||||||||
Savings and money market accounts | |||||||||||
Time | |||||||||||
Total deposits | |||||||||||
Securities sold under agreements to repurchase | |||||||||||
Federal Home Loan Bank advances | |||||||||||
Subordinated debt and other borrowings | |||||||||||
Accrued interest payable | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Stockholders' equity: | |||||||||||
Preferred stock, no par value, 10.0 million shares authorized; 225,000 shares non-cumulative perpetual preferred stock, Series B, liquidation preference $225.0 million, issued and outstanding at June 30, 2020 and no shares issued and outstanding at Dec. 31, 2019, respectively. | |||||||||||
Common stock, par value $1.00; 180.0 million shares authorized; 75.8 million and 76.6 million shares issued and outstanding at June 30, 2020 and Dec. 31, 2019, respectively | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income, net of taxes | |||||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
(dollars in thousands, except per share data) | Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Interest income: | |||||||||||||||||||||||
Loans, including fees | $ | $ | $ | $ | |||||||||||||||||||
Securities: | |||||||||||||||||||||||
Taxable | |||||||||||||||||||||||
Tax-exempt | |||||||||||||||||||||||
Federal funds sold and other | |||||||||||||||||||||||
Total interest income | |||||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||
Deposits | |||||||||||||||||||||||
Securities sold under agreements to repurchase | |||||||||||||||||||||||
Federal Home Loan Bank advances and other borrowings | |||||||||||||||||||||||
Total interest expense | |||||||||||||||||||||||
Net interest income | |||||||||||||||||||||||
Provision for credit losses | |||||||||||||||||||||||
Net interest income after provision for credit losses | |||||||||||||||||||||||
Noninterest income: | |||||||||||||||||||||||
Service charges on deposit accounts | |||||||||||||||||||||||
Investment services | |||||||||||||||||||||||
Insurance sales commissions | |||||||||||||||||||||||
Gain on mortgage loans sold, net | |||||||||||||||||||||||
Investment gains (losses) on sales, net | ( | ( | ( | ||||||||||||||||||||
Trust fees | |||||||||||||||||||||||
Income from equity method investment | |||||||||||||||||||||||
Other noninterest income | |||||||||||||||||||||||
Total noninterest income | |||||||||||||||||||||||
Noninterest expense: | |||||||||||||||||||||||
Salaries and employee benefits | |||||||||||||||||||||||
Equipment and occupancy | |||||||||||||||||||||||
Other real estate expense, net | |||||||||||||||||||||||
Marketing and other business development | |||||||||||||||||||||||
Postage and supplies | |||||||||||||||||||||||
Amortization of intangibles | |||||||||||||||||||||||
Other noninterest expense | |||||||||||||||||||||||
Total noninterest expense | |||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Per share information: | |||||||||||||||||||||||
Basic net income per common share | $ | $ | $ | $ | |||||||||||||||||||
Diluted net income per common share | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income, net of tax: | |||||||||||||||||||||||
Change in fair value on available-for-sale securities, net of tax | |||||||||||||||||||||||
Change in fair value of cash flow hedges, net of tax | |||||||||||||||||||||||
Amortization (accretion) of net unrealized losses (gains) on securities transferred from available-for-sale to held-to-maturity, net of tax | ( | ( | |||||||||||||||||||||
Net loss (gain) on cash flow hedges reclassified from other comprehensive income into net income, net of tax | ( | ( | |||||||||||||||||||||
Net loss (gain) on sale of investment securities reclassified from other comprehensive income into net income, net of tax | ( | ||||||||||||||||||||||
Total other comprehensive income, net of tax | |||||||||||||||||||||||
Total comprehensive income | $ | $ | $ | $ |
Common Stock | |||||||||||||||||||||||
Preferred Stock Amount | Shares | Amounts | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comp. Income (Loss), net | Total Stockholder's Equity | |||||||||||||||||
Balance at December 31, 2018 | $ | — | $ | $ | $ | $ | ( | $ | |||||||||||||||
Exercise of employee common stock options & related tax benefits | — | — | — | ||||||||||||||||||||
Common stock dividends paid ($0.16 per share) | — | — | — | — | ( | — | ( | ||||||||||||||||
Repurchase of common stock | — | ( | ( | ( | — | — | ( | ||||||||||||||||
Issuance of restricted common shares, net of forfeitures | — | ( | — | — | |||||||||||||||||||
Restricted shares withheld for taxes & related tax benefit | — | ( | ( | ( | — | — | ( | ||||||||||||||||
Compensation expense for restricted shares & performance stock units | — | — | — | — | — | ||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||
Balance at March 31, 2019 | $ | — | $ | $ | $ | $ | ( | $ | |||||||||||||||
Exercise of employee common stock options & related tax benefits | $ | — | $ | $ | — | $ | — | $ | |||||||||||||||
Common stock dividends paid ($0.16 per share) | — | — | — | — | ( | — | ( | ||||||||||||||||
Repurchase of common stock | — | ( | ( | ( | — | — | ( | ||||||||||||||||
Issuance of restricted common shares, net of forfeitures | — | ( | — | — | |||||||||||||||||||
Restricted shares withheld for taxes & related tax benefit | — | ( | ( | ( | — | — | ( | ||||||||||||||||
Compensation expense for restricted shares & performance stock units | — | — | — | — | — | ||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||
Balance at June 30, 2019 | $ | — | $ | $ | $ | $ | $ |
Common Stock | |||||||||||||||||||||||
Preferred Stock Amount | Shares | Amounts | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comp. Income (Loss), net | Total Stockholder's Equity | |||||||||||||||||
Balance at December 31, 2019 | $ | — | $ | $ | $ | $ | $ | ||||||||||||||||
Exercise of employee common stock options & related tax benefits | — | — | — | ||||||||||||||||||||
Common dividends paid ($0.16 per share) | — | — | — | — | ( | — | ( | ||||||||||||||||
Repurchase of common stock | — | ( | ( | ( | — | — | ( | ||||||||||||||||
Issuance of restricted common shares, net of forfeitures | — | ( | — | — | |||||||||||||||||||
Restricted shares withheld for taxes & related tax benefits | — | ( | ( | ( | — | — | ( | ||||||||||||||||
Issuance of common stock pursuant to restricted stock unit agreement, net of shares withheld for taxes & related tax benefits | — | ( | — | — | ( | ||||||||||||||||||
Compensation expense for restricted shares & performance stock units | — | — | — | — | — | ||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||
Cumulative effect of change in accounting principle | — | — | — | — | ( | — | ( | ||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||
Balance at March 31, 2020 | $ | — | $ | $ | $ | $ | $ | ||||||||||||||||
Issuance of preferred stock, net of issuance costs | $ | — | $ | — | $ | — | $ | — | $ | — | $ | ||||||||||||
Exercise of employee common stock options & related tax benefits | — | — | — | ||||||||||||||||||||
Common dividends paid ($0.16 per share) | — | — | — | — | ( | ( | |||||||||||||||||
Issuance of restricted common shares, net of forfeitures | — | ( | — | — | |||||||||||||||||||
Restricted shares withheld for taxes & related tax benefits | — | ( | ( | ( | — | — | ( | ||||||||||||||||
Issuance of common stock pursuant to restricted stock unit agreement, net of shares withheld for taxes & related tax benefits | — | ( | — | — | ( | ||||||||||||||||||
Compensation expense for restricted shares & performance stock units | — | — | — | — | — | ||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | $ | $ |
(dollars in thousands) | Six months ended June 30, | ||||||||||
2020 | 2019 | ||||||||||
Operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Net amortization/accretion of premium/discount on securities | |||||||||||
Depreciation, amortization and accretion | |||||||||||
Provision for credit losses | |||||||||||
Gain on mortgage loans sold, net | ( | ( | |||||||||
Investment losses (gains) on sales, net | ( | ||||||||||
Stock-based compensation expense | |||||||||||
Deferred tax expense (benefit) | ( | ||||||||||
Losses on dispositions of other real estate and other investments | |||||||||||
Income from equity method investment | ( | ( | |||||||||
Dividends received from equity method investment | |||||||||||
Excess tax benefit from stock compensation | ( | ( | |||||||||
Gain on commercial loans sold, net | ( | ( | |||||||||
Commercial loans held for sale: | |||||||||||
Loans originated | ( | ( | |||||||||
Loans sold | |||||||||||
Consumer loans held for sale: | |||||||||||
Loans originated | ( | ( | |||||||||
Loans sold | |||||||||||
Increase in other assets | ( | ( | |||||||||
Increase in other liabilities | |||||||||||
Net cash provided by operating activities | |||||||||||
Investing activities: | |||||||||||
Activities in securities available-for-sale: | |||||||||||
Purchases | ( | ( | |||||||||
Sales | |||||||||||
Maturities, prepayments and calls | |||||||||||
Activities in securities held-to-maturity: | |||||||||||
Purchases | ( | ||||||||||
Maturities, prepayments and calls | |||||||||||
Increase in loans, net | ( | ( | |||||||||
Purchases of software, premises and equipment | ( | ( | |||||||||
Proceeds from sales of software, premises and equipment | |||||||||||
Proceeds from sale of other real estate | |||||||||||
Purchase of bank owned life insurance policies | ( | ||||||||||
Proceeds from bank owned life insurance settlements | |||||||||||
Proceeds from (payments for) derivative instruments | ( | ||||||||||
Purchase of trade name | ( | ||||||||||
Increase in other investments | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing activities: | |||||||||||
Net increase in deposits | |||||||||||
Net increase in securities sold under agreements to repurchase | |||||||||||
Federal Home Loan Bank: Issuances, net of restructuring charges | |||||||||||
Federal Home Loan Bank: Payments/maturities | ( | ( | |||||||||
Increase in other borrowings, net of issuance costs | |||||||||||
Decrease in other borrowings | ( | ( | |||||||||
Principal payments of finance lease obligation | ( | ( | |||||||||
Issuance of preferred stock, net of issuance costs | |||||||||||
Issuance of common stock pursuant to restricted stock unit agreement, net of shares withheld for taxes | ( | ||||||||||
Exercise of common stock options, net of repurchase of restricted shares | ( | ( | |||||||||
Repurchase of common stock | ( | ( | |||||||||
Common stock dividends paid | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | ( | ||||||||||
Cash, cash equivalents, and restricted cash, beginning of period | |||||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | $ |
For the six months ended June 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash Transactions: | |||||||||||
Interest paid | $ | $ | |||||||||
Income taxes paid, net | |||||||||||
Operating lease payments | |||||||||||
Noncash Transactions: | |||||||||||
Loans charged-off to the allowance for credit losses | |||||||||||
Loans foreclosed upon and transferred to other real estate owned | |||||||||||
Loans foreclosed upon and transferred to other assets | |||||||||||
Fixed assets transferred to other real estate owned | |||||||||||
Available-for-sale securities transferred to held-to-maturity portfolio | |||||||||||
Right-of-use asset recognized during the period in exchange for lease obligations (1) |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
Basic net income per common share calculation: | |||||||||||||||||
Numerator - Net income | $ | $ | $ | $ | |||||||||||||
Denominator - Weighted average common shares outstanding | |||||||||||||||||
Basic net income per common share | $ | $ | $ | $ | |||||||||||||
Diluted net income per common share calculation: | |||||||||||||||||
Numerator – Net income | $ | $ | $ | $ | |||||||||||||
Denominator - Weighted average common shares outstanding | |||||||||||||||||
Dilutive shares contingently issuable | |||||||||||||||||
Weighted average diluted common shares outstanding | |||||||||||||||||
Diluted net income per common share | $ | $ | $ | $ |
As of | |||||||||||
June 30, 2020 | December 31, 2019 | ||||||||||
Assets | $ | $ | |||||||||
Liabilities | |||||||||||
Equity interests | |||||||||||
Total liabilities and equity | $ | $ |
For the three months ended June 30, | For the six months ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||||||||||
Net income | $ | $ | $ | $ |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
June 30, 2020: | |||||||||||||||||||||||
Securities available-for-sale: | |||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
U.S. government agency securities | |||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||
State and municipal securities | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Corporate notes and other | |||||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||
Securities held-to-maturity: | |||||||||||||||||||||||
State and municipal securities | $ | $ | $ | $ | |||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||
Allowance for credit losses - securities held-to-maturity | ( | ||||||||||||||||||||||
Securities held-to-maturity, net of allowance for credit losses | $ |
December 31, 2019: | |||||||||||||||||||||||
Securities available-for-sale: | |||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
U.S. government agency securities | |||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||
State and municipal securities | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Corporate notes and other | |||||||||||||||||||||||
$ | $ | $ | |||||||||||||||||||||
Securities held-to-maturity: | |||||||||||||||||||||||
State and municipal securities | $ | $ | $ | $ | |||||||||||||||||||
$ | $ | $ | $ |
Available-for-sale | Held-to-maturity | ||||||||||||||||||||||
June 30, 2020: | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
Due in one year or less | $ | $ | $ | $ | |||||||||||||||||||
Due in one year to five years | |||||||||||||||||||||||
Due in five years to ten years | |||||||||||||||||||||||
Due after ten years | |||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
$ | $ | $ | $ |
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, 2020 | |||||||||||||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
U.S. government agency securities | |||||||||||||||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||||||||||||||
State and municipal securities | |||||||||||||||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||||||||||||||
Corporate notes | |||||||||||||||||||||||||||||||||||
Total temporarily-impaired securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
At December 31, 2019 | |||||||||||||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
U.S. government agency securities | |||||||||||||||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||||||||||||||
State and municipal securities | |||||||||||||||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||||||||||||||
Corporate notes | |||||||||||||||||||||||||||||||||||
Total temporarily-impaired securities | $ | $ | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | |||||||||||||
Commercial real estate: | ||||||||||||||
Owner occupied | $ | $ | ||||||||||||
Non-owner occupied | ||||||||||||||
Consumer real estate – mortgage | ||||||||||||||
Construction and land development | ||||||||||||||
Commercial and industrial | ||||||||||||||
Consumer and other | ||||||||||||||
Subtotal | $ | $ | ||||||||||||
Allowance for credit losses | ( | ( | ||||||||||||
Loans, net | $ | $ |
June 30, 2020 | 2020 | 2019 | 2018 | 2017 | 2016 | Prior | Revolving Loans | Total | ||||||||||||||||||
Commercial real estate- owner occupied | ||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard (1) | ||||||||||||||||||||||||||
Substandard-nonaccrual | ||||||||||||||||||||||||||
Doubtful-nonaccrual | ||||||||||||||||||||||||||
Total Commercial real estate - owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Commercial real estate- Non-owner occupied | ||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard (1) | ||||||||||||||||||||||||||
Substandard-nonaccrual | ||||||||||||||||||||||||||
Doubtful-nonaccrual | ||||||||||||||||||||||||||
Total Commercial real estate - Non-owner occupied | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Consumer real estate – mortgage | ||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard (1) | ||||||||||||||||||||||||||
Substandard-nonaccrual | ||||||||||||||||||||||||||
Doubtful-nonaccrual | ||||||||||||||||||||||||||
Total Consumer real estate – mortgage | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Construction and land development | ||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard (1) | ||||||||||||||||||||||||||
Substandard-nonaccrual | ||||||||||||||||||||||||||
Doubtful-nonaccrual | ||||||||||||||||||||||||||
Total Construction and land development | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard (1) | ||||||||||||||||||||||||||
Substandard-nonaccrual | ||||||||||||||||||||||||||
Doubtful-nonaccrual | ||||||||||||||||||||||||||
Total Commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Consumer and other | ||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||
Substandard (1) | ||||||||||||||||||||||||||
Substandard-nonaccrual | ||||||||||||||||||||||||||
Doubtful-nonaccrual | ||||||||||||||||||||||||||
Total Consumer and other | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Total loans | ||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Special Mention |
June 30, 2020 | 2020 | 2019 | 2018 | 2017 | 2016 | Prior | Revolving Loans | Total | ||||||||||||||||||
Substandard (1) | ||||||||||||||||||||||||||
Substandard-nonaccrual | ||||||||||||||||||||||||||
Doubtful-nonaccrual | ||||||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate - mortgage | Consumer real estate - mortgage | Construction and land development | Commercial and industrial | Consumer and other | Total | |||||||||||||||
December 31, 2019 | ||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | ||||||||||||||
Special Mention | ||||||||||||||||||||
Substandard (1) | ||||||||||||||||||||
Substandard-nonaccrual | ||||||||||||||||||||
Doubtful-nonaccrual | ||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ |
June 30, 2020 | 30-59 days past due | 60-89 days past due | 90 days or more past due | Total past due | Current | Total loans | |||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||||
Owner-occupied | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Non-owner occupied | |||||||||||||||||||||||||||||||||||
Consumer real estate – mortgage | |||||||||||||||||||||||||||||||||||
Construction and land development | |||||||||||||||||||||||||||||||||||
Commercial and industrial | |||||||||||||||||||||||||||||||||||
Consumer and other | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | 28,503 | $ | $ | $ | |||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||||
Owner-occupied | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Non-owner occupied | |||||||||||||||||||||||||||||||||||
Consumer real estate – mortgage | |||||||||||||||||||||||||||||||||||
Construction and land development | |||||||||||||||||||||||||||||||||||
Commercial and industrial | |||||||||||||||||||||||||||||||||||
Consumer and other | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | 21,260 | $ | $ | $ |
Commercial real estate - Owner occupied | Commercial real estate - Non-owner occupied | Consumer real estate - mortgage | Construction and land development | Commercial and industrial | Consumer and other | Unallocated | Total | |||||||||||||||||||
Three months ended June 30, 2020: | ||||||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Charged-off loans | ( | ( | ( | ( | ( | |||||||||||||||||||||
Recovery of previously charged-off loans | ||||||||||||||||||||||||||
Provision for credit losses on loans | ( | ( | ||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Three months ended June 30, 2019: | ||||||||||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Charged-off loans | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||
Recovery of previously charged-off loans | ||||||||||||||||||||||||||
Provision for credit losses on loans | ( | ( | ||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Six months ended June 30, 2020: | ||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Impact of adopting ASC 326 | ( | ( | ( | |||||||||||||||||||||||
Charged-off loans | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||
Recovery of previously charged-off loans | ||||||||||||||||||||||||||
Provision for credit losses on loans | ||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Six months ended June 30, 2019: | ||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Charged-off loans | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||
Recovery of previously charged-off loans | ||||||||||||||||||||||||||
Provision for credit losses on loans | ( | ( | ( | |||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ | $ | $ | $ |
Commercial real estate - mortgage | Consumer real estate - mortgage | Construction and land development | Commercial and industrial | Consumer and other | Unallocated | Total | |||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||
Allowance for Loan Losses: | |||||||||||||||||||||||
Collectively evaluated for impairment | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Individually evaluated for impairment | |||||||||||||||||||||||
Loans acquired with deteriorated credit quality(1) | |||||||||||||||||||||||
Total allowance for loan losses | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||
Loans: | |||||||||||||||||||||||
Collectively evaluated for impairment | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Individually evaluated for impairment | |||||||||||||||||||||||
Loans acquired with deteriorated credit quality | |||||||||||||||||||||||
Total loans | $ | $ | $ | $ | $ | $ |
June 30, 2020 | Real Estate | Business Assets | Other | Total | ||||||||||
Commercial real estate: | ||||||||||||||
Owner-occupied | ||||||||||||||
Non-owner occupied | ||||||||||||||
Consumer real estate – mortgage | ||||||||||||||
Construction and land development | ||||||||||||||
Commercial and industrial | ||||||||||||||
Consumer and other | ||||||||||||||
Total | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||
Total nonaccrual loans | Nonaccrual loans with no allowance for credit losses | Loans past due 90 or more days and still accruing | Total nonaccrual loans | Loans past due 90 or more days and still accruing | |||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||
Owner-occupied | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Non-owner occupied | |||||||||||||||||||||||||||||
Consumer real estate – mortgage | |||||||||||||||||||||||||||||
Construction and land development | |||||||||||||||||||||||||||||
Commercial and industrial | |||||||||||||||||||||||||||||
Consumer and other | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
At December 31, 2019 | |||||||||||
Recorded investment | Unpaid principal balances | Related allowance | |||||||||
Impaired loans with an allowance: | |||||||||||
Commercial real estate – mortgage | $ | $ | $ | ||||||||
Consumer real estate – mortgage | |||||||||||
Construction and land development | |||||||||||
Commercial and industrial | |||||||||||
Consumer and other | |||||||||||
Total | $ | $ | $ | ||||||||
Impaired loans without an allowance: | |||||||||||
Commercial real estate – mortgage | $ | $ | $ | ||||||||
Consumer real estate – mortgage | |||||||||||
Construction and land development | |||||||||||
Commercial and industrial | |||||||||||
Consumer and other | |||||||||||
Total | $ | $ | $ | ||||||||
Total impaired loans | $ | $ | $ |
Three months ended | Six months ended | |||||||||||||
Average recorded investment | Interest income recognized | Average recorded investment | Interest income recognized | |||||||||||
Impaired loans with an allowance: | ||||||||||||||
Commercial real estate – mortgage | $ | $ | $ | $ | ||||||||||
Consumer real estate – mortgage | ||||||||||||||
Construction and land development | ||||||||||||||
Commercial and industrial | ||||||||||||||
Consumer and other | ||||||||||||||
Total | $ | $ | $ | $ | ||||||||||
Impaired loans without an allowance: | ||||||||||||||
Commercial real estate – mortgage | $ | $ | $ | $ | ||||||||||
Consumer real estate – mortgage | ||||||||||||||
Construction and land development | ||||||||||||||
Commercial and industrial | ||||||||||||||
Consumer and other | ||||||||||||||
Total | $ | $ | $ | $ | ||||||||||
Total impaired loans | $ | $ | $ | $ |
Gross Carrying Value | Accretable Yield | Nonaccretable Yield | Net Carrying Value | |||||||||||
December 31, 2019 | $ | $ | ( | $ | ( | $ | ||||||||
Reclassification of discount to allowance for credit losses | ||||||||||||||
Year-to-date settlements | ( | ( | ||||||||||||
June 30, 2020 | $ | $ | ( | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
2020 | |||||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||||
Owner-occupied | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Non-owner occupied | |||||||||||||||||||||||||||||||||||
Consumer real estate – mortgage | |||||||||||||||||||||||||||||||||||
Construction and land development | |||||||||||||||||||||||||||||||||||
Commercial and industrial | |||||||||||||||||||||||||||||||||||
Consumer and other | |||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||||||||||||||
2019 | |||||||||||||||||||||||||||||||||||
Commercial real estate: | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Consumer real estate – mortgage | |||||||||||||||||||||||||||||||||||
Construction and land development | |||||||||||||||||||||||||||||||||||
Commercial and industrial | |||||||||||||||||||||||||||||||||||
Consumer and other | |||||||||||||||||||||||||||||||||||
$ | $ | $ | $ |
June 30, 2020 | |||||||||||||||||||||||
Outstanding Principal Balances | Unfunded Commitments | Total exposure | Total Exposure at December 31, 2019 | ||||||||||||||||||||
Lessors of nonresidential buildings | $ | $ | $ | $ | |||||||||||||||||||
Lessors of residential buildings | |||||||||||||||||||||||
New Housing For-Sale Builders | |||||||||||||||||||||||
Hotels (except Casino Hotels) and Motels |
Number | Weighted-Average Exercise Price | Weighted-Average Contractual Remaining Term (in years) | Aggregate Intrinsic Value (000's) | ||||||||||||||
Outstanding at December 31, 2019 | $ | $ | (1) | ||||||||||||||
Granted | |||||||||||||||||
Exercised | ( | ||||||||||||||||
Forfeited | |||||||||||||||||
Outstanding at June 30, 2020 | $ | $ | (2) | ||||||||||||||
Options exercisable at June 30, 2020 | $ | $ | (2) |
Number | Grant Date Weighted-Average Cost | ||||||||||
Unvested at December 31, 2019 | $ | ||||||||||
Shares awarded | |||||||||||
Restrictions lapsed and shares released to associates/directors | ( | ||||||||||
Shares forfeited (1) | ( | ||||||||||
Unvested at June 30, 2020 | $ |
Grant Year | Group (1) | Vesting Period in years | Shares awarded | Restrictions Lapsed and shares released to participants | Shares Forfeited by participants (4) | Shares Unvested | ||||||||||||||||||||||||||||||||||||||
Time Based Awards | ||||||||||||||||||||||||||||||||||||||||||||
2020 | Associates (2) | - | ||||||||||||||||||||||||||||||||||||||||||
Outside Director Awards (3) | ||||||||||||||||||||||||||||||||||||||||||||
2020 | Outside directors |
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 tranche (in years) | Subsequent holding period per tranche (in years) | Period in which units to be settled into shares of common stock(2) | ||||||||||||||||||||
2020 | — | 2020 | 2025 | |||||||||||||||||||||||
2021 | 2025 | |||||||||||||||||||||||||
2022 | 2025 | |||||||||||||||||||||||||
2019 | - | 2019 | 2024 | |||||||||||||||||||||||
2020 | 2024 | |||||||||||||||||||||||||
2021 | 2024 | |||||||||||||||||||||||||
2018 | - | 2018 | 2023 | |||||||||||||||||||||||
2019 | 2023 | |||||||||||||||||||||||||
2020 | 2023 | |||||||||||||||||||||||||
2017 | - | 2017 | 2022 | |||||||||||||||||||||||
2018 | 2022 | |||||||||||||||||||||||||
2019 | 2022 | |||||||||||||||||||||||||
2016 | - | 2016 | 2021 | |||||||||||||||||||||||
2017 | 2021 | |||||||||||||||||||||||||
2018 | 2021 |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||
Balance Sheet Location | Notional Amount | Estimated Fair Value | Notional Amount | Estimated Fair Value | |||||||||||||||||||||||||
Interest rate swap agreements: | |||||||||||||||||||||||||||||
Assets | $ | $ | $ | $ | |||||||||||||||||||||||||
Liabilities | ( | ( | |||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( |
Amount of Loss Recognized in Income | |||||||||||||||||||||||||||||
Location of Loss Recognized in Income | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||
Interest rate swap agreements | Other noninterest income | $ | ( | $ | ( | $ | ( | $ | ( |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Location | Weighted Average Remaining Maturity (In Years) | Weighted Average Pay Rate | Receive Rate | Notional Amount | Estimated Fair Value | Notional Amount | Estimated Fair Value | ||||||||||||||||||||||||||||||||||||||||
Asset derivatives | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate floor | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Liability derivatives | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
Asset derivatives | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Interest rate floor - loans | $ | $ | $ | $ | |||||||||||||||||||
Liability derivatives | |||||||||||||||||||||||
Interest rate swaps - borrowings | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
$ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Location | Weighted Average Remaining Maturity (In Years) | Weighted Average Pay Rate | Receive Rate | Notional Amount | Estimated Fair Value | Notional Amount | Estimated Fair Value | |||||||||||||||||||||||||||||||||||||||||||
Liability derivatives | ||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swap agreements - securities | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
Location of Loss on Derivative | Amount of Loss Recognized in Income | ||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
Liability derivatives | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
Interest rate swaps - securities | Interest income on securities | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
Interest rate swaps - loans | Interest income on loans | $ | $ | ( | $ | $ | ( |
Location of Gain on Hedged Item | Amount of Gain Recognized in Income | ||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
Liability derivatives - hedged items | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
Interest rate swaps - securities | Interest income on securities | $ | $ | $ | $ | ||||||||||||||||||||||||
Interest rate swaps - loans | Interest income on loans | $ | $ | $ | $ |
Carrying Amount of the Hedged Assets | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets | ||||||||||||||||||||||
June 30, 2020 | December 31, 2019 | June 30, 2020 | December 31, 2019 | ||||||||||||||||||||
Line item on the balance sheet | |||||||||||||||||||||||
Securities available-for-sale | $ | $ | $ | $ |
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) | ||||||||||||||||||||
June 30, 2020 | |||||||||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
U.S. government agency securities | |||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||
State and municipal securities | |||||||||||||||||||||||
Agency-backed securities | |||||||||||||||||||||||
Corporate notes and other | |||||||||||||||||||||||
Total investment securities available-for-sale | $ | $ | $ | $ | |||||||||||||||||||
Other investments | |||||||||||||||||||||||
Other assets | |||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
Other liabilities | $ | $ | $ | $ | |||||||||||||||||||
Total liabilities at fair value | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | |||||||||||||||||||
U.S. government agency securities | |||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||
State and municipal securities | |||||||||||||||||||||||
Agency-backed securities | |||||||||||||||||||||||
Corporate notes and other | |||||||||||||||||||||||
Total investment securities available-for-sale | |||||||||||||||||||||||
Other investments | |||||||||||||||||||||||
Other assets | |||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
Other liabilities | $ | $ | $ | $ | |||||||||||||||||||
Total liabilities at fair value | $ | $ | $ | $ |
June 30, 2020 | 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) | |||||||||||||||||||
Other real estate owned | $ | $ | $ | $ | |||||||||||||||||||
Collateral dependent loans | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||
Other real estate owned | $ | $ | $ | $ | |||||||||||||||||||
Impaired loans, net (1) | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
For the Three months ended June 30, | For the Six months ended June 30, | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||
Available-for-sale Securities | Other assets | Available-for-sale Securities | Other assets | Available-for-sale Securities | Other assets | Available-for-sale Securities | Other assets | ||||||||||||||||||||||
Fair value, beginning of period | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Total realized gains (losses) included in income | ( | ( | |||||||||||||||||||||||||||
Changes in unrealized gains/losses included in other comprehensive income for assets and liabilities still held at period-end | |||||||||||||||||||||||||||||
Purchases | |||||||||||||||||||||||||||||
Issuances | |||||||||||||||||||||||||||||
Settlements | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||
Transfers out of Level 3 | |||||||||||||||||||||||||||||
Fair value, end of period | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Total realized gains (losses) included in income related to financial assets and liabilities still on the consolidated balance sheet at period-end | $ | $ | ( | $ | $ | $ | $ | ( | $ | $ |
June 30, 2020 | 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 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Loans, net | |||||||||||||||||||||||||||||
Consumer loans held-for-sale | |||||||||||||||||||||||||||||
Commercial loans held-for-sale | |||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Deposits and securities sold under | |||||||||||||||||||||||||||||
agreements to repurchase | |||||||||||||||||||||||||||||
Federal Home Loan Bank advances | |||||||||||||||||||||||||||||
Subordinated debt and other borrowings | |||||||||||||||||||||||||||||
Off-balance sheet instruments: | |||||||||||||||||||||||||||||
Commitments to extend credit (2) | |||||||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Securities held-to-maturity | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Loans, net | |||||||||||||||||||||||||||||
Consumer loans held-for-sale | |||||||||||||||||||||||||||||
Commercial loans held-for-sale | |||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Deposits and securities sold under | |||||||||||||||||||||||||||||
agreements to repurchase | |||||||||||||||||||||||||||||
Federal Home Loan Bank advances | |||||||||||||||||||||||||||||
Subordinated debt and other borrowings | |||||||||||||||||||||||||||||
Off-balance sheet instruments: | |||||||||||||||||||||||||||||
Commitments to extend credit (2) | |||||||||||||||||||||||||||||
Actual | Minimum Capital Requirement | Minimum To Be Well-Capitalized Under Prompt Corrective Action Regulations | ||||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||
At June 30, 2020 | ||||||||||||||||||||||||||
Total capital to risk weighted assets: | ||||||||||||||||||||||||||
Pinnacle Financial | $ | % | $ | % | $ | % | ||||||||||||||||||||
Pinnacle Bank | $ | % | $ | % | $ | % | ||||||||||||||||||||
Tier 1 capital to risk weighted assets: | ||||||||||||||||||||||||||
Pinnacle Financial | $ | % | $ | % | $ | % | ||||||||||||||||||||
Pinnacle Bank | $ | % | $ | % | $ | % | ||||||||||||||||||||
Common equity Tier 1 capital to risk weighted assets | ||||||||||||||||||||||||||
Pinnacle Financial | $ | % | $ | % | NA | NA | ||||||||||||||||||||
Pinnacle Bank | $ | % | $ | % | $ | % | ||||||||||||||||||||
Tier 1 capital to average assets (*): | ||||||||||||||||||||||||||
Pinnacle Financial | $ | % | $ | % | NA | NA | ||||||||||||||||||||
Pinnacle Bank | $ | % | $ | % | $ | % | ||||||||||||||||||||
At December 31, 2019 | ||||||||||||||||||||||||||
Total capital to risk weighted assets: | ||||||||||||||||||||||||||
Pinnacle Financial | $ | % | $ | % | $ | % | ||||||||||||||||||||
Pinnacle Bank | $ | % | $ | % | $ | % | ||||||||||||||||||||
Tier 1 capital to risk weighted assets: | ||||||||||||||||||||||||||
Pinnacle Financial | $ | % | $ | % | $ | % | ||||||||||||||||||||
Pinnacle Bank | $ | % | $ | % | $ | % | ||||||||||||||||||||
Common equity Tier 1 capital to risk weighted assets | ||||||||||||||||||||||||||
Pinnacle Financial | $ | % | $ | % | NA | NA | ||||||||||||||||||||
Pinnacle Bank | $ | % | $ | % | $ | % | ||||||||||||||||||||
Tier 1 capital to average assets (*): | ||||||||||||||||||||||||||
Pinnacle Financial | $ | % | $ | % | NA | NA | ||||||||||||||||||||
Pinnacle Bank | $ | % | $ | % | $ | % |
Name | Date Established | Maturity | Total Debt Outstanding | Interest Rate at June 30, 2020 | Coupon Structure | ||||||||||||
Trust preferred securities | |||||||||||||||||
Pinnacle Statutory Trust I | $ | % | |||||||||||||||
Pinnacle Statutory Trust II | % | ||||||||||||||||
Pinnacle Statutory Trust III | % | ||||||||||||||||
Pinnacle Statutory Trust IV | % | ||||||||||||||||
BNC Capital Trust I | % | ||||||||||||||||
BNC Capital Trust II | % | ||||||||||||||||
BNC Capital Trust III | % | ||||||||||||||||
BNC Capital Trust IV | % | ||||||||||||||||
Valley Financial Trust I | % | ||||||||||||||||
Valley Financial Trust II | % | ||||||||||||||||
Valley Financial Trust III | % | ||||||||||||||||
Southcoast Capital Trust III | % | ||||||||||||||||
Subordinated Debt | |||||||||||||||||
Pinnacle Bank Subordinated Notes | % | Fixed (1) | |||||||||||||||
Pinnacle Bank Subordinated Notes | % | Fixed (1) | |||||||||||||||
Pinnacle Financial Subordinated Notes | % | Fixed (2) | |||||||||||||||
Pinnacle Financial Subordinated Notes | % | Fixed (3) | |||||||||||||||
Other Borrowings | |||||||||||||||||
Revolving credit facility (4) | |||||||||||||||||
Paycheck Protection Program Liquidity Facility | % | ||||||||||||||||
Debt issuance costs and fair value adjustments | ( | ||||||||||||||||
Total subordinated debt and other borrowings | $ |
Three Months Ended June 30, | 2020 - 2019 Percent | Six Months Ended June 30, | 2020 - 2019 Percent | ||||||||||||||||||||
2020 | 2019 | Increase (Decrease) | 2020 | 2019 | Increase (Decrease) | ||||||||||||||||||
Income Statement: | |||||||||||||||||||||||
Interest income | $ | 251,738 | $ | 265,851 | (5.3) | % | $ | 514,807 | $ | 523,734 | (1.7) | % | |||||||||||
Interest expense | 51,081 | 76,933 | (33.6) | % | 120,598 | 147,570 | (18.3) | % | |||||||||||||||
Net interest income | 200,657 | 188,918 | 6.2 | % | 394,209 | 376,164 | 4.8 | % | |||||||||||||||
Provision for credit losses | 68,332 | 7,195 | 849.7 | % | 168,221 | 14,379 | 1,069.9 | % | |||||||||||||||
Net interest income after provision for credit losses | 132,325 | 181,723 | (27.2) | % | 225,988 | 361,785 | (37.5) | % | |||||||||||||||
Noninterest income | 72,954 | 70,682 | 3.2 | % | 143,331 | 121,745 | 17.7 | % | |||||||||||||||
Noninterest expense | 131,605 | 127,686 | 3.1 | % | 268,954 | 241,737 | 11.3 | % | |||||||||||||||
Net income before income taxes | 73,674 | 124,719 | (40.9) | % | 100,365 | 241,793 | (58.5) | % | |||||||||||||||
Income tax expense | 11,230 | 24,398 | (54.0) | % | 9,565 | 47,512 | (79.9) | % | |||||||||||||||
Net income | $ | 62,444 | $ | 100,321 | (37.8) | % | $ | 90,800 | $ | 194,281 | (53.3) | % | |||||||||||
Per Share Data: | |||||||||||||||||||||||
Basic net income per common share | $ | 0.83 | $ | 1.31 | (36.6) | % | $ | 1.20 | $ | 2.54 | (52.8) | % | |||||||||||
Diluted net income per common share | $ | 0.83 | $ | 1.31 | (36.6) | % | $ | 1.20 | $ | 2.53 | (52.6) | % | |||||||||||
Balance Sheet: | |||||||||||||||||||||||
Loans, net of allowance for credit losses | $ | 22,234,928 | $ | 19,693,099 | 12.9 | % | $ | 22,234,928 | $ | 19,693,099 | 12.9 | % | |||||||||||
Deposits | $ | 25,521,829 | $ | 20,181,028 | 26.5 | % | $ | 25,521,829 | $ | 20,181,028 | 26.5 | % | |||||||||||
Performance Ratios: | |||||||||||||||||||||||
Return on average assets (1) | 0.77 | % | 1.55 | % | (50.3) | % | 0.60 | % | 1.54 | % | (61.0) | % | |||||||||||
Return on average stockholders' equity (2) | 5.58 | % | 9.77 | % | (42.9) | % | 4.10 | % | 9.63 | % | (57.4) | % | |||||||||||
Return on average common stockholders' equity (3) | 5.66 | % | 9.77 | % | (42.1) | % | 4.12 | % | 9.63 | % | (57.2) | % |
Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | |||||||||||||||||||
Average Balances | Interest | Rates/ Yields | Average Balances | Interest | Rates/ Yields | |||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Loans (1)(2) | $ | 22,257,168 | $ | 226,281 | 4.16 | % | $ | 18,611,164 | $ | 237,653 | 5.22 | % | ||||||||
Securities: | ||||||||||||||||||||
Taxable | 2,157,081 | 9,589 | 1.79 | % | 1,781,814 | 12,243 | 2.76 | % | ||||||||||||
Tax-exempt (2) | 2,037,730 | 14,596 | 3.44 | % | 1,630,661 | 12,556 | 3.68 | % | ||||||||||||
Federal funds sold and other | 2,618,832 | 1,272 | 0.20 | % | 530,556 | 3,399 | 2.57 | % | ||||||||||||
Total interest-earning assets | 29,070,811 | $ | 251,738 | 3.58 | % | 22,554,195 | $ | 265,851 | 4.85 | % | ||||||||||
Nonearning assets | ||||||||||||||||||||
Intangible assets | 1,868,231 | 1,850,146 | ||||||||||||||||||
Other nonearning assets | 1,846,349 | 1,511,630 | ||||||||||||||||||
Total assets | $ | 32,785,391 | $ | 25,915,971 | ||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||
Interest checking | 4,639,729 | 4,256 | 0.37 | % | 3,150,865 | 9,305 | 1.18 | % | ||||||||||||
Savings and money market | 9,181,266 | 8,904 | 0.39 | % | 7,355,783 | 26,947 | 1.47 | % | ||||||||||||
Time | 4,554,027 | 20,567 | 1.82 | % | 3,958,445 | 22,736 | 2.30 | % | ||||||||||||
Total interest-bearing deposits | 18,375,022 | 33,727 | 0.74 | % | 14,465,093 | 58,988 | 1.64 | % | ||||||||||||
Securities sold under agreements to repurchase | 191,084 | 94 | 0.20 | % | 117,261 | 142 | 0.49 | % | ||||||||||||
Federal Home Loan Bank advances | 2,213,769 | 9,502 | 1.73 | % | 2,164,341 | 11,552 | 2.14 | % | ||||||||||||
Subordinated debt and other borrowings | 706,657 | 7,758 | 4.42 | % | 469,498 | 6,251 | 5.34 | % | ||||||||||||
Total interest-bearing liabilities | 21,486,532 | 51,081 | 0.96 | % | 17,216,193 | 76,933 | 1.79 | % | ||||||||||||
Noninterest-bearing deposits | 6,432,010 | — | 0.00 | % | 4,399,766 | — | 0.00 | % | ||||||||||||
Total deposits and interest-bearing liabilities | 27,918,542 | $ | 51,081 | 0.74 | % | 21,615,959 | $ | 76,933 | 1.43 | % | ||||||||||
Other liabilities | 367,411 | 182,258 | ||||||||||||||||||
Stockholders' equity | 4,499,438 | 4,117,754 | ||||||||||||||||||
Total liabilities and stockholders' equity | $ | 32,785,391 | $ | 25,915,971 | ||||||||||||||||
Net interest income | $ | 200,657 | $ | 188,918 | ||||||||||||||||
Net interest spread (3) | 2.62 | % | 3.06 | % | ||||||||||||||||
Net interest margin (4) | 2.87 | % | 3.48 | % |
(dollars in thousands) | Six months ended | Six months ended | |||||||||||||||||||||
June 30, 2020 | June 30, 2019 | ||||||||||||||||||||||
Average Balances | Interest | Rates/ Yields | Average Balances | Interest | Rates/ Yields | ||||||||||||||||||
Interest-earning assets | |||||||||||||||||||||||
Loans (1) (2) | $ | 21,133,228 | $ | 462,701 | 4.48 | % | $ | 18,276,680 | $ | 467,032 | 5.25 | % | |||||||||||
Securities | |||||||||||||||||||||||
Taxable | 2,040,855 | 19,857 | 1.96 | % | 1,813,693 | 25,783 | 2.87 | % | |||||||||||||||
Tax-exempt (2) | 1,963,822 | 28,420 | 3.47 | % | 1,544,186 | 24,228 | 3.77 | % | |||||||||||||||
Federal funds sold and other | 1,713,314 | 3,829 | 0.45 | % | 500,400 | 6,691 | 2.70 | % | |||||||||||||||
Total interest-earning assets | 26,851,219 | $ | 514,807 | 3.96 | % | 22,134,959 | $ | 523,734 | 4.89 | % | |||||||||||||
Nonearning assets | |||||||||||||||||||||||
Intangible assets | 1,869,147 | 1,851,292 | |||||||||||||||||||||
Other nonearning assets | 1,791,150 | 1,499,104 | |||||||||||||||||||||
Total assets | $ | 30,511,516 | $ | 25,485,355 | |||||||||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||
Interest checking | 4,192,505 | 12,723 | 0.61 | % | 3,140,734 | 18,628 | 1.20 | % | |||||||||||||||
Savings and money market | 8,639,407 | 29,339 | 0.68 | % | 7,446,911 | 53,284 | 1.44 | % | |||||||||||||||
Time | 4,315,462 | 42,363 | 1.97 | % | 3,727,061 | 41,293 | 2.23 | % | |||||||||||||||
Total interest-bearing deposits | 17,147,374 | 84,425 | 0.99 | % | 14,314,706 | 113,205 | 1.59 | % | |||||||||||||||
Securities sold under agreements to repurchase | 166,138 | 209 | 0.25 | % | 113,305 | 287 | 0.51 | % | |||||||||||||||
Federal Home Loan Bank advances | 2,121,828 | 19,909 | 1.89 | % | 2,046,007 | 21,515 | 2.12 | % | |||||||||||||||
Subordinated debt and other borrowings | 690,036 | 16,055 | 4.68 | % | 470,133 | 12,563 | 5.39 | % | |||||||||||||||
Total interest-bearing liabilities | 20,125,376 | 120,598 | 1.21 | % | 16,944,151 | 147,570 | 1.76 | % | |||||||||||||||
Noninterest-bearing deposits | 5,595,869 | — | — | 4,298,169 | — | — | |||||||||||||||||
Total deposits and interest-bearing liabilities | 25,721,245 | $ | 120,598 | 0.94 | % | 21,242,320 | $ | 147,570 | 1.40 | % | |||||||||||||
Other liabilities | 331,975 | 175,193 | |||||||||||||||||||||
Stockholders' equity | 4,458,296 | 4,067,842 | |||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 30,511,516 | $ | 25,485,355 | |||||||||||||||||||
Net interest income | $ | 394,209 | $ | 376,164 | |||||||||||||||||||
Net interest spread (3) | 2.76 | % | 3.14 | % | |||||||||||||||||||
Net interest margin (4) | 3.06 | % | 3.55 | % |
Three Months Ended June 30, | 2020 - 2019 Percent | Six Months Ended June 30, | 2020 - 2019 Percent | ||||||||||||||||||||
2020 | 2019 | Increase (Decrease) | 2020 | 2019 | Increase (Decrease) | ||||||||||||||||||
Noninterest income: | |||||||||||||||||||||||
Service charges on deposit accounts | $ | 6,910 | $ | 8,940 | (22.7)% | $ | 15,942 | $ | 17,482 | (8.8)% | |||||||||||||
Investment services | 5,971 | 5,868 | 1.8% | 15,210 | 11,336 | 34.2% | |||||||||||||||||
Insurance sales commissions | 2,231 | 2,147 | 3.9% | 5,471 | 5,075 | 7.8% | |||||||||||||||||
Gains on mortgage loans sold, net | 19,619 | 6,011 | 226.4% | 28,202 | 10,889 | 159.0% | |||||||||||||||||
Investment (gains) losses on sales of securities, net | (128) | (4,466) | 97.1% | 335 | (6,426) | 105.2% | |||||||||||||||||
Trust fees | 3,958 | 3,461 | 14.4% | 8,128 | 6,756 | 20.3% | |||||||||||||||||
Income from equity method investment | 17,208 | 32,261 | (46.7)% | 32,800 | 45,551 | (28.0)% | |||||||||||||||||
Other noninterest income: | |||||||||||||||||||||||
Interchange and other consumer fees | 8,323 | 9,088 | (8.4)% | 18,292 | 16,595 | 10.2% | |||||||||||||||||
Bank-owned life insurance | 4,726 | 4,201 | 12.5% | 9,378 | 8,296 | 13.0% | |||||||||||||||||
Loan swap fees | 614 | 799 | (23.2)% | 2,801 | 1,560 | 79.6% | |||||||||||||||||
SBA loan sales | 941 | 1,171 | (19.6)% | 2,282 | 1,743 | 30.9% | |||||||||||||||||
Gain (loss) on other equity investments | (278) | 832 | (133.4)% | (452) | 1,614 | (128.0)% | |||||||||||||||||
Other noninterest income | 2,859 | 369 | 674.8% | 4,942 | 1,274 | 287.9% | |||||||||||||||||
Total other noninterest income | 17,185 | 16,460 | 4.4% | 37,243 | 31,082 | 19.8% | |||||||||||||||||
Total noninterest income | $ | 72,954 | $ | 70,682 | 3.2% | $ | 143,331 | $ | 121,745 | 17.7% |
Three Months Ended June 30, | 2020 - 2019 Percent | Six Months Ended June 30, | 2020 - 2019 Percent | ||||||||||||||||||||||||||
2020 | 2019 | Increase (Decrease) | 2020 | 2019 | Increase (Decrease) | ||||||||||||||||||||||||
Noninterest expense: | |||||||||||||||||||||||||||||
Salaries and employee benefits: | |||||||||||||||||||||||||||||
Salaries | $ | 54,645 | $ | 44,625 | 22.5% | $ | 106,821 | $ | 89,681 | 19.1% | |||||||||||||||||||
Commissions | 3,611 | 3,224 | 12.0% | 7,594 | 6,364 | 19.3% | |||||||||||||||||||||||
Cash and equity incentives | 4,824 | 16,159 | (70.1%) | 15,104 | 27,322 | (44.7%) | |||||||||||||||||||||||
Employee benefits and other | 10,807 | 11,612 | (6.9%) | 24,848 | 22,629 | 9.8% | |||||||||||||||||||||||
Total salaries and employee benefits | 73,887 | 75,620 | (2.3%) | 154,367 | 145,996 | 5.7% | |||||||||||||||||||||||
Equipment and occupancy | 22,026 | 23,844 | (7.6%) | 43,004 | 43,175 | (0.4%) | |||||||||||||||||||||||
Other real estate expense, net | 2,888 | 2,523 | 14.5% | 5,303 | 2,769 | 91.5% | |||||||||||||||||||||||
Marketing and other business development | 2,142 | 3,282 | (34.7%) | 5,393 | 6,230 | (13.4%) | |||||||||||||||||||||||
Postage and supplies | 2,070 | 2,079 | (0.4%) | 4,060 | 3,971 | 2.2% | |||||||||||||||||||||||
Amortization of intangibles | 2,479 | 2,271 | 9.2% | 4,999 | 4,582 | 9.1% | |||||||||||||||||||||||
Other noninterest expense: | |||||||||||||||||||||||||||||
Deposit related expense | 5,677 | 4,873 | 16.5% | 10,915 | 9,416 | 15.9% | |||||||||||||||||||||||
Lending related expense | 10,476 | 5,401 | 94.0% | 22,544 | 10,700 | 110.7% | |||||||||||||||||||||||
Wealth management related expense | 499 | 610 | (18.2%) | 1,057 | 1,140 | (7.3%) | |||||||||||||||||||||||
Other noninterest expense | 9,461 | 7,183 | 31.7% | 17,312 | 13,758 | 25.8% | |||||||||||||||||||||||
Total other noninterest expense | $ | 26,113 | $ | 18,067 | 44.5% | $ | 51,828 | $ | 35,014 | 48.0% | |||||||||||||||||||
Total noninterest expense | $ | 131,605 | $ | 127,686 | 3.1% | $ | 268,954 | $ | 241,737 | 11.3% |
Year acquired | Initial Valuation (in millions) | Amortizable Life (in years) | Remaining Value (in millions) | ||||||||||||||||||||
Core Deposit Intangible: | |||||||||||||||||||||||
CapitalMark | 2015 | $ | 6.2 | 7 | $ | 0.6 | |||||||||||||||||
Magna Bank | 2015 | 3.2 | 6 | 0.1 | |||||||||||||||||||
Avenue | 2016 | 8.8 | 9 | 2.7 | |||||||||||||||||||
BNC | 2017 | 48.1 | 10 | 27.9 | |||||||||||||||||||
Book of Business Intangible: | |||||||||||||||||||||||
Miller Loughry Beach Insurance | 2008 | $ | 1.3 | 20 | $ | 0.2 | |||||||||||||||||
CapitalMark | 2015 | 0.3 | 16 | 0.1 | |||||||||||||||||||
BNC Insurance | 2017 | 0.4 | 20 | 0.3 | |||||||||||||||||||
BNC Trust | 2017 | 1.9 | 10 | 1.3 | |||||||||||||||||||
Advocate Capital | 2019 | 13.6 | 13 | 11.5 |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Amount | Percent | Amount | Percent | ||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||
Owner-occupied | $ | 2,708,306 | 12.0 | % | $ | 2,669,766 | 13.5 | % | |||||||||||||||
Non-owner occupied | 5,384,018 | 23.9 | % | 5,039,452 | 25.5 | % | |||||||||||||||||
Consumer real estate – mortgage | 3,042,604 | 13.5 | % | 3,068,625 | 15.5 | % | |||||||||||||||||
Construction and land development | 2,574,494 | 11.4 | % | 2,430,483 | 12.3 | % | |||||||||||||||||
Commercial and industrial | 8,516,333 | 37.8 | % | 6,290,296 | 31.8 | % | |||||||||||||||||
Consumer and other | 294,545 | 1.4 | % | 289,254 | 1.4 | % | |||||||||||||||||
Total loans | $ | 22,520,300 | 100.0 | % | $ | 19,787,876 | 100.0 | % |
Amounts at June 30, 2020 | Percentage | Percentage | ||||||||||||||||||||||||
Fixed Rates | Variable Rates | Totals | At June 30, 2020 | At December 31, 2019 | ||||||||||||||||||||||
Based on contractual maturity: | ||||||||||||||||||||||||||
Due within one year | $ | 2,238,016 | $ | 1,691,375 | $ | 3,929,391 | 17.4% | 20.6% | ||||||||||||||||||
Due in one year to five years | 8,004,035 | 4,694,556 | 12,698,591 | 56.4% | 50.2% | |||||||||||||||||||||
Due after five years | 3,896,408 | 1,995,910 | 5,892,318 | 26.2% | 29.2% | |||||||||||||||||||||
Totals | $ | 14,138,459 | $ | 8,381,841 | $ | 22,520,300 | 100.0% | 100.0% | ||||||||||||||||||
Based on contractual repricing dates: | ||||||||||||||||||||||||||
Daily floating rate | $ | — | $ | 1,289,724 | $ | 1,289,724 | 5.7% | 13.4% | ||||||||||||||||||
Due within one year | 2,238,016 | 6,503,917 | 8,741,933 | 38.8% | 42.7% | |||||||||||||||||||||
Due in one year to five years | 8,004,035 | 309,803 | 8,313,838 | 36.9% | 27.7% | |||||||||||||||||||||
Due after five years | 3,896,408 | 278,397 | 4,174,805 | 18.6% | 16.2% | |||||||||||||||||||||
Totals | $ | 14,138,459 | $ | 8,381,841 | $ | 22,520,300 | 100.0% | 100.0% |
June 30, | December 31, | ||||||||||
Loans past due 30 to 89 days: | 2020 | 2019 | |||||||||
Commercial real estate: | |||||||||||
Owner occupied | $ | 3,687 | $ | 5,239 | |||||||
Non-owner occupied | 640 | 6,797 | |||||||||
Consumer real estate – mortgage | 4,875 | 13,803 | |||||||||
Construction and land development | 2,059 | 2,103 | |||||||||
Commercial and industrial | 10,292 | 10,952 | |||||||||
Consumer and other | 1,603 | 2,184 | |||||||||
Total loans past due 30 to 89 days | $ | 23,156 | $ | 41,078 | |||||||
Loans past due 90 days or more: | |||||||||||
Commercial real estate: | |||||||||||
Owner occupied | $ | 4,943 | $ | 1,719 | |||||||
Non-owner occupied | 9,950 | 3,816 | |||||||||
Consumer real estate – mortgage | 5,917 | 7,304 | |||||||||
Construction and land development | 2,154 | 1,487 | |||||||||
Commercial and industrial | 4,991 | 6,364 | |||||||||
Consumer and other | 548 | 570 | |||||||||
Total loans past due 90 days or more | $ | 28,503 | $ | 21,260 | |||||||
Ratios: | |||||||||||
Loans past due 30 to 89 days as a percentage of total loans | 0.10 | % | 0.21 | % | |||||||
Loans past due 90 days or more as a percentage of total loans | 0.13 | % | 0.11 | % | |||||||
Total loans in past due status as a percentage of total loans | 0.23 | % | 0.32 | % |
Accretable Yield | Nonaccretable Yield | Total | |||||||||||||||
December 31, 2019 | $ | (51,322) | $ | (3,828) | $ | (55,150) | |||||||||||
Reclassification of discount to allowance for credit losses | — | 3,828 | 3,828 | ||||||||||||||
Year-to-date accretion and settlements | 13,319 | — | 13,319 | ||||||||||||||
June 30, 2020 | $ | (38,003) | $ | — | $ | (38,003) |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Amount | Percent | Amount | Percent | ||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||
Owner occupied | $ | 38,803 | 12.0 | % | $ | 13,406 | 13.5 | % | |||||||||||||||
Non-owner occupied | 68,426 | 23.9 | % | 19,963 | 25.5 | % | |||||||||||||||||
Consumer real estate - mortgage | 29,358 | 13.5 | % | 8,054 | 15.5 | % | |||||||||||||||||
Construction and land development | 41,897 | 11.4 | % | 12,662 | 12.3 | % | |||||||||||||||||
Commercial and industrial | 100,610 | 37.8 | % | 36,112 | 31.8 | % | |||||||||||||||||
Consumer and other | 6,278 | 1.4 | % | 3,595 | 1.4 | % | |||||||||||||||||
Unallocated | — | NA | 985 | NA | |||||||||||||||||||
Total allowance for credit losses on loans | $ | 285,372 | 100.0 | % | $ | 94,777 | 100.0 | % |
Six Months Ended June 30, 2020 | Year ended December 31, 2019 | ||||||||||
Balance at beginning of period | $ | 94,777 | $ | 83,575 | |||||||
Impact of adopting ASC 326 | 38,102 | — | |||||||||
Provision for credit losses on loans | 168,033 | 27,283 | |||||||||
Charged-off loans: | |||||||||||
Commercial real estate: | |||||||||||
Owner occupied | (1,061) | (1,625) | |||||||||
Non-owner occupied | (263) | (75) | |||||||||
Consumer real estate – mortgage | (2,126) | (1,335) | |||||||||
Construction and land development | — | (18) | |||||||||
Commercial and industrial | (14,998) | (19,208) | |||||||||
Consumer and other loans | (2,247) | (6,206) | |||||||||
Total charged-off loans | (20,695) | (28,467) | |||||||||
Recoveries of previously charged-off loans: | |||||||||||
Commercial real estate: | |||||||||||
Owner occupied | 225 | 1,252 | |||||||||
Non-owner occupied | 199 | 980 | |||||||||
Consumer real estate – mortgage | 674 | 1,827 | |||||||||
Construction and land development | 93 | 682 | |||||||||
Commercial and industrial | 2,997 | 6,473 | |||||||||
Consumer and other loans | 967 | 1,172 | |||||||||
Total recoveries of previously charged-off loans | 5,155 | 12,386 | |||||||||
Net charge-offs | (15,540) | (16,081) | |||||||||
Balance at end of period | $ | 285,372 | $ | 94,777 | |||||||
Ratio of allowance for credit losses on loans to total loans outstanding at end of period | 1.27 | % | 0.48 | % | |||||||
Ratio of net charge-offs to average total loans outstanding for the period (1) | 0.15 | % | 0.08 | % |
June 30, 2020 | December 31, 2019 | ||||||||||
Weighted average life | 6.73 years | 6.55 years | |||||||||
Effective duration* | 4.60% | 4.75% | |||||||||
Tax equivalent yield | 2.59% | 2.85% |
June 30, 2020 | Percent | December 31, 2019 | Percent | ||||||||||||||||||||
Core funding: | |||||||||||||||||||||||
Noninterest-bearing deposit accounts | $ | 6,892,864 | 24.4% | $ | 4,795,476 | 20.7% | |||||||||||||||||
Interest-bearing demand accounts | 3,747,577 | 13.3% | 3,135,581 | 13.6% | |||||||||||||||||||
Savings and money market accounts | 7,424,099 | 26.3% | 6,807,825 | 29.5% | |||||||||||||||||||
Time deposit accounts less than $250,000 | 1,524,146 | 5.4% | 1,674,970 | 7.2% | |||||||||||||||||||
Reciprocating demand deposit accounts (1) | 455,889 | 1.6% | 302,610 | 1.3% | |||||||||||||||||||
Reciprocating savings accounts (1) | 1,120,722 | 4.0% | 717,149 | 3.1% | |||||||||||||||||||
Reciprocating CD accounts (1) | 226,496 | 0.8% | 183,868 | 0.8% | |||||||||||||||||||
Total core funding | 21,391,793 | 75.8% | 17,617,479 | 76.2% | |||||||||||||||||||
Noncore funding: | |||||||||||||||||||||||
Relationship based noncore funding: | |||||||||||||||||||||||
Other time deposits | 827,254 | 2.9% | 850,189 | 3.7% | |||||||||||||||||||
Securities sold under agreements to repurchase | 194,553 | 0.7% | 126,354 | 0.5% | |||||||||||||||||||
Total relationship based noncore funding | 1,021,807 | 3.6% | 976,543 | 4.2% | |||||||||||||||||||
Wholesale funding: | |||||||||||||||||||||||
Brokered deposits | 1,405,444 | 5.0% | 480,942 | 2.1% | |||||||||||||||||||
Brokered time deposits | 1,897,338 | 6.7% | 1,232,418 | 5.3% | |||||||||||||||||||
Federal Home Loan Bank advances | 1,787,551 | 6.3% | 2,062,534 | 8.9% | |||||||||||||||||||
Paycheck Protection Program liquidity facility | 47,082 | 0.2% | — | —% | |||||||||||||||||||
Subordinated debt and other funding | 669,961 | 2.4% | 749,080 | 3.3% | |||||||||||||||||||
Total wholesale funding | 5,807,376 | 20.6% | 4,524,974 | 19.6% | |||||||||||||||||||
Total noncore funding | 6,829,183 | 24.2% | 5,501,517 | 23.8% | |||||||||||||||||||
Totals | $ | 28,220,976 | 100.0% | $ | 23,118,996 | 100.0% |
Balances | Weighted Avg. Rate | ||||||||||
Denominations less than $100,000 | |||||||||||
Three months or less | $ | 492,482 | 1.68 | % | |||||||
Over three but less than six months | 429,745 | 1.90 | % | ||||||||
Over six but less than twelve months | 841,281 | 1.36 | % | ||||||||
Over twelve months | 726,287 | 1.06 | % | ||||||||
$ | 2,489,795 | 1.43 | % | ||||||||
Denominations $100,000 and greater | |||||||||||
Three months or less | $ | 644,536 | 1.86 | % | |||||||
Over three but less than six months | 433,041 | 1.70 | % | ||||||||
Over six but less than twelve months | 576,978 | 1.63 | % | ||||||||
Over twelve months | 330,884 | 1.85 | % | ||||||||
$ | 1,985,439 | 1.76 | % | ||||||||
Totals | $ | 4,475,234 | 1.57 | % |
Name | Date Established | Maturity | Total Debt Outstanding | Interest Rate at June 30, 2020 | Coupon Structure | |||||||||||||||||||||||||||
Trust preferred securities | ||||||||||||||||||||||||||||||||
Pinnacle Statutory Trust I | December 29, 2003 | December 30, 2033 | $ | 10,310 | 3.10 | % | 30-day LIBOR + 2.80% | |||||||||||||||||||||||||
Pinnacle Statutory Trust II | September 15, 2005 | September 30, 2035 | 20,619 | 1.71 | % | 30-day LIBOR + 1.40% | ||||||||||||||||||||||||||
Pinnacle Statutory Trust III | September 7, 2006 | September 30, 2036 | 20,619 | 1.96 | % | 30-day LIBOR + 1.65% | ||||||||||||||||||||||||||
Pinnacle Statutory Trust IV | October 31, 2007 | September 30, 2037 | 30,928 | 3.16 | % | 30-day LIBOR + 2.85% | ||||||||||||||||||||||||||
BNC Capital Trust I | April 3, 2003 | April 15, 2033 | 5,155 | 4.47 | % | 30-day LIBOR + 3.25% | ||||||||||||||||||||||||||
BNC Capital Trust II | March 11, 2004 | April 7, 2034 | 6,186 | 4.07 | % | 30-day LIBOR + 2.85% | ||||||||||||||||||||||||||
BNC Capital Trust III | September 23, 2004 | September 23, 2034 | 5,155 | 3.62 | % | 30-day LIBOR + 2.40% | ||||||||||||||||||||||||||
BNC Capital Trust IV | September 27, 2006 | December 31, 2036 | 7,217 | 2.01 | % | 30-day LIBOR + 1.70% | ||||||||||||||||||||||||||
Valley Financial Trust I | June 26, 2003 | June 26, 2033 | 4,124 | 4.33 | % | 30-day LIBOR + 3.10% | ||||||||||||||||||||||||||
Valley Financial Trust II | September 26, 2005 | December 15, 2035 | 7,217 | 1.80 | % | 30-day LIBOR + 1.49% | ||||||||||||||||||||||||||
Valley Financial Trust III | December 15, 2006 | January 30, 2037 | 5,155 | 2.49 | % | 30-day LIBOR + 1.73% | ||||||||||||||||||||||||||
Southcoast Capital Trust III | August 5, 2005 | September 30, 2035 | 10,310 | 1.81 | % | 30-day LIBOR + 1.50% | ||||||||||||||||||||||||||
Subordinated Debt | ||||||||||||||||||||||||||||||||
Pinnacle Bank Subordinated Notes | July 30, 2015 | July 30, 2025 | 60,000 | 4.88 | % | Fixed (1) | ||||||||||||||||||||||||||
Pinnacle Bank Subordinated Notes | March 10, 2016 | July 30, 2025 | 70,000 | 4.88 | % | Fixed (1) | ||||||||||||||||||||||||||
Pinnacle Financial Subordinated Notes | November 16, 2016 | November 16, 2026 | 120,000 | 5.25 | % | Fixed (2) | ||||||||||||||||||||||||||
Pinnacle Financial Subordinated Notes | September 11, 2019 | September 15, 2029 | 300,000 | 4.13 | % | Fixed (3) | ||||||||||||||||||||||||||
Other Borrowings | ||||||||||||||||||||||||||||||||
Revolving credit facility (4) | April 22, 2020 | July 24, 2020 | — | 30-day LIBOR + 1.50% | ||||||||||||||||||||||||||||
Paycheck Protection Program Liquidity Facility | April 22, 2020 | September 30, 2020 | 47,082 | 0.35 | % | Fixed | ||||||||||||||||||||||||||
Debt issuance costs and fair value adjustments | (13,034) | |||||||||||||||||||||||||||||||
Total subordinated debt and other borrowings | $ | 717,043 |
Estimated % Change in Net Interest Income Over 12 Months | |||||
June 30, 2020* | |||||
Instantaneous Rate Change | |||||
100 bps increase | 0.0 | % | |||
200 bps increase | 1.7 | % | |||
100 bps decrease | 0.6 | % |
June 30, 2020* | |||||
Instantaneous Rate Change | |||||
100 bps increase | 1.9 | % | |||
200 bps increase | (1.2 | %) | |||
100 bps decrease | (2.9 | %) |
Scheduled Maturities | Amount | Interest Rates (1) | |||||||||
2020 | $ | 125,000 | 0.62% | ||||||||
2021 | 575,000 | 0.89% | |||||||||
2022 | — | —% | |||||||||
2023 | — | —% | |||||||||
2024 | 200,000 | 2.09% | |||||||||
Thereafter | 891,266 | 1.95% | |||||||||
Total | $ | 1,791,266 | |||||||||
Weighted average interest rate | 1.53% |
Period | Total Number of Shares Repurchased (1)(2) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
April 1, 2020 to April 30, 2020 | 3,890 | $ | 37.14 | — | 67,170,000 | |||||||||||||||||||||
May 1, 2020 to May 31, 2020 | 1,089 | 36.83 | — | 67,170,000 | ||||||||||||||||||||||
June 1, 2020 to June 30, 2020 | 9,009 | 42.95 | — | 67,170,000 | ||||||||||||||||||||||
Total | 13,988 | $ | 40.62 | — | 67,170,000 |
101.INS* | Inline XBRL Instance Document | |||||||
101.SCH* | Inline XBRL Schema Documents | |||||||
101.CAL* | Inline XBRL Calculation Linkbase Document | |||||||
101.LAB* | Inline XBRL Label Linkbase Document | |||||||
101.PRE* | Inline XBRL Presentation Linkbase Document | |||||||
101.DEF* | Inline XBRL Definition Linkbase Document | |||||||
104 | The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline XBRL (included in Exhibit 101) | |||||||
* | Filed herewith. | |||||||
** | Furnished herewith. |
PINNACLE FINANCIAL PARTNERS, INC. | ||||||||
August 7, 2020 | /s/ M. Terry Turner | |||||||
M. Terry Turner | ||||||||
President and Chief Executive Officer | ||||||||
August 7, 2020 | /s/ Harold R. Carpenter | |||||||
Harold R. Carpenter | ||||||||
Chief Financial Officer |
August 7, 2020 | Signature: | /s/ M. Terry Turner | ||||||
M. Terry Turner | ||||||||
President and Chief Executive Officer | ||||||||
Pinnacle Financial Partners, Inc. |
August 7, 2020 | Signature: | /s/ Harold R. Carpenter | ||||||
Harold R. Carpenter | ||||||||
Chief Financial Officer | ||||||||
Pinnacle Financial Partners, Inc. |
August 7, 2020 | /s/ M. Terry Turner | |||||||
M. Terry Turner | ||||||||
President and Chief Executive Officer | ||||||||
Pinnacle Financial Partners, Inc. |
August 7, 2020 | /s/ Harold R. Carpenter | |||||||
Harold R. Carpenter | ||||||||
Chief Financial Officer | ||||||||
Pinnacle Financial Partners, Inc. |
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CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Securities held-to-maturity, fair value | $ 1,061,233,000 | $ 201,217,000 |
Allowance for credit losses - securities held-to-maturity | $ (188,000) | $ 0 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 225,000 | 0 |
Preferred stock, shares outstanding (in shares) | 225,000 | 0 |
Preferred Stock, Liquidation Preference Per Share | $ 1 | $ 0 |
Common stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Common stock, shares authorized (in shares) | 180,000,000 | 180,000,000 |
Common stock, shares issued (in shares) | 75,836,000 | 76,564,000 |
Common stock, shares outstanding (in shares) | 75,836,000 | 76,564,000 |
Summary of Significant Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Nature of Business — Pinnacle Financial Partners, Inc. (Pinnacle Financial) is a financial holding company whose primary business is conducted by its wholly-owned subsidiary, Pinnacle Bank. Pinnacle Bank is a commercial bank headquartered in Nashville, Tennessee. Pinnacle Financial completed its acquisitions of CapitalMark Bank & Trust (CapitalMark), Magna Bank (Magna), Avenue Financial Holdings, Inc. (Avenue) and BNC Bancorp (BNC) on July 31, 2015, September 1, 2015, July 1, 2016 and June 16, 2017, respectively. Pinnacle Financial and Pinnacle Bank also collectively hold a 49% interest in Bankers Healthcare Group, LLC (BHG), a company that primarily serves as a full-service commercial loan provider to healthcare and other professional practices. Pinnacle Bank provides a full range of banking services, including investment, mortgage, insurance, and comprehensive wealth management services, in its 12 primarily urban markets within Tennessee, the Carolinas, Virginia and beginning in December 2019, Georgia. On July 2, 2019, Pinnacle Bank acquired all of the outstanding stock of Advocate Capital, Inc. (Advocate Capital) for a cash price of $59.0 million. Advocate Capital is a finance firm headquartered in Nashville, TN which supports the financial needs of legal firms through both case expense financing and working capital lines of credit. Pinnacle Financial accounted for the acquisition of Advocate Capital under the acquisition method in accordance with ASC Topic 805. Accordingly, the purchase price is allocated to the fair value of the assets acquired and liabilities acquired as of the date of acquisition. Determining the fair value of assets and liabilities, particularly illiquid assets and liabilities, is a complicated process involving significant judgment regarding estimates and assumptions used to calculate estimated fair value. At the acquisition date, Advocate Capital's net assets were recorded at a fair value of approximately $45.6 million, consisting mainly of loans receivable. Advocate Capital's $134.3 million of indebtedness was also paid off in connection with consummation of the acquisition. The purchase price allocations for the acquisition of Advocate Capital were finalized during the second quarter of 2020. Basis of Presentation — The accompanying unaudited consolidated financial statements have been prepared in accordance with instructions to Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles (U.S. GAAP). All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods covered by the report have been included. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes appearing in Pinnacle Financial's Annual Report on Form 10-K for the year ended December 31, 2019 (2019 10-K). These consolidated financial statements include the accounts of Pinnacle Financial and its wholly-owned subsidiaries. Certain statutory trust affiliates of Pinnacle Financial, as noted in Note 11. Other Borrowings are included in these consolidated financial statements pursuant to the equity method of accounting. Significant intercompany transactions and accounts are eliminated in consolidation. Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for credit losses and determination of any impairment of goodwill or intangible assets. It is reasonably possible Pinnacle Financial's estimate of the allowance for credit losses and determination of impairment of goodwill or intangible assets could change as a result of the continued impact of the COVID-19 pandemic on the economy. The resulting change in these estimates could be material to Pinnacle Financial's consolidated financial statements. There have been no significant changes to Pinnacle Financial's significant accounting policies as disclosed in the 2019 10-K other than those that relate to the allowance for credit losses upon adoption of ASU 2016-13 as described later within Note 1. Cash Flow Information — Supplemental cash flow information addressing certain cash and noncash transactions for the six months ended June 30, 2020 and 2019 was as follows (in thousands):
(1) Includes $79.9 million recognized upon initial adoption of ASU 2016-02 on January 1, 2019. Income Per Common Share — Basic net income per common share (EPS) is computed by dividing net income by the weighted average common shares outstanding for the period. Diluted EPS reflects the dilution that could occur if securities or other contracts to issue common stock were exercised or converted. The difference between basic and diluted weighted average common shares outstanding is attributable to common stock options, restricted share awards, and restricted share unit awards. The dilutive effect of outstanding options, restricted share awards, and restricted share unit awards is reflected in diluted EPS by application of the treasury stock method. The following is a summary of the basic and diluted net income per common share calculations for the three and six months ended June 30, 2020 and 2019 (in thousands, except per share data):
Allowance for Credit Losses - Loans - As described below under Recently Adopted Accounting Pronouncements, Pinnacle Financial adopted FASB ASC 326 effective January 1, 2020, which requires the estimation of an allowance for credit losses in accordance with the current expected credit loss (CECL) methodology. Pinnacle Financial's management assesses the adequacy of the allowance on a quarterly basis. This assessment includes procedures to estimate the allowance and test the adequacy and appropriateness of the resulting balance. The level of the allowance is based upon management's evaluation of historical default and loss experience, current and projected economic conditions, asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrowers' ability to repay a loan (including the timing of future payments), the estimated value of any underlying collateral, composition of the loan portfolio, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. The level of the allowance for credit losses maintained by management is believed adequate to absorb all expected future losses inherent in the loan portfolio at the balance sheet date. The allowance is increased through provision for credit losses and decreased by charge-offs, net of recoveries of amounts previously charged-off. The allowance for credit losses is measured on a collective basis for pools of loans with similar risk characteristics. Pinnacle Financial has identified the following pools of financial assets with similar risk characteristics for measuring expected credit losses: •Owner occupied commercial real estate mortgage loans - Owner occupied commercial real estate mortgage loans are secured by commercial office buildings, industrial buildings, warehouses or retail buildings where the owner of the building occupies the property. For such loans, repayment is largely dependent upon the operation of the borrower's business. •Non-owner occupied commercial real estate loans - These loans represent investment real estate loans secured by office buildings, industrial buildings, warehouses, retail buildings, and multifamily residential housing. Repayment is primarily dependent on lease income generated from the underlying collateral. •Consumer real estate mortgage loans - Consumer real estate mortgage consists primarily of loans secured by 1-4 family residential properties, including home equity lines of credit. Repayment is primarily dependent on the personal cash flow of the borrower. •Construction and land development loans - Construction and land development loans include loans where the repayment is dependent on the successful completion and eventual sale, refinance or 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. These loans are generally secured by equipment, inventory, and accounts receivable of the borrower and repayment is primarily dependent on business cash flows. •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, consumer credit cards and loans to finance education, among others. Many consumer loans are unsecured. Repayment is primarily dependent on the personal cash flow of the borrower. For commercial real estate, consumer real estate, construction and land development, and commercial and industrial loans, Pinnacle Financial primarily utilizes a probability of default (PD) and loss given default (LGD) modeling approach. These models utilize historical correlations between default experience and certain macroeconomic factors as determined through a statistical regression analysis. All loan segments modeled using this approach consider changes in the national unemployment rate. In addition to the national unemployment rate, gross domestic product and the three month treasury rate are considered for owner occupied commercial real estate, the commercial real estate price index and the five year treasury rate are considered for construction loans, and the three month treasury rate is considered for commercial and industrial loans. Projections of these macroeconomic factors, obtained from an independent third party, are utilized to predict quarterly rates of default based on the statistical PD models. The predicted quarterly default rates are then applied to the estimated future exposure at default (EAD), as determined based on contractual amortization terms and estimated prepayments. An estimated LGD, determined based on historical loss experience, is applied to the quarterly defaulted balances for each loan segment to estimate future losses of the loan's amortized cost. Losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable period losses are reverted to long term historical averages. The reasonable and supportable period and reversion period are re-evaluated each quarter by Pinnacle Financial and are dependent on the current economic environment among other factors. Upon implementation of CECL on January 1, 2020, a reasonable and supportable period of eighteen months was utilized for all loan segments, followed by a twelve month straight line reversion to long term averages. At June 30, 2020, a reasonable and supportable period of twelve months was used for owner occupied commercial real estate, construction and land development and commercial and industrial, and a reasonable and supportable period of eighteen months was used for all other loan segments. The twelve month straight line reversion period was maintained for all loan segments at June 30, 2020. For the consumer and other loan segment, a loss rate approach is utilized. For these loans, historical charge off rates are applied to projected future balances, as determined in the same manner as EAD for the statistically modeled loan segments. For credit cards, which have no amortization terms or contractual maturities, future balances are estimated based on expected payment volume applied to the current balance. The estimated loan losses for all loan segments are adjusted for changes in qualitative factors not inherently considered in the quantitative analyses. The qualitative categories and the measurements used to quantify the risks within each of these categories are subjectively selected by management, but measured by objective measurements period over period. The data for each measurement may be obtained from internal or external sources. The current period measurements are evaluated and assigned a factor commensurate with the current level of risk relative to past measurements over time. The resulting qualitative adjustments are applied to the relevant collectively evaluated loan portfolios. These adjustments are based upon quarterly trend assessments in portfolio concentrations, policy exceptions, associate retention, independent loan review results, collateral considerations, risk ratings, competition and peer group credit quality trends. The qualitative allowance allocation, as determined by the processes noted above, is increased or decreased for each loan segment based on the assessment of these various qualitative factors. Loans that do not share similar risk characteristics with the collectively evaluated pools are evaluated on an individual basis and are excluded from the collectively evaluated pools. Individual evaluations are generally performed for loans greater than $1.0 million which have experienced significant credit deterioration. Such loans are evaluated for credit losses based on either discounted cash flows or the fair value of collateral. When management determines that foreclosure is probable, expected credit losses are based on the fair value of the collateral, less selling costs. For loans for which foreclosure is not probable, but for which repayment is expected to be provided substantially through the operation or sale of the collateral, Pinnacle Financial has elected the practical expedient under ASC 326 to estimate expected credit losses based on the fair value of collateral, with selling costs considered in the event sale of the collateral is expected. Loans for which terms have been modified in a troubled debt restructuring (TDR) are evaluated using these same individual evaluation methods. In the event the discounted cash flow method is used for a TDR, the original interest rate is used to discount expected cash flows. In assessing the adequacy of the allowance for credit losses, Pinnacle Financial considers the results of Pinnacle Financial's ongoing independent loan review process. Pinnacle Financial undertakes this process both to ascertain those loans in the portfolio with elevated credit risk and to assist in its overall evaluation of the risk characteristics of the entire loan portfolio. Its loan review process includes the judgment of management, independent internal loan reviewers and reviews that may have been conducted by third-party reviewers including regulatory examiners. Pinnacle Financial incorporates relevant loan review results in the allowance. In accordance with CECL, losses are estimated over the remaining contractual terms of loans, adjusted for prepayments. The contractual term excludes expected extensions, renewals and modifications unless management has a reasonable expectation at the reporting date that a troubled debt restructuring will be executed or such renewals, extensions or modifications are included in the original loan agreement and are not unconditionally cancellable by Pinnacle Financial. Credit losses are estimated on the amortized cost basis of loans, which includes the principal balance outstanding, purchase discounts and premiums, deferred loan fees and costs and accrued interest receivable. Accrued interest receivable is presented separately on the balance sheets and as allowed under ASU 2016-13 is excluded from the tabular loan disclosures in Note 4. While policies and procedures used to estimate the allowance for credit losses, as well as the resultant provision for credit losses charged to income, are considered adequate by management and are reviewed periodically by regulators, model validators and internal audit, they are necessarily approximate and imprecise. There are factors beyond Pinnacle Financial's control, such as changes in projected economic conditions, real estate markets or particular industry conditions which may materially impact asset quality and the adequacy of the allowance for credit losses and thus the resulting provision for credit losses. Allowance for Credit Losses on Off Balance Sheet Credit Exposures - Pinnacle Financial estimates expected credit losses over the contractual term of obligations to extend credit, unless the obligation is unconditionally cancellable. The allowance for off balance sheet exposures is adjusted through other noninterest expense. The estimates are determined based on the likelihood of funding during the contractual term and an estimate of credit losses subsequent to funding. Estimated credit losses on subsequently funded balances are based on the same assumptions as used to estimated credit losses on existing funded loans. Allowance for Credit Losses - Securities Held-to-Maturity - Expected credit losses on debt securities classified as held-to-maturity are measured on a collective basis by major security type. The estimates of expected credit losses are based on historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The models rely on regression analyses to predict PD based on projected macroeconomic factors, including unemployment rates and GDP, among others. At June 30, 2020, Pinnacle Financial's held-to-maturity securities consisted entirely of municipal securities rated A or higher by the ratings agencies. A reasonable and supportable period of 18 months and reversion period of 12 months is utilized to estimate credit losses on held-to-maturity municipal securities. The allowance is increased through provision for credit losses and decreased by charge-offs, net of recoveries of amounts previously charged-off. Allowance for Credit Losses - Securities Available-for-Sale - For any securities classified as available-for-sale that are in an unrealized loss position at the balance sheet date, Pinnacle Financial assesses whether or not it intends to sell the security, or more likely than not will be required to sell the security, before recovery of its amortized cost basis. If either criteria is met, the security's amortized cost basis is written down to fair value through net income. If neither criteria is met, Pinnacle Financial evaluates whether any portion of the decline in fair value is the result of credit deterioration. Such evaluations consider the extent to which the amortized cost of the security exceeds its fair value, changes in credit ratings and any other known adverse conditions related to the specific security. If the evaluation indicates that a credit loss exists, an allowance for credit losses is recorded through provisions for credit losses for the amount by which the amortized cost basis of the security exceeds the present value of cash flows expected to be collected, limited by the amount by which the amortized cost exceeds fair value. Any impairment not recognized in the allowance for credit losses is recognized in other comprehensive income. Recently Adopted Accounting Pronouncements — In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment to simplify how entities other than private companies, such as public business entities and not-for-profit entities, are required to test goodwill for impairment by eliminating the comparison of the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. The amendments became effective for Pinnacle Financial on January 1, 2020 and did not have a material impact on Pinnacle Financial's consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326), and has issued subsequent amendments thereto, which introduces the current expected credit losses (CECL) methodology. Among other things, ASC 326 requires the measurement of all expected credit losses for financial assets, including loans and held-to-maturity debt securities, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The new model requires institutions to calculate all probable and estimable losses that are expected to be incurred through the financial asset's contractual life through a provision for credit losses, including loans obtained as a result of any acquisition not deemed to be purchased credit deteriorated (PCD). ASC 326 also requires the allowance for credit losses for PCD loans to be determined in a manner similar to that of other financial assets measured at amortized cost; however, the initial allowance determined at acquisition is added to the purchase price rather than recorded as provision expense. In accordance with ASC 326, the disclosure of credit quality indicators related to the amortized cost of financing receivables is further disaggregated by year of origination (or vintage). Pinnacle Financial adopted ASU 2016-13 and all subsequent amendments thereto effective January 1, 2020 using the modified retrospective method for all financial assets measured at amortized cost and off balance sheet credit exposures. Amounts for periods beginning on or after January 1, 2020 are presented under ASC 326 and all prior period information is presented in accordance with previously applicable GAAP. At January 1, 2020, Pinnacle Financial recognized a cumulative adjustment to retained earnings of $31.8 million, net of tax, attributable to an increase in the allowance for credit losses of $34.3 million, an increase in the allowance for off balance sheet credit exposures of $8.8 million, and an increase in deferred tax assets of $11.3 million. In addition, an allowance of $3.8 million was recognized on loans purchased with credit deterioration (PCD) previously classified as purchased credit impaired (PCI) with a corresponding adjustment to the gross carrying amount of the loans. Pinnacle Financial adopted ASC 326 using the prospective transition approach for PCD loans, which did not require re-evaluation of whether loans previously classified as PCI loans met the criteria of PCD assets at the date of adoption. The remaining noncredit discount will be accreted into interest income at the effective interest rate as of January 1, 2020. Newly Issued Not Yet Effective Accounting Standards — In March 2020, the FASB issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. Pinnacle Financial is implementing a transition plan to identify and modify its loans and other financial instruments, including certain indebtedness, with attributes that are either directly or indirectly influenced by LIBOR. Pinnacle Financial is assessing ASU 2020-04 and its impact on the transition away from LIBOR for its loans and other financial instruments. In January 2020, the FASB issued Accounting Standards Update 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. These amendments, among other things, clarify that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments-Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The amendments also clarify that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early application is permitted, including early adoption in an interim period. An entity should apply ASU 2020-01 prospectively at the beginning of the interim period that includes the adoption date. Pinnacle Financial is assessing ASU 2020-01 and its impact on its accounting and disclosures. In December 2019, the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes to simplify various aspects of the current guidance to promote consistent application of the standard among reporting entities by moving certain exceptions to the general principles. The amendments are effective for fiscal years beginning after December 15, 2020, with early adoption permitted. Pinnacle Financial does not plan to adopt this standard early. If this standard had been effective as of the date of the financial statements included in this report, there would have been no impact on Pinnacle Financial's consolidated financial statements. Other than those pronouncements discussed above and those which have been recently adopted, we do not believe there were any other recently issued accounting pronouncements that are expected to materially impact Pinnacle Financial. Reclassifications — Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or stockholders' equity. Subsequent Events — ASC Topic 855, Subsequent Events, establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. Pinnacle Financial evaluated all events or transactions that occurred after June 30, 2020 through the date of the issued financial statements.
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Equity method investment |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity method investment | Note 2. Equity method investment A summary of BHG's financial position as of June 30, 2020 and December 31, 2019 and results of operations as of and for the three and six months ended June 30, 2020 and 2019, were as follows (in thousands):
At June 30, 2020, technology, trade name and customer relationship intangibles, net of related amortization, totaled $8.2 million compared to $8.8 million as of December 31, 2019. Amortization expense of $293,000 and $587,000, respectively, was included for the three and six months ended June 30, 2020 compared to $475,000 and $950,000, respectively, for the same periods in the prior year. Accretion income of $541,000 and $1.1 million, respectively, was included in the three and six months ended June 30, 2020 compared to $660,000 and $1.3 million, respectively, for the same periods in the prior year. During the three months ended June 30, 2020, Pinnacle Financial and Pinnacle Bank received no dividends from BHG. During the six months ended June 30, 2020, Pinnacle Financial and Pinnacle Bank received dividends from BHG of $8.0 million in the aggregate. During the three and six months ended June 30, 2019, Pinnacle Financial and Pinnacle Bank received dividends of $28.2 million and $40.9 million, respectively, in the aggregate. Earnings from BHG are included in Pinnacle Financial's consolidated tax return. Profits from intercompany transactions are eliminated. No loans were purchased from BHG by Pinnacle Bank for the three and six month periods ended June 30, 2020 or 2019, respectively.
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Note 3. Securities The amortized cost and fair value of securities available-for-sale and held-to-maturity at June 30, 2020 and December 31, 2019 are summarized as follows (in thousands):
During the first quarter of 2020, Pinnacle Financial transferred, at fair value, $873.6 million of municipal securities from the available-for-sale portfolio to the held-to-maturity portfolio. The related unrealized after tax gains of $69.0 million remained in accumulated other comprehensive income (loss) and will be amortized over the remaining life of the securities, offsetting the related amortization of discount on the transferred securities. No gains or losses were recognized at the time of transfer. At June 30, 2020, approximately $1.3 billion of securities within Pinnacle Financial's investment portfolio were pledged to secure either public funds and other deposits or securities sold under agreements to repurchase. At June 30, 2020, repurchase agreements comprised of secured borrowings totaled $194.6 million and were secured by $194.6 million of pledged U.S. government agency securities, municipal securities, asset-backed securities, and corporate debentures. As the fair value of securities pledged to secure repurchase agreements may decline, Pinnacle Financial regularly evaluates its need to pledge additional securities to remain adequately secured. The amortized cost and fair value of debt securities as of June 30, 2020 by contractual maturity are shown below. Actual maturities may differ from contractual maturities of mortgage- and asset-backed securities since the mortgages and assets underlying the securities may be called or prepaid with or without penalty. Therefore, these securities are not included in the maturity categories in the following summary (in thousands):
At June 30, 2020 and December 31, 2019, the following investments had unrealized losses. The table below classifies these investments according to the term of the unrealized losses of less than twelve months or twelve months or longer (in thousands):
The applicable dates for determining when securities were in an unrealized loss position were June 30, 2020 and December 31, 2019. As such, it is possible that a security had a market value less than its amortized cost on other days during the past twelve-month periods ended June 30, 2020 and December 31, 2019, but is not in the "Investments with an Unrealized Loss of less than 12 months" category above. As shown in the tables above, including both available-for-sale and held-to-maturity investment securities, at June 30, 2020, Pinnacle Financial had approximately $40.7 million in unrealized losses on $965.1 million of securities. The unrealized losses associated with $873.6 million and $179.8 million of municipal securities transferred from the available-for-sale portfolio to the held-to-maturity portfolio during the quarters ended March 31, 2020 and September 30, 2018, respectively, represent unrealized losses since the date of purchase, independent of the impact associated with changes in the cost basis upon transfer between portfolios. As described in Note 1. Summary of Significant Accounting Policies, for any securities classified as available-for-sale that are in an unrealized loss position at the balance sheet date, Pinnacle Financial assesses whether or not it intends to sell the security, or more likely than not will be required to sell the security, before recovery of its amortized cost basis which would require a write-down to fair value through net income. Because Pinnacle Financial currently does not intend to sell those securities that have an unrealized loss at June 30, 2020, and it is not more-likely-than-not that Pinnacle Financial will be required to sell the securities before recovery of their amortized cost bases, which may be maturity, Pinnacle Financial has determined that no write-down is necessary. In addition, Pinnacle Financial evaluates whether any portion of the decline in fair value is the result of credit deterioration, which would require the recognition of an allowance for credit losses. Such evaluations consider the extent to which the amortized cost of the security exceeds its fair value, changes in credit ratings and any other known adverse conditions related to the specific security. The unrealized losses associated with securities at June 30, 2020 are driven by changes in interest rates and are not due to the credit quality of the securities, and accordingly, no allowance for credit losses is considered necessary related to available-for-sale securities at June 30, 2020. These securities will continue to be monitored as a part of Pinnacle Financial's ongoing evaluation of credit quality. Management evaluates the financial performance of the issuers on a quarterly basis to determine if it is probable that the issuers can make all contractual principal and interest payments. The allowance for credit losses on held-to-maturity securities is measured on a collective basis by major security type as described in Note 1. Summary of Significant Accounting Policies. At June 30, 2020, Pinnacle Financial's held-to-maturity securities consist entirely of municipal securities. A reasonable and supportable period of 18 months and reversion period of 12 months was utilized to estimate credit losses on held-to-maturity municipal securities at June 30, 2020. With the implementation of CECL effective January 1, 2020, estimated credit losses on held-to-maturity municipal securities totaled approximately $10,000. At June 30, 2020, the estimated allowance for credit losses on these securities increased to $188,000, with the increase driven largely by changes in macroeconomic projections. Pinnacle Financial utilizes bond credit ratings assigned by third party ratings agencies to monitor the credit quality of debt securities held-to-maturity. At June 30, 2020, all debt securities classified as held-to-maturity were rated A or higher by the ratings agencies. Updated credit ratings are obtained as they become available from the ratings agencies. Periodically, available-for-sale securities may be sold or the composition of the portfolio realigned to improve yields, quality or marketability, or to implement changes in investment or asset/liability strategy, including maintaining collateral requirements and raising funds for liquidity purposes or preparing for anticipated changes in market interest rates. Additionally, if an available-for-sale security loses its investment grade or tax-exempt status, the underlying credit support is terminated or collection otherwise becomes uncertain based on factors known to management, Pinnacle Financial will consider selling the security, but will review each security on a case-by-case basis as these factors become known. Consistent with the investment policy, during the six months ended June 30, 2020, available-for-sale securities of approximately $100.1 million were sold and net unrealized gains, net of tax, of $247,000 were reclassified from accumulated other comprehensive income into net income. The carrying values of Pinnacle Financial's investment securities could decline in the future if the financial condition of issuers deteriorates and management determines it is probable that Pinnacle Financial will not recover the entire amortized cost bases of the securities. As a result, there is a risk that other-than-temporary impairment charges may occur in the future. Additionally, there is a risk that other-than-temporary impairment charges may occur in the future if management's intention to hold these securities to maturity and/or recovery changes. Pinnacle Financial has entered into various fair value hedging transactions to mitigate the impact of changing interest rates on the fair values of available for sale securities. See Note 8. Derivative Instruments for disclosure of the gains and losses recognized on derivative instruments and the cumulative fair value hedging adjustments to the carrying amount of the hedged securities.
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Loans and Allowance for Credit Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Allowance for Credit Losses | Note 4. Loans and Allowance for Credit Losses For financial reporting purposes, Pinnacle Financial classifies its loan portfolio based on the underlying collateral utilized to secure each loan. This classification is consistent with those utilized in the Quarterly Report of Condition and Income filed by Pinnacle Bank with the Federal Deposit Insurance Corporation (FDIC). Pinnacle Financial uses the following loan categories for presentation of loan balances and the related allowance for credit losses on loans: •Owner occupied commercial real estate mortgage loans - Owner occupied commercial real estate mortgage loans are secured by commercial office buildings, industrial buildings, warehouses or retail buildings where the owner of the building occupies the property. For such loans, repayment is largely dependent upon the operation of the borrower's business. •Non-owner occupied commercial real estate loans - These loans represent investment real estate loans secured by office buildings, industrial buildings, warehouses, retail buildings, and multifamily residential housing. Repayment is primarily dependent on lease income generated from the underlying collateral. •Consumer real estate mortgage loans - Consumer real estate mortgage consists primarily of loans secured by 1-4 family residential properties, including home equity lines of credit. Repayment is primarily dependent on the personal cash flow of the borrower. •Construction and land development loans - Construction and land development loans include loans where the repayment is dependent on the successful completion and eventual sale, refinance or 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. These loans are generally secured by equipment, inventory, and accounts receivable of the borrower and repayment is primarily dependent on business cash flows. Loans amounting to $2.3 billion which were granted under the Paycheck Protection Program are included in this category. •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, consumer credit cards and loans to finance education, among others. Many consumer loans are unsecured. Repayment is primarily dependent on the personal cash flow of the borrower. Loans at June 30, 2020 and December 31, 2019 were as follows:
Commercial loans receive risk ratings assigned by a financial advisor subject to validation by Pinnacle Financial's independent loan review department. Risk ratings are categorized as pass, special mention, substandard, substandard-nonaccrual or doubtful-nonaccrual. Pass rated loans include six distinct ratings categories for loans that represent specific attributes. Pinnacle Financial believes that its categories follow those used by Pinnacle Bank's primary regulators. At June 30, 2020, approximately 82.5% of Pinnacle Financial's loan portfolio was analyzed as a commercial loan type with a specifically assigned risk rating. Consumer loans and small business loans are generally not assigned an individual risk rating but are evaluated as either accrual or nonaccrual based on the performance of the individual loans. However, certain consumer real estate-mortgage loans and certain consumer and other loans receive a specific risk rating due to the loan proceeds being used for commercial purposes even though the collateral may be of a consumer loan nature. Consumer loans that have been placed on nonaccrual but have not otherwise been assigned a risk rating are believed by management to share risk characteristics with loans rated substandard-nonaccrual and have been presented as such in Pinnacle Financial's risk rating disclosures. Risk ratings are subject to continual review by a financial advisor and a senior credit officer. At least annually, Pinnacle Financial's credit procedures require every risk rated loan of $1.0 million or more be subject to a formal credit risk review process. Each loan's risk rating is also subject to review by Pinnacle Financial's independent loan review department, which reviews a substantial portion of Pinnacle Financial's risk rated portfolio annually. Included in the coverage are independent loan reviews of loans in targeted higher-risk portfolio segments such as certain commercial and industrial loans, land loans and/or loan types in certain geographies. During the second quarter of 2020, Pinnacle Financial performed an in-depth review of all risk-graded loans greater than $1.0 million for which we had granted the borrower the ability to defer the payment of principal and/or interest for a period of up to 90 days following the COVID-19 outbreak. Pinnacle Financial also performed an in-depth review of all of its hotel and retail commercial real estate loans greater than $1.0 million regardless of their receipt of deferral. Following are the definitions of the risk rating categories used by Pinnacle Financial. Pass rated loans include all credits other than those included within these categories: •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 net worth and financial 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 could 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. The table below presents loan balances classified within each risk rating category by primary loan type and based on year of origination as of June 30, 2020 (in thousands):
The following table outlines the risk category of loans as of December 31, 2019 (in thousands):
(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 troubled debt restructurings. Potential problem loans, which are not included in nonaccrual loans, amounted to approximately $251.3 million at June 30, 2020, compared to $276.0 million at December 31, 2019. The table below presents the aging of past due balances by loan segment at June 30, 2020 and December 31, 2019 (in thousands):
The following table details the changes in the allowance for credit losses for the three and six months ended June 30, 2020 and 2019, respectively, by loan classification (in thousands):
The following table details the allowance for credit losses on loans and recorded investment in loans by loan classification and by impairment evaluation method as of December 31, 2019, as determined in accordance with ASC 310 prior to the adoption of ASU 2016-13 (in thousands):
(1) Prior to the adoption of ASC 326 on January 1, 2020, an allowance for loan losses was recorded on loans acquired with deteriorated credit quality only in the event of additional credit deterioration subsequent to acquisition. The adequacy of the allowance for credit losses is reviewed by Pinnacle Financial's management on a quarterly basis. This assessment includes procedures to estimate the allowance and test the adequacy and appropriateness of the resulting balance. The level of the allowance is based upon management's evaluation of historical default and loss experience, current and projected economic conditions, asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrowers' ability to repay the loan (including the timing of future payment), the estimated value of any underlying collateral, composition of the loan portfolio, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. The level of the allowance for credit losses maintained by management is believed adequate to absorb all expected future losses inherent in the loan portfolio at the balance sheet date. The allowance is increased by provisions charged to expense and decreased by charge-offs, net of recoveries of amounts previously charged-off. As described in Note 1. Summary of Significant Accounting Policies, Pinnacle Financial adopted ASU 2016-13 on January 1, 2020, which introduced the CECL methodology for estimating all expected losses over the life of a financial asset. Under the CECL methodology the allowance for credit losses is measured on a collective basis for pools of loans with similar risk characteristics, and for loans that do not share similar risk characteristics with the collectively evaluated pools, evaluations are performed on an individual basis. For all loan segments collectively evaluated, losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable period losses are reverted to long term historical averages. Upon implementation of ASU 2016-13 on January 1, 2020, Pinnacle Financial utilized a reasonable and supportable period of eighteen months for all loan segments, followed by a twelve month straight line reversion to long term averages. At June 30, 2020, a reasonable and supportable period of twelve months was utilized for owner occupied commercial real estate, construction and land development, and commercial and industrial in response to the relatively high level of economic uncertainly related to the ongoing COVID-19 pandemic. For all other loan segments, the reasonable and supportable period of eighteen months was maintained as longer variable lag structures are used within their statistical models, which inherently mitigates the uncertainty in the economic projections by placing less reliance on sudden changes in the projections. The twelve month straight line reversion period was maintained for all loan segments at June 30, 2020. Upon adoption of ASU 2016-13, the opening balance of the allowance for credit losses was increased by $38.1 million through retained earnings. The additional increase during the three months ended June 30, 2020 is primarily attributable to the change in projected economic conditions resulting from the COVID-19 pandemic, with the projected increase in the unemployment rate being the most significant driver. The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses:
The table below presents the amortized cost basis of loans on nonaccrual status and loans past due 90 or more days and still accruing interest at June 30, 2020 and December 31, 2019. Also presented is the balance of loans on nonaccrual status at June 30, 2020 for which there was no related allowance for credit losses recorded (in thousands):
Pinnacle Financial's policy is the accrual of interest income will be discontinued when (1) there is a significant deterioration in the financial condition of the borrower and full repayment of principal and interest is not expected or (2) the principal or interest is more than 90 days past due, unless the loan is both well secured and in the process of collection. As such, at the date loans are placed on nonaccrual status, Pinnacle Financial reverses all previously accrued interest income against current year earnings. Pinnacle Financial's policy is once a loan is placed on nonaccrual status each subsequent payment is reviewed on a case-by-case basis to determine if the payment should be applied to interest or principal pursuant to regulatory guidelines. Pinnacle Financial recognized no interest income from cash payments received on nonaccrual loans during the three and six months ended June 30, 2020, compared to $89,000 and $176,000 during the three and six months ended June 30, 2019, respectively. Had these nonaccruing loans been on accruing status, interest income would have been higher by $854,000 and $1.6 million for the three and six months ended June 30, 2020, respectively, compared to $1.4 million and $2.6 million higher for the three and six months ended June 30, 2019, respectively. Approximately $32.1 million and $35.8 million of nonaccrual loans as of June 30, 2020 and December 31, 2019, respectively, were performing pursuant to their contractual terms at those dates. The following table presents impaired loans at December 31, 2019 as determined under ASC 310 prior to the adoption of ASU 2016-13. Impaired loans generally include nonaccrual loans, troubled debt restructurings, and other loans deemed to be impaired but that continue to accrue interest. Presented are the recorded investment, unpaid principal balance and related allowance of impaired loans at December 31, 2019 by loan classification (in thousands):
The following table details the average recorded investment and the amount of interest income recognized on a cash basis for the three and six months ended June 30, 2019, respectively, of impaired loans by loan classification as determined under ASC 310 prior to the adoption of ASU 2016-13 (in thousands):
Prior to the adoption of ASU 2016-13, loans acquired with deteriorated credit quality, referred to under ASC 310-30 as purchased credit impaired loans and under ASU 2016-13 as purchased credit deteriorated loans, were assigned a credit related purchase discount and non-credit related purchase discount at acquisition. Upon adoption of ASU 2016-13 on January 1, 2020, the remaining credit related discount was re-classified to a component of the allowance for credit losses. The remaining non-credit discount will continue to be accreted into income over the remaining lives of the related loans. The following table provides a rollforward of purchased credit deteriorated loans from December 31, 2019 through June 30, 2020 (in thousands):
The carrying value is adjusted for additional draws, pursuant to contractual arrangements, offset by loan paydowns. Year-to-date settlements include both loans that were charged-off as well as loans that were paid off, typically as a result of refinancings at other institutions. At June 30, 2020 and December 31, 2019, there were $3.3 million and $4.9 million, respectively, of troubled debt restructurings that were performing as of their restructure date and which were accruing interest. Troubled commercial loans are restructured by specialists within Pinnacle Bank's Special Assets Group, and all restructurings are approved by committees and/or credit officers separate and apart from the normal loan approval process. These specialists are charged with reducing Pinnacle Financial's overall risk and exposure to loss in the event of a restructuring by obtaining some or all of the following: improved documentation, additional guaranties, increase in curtailments, reduction in collateral release terms, additional collateral or other similar strategies. The following table outlines the amount of each loan category where troubled debt restructurings were made during the three and six months ended June 30, 2020 and 2019 (dollars in thousands):
There were no troubled debt restructurings made during the three months ended June 30, 2020. During the six months ended June 30, 2020 and 2019, there were no troubled debt restructurings that subsequently defaulted within twelve months of the restructuring. In response to the COVID-19 pandemic and its economic impact to its customers, Pinnacle Bank implemented a short-term modification program in accordance with interagency regulatory guidance to provide temporary payment relief to those borrowers directly impacted by COVID-19 who were not more than 30 days past due at the time of the modification. This program allows for a deferral of payments for 90 days, which Pinnacle Bank may extend for an additional 90 days, for a maximum of 180 days on a cumulative and successive basis. Pursuant to the interagency regulatory guidance, Pinnacle Financial may elect to not classify loans for which these deferrals are granted as troubled debt restructurings. Pinnacle Financial analyzes its commercial loan portfolio to determine if a concentration of credit risk exists to any industries. Pinnacle Financial utilizes broadly accepted industry classification systems in order to classify borrowers into various industry classifications. Pinnacle Financial has a credit exposure (loans outstanding plus unfunded lines of credit) exceeding 25% of Pinnacle Bank's total risk-based capital to borrowers in the following industries at June 30, 2020 with the comparative exposures for December 31, 2019 (in thousands):
Pinnacle Financial monitors two ratios regarding construction and commercial real estate lending as part of its concentration management processes. Both ratios are calculated by dividing certain types of loan balances for each of the two categories by Pinnacle Bank’s total risk-based capital. At both June 30, 2020 and December 31, 2019, Pinnacle Bank’s construction and land development loans as a percentage of total risk-based capital were 83.6%. Non-owner occupied commercial real estate and multifamily loans (including construction and land development loans) as a percentage of total risk-based capital were 275.0% and 268.3% as of June 30, 2020 and December 31, 2019, respectively. Banking regulations have established guidelines for the construction ratio of less than 100% of total risk-based capital and for the non-owner occupied ratio of less than 300% of total risk-based capital. When a bank’s ratios are in excess of one or both of these guidelines, banking regulations generally require an increased level of monitoring in these lending areas by bank management. At June 30, 2020, Pinnacle Bank was within the 100% and 300% guidelines and has established what it believes to be appropriate controls to monitor its lending in these areas as it aims to keep the level of these loans below the 100% and 300% thresholds. At June 30, 2020, Pinnacle Bank had granted loans and other extensions of credit amounting to approximately $11.1 million to current directors, executive officers, and their related entities, of which $7.1 million had been drawn upon. At December 31, 2019, Pinnacle Bank had granted loans and other extensions of credit amounting to approximately $10.6 million to directors, executive officers, and their related entities, of which approximately $6.8 million had been drawn upon. All loans to directors, executive officers, and their related entities were performing in accordance with contractual terms at June 30, 2020 and December 31, 2019. At June 30, 2020, Pinnacle Financial had approximately $16.2 million in commercial loans held for sale compared to $17.6 million at December 31, 2019, which primarily included commercial real estate and apartment loans originated for sale to a third-party as part of a multi-family loan program. Such loans are closed under a pass-through commitment structure wherein Pinnacle Bank's loan commitment to the borrower is the same as the third party's take-out commitment to Pinnacle Bank and the third party purchase typically occurs within thirty days of Pinnacle Bank closing with the borrowers. Residential Lending At June 30, 2020, Pinnacle Financial had approximately $53.7 million of mortgage loans held-for-sale compared to approximately $61.6 million at December 31, 2019. Total loan volumes sold during the six months ended June 30, 2020 were approximately $837.4 million compared to approximately $485.6 million for the six months ended June 30, 2019. During the three and six months ended June 30, 2020, Pinnacle Financial recognized $19.6 million and $28.2 million, respectively, in gains on the sale of these loans, net of commissions paid, compared to $6.0 million and $10.9 million, respectively, net of commissions paid, during the three and six months ended June 30, 2019. These mortgage loans held-for-sale are originated internally and are primarily to borrowers in Pinnacle Bank's geographic markets. These sales are typically on a mandatory basis to investors that follow conventional government sponsored entities (GSE) and the Department of Housing and Urban Development/U.S. Department of Veterans Affairs (HUD/VA) guidelines. Each purchaser of a mortgage loan held-for-sale has specific guidelines and criteria for sellers of loans and the risk of credit loss with regard to the principal amount of the loans sold is generally transferred to the purchasers upon sale. While the loans are sold without recourse, the purchase agreements require Pinnacle Bank to make certain representations and warranties regarding the existence and sufficiency of file documentation and the absence of fraud by borrowers or other third parties such as appraisers in connection with obtaining the loan. If it is determined that the loans sold were in breach of these representations or warranties, Pinnacle Bank has obligations to either repurchase the loan for the unpaid principal balance and related investor fees or make the purchaser whole for the economic benefits of the loan. To date, Pinnacle Bank's liability pursuant to the terms of these representations and warranties has been insignificant to Pinnacle Bank.
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Income Taxes |
6 Months Ended |
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Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 5. Income Taxes ASC 740, Income Taxes, defines the threshold for recognizing the benefits of tax return positions in the financial statements as "more-likely-than-not" to be sustained by the taxing authority. This section also provides guidance on the derecognition, measurement and classification of income tax uncertainties, along with any related interest and penalties, and includes guidance concerning accounting for income tax uncertainties in interim periods. The unrecognized tax benefit related to uncertain tax positions related to state income tax filings was $6.9 million at June 30, 2020 and December 31, 2019, respectively. No change was recorded to the unrecognized tax benefit related to uncertain tax positions in each of the three and six month periods ended June 30, 2020 and 2019. Pinnacle Financial's policy is to recognize interest and/or penalties related to income tax matters in income tax expense. For both the three and six months ended June 30, 2020 and 2019, respectively, there were no interest and penalties recorded in the income statement. Pinnacle Financial's effective tax rate for the three and six months ended June 30, 2020 was expense of 15.2% and 9.5%, respectively, compared to expense of 19.6% for the three and six months ended June 30, 2019. The difference between the effective tax rate and the federal and state income tax statutory rate of 26.14% at June 30, 2020 and 2019 is primarily due to investments in bank qualified municipal securities, tax benefits of Pinnacle Bank's real estate investment trust subsidiary, participation in the Tennessee Community Investment Tax Credit (CITC) program, and tax benefits associated with share-based compensation, bank-owned life insurance and our captive insurance subsidiary, offset in part by the limitation on deductibility of meals and entertainment expense, non-deductible executive compensation and non-deductible FDIC premiums. Income tax expense is also impacted by the vesting of equity-based awards and the exercise of employee stock options, which expense or benefit is recorded as a discrete item as a component of total income tax, the amount of which is dependent upon the change in the grant date fair value and the vest date fair value of the underlying award. Accordingly, for the three and six months ended June 30, 2020 we recognized excess tax expense of $272,000 and benefits of $590,000, respectively, compared to excess tax expense of $68,000 and benefits of $701,000, respectively, for the three and six months ended June 30, 2019. For the six months ended June 30, 2020, income tax expense was also impacted by provision for credit losses, including provision for credit losses resulting from the COVID-19 pandemic, which was recorded as a discrete item as a component of total income tax. Accordingly, we recognized a tax benefit of $22.4 million for the six months ended June 30, 2020.
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Commitments and Contingent Liabilities |
3 Months Ended |
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Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Note 6. Commitments and Contingent Liabilities In the normal course of business, Pinnacle Bank has entered into off-balance sheet financial instruments which include commitments to extend credit (i.e., including unfunded lines of credit) and standby letters of credit. Commitments to extend credit are usually the result of lines of credit granted to existing borrowers under agreements that the total outstanding indebtedness will not exceed a specific amount during the term of the indebtedness. Typical borrowers are commercial concerns that use lines of credit to supplement their treasury management functions, and thus their total outstanding indebtedness may fluctuate during any time period based on the seasonality of their business and the resultant timing of their cash flows. Other typical lines of credit are related to home equity loans granted to consumers. Commitments to extend credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. At June 30, 2020, these commitments amounted to $8.7 billion, of which approximately $1.1 billion related to home equity lines of credit. Standby letters of credit are generally issued on behalf of an applicant (Pinnacle Bank's customer) to a specifically named beneficiary and are the result of a particular business arrangement that exists between the applicant and the beneficiary. Standby letters of credit have fixed expiration dates and are usually for terms of two years or less unless terminated beforehand due to criteria specified in the standby letter of credit. A typical arrangement involves the applicant routinely being indebted to the beneficiary for such items as inventory purchases, insurance, utilities, lease guarantees or other third party commercial transactions. The standby letter of credit would permit the beneficiary to obtain payment from Pinnacle Bank under certain prescribed circumstances. Subsequently, Pinnacle Bank would then seek reimbursement from the applicant pursuant to the terms of the standby letter of credit. At June 30, 2020, these commitments amounted to $213.3 million. Pinnacle Bank typically follows the same credit policies and underwriting practices when making these commitments as it does for on-balance sheet instruments. Each customer's creditworthiness is typically evaluated on a case-by-case basis, and the amount of collateral obtained, if any, is based on management's credit evaluation of the customer. Collateral held varies but may include cash, real estate and improvements, marketable securities, accounts receivable, inventory, equipment and personal property. The contractual amounts of these commitments are not reflected in the consolidated financial statements and only amounts drawn upon would be reflected in the future. Since many of the commitments are expected to expire without being drawn upon, the contractual amounts do not necessarily represent future cash requirements. However, should the commitments be drawn upon and should Pinnacle Bank's customers default on their resulting obligation to Pinnacle Bank, the maximum exposure to credit loss, without consideration of collateral, is represented by the contractual amount of those commitments. At June 30, 2020 and December 31, 2019, Pinnacle Financial had accrued $20.8 million and $2.4 million, respectively, for the inherent risks associated with these off-balance sheet commitments. The adoption of ASU 2016-13 effective January 1, 2020, which introduced the CECL methodology for measuring credit losses, as discussed more fully in Note. 1 Summary of Significant Accounting Policies, increased the opening balance of our accrual for off-balance sheet commitments at adoption by $8.8 million. The remainder of the increase is largely attributable to the anticipated economic impact of the COVID-19 pandemic and its effect on Pinnacle Financial's CECL credit loss modeling for the three and six months ended June 30, 2020. In June 2020, a purported class action lawsuit was filed against Pinnacle Bank alleging, among other claims, that Pinnacle Bank failed to pay fees to purported agents of PPP borrowers that the plaintiff alleges were owed under the PPP in violation of SBA regulations. Pinnacle Bank disputes the plaintiff’s claims and intends to vigorously defend itself in connection with this proceeding. Various legal claims also arise from time to time in the normal course of business. In the opinion of management, the resolutions of these claims outstanding at June 30, 2020 are not expected to have a material adverse impact on Pinnacle Financial's consolidated financial condition, operating results or cash flows.
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Stock Options and Restricted Shares |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options and Restricted Shares | Note 7. Stock Options and Restricted Shares The 2018 Omnibus Equity Incentive Plan (the "2018 Plan") permits Pinnacle Financial to reissue outstanding awards that are subsequently forfeited, settled in cash, withheld by Pinnacle Financial to cover withholding taxes or expire unexercised and returned to the 2018 Plan. At June 30, 2020, there were approximately 838,996 shares available for issuance under the 2018 Plan. The BNC Bancorp 2013 Amended and Restated Omnibus Stock Incentive Plan (the "BNC Plan") was assumed by Pinnacle Financial in connection with its merger with BNC. As of June 30, 2020, there were no shares remaining available for issuance from the BNC Plan. No new awards may be granted under equity incentive plans of Pinnacle Financial other than the 2018 Plan. Upon the acquisition of CapitalMark, Pinnacle Financial assumed approximately 858,000 stock options under the CapitalMark Option Plan. No further awards remain available for issuance under the CapitalMark Option Plan. At June 30, 2020, all of the remaining options outstanding were granted under the CapitalMark Option Plan. Common Stock Options A summary of the stock option activity within the equity incentive plans during the six months ended June 30, 2020 and information regarding expected vesting, contractual terms remaining, intrinsic values and other matters is as follows:
(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 $64.00 per common share at December 31, 2019 for the 119,274 options that were in-the-money at December 31, 2019. (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 $41.99 per common share at June 30, 2020 for the 109,487 options that were in-the-money at June 30, 2020. Compensation costs related to stock options granted under Pinnacle Financial's equity incentive plans have been fully recognized and all outstanding option awards are fully vested. Restricted Share Awards A summary of activity for unvested restricted share awards for the six months ended June 30, 2020 is as follows:
(1)Represents shares forfeited due to employee termination and/or retirement. No shares were forfeited due to failure to meet performance targets. Pinnacle Financial has granted restricted share awards to associates and outside directors with a time-based vesting criteria. Compensation expense associated with time-based vesting restricted share awards is recognized over the time period that the restrictions associated with the awards lapse on a straight-line basis based on the total cost of the award. The following table outlines restricted stock grants that were made, grouped by similar vesting criteria, during the six months ended June 30, 2020. The table reflects the life-to-date activity for these awards:
(1)Groups include employees (referred to as associates above) 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 (or have Pinnacle Financial withhold some shares) to pay the applicable income taxes associated with the award. Alternatively, the recipient can pay the withholding taxes in cash. For time-based vesting 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 vesting awards to Pinnacle Financial's directors, 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)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, 2021 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. (4)These shares represent forfeitures resulting from recipients whose employment or board membership was terminated during the year-to-date period ended June 30, 2020. Any dividends paid on shares for which the forfeiture restrictions do not lapse will be recouped by Pinnacle Financial at the time of termination or will not be distributed from escrow, as applicable. Performance-based Vesting Restricted Stock Units The following table details the performance-based vesting restricted stock unit awards outstanding at June 30, 2020:
(1)The named executive officers are awarded a range of awards that may be earned based on attainment of goals between a target level of performance and a maximum level of performance. (2)Restricted share unit awards, if earned, will be settled in shares of Pinnacle Financial Common Stock in the periods noted in the table, if Pinnacle Bank's ratio of non-performing assets to its loans plus ORE is less than amounts established in the applicable award agreement. During the six months ended June 30, 2020, the restrictions associated with 129,723 performance-based vesting restricted stock unit awards granted in prior years and lapsed, based on the terms of the agreement and approval by Pinnacle Financial's Human Resources and Compensation Committee, and were settled into shares of Pinnacle Financial common stock with 43,996 shares being withheld to pay the taxes associated with the settlement of those shares. Stock compensation expense related to both restricted share awards and restricted share units for the three and six months ended June 30, 2020 was $4.1 million and $9.6 million, respectively, compared to $5.2 million and $10.1 million, respectively, for the three and six months ended June 30, 2019. As of the June 30, 2020, the total compensation cost related to unvested restricted share awards and performance-based vesting restricted stock units not yet recognized was $45.1 million. This expense, if the underlying units are earned, is expected to be recognized over a weighted-average period of 2.06 years.
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Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Note 8. Derivative Instruments Financial derivatives are reported at fair value in other assets or other liabilities. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies as part of a hedging relationship. Non-hedge derivatives For derivatives not designated as hedges, the gain or loss is recognized in current period earnings. Pinnacle Financial enters into interest rate swaps (swaps) to facilitate customer transactions and meet their financing needs. Upon entering into these instruments to meet customer needs, Pinnacle Financial enters into offsetting positions in order to minimize the risk to Pinnacle Financial. These swaps qualify as derivatives, but are not designated as hedging instruments. The income statement impact of the offsetting positions is limited to changes in the reserve for counterparty credit risk. A summary of Pinnacle Financial's interest rate swaps to facilitate customers' transactions as of June 30, 2020 and December 31, 2019 is included in the following table (in thousands):
The effects of Pinnacle Financial's interest rate swaps to facilitate customers' transactions on the income statement during the three and six months ended June 30, 2020 and 2019 were as follows (in thousands):
Derivatives designated as cash flow hedges For derivative instruments that are designated and qualify as a cash flow hedge, the aggregate fair value of the derivative instrument is recorded in other assets or other liabilities with any gain or loss related to changes in fair value recorded in accumulated other comprehensive income, net of tax. The gain or loss is reclassified into earnings in the same period during which the hedged asset or liability affects earnings and is presented in the same income statement line item as the earnings effect of the hedged asset or liability. Pinnacle Financial uses interest rate floors in an effort to mitigate the impact of declining interest rates on LIBOR-based variable rate loans. Pinnacle Financial uses forward cash flow hedges in an effort to manage future interest rate exposure on borrowings. The hedging strategy converts the LIBOR-based variable interest rate on forecasted borrowings to a fixed interest rate and is used in an effort to protect Pinnacle Financial from floating interest rate variability. A summary of Pinnacle Financial's cash flow hedge relationships as of June 30, 2020 and December 31, 2019 is as follows (in thousands):
The effects of Pinnacle Financial's cash flow hedge relationships on the statement of comprehensive income (loss) during the three and six months ended June 30, 2020 and 2019 were as follows, net of tax (in thousands):
The cash flow hedges were determined to be highly effective during the periods presented and as a result qualify for hedge accounting treatment. The hedge would no longer be considered effective if a portion of the hedge becomes ineffective, the item hedged is no longer in existence or Pinnacle Financial discontinues hedge accounting. Pinnacle Financial expects the hedges at June 30, 2020 to continue to be highly effective and qualify for hedge accounting during the remaining terms of the original hedging transactions. Gains totaling $123,000 net of tax and losses totaling $1.7 million net of tax were reclassified from accumulated other comprehensive income (loss) into net income during the three and six months ended June 30, 2020, respectively, compared to losses totaling $73,000 net of tax and gains totaling $183,000 net of tax during the three and six months ended June 30, 2019, respectively. During the first quarter of 2020, loan interest rate floors entered into in the second quarter of 2019 with a notional amount totaling $1.3 billion and unrealized gains totaling $16.5 million were terminated. These unrealized gains are being amortized into income on a straight line basis through October 2021. Approximately $8.1 million in unrealized gains, net of tax, are expected to be reclassified from accumulated other comprehensive income (loss) into net income over the next twelve months related to terminated cash flow hedges. Derivatives designated as fair value hedges For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current earnings. The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings effect of the hedged item. Pinnacle Financial utilizes interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on the fair values of fixed rate callable available-for-sale securities. The hedging strategy converts the fixed interest rates to LIBOR-based variable interest rates. These derivatives are designated as partial term hedges of selected cash flows covering specified periods of time prior to the call dates of the hedged securities. A summary of Pinnacle Financial's fair value hedge relationships as of June 30, 2020 and December 31, 2019 is as follows (in thousands):
The effects of Pinnacle Financial's fair value hedge relationships on the income statement during the three and six months ended June 30, 2020 and 2019 were as follows (in thousands):
The following amounts were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges at June 30, 2020 and December 31, 2019 (in thousands):
During the three and six months ended June 30, 2020, amortization expense totaling $1.0 million and $2.1 million, respectively, related to previously terminated fair value hedges was recognized as a reduction to interest income on loans.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Note 9. Fair Value of Financial Instruments FASB ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements. The definition of fair value focuses on the exit price, i.e., the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not the entry price, i.e., the price that would be paid to acquire the asset or received to assume the liability at the measurement date. The statement emphasizes that fair value is a market-based measurement; not an entity-specific measurement. Therefore, the fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. Valuation Hierarchy FASB ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: •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. A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following is a description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy. Assets Securities available-for-sale – Where quoted prices are available for identical securities in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid government securities and certain other financial products. If quoted market prices are not available, then fair values are estimated by using pricing models that use observable inputs or quoted prices of securities with similar characteristics and are classified within Level 2 of the valuation hierarchy. In certain cases where there is limited activity or less transparency around inputs to the valuation and more complex pricing models or discounted cash flows are used, securities are classified within Level 3 of the valuation hierarchy. Other investments – Included in other investments are investments recorded at fair value primarily in certain nonpublic investments and funds. The valuation of these nonpublic investments requires management judgment due to the absence of observable quoted market prices, inherent lack of liquidity and the long-term nature of such assets. These investments are valued initially based upon transaction price. The carrying values of other investments are adjusted either upwards or downwards from the transaction price to reflect expected exit values as evidenced by financing and sale transactions with third parties, or when determination of a valuation adjustment is confirmed through ongoing reviews by senior investment managers. A variety of factors are reviewed and monitored to assess positive and negative changes in valuation including, but not limited to, current operating performance and future expectations of the particular investment, industry valuations of comparable public companies and changes in market outlook and the third-party financing environment over time. In determining valuation adjustments resulting from the investment review process, emphasis is placed on current company performance and market conditions. These investments are included in Level 3 of the valuation hierarchy if the entities and funds are not widely traded and the underlying investments are in privately-held and/or start-up companies for which market values are not readily available. Certain investments in funds for which the underlying assets of the fund represent publicly traded investments are included in Level 2 of the valuation hierarchy. Other assets – Included in other assets are certain assets carried at fair value, including interest rate swap agreements to facilitate customer transactions, interest rate floors designated as cash flow hedges, and interest rate locks associated with the mortgage loan pipeline. The carrying amount of interest rate swap agreements is based on Pinnacle Financial's pricing models that utilize observable market inputs. The fair value of the cash flow hedge agreements is determined by calculating the difference between the discounted fixed rate cash flows and the discounted variable rate cash flows. The fair value of the mortgage loan pipeline is based upon the projected sales price of the underlying loans, taking into account market interest rates and other market factors at the measurement date, net of the projected fallout rate. Pinnacle Financial reflects these assets within Level 2 of the valuation hierarchy as these assets are valued using similar transactions that occur in the market. Collateral dependent loans – Collateral dependent loans are measured at the fair value of the collateral securing the loan less estimated selling costs. The fair value of real estate collateral is determined based on real estate appraisals which are generally based on recent sales of comparable properties which are then adjusted for property specific factors. Non real estate collateral is valued based on various sources, including third party asset valuations and internally determined values based on cost adjusted for depreciation and other judgmentally determined discount factors. Collateral dependent loans are classified within Level 3 of the hierarchy due to the unobservable inputs used in determining their fair value such as collateral values and the borrower's underlying financial condition. Other real estate owned – Other real estate owned (OREO) represents real estate foreclosed upon by Pinnacle Bank through loan defaults by customers or acquired by deed in lieu of foreclosure. A significant portion of these amounts relate to lots, homes and development projects that are either completed or are in various stages of construction for which Pinnacle Financial believes it has adequate collateral. Upon foreclosure, the property is recorded at the lower of cost or fair value, based on appraised value, less selling costs estimated as of the date acquired with any loss recognized as a charge-off through the allowance for loan losses. Additional OREO losses for subsequent valuation downward adjustments are determined on a specific property basis and are included as a component of noninterest expense along with holding costs. Any gains or losses realized at the time of disposal are also reflected in noninterest expense, as applicable. OREO is included in Level 3 of the valuation hierarchy due to the lack of observable market inputs into the determination of fair value as appraisal values are property-specific and sensitive to the changes in the overall economic environment. Liabilities Other liabilities – Pinnacle Financial has certain liabilities carried at fair value including certain interest rate swap agreements to facilitate customer transactions, interest rate swaps designated as fair value and cash flow hedges, and interest rate locks associated with the funding for its mortgage loan originations. The fair value of these liabilities is based on Pinnacle Financial's pricing models that utilize observable market inputs and is reflected within Level 2 of the valuation hierarchy. The following tables present financial instruments measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019, by caption on the consolidated balance sheets and by FASB ASC 820 valuation hierarchy (as described above) (in thousands):
The following table presents assets measured at fair value on a nonrecurring basis as of June 30, 2020 and December 31, 2019 (in thousands):
(1) Amount is net of valuation allowance of $3.3 million at December 31, 2019 as required by ASC 310-10, "Receivables." In the case of the investment securities portfolio, Pinnacle Financial monitors the portfolio to ascertain when transfers between levels have been affected. The nature of the remaining assets and liabilities is such that transfers in and out of any level are expected to be rare. For the six months ended June 30, 2020, there were no transfers between Levels 1, 2 or 3. The table below includes a rollforward of the balance sheet amounts for the three and six months ended June 30, 2020 and June 30, 2019 (including the change in fair value) for financial instruments classified by Pinnacle Financial within Level 3 of the valuation hierarchy measured at fair value on a recurring basis including changes in fair value due in part to observable factors that are part of the valuation methodology (in thousands):
The following tables present the carrying amounts, estimated fair value and placement in the fair value hierarchy of Pinnacle Financial's financial instruments at June 30, 2020 and December 31, 2019. This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash, cash equivalents, and restricted cash, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as non-interest bearing demand, interest-bearing demand, and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity (in thousands):
(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, including both commitments for unfunded loans and standby letters of credit. In making this evaluation, Pinnacle Financial utilizes credit loss expectations on funded loans from our allowance for credit losses methodology and evaluates the probability that the outstanding commitment will eventually become a funded loan. As a result, at June 30, 2020 and December 31, 2019, Pinnacle Financial included in other liabilities $20.8 million and $2.4 million, respectively, representing expected credit losses on off-balance sheet commitments, which are reflected in the estimated fair values of the related commitments. Also included in the fair values at June 30, 2020 and December 31, 2019 are unamortized fees related to these commitments of $1.4 million at both dates.
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Regulatory Matters |
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Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Matters | Note 10. Regulatory Matters Pursuant to Tennessee banking law, Pinnacle Bank may not, without the prior consent of the Commissioner of the Tennessee Department of Financial Institutions (TDFI), pay any dividends to Pinnacle Financial in a calendar year in excess of the total of Pinnacle Bank's retained net income for that year plus the retained net income for the preceding two years. Under Tennessee corporate law, Pinnacle Financial is not permitted to pay dividends if, after giving effect to such payment, it would not be able to pay its debts as they become due in the usual course of business or its total assets would be less than the sum of its total liabilities plus any amounts needed to satisfy any preferential rights if it were dissolving. In addition, in deciding whether or not to declare a dividend of any particular size, Pinnacle Financial's board of directors must consider its and Pinnacle Bank's current and prospective capital, liquidity, and other needs. In addition to state law limitations on Pinnacle Financial's ability to pay dividends, the Federal Reserve imposes limitations on Pinnacle Financial's ability to pay dividends. Federal Reserve regulations limit dividends, stock repurchases and discretionary bonuses to executive officers if Pinnacle Financial's regulatory capital is below the level of regulatory minimums plus the applicable capital conservation buffer. In addition, the Federal Reserve has issued supervisory guidance advising bank holding companies to eliminate, defer or reduce dividends paid on common stock and other forms of Tier 1 capital where the company’s net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends, the company’s prospective rate of earnings retention is not consistent with the company’s capital needs and overall current and prospective financial condition or the company will not meet, or is in danger of not meeting, minimum regulatory capital adequacy ratios. Recent supplements to this guidance reiterate the need for bank holding companies to inform their applicable reserve bank sufficiently in advance of the proposed payment of a dividend in certain circumstances. During the six months ended June 30, 2020, Pinnacle Bank paid $94.1 million in dividends to Pinnacle Financial. As of June 30, 2020, Pinnacle Bank could pay approximately $619.2 million of additional dividends to Pinnacle Financial without prior approval of the Commissioner of the TDFI. Since the fourth quarter of 2018, Pinnacle Financial has paid a quarterly common stock dividend of $0.16 per share. The amount and timing of all future dividend payments by Pinnacle Financial, if any, is subject to discretion of Pinnacle Financial's board of directors and will depend on Pinnacle Financial's receipt of dividends, including dividends on Pinnacle Financial's 6.75% fixed rate non-cumulative perpetual preferred stock, Series B (the Series B Preferred Stock) from Pinnacle Bank, earnings, capital position, financial condition and other factors, including regulatory capital requirements, as they become known to Pinnacle Financial and receipt of any regulatory approvals that may become required as a result of each of Pinnacle Financial's or Pinnacle Bank's financial results. Pinnacle Financial and Pinnacle Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, Pinnacle Financial and Pinnacle Bank must meet specific capital guidelines that involve quantitative measures of the assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Pinnacle Financial's and Pinnacle Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require Pinnacle Financial and its banking subsidiary to maintain minimum amounts and ratios of common equity Tier 1 capital to risk-weighted assets, Tier 1 capital to risk-weighted assets, total risk-based capital to risk-weighted assets and Tier 1 capital to average assets. As permitted by the interim final rule issued on March 27, 2020 by the federal banking regulatory agencies, each of Pinnacle Bank and Pinnacle Financial has elected the option to delay the estimated impact on regulatory capital of Pinnacle Financial's and Pinnacle Bank's adoption of ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which was effective January 1, 2020. The initial impact of adoption of ASU 2016-13, as well as 25% of the quarterly increases in the allowance for credit losses subsequent to adoption of ASU 2016-13 (collectively the “transition adjustments”), will be delayed for two years. After two years, the cumulative amount of the transition adjustments will become fixed and will be phased out of the regulatory capital calculations evenly over a three year period, with 75% recognized in year three, 50% recognized in year four, and 25% recognized in year five. After five years, the temporary regulatory capital benefits will be fully reversed. Management believes, as of June 30, 2020, that Pinnacle Financial and Pinnacle Bank met all capital adequacy requirements to which they are subject. To be categorized as well-capitalized under applicable banking regulations, Pinnacle Bank must maintain certain total risk-based, Tier 1 risk-based, common equity Tier 1 and Tier 1 leverage ratios as set forth in the following table and not be subject to a written agreement, order or directive to maintain a higher capital level. The capital conservation buffer is not included in the required ratios of the table presented below. Pinnacle Financial's and Pinnacle Bank's actual capital amounts and resulting ratios, not including the capital conservation buffer, are presented in the following table (in thousands):
(*) Average assets for the above calculations were based on the most recent quarter. During the second quarter of 2020, Pinnacle Financial issued 9.0 million depositary shares, each representing a 1/40th interest in a share of Series B preferred stock in a registered public offering to both retail and institutional investors. Net proceeds from the transaction were approximately $217.6 million after deducting the underwriting discounts and offering expenses payable by Pinnacle Financial. The net proceeds were retained by Pinnacle Financial and are available to support the capital needs of Pinnacle Financial and Pinnacle Bank, to support Pinnacle Financial's obligations, including interest payments on its outstanding indebtedness, and for other general corporate purposes.
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Other borrowings |
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Subordinated Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Borrowings | Note 11. Other Borrowings Pinnacle Financial has twelve wholly-owned subsidiaries that are statutory business trusts created for the exclusive purpose of issuing 30-year capital trust preferred securities, and Pinnacle Financial and Pinnacle Bank have entered into certain other subordinated debt agreements. On April 22, 2020, Pinnacle Financial established a credit facility with the Federal Reserve Bank in conjunction with the SBA Paycheck Protection Program, with available borrowing capacity equal to the outstanding balance of Paycheck Protection Program loans, which totaled approximately $2.2 billion at June 30, 2020. Pinnacle Financial also had a $75.0 million revolving credit facility with no outstanding borrowings as of June 30, 2020 that matured on July 24, 2020 and was not renewed. These instruments are outlined below as of June 30, 2020 (in thousands):
(1) Migrates to three month LIBOR + 3.128% beginning July 30, 2020 through the end of the term. (2) Migrates to three month LIBOR + 3.884% beginning November 16, 2021 through the end of the term. (3) Migrates to three month LIBOR + 2.775% beginning September 15, 2024 through the end of the term. (4) Borrowing capacity on the revolving credit facility is $75.0 million. At June 30, 2020, there were no amounts outstanding under this facility. An unused fee of 0.30% is assessed on the average daily unused amount of the line. This credit facility matured on July 24, 2020 and was not renewed. On September 11, 2019, Pinnacle Financial issued $300.0 aggregate principal amount of 4.125% Fixed-to-Floating Rate Subordinated Notes due 2029 (the 2029 Notes) in a public offering. The offering and sale of the 2029 Notes yielded net proceeds of approximately $296.5 million after deducting the underwriting discount and offering expenses payable by Pinnacle Financial. Pinnacle Financial used approximately $8.8 million of such proceeds to redeem the previously outstanding Subordinated Note due October 15, 2023, which Pinnacle Financial assumed in the BNC merger and which carried an interest rate of 7.23% at the time of such redemption, which occurred on September 30, 2019. Pinnacle Financial also used a portion of the net proceeds of this offering to redeem, effective January 1, 2020, the outstanding balance and accrued interest of the $20.0 million aggregate principal amount of Avenue subordinated notes and $60.0 million aggregate principal amount of BNC subordinated notes. Pinnacle Financial intends to use the remainder of the net proceeds from the offering of the 2029 Notes for general corporate purposes, including providing capital to support the growth of Pinnacle Bank's business.
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation — The accompanying unaudited consolidated financial statements have been prepared in accordance with instructions to Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles (U.S. GAAP). All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods covered by the report have been included. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes appearing in Pinnacle Financial's Annual Report on Form 10-K for the year ended December 31, 2019 (2019 10-K). These consolidated financial statements include the accounts of Pinnacle Financial and its wholly-owned subsidiaries. Certain statutory trust affiliates of Pinnacle Financial, as noted in Note 11. Other Borrowings are included in these consolidated financial statements pursuant to the equity method of accounting. Significant intercompany transactions and accounts are eliminated in consolidation.
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Use of Estimates | Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for credit losses and determination of any impairment of goodwill or intangible assets. It is reasonably possible Pinnacle Financial's estimate of the allowance for credit losses and determination of impairment of goodwill or intangible assets could change as a result of the continued impact of the COVID-19 pandemic on the economy. The resulting change in these estimates could be material to Pinnacle Financial's consolidated financial statements. There have been no significant changes to Pinnacle Financial's significant accounting policies as disclosed in the 2019 10-K other than those that relate to the allowance for credit losses upon adoption of ASU 2016-13 as described later within Note 1. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Per Common Share | Income Per Common Share — Basic net income per common share (EPS) is computed by dividing net income by the weighted average common shares outstanding for the period. Diluted EPS reflects the dilution that could occur if securities or other contracts to issue common stock were exercised or converted. The difference between basic and diluted weighted average common shares outstanding is attributable to common stock options, restricted share awards, and restricted share unit awards. The dilutive effect of outstanding options, restricted share awards, and restricted share unit awards is reflected in diluted EPS by application of the treasury stock method. The following is a summary of the basic and diluted net income per common share calculations for the three and six months ended June 30, 2020 and 2019 (in thousands, except per share data):
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Allowance for credit losses | Allowance for Credit Losses - Loans - As described below under Recently Adopted Accounting Pronouncements, Pinnacle Financial adopted FASB ASC 326 effective January 1, 2020, which requires the estimation of an allowance for credit losses in accordance with the current expected credit loss (CECL) methodology. Pinnacle Financial's management assesses the adequacy of the allowance on a quarterly basis. This assessment includes procedures to estimate the allowance and test the adequacy and appropriateness of the resulting balance. The level of the allowance is based upon management's evaluation of historical default and loss experience, current and projected economic conditions, asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrowers' ability to repay a loan (including the timing of future payments), the estimated value of any underlying collateral, composition of the loan portfolio, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. The level of the allowance for credit losses maintained by management is believed adequate to absorb all expected future losses inherent in the loan portfolio at the balance sheet date. The allowance is increased through provision for credit losses and decreased by charge-offs, net of recoveries of amounts previously charged-off. The allowance for credit losses is measured on a collective basis for pools of loans with similar risk characteristics. Pinnacle Financial has identified the following pools of financial assets with similar risk characteristics for measuring expected credit losses: •Owner occupied commercial real estate mortgage loans - Owner occupied commercial real estate mortgage loans are secured by commercial office buildings, industrial buildings, warehouses or retail buildings where the owner of the building occupies the property. For such loans, repayment is largely dependent upon the operation of the borrower's business. •Non-owner occupied commercial real estate loans - These loans represent investment real estate loans secured by office buildings, industrial buildings, warehouses, retail buildings, and multifamily residential housing. Repayment is primarily dependent on lease income generated from the underlying collateral. •Consumer real estate mortgage loans - Consumer real estate mortgage consists primarily of loans secured by 1-4 family residential properties, including home equity lines of credit. Repayment is primarily dependent on the personal cash flow of the borrower. •Construction and land development loans - Construction and land development loans include loans where the repayment is dependent on the successful completion and eventual sale, refinance or 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. These loans are generally secured by equipment, inventory, and accounts receivable of the borrower and repayment is primarily dependent on business cash flows. •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, consumer credit cards and loans to finance education, among others. Many consumer loans are unsecured. Repayment is primarily dependent on the personal cash flow of the borrower. For commercial real estate, consumer real estate, construction and land development, and commercial and industrial loans, Pinnacle Financial primarily utilizes a probability of default (PD) and loss given default (LGD) modeling approach. These models utilize historical correlations between default experience and certain macroeconomic factors as determined through a statistical regression analysis. All loan segments modeled using this approach consider changes in the national unemployment rate. In addition to the national unemployment rate, gross domestic product and the three month treasury rate are considered for owner occupied commercial real estate, the commercial real estate price index and the five year treasury rate are considered for construction loans, and the three month treasury rate is considered for commercial and industrial loans. Projections of these macroeconomic factors, obtained from an independent third party, are utilized to predict quarterly rates of default based on the statistical PD models. The predicted quarterly default rates are then applied to the estimated future exposure at default (EAD), as determined based on contractual amortization terms and estimated prepayments. An estimated LGD, determined based on historical loss experience, is applied to the quarterly defaulted balances for each loan segment to estimate future losses of the loan's amortized cost. Losses are predicted over a period of time determined to be reasonable and supportable, and at the end of the reasonable and supportable period losses are reverted to long term historical averages. The reasonable and supportable period and reversion period are re-evaluated each quarter by Pinnacle Financial and are dependent on the current economic environment among other factors. Upon implementation of CECL on January 1, 2020, a reasonable and supportable period of eighteen months was utilized for all loan segments, followed by a twelve month straight line reversion to long term averages. At June 30, 2020, a reasonable and supportable period of twelve months was used for owner occupied commercial real estate, construction and land development and commercial and industrial, and a reasonable and supportable period of eighteen months was used for all other loan segments. The twelve month straight line reversion period was maintained for all loan segments at June 30, 2020. For the consumer and other loan segment, a loss rate approach is utilized. For these loans, historical charge off rates are applied to projected future balances, as determined in the same manner as EAD for the statistically modeled loan segments. For credit cards, which have no amortization terms or contractual maturities, future balances are estimated based on expected payment volume applied to the current balance. The estimated loan losses for all loan segments are adjusted for changes in qualitative factors not inherently considered in the quantitative analyses. The qualitative categories and the measurements used to quantify the risks within each of these categories are subjectively selected by management, but measured by objective measurements period over period. The data for each measurement may be obtained from internal or external sources. The current period measurements are evaluated and assigned a factor commensurate with the current level of risk relative to past measurements over time. The resulting qualitative adjustments are applied to the relevant collectively evaluated loan portfolios. These adjustments are based upon quarterly trend assessments in portfolio concentrations, policy exceptions, associate retention, independent loan review results, collateral considerations, risk ratings, competition and peer group credit quality trends. The qualitative allowance allocation, as determined by the processes noted above, is increased or decreased for each loan segment based on the assessment of these various qualitative factors. Loans that do not share similar risk characteristics with the collectively evaluated pools are evaluated on an individual basis and are excluded from the collectively evaluated pools. Individual evaluations are generally performed for loans greater than $1.0 million which have experienced significant credit deterioration. Such loans are evaluated for credit losses based on either discounted cash flows or the fair value of collateral. When management determines that foreclosure is probable, expected credit losses are based on the fair value of the collateral, less selling costs. For loans for which foreclosure is not probable, but for which repayment is expected to be provided substantially through the operation or sale of the collateral, Pinnacle Financial has elected the practical expedient under ASC 326 to estimate expected credit losses based on the fair value of collateral, with selling costs considered in the event sale of the collateral is expected. Loans for which terms have been modified in a troubled debt restructuring (TDR) are evaluated using these same individual evaluation methods. In the event the discounted cash flow method is used for a TDR, the original interest rate is used to discount expected cash flows. In assessing the adequacy of the allowance for credit losses, Pinnacle Financial considers the results of Pinnacle Financial's ongoing independent loan review process. Pinnacle Financial undertakes this process both to ascertain those loans in the portfolio with elevated credit risk and to assist in its overall evaluation of the risk characteristics of the entire loan portfolio. Its loan review process includes the judgment of management, independent internal loan reviewers and reviews that may have been conducted by third-party reviewers including regulatory examiners. Pinnacle Financial incorporates relevant loan review results in the allowance. In accordance with CECL, losses are estimated over the remaining contractual terms of loans, adjusted for prepayments. The contractual term excludes expected extensions, renewals and modifications unless management has a reasonable expectation at the reporting date that a troubled debt restructuring will be executed or such renewals, extensions or modifications are included in the original loan agreement and are not unconditionally cancellable by Pinnacle Financial. Credit losses are estimated on the amortized cost basis of loans, which includes the principal balance outstanding, purchase discounts and premiums, deferred loan fees and costs and accrued interest receivable. Accrued interest receivable is presented separately on the balance sheets and as allowed under ASU 2016-13 is excluded from the tabular loan disclosures in Note 4. While policies and procedures used to estimate the allowance for credit losses, as well as the resultant provision for credit losses charged to income, are considered adequate by management and are reviewed periodically by regulators, model validators and internal audit, they are necessarily approximate and imprecise. There are factors beyond Pinnacle Financial's control, such as changes in projected economic conditions, real estate markets or particular industry conditions which may materially impact asset quality and the adequacy of the allowance for credit losses and thus the resulting provision for credit losses. Allowance for Credit Losses on Off Balance Sheet Credit Exposures - Pinnacle Financial estimates expected credit losses over the contractual term of obligations to extend credit, unless the obligation is unconditionally cancellable. The allowance for off balance sheet exposures is adjusted through other noninterest expense. The estimates are determined based on the likelihood of funding during the contractual term and an estimate of credit losses subsequent to funding. Estimated credit losses on subsequently funded balances are based on the same assumptions as used to estimated credit losses on existing funded loans. Allowance for Credit Losses - Securities Held-to-Maturity - Expected credit losses on debt securities classified as held-to-maturity are measured on a collective basis by major security type. The estimates of expected credit losses are based on historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The models rely on regression analyses to predict PD based on projected macroeconomic factors, including unemployment rates and GDP, among others. At June 30, 2020, Pinnacle Financial's held-to-maturity securities consisted entirely of municipal securities rated A or higher by the ratings agencies. A reasonable and supportable period of 18 months and reversion period of 12 months is utilized to estimate credit losses on held-to-maturity municipal securities. The allowance is increased through provision for credit losses and decreased by charge-offs, net of recoveries of amounts previously charged-off. Allowance for Credit Losses - Securities Available-for-Sale - For any securities classified as available-for-sale that are in an unrealized loss position at the balance sheet date, Pinnacle Financial assesses whether or not it intends to sell the security, or more likely than not will be required to sell the security, before recovery of its amortized cost basis. If either criteria is met, the security's amortized cost basis is written down to fair value through net income. If neither criteria is met, Pinnacle Financial evaluates whether any portion of the decline in fair value is the result of credit deterioration. Such evaluations consider the extent to which the amortized cost of the security exceeds its fair value, changes in credit ratings and any other known adverse conditions related to the specific security. If the evaluation indicates that a credit loss exists, an allowance for credit losses is recorded through provisions for credit losses for the amount by which the amortized cost basis of the security exceeds the present value of cash flows expected to be collected, limited by the amount by which the amortized cost exceeds fair value. Any impairment not recognized in the allowance for credit losses is recognized in other comprehensive income.
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Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements — In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment to simplify how entities other than private companies, such as public business entities and not-for-profit entities, are required to test goodwill for impairment by eliminating the comparison of the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. The amendments became effective for Pinnacle Financial on January 1, 2020 and did not have a material impact on Pinnacle Financial's consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326), and has issued subsequent amendments thereto, which introduces the current expected credit losses (CECL) methodology. Among other things, ASC 326 requires the measurement of all expected credit losses for financial assets, including loans and held-to-maturity debt securities, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The new model requires institutions to calculate all probable and estimable losses that are expected to be incurred through the financial asset's contractual life through a provision for credit losses, including loans obtained as a result of any acquisition not deemed to be purchased credit deteriorated (PCD). ASC 326 also requires the allowance for credit losses for PCD loans to be determined in a manner similar to that of other financial assets measured at amortized cost; however, the initial allowance determined at acquisition is added to the purchase price rather than recorded as provision expense. In accordance with ASC 326, the disclosure of credit quality indicators related to the amortized cost of financing receivables is further disaggregated by year of origination (or vintage). Pinnacle Financial adopted ASU 2016-13 and all subsequent amendments thereto effective January 1, 2020 using the modified retrospective method for all financial assets measured at amortized cost and off balance sheet credit exposures. Amounts for periods beginning on or after January 1, 2020 are presented under ASC 326 and all prior period information is presented in accordance with previously applicable GAAP. At January 1, 2020, Pinnacle Financial recognized a cumulative adjustment to retained earnings of $31.8 million, net of tax, attributable to an increase in the allowance for credit losses of $34.3 million, an increase in the allowance for off balance sheet credit exposures of $8.8 million, and an increase in deferred tax assets of $11.3 million. In addition, an allowance of $3.8 million was recognized on loans purchased with credit deterioration (PCD) previously classified as purchased credit impaired (PCI) with a corresponding adjustment to the gross carrying amount of the loans. Pinnacle Financial adopted ASC 326 using the prospective transition approach for PCD loans, which did not require re-evaluation of whether loans previously classified as PCI loans met the criteria of PCD assets at the date of adoption. The remaining noncredit discount will be accreted into interest income at the effective interest rate as of January 1, 2020.
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Newly Issued Not Yet Effective Accounting Standards | Newly Issued Not Yet Effective Accounting Standards — In March 2020, the FASB issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. Pinnacle Financial is implementing a transition plan to identify and modify its loans and other financial instruments, including certain indebtedness, with attributes that are either directly or indirectly influenced by LIBOR. Pinnacle Financial is assessing ASU 2020-04 and its impact on the transition away from LIBOR for its loans and other financial instruments. In January 2020, the FASB issued Accounting Standards Update 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. These amendments, among other things, clarify that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments-Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The amendments also clarify that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early application is permitted, including early adoption in an interim period. An entity should apply ASU 2020-01 prospectively at the beginning of the interim period that includes the adoption date. Pinnacle Financial is assessing ASU 2020-01 and its impact on its accounting and disclosures. In December 2019, the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes to simplify various aspects of the current guidance to promote consistent application of the standard among reporting entities by moving certain exceptions to the general principles. The amendments are effective for fiscal years beginning after December 15, 2020, with early adoption permitted. Pinnacle Financial does not plan to adopt this standard early. If this standard had been effective as of the date of the financial statements included in this report, there would have been no impact on Pinnacle Financial's consolidated financial statements.
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Reclassifications | Reclassifications — Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or stockholders' equity. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Events | Subsequent Events — ASC Topic 855, Subsequent Events, establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. Pinnacle Financial evaluated all events or transactions that occurred after June 30, 2020 through the date of the issued financial statements. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information | Cash Flow Information — Supplemental cash flow information addressing certain cash and noncash transactions for the six months ended June 30, 2020 and 2019 was as follows (in thousands):
(1) Includes $79.9 million recognized upon initial adoption of ASU 2016-02 on January 1, 2019.
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Basic and Diluted Earnings Per Share Calculations | The following is a summary of the basic and diluted net income per common share calculations for the three and six months ended June 30, 2020 and 2019 (in thousands, except per share data):
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Equity method investment (Tables) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments | A summary of BHG's financial position as of June 30, 2020 and December 31, 2019 and results of operations as of and for the three and six months ended June 30, 2020 and 2019, were as follows (in thousands):
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Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Amortized Cost and Fair Value of Available-for-sale and Held-to-maturity Securities | The amortized cost and fair value of securities available-for-sale and held-to-maturity at June 30, 2020 and December 31, 2019 are summarized as follows (in thousands):
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Amortized Cost and Fair Value of Debt Securities by Contractual Maturity | The amortized cost and fair value of debt securities as of June 30, 2020 by contractual maturity are shown below. Actual maturities may differ from contractual maturities of mortgage- and asset-backed securities since the mortgages and assets underlying the securities may be called or prepaid with or without penalty. Therefore, these securities are not included in the maturity categories in the following summary (in thousands):
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Classification of Investments According to Term of Unrealized Losses of Less than Twelve Months or Twelve Months or Longer | At June 30, 2020 and December 31, 2019, the following investments had unrealized losses. The table below classifies these investments according to the term of the unrealized losses of less than twelve months or twelve months or longer (in thousands):
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Loans and Allowance for Loan Losses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | Loans at June 30, 2020 and December 31, 2019 were as follows:
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Loan Classification Categorized by Risk Rating Category | The table below presents loan balances classified within each risk rating category by primary loan type and based on year of origination as of June 30, 2020 (in thousands):
The following table outlines the risk category of loans as of December 31, 2019 (in thousands):
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Past Due Balances by Loan Classification | The table below presents the aging of past due balances by loan segment at June 30, 2020 and December 31, 2019 (in thousands):
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Details of Changes in the Allowance for Loan Losses | The following table details the changes in the allowance for credit losses for the three and six months ended June 30, 2020 and 2019, respectively, by loan classification (in thousands):
The following table details the allowance for credit losses on loans and recorded investment in loans by loan classification and by impairment evaluation method as of December 31, 2019, as determined in accordance with ASC 310 prior to the adoption of ASU 2016-13 (in thousands):
(1) Prior to the adoption of ASC 326 on January 1, 2020, an allowance for loan losses was recorded on loans acquired with deteriorated credit quality only in the event of additional credit deterioration subsequent to acquisition.
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Schedule of Collateral Dependent Loans Individually Evaluated for ACL | The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses:
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Financing Receivable, Nonaccrual | The table below presents the amortized cost basis of loans on nonaccrual status and loans past due 90 or more days and still accruing interest at June 30, 2020 and December 31, 2019. Also presented is the balance of loans on nonaccrual status at June 30, 2020 for which there was no related allowance for credit losses recorded (in thousands):
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Summary of Recorded Investment, Unpaid Principal Balance and Related Allowance and Average Recorded Investment of Impaired Loans | The following table presents impaired loans at December 31, 2019 as determined under ASC 310 prior to the adoption of ASU 2016-13. Impaired loans generally include nonaccrual loans, troubled debt restructurings, and other loans deemed to be impaired but that continue to accrue interest. Presented are the recorded investment, unpaid principal balance and related allowance of impaired loans at December 31, 2019 by loan classification (in thousands):
The following table details the average recorded investment and the amount of interest income recognized on a cash basis for the three and six months ended June 30, 2019, respectively, of impaired loans by loan classification as determined under ASC 310 prior to the adoption of ASU 2016-13 (in thousands):
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Purchase Credit Impaired Loans | Prior to the adoption of ASU 2016-13, loans acquired with deteriorated credit quality, referred to under ASC 310-30 as purchased credit impaired loans and under ASU 2016-13 as purchased credit deteriorated loans, were assigned a credit related purchase discount and non-credit related purchase discount at acquisition. Upon adoption of ASU 2016-13 on January 1, 2020, the remaining credit related discount was re-classified to a component of the allowance for credit losses. The remaining non-credit discount will continue to be accreted into income over the remaining lives of the related loans. The following table provides a rollforward of purchased credit deteriorated loans from December 31, 2019 through June 30, 2020 (in thousands):
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Troubled Debt Restructurings | The following table outlines the amount of each loan category where troubled debt restructurings were made during the three and six months ended June 30, 2020 and 2019 (dollars in thousands):
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Summary of Loan Portfolio Credit Risk Exposure | Pinnacle Financial analyzes its commercial loan portfolio to determine if a concentration of credit risk exists to any industries. Pinnacle Financial utilizes broadly accepted industry classification systems in order to classify borrowers into various industry classifications. Pinnacle Financial has a credit exposure (loans outstanding plus unfunded lines of credit) exceeding 25% of Pinnacle Bank's total risk-based capital to borrowers in the following industries at June 30, 2020 with the comparative exposures for December 31, 2019 (in thousands):
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Stock Options and Restricted Shares (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | A summary of the stock option activity within the equity incentive plans during the six months ended June 30, 2020 and information regarding expected vesting, contractual terms remaining, intrinsic values and other matters is as follows:
(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 $64.00 per common share at December 31, 2019 for the 119,274 options that were in-the-money at December 31, 2019. (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 $41.99 per common share at June 30, 2020 for the 109,487 options that were in-the-money at June 30, 2020.
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Summary of Activity for Unvested Restricted Share Awards | A summary of activity for unvested restricted share awards for the six months ended June 30, 2020 is as follows:
(1)Represents shares forfeited due to employee termination and/or retirement. No shares were forfeited due to failure to meet performance targets. Pinnacle Financial has granted restricted share awards to associates and outside directors with a time-based vesting criteria. Compensation expense associated with time-based vesting restricted share awards is recognized over the time period that the restrictions associated with the awards lapse on a straight-line basis based on the total cost of the award. The following table outlines restricted stock grants that were made, grouped by similar vesting criteria, during the six months ended June 30, 2020. The table reflects the life-to-date activity for these awards:
(1)Groups include employees (referred to as associates above) 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 (or have Pinnacle Financial withhold some shares) to pay the applicable income taxes associated with the award. Alternatively, the recipient can pay the withholding taxes in cash. For time-based vesting 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 vesting awards to Pinnacle Financial's directors, 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)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, 2021 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. (4)These shares represent forfeitures resulting from recipients whose employment or board membership was terminated during the year-to-date period ended June 30, 2020. Any dividends paid on shares for which the forfeiture restrictions do not lapse will be recouped by Pinnacle Financial at the time of termination or will not be distributed from escrow, as applicable.
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Summary of Restricted Share Unit awards | The following table details the performance-based vesting restricted stock unit awards outstanding at June 30, 2020:
(1)The named executive officers are awarded a range of awards that may be earned based on attainment of goals between a target level of performance and a maximum level of performance. (2)Restricted share unit awards, if earned, will be settled in shares of Pinnacle Financial Common Stock in the periods noted in the table, if Pinnacle Bank's ratio of non-performing assets to its loans plus ORE is less than amounts established in the applicable award agreement.
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Derivative Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Interest Rate Swaps | A summary of Pinnacle Financial's interest rate swaps to facilitate customers' transactions as of June 30, 2020 and December 31, 2019 is included in the following table (in thousands):
The effects of Pinnacle Financial's interest rate swaps to facilitate customers' transactions on the income statement during the three and six months ended June 30, 2020 and 2019 were as follows (in thousands):
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Schedule of Derivative Instruments | Derivatives designated as cash flow hedges For derivative instruments that are designated and qualify as a cash flow hedge, the aggregate fair value of the derivative instrument is recorded in other assets or other liabilities with any gain or loss related to changes in fair value recorded in accumulated other comprehensive income, net of tax. The gain or loss is reclassified into earnings in the same period during which the hedged asset or liability affects earnings and is presented in the same income statement line item as the earnings effect of the hedged asset or liability. Pinnacle Financial uses interest rate floors in an effort to mitigate the impact of declining interest rates on LIBOR-based variable rate loans. Pinnacle Financial uses forward cash flow hedges in an effort to manage future interest rate exposure on borrowings. The hedging strategy converts the LIBOR-based variable interest rate on forecasted borrowings to a fixed interest rate and is used in an effort to protect Pinnacle Financial from floating interest rate variability. A summary of Pinnacle Financial's cash flow hedge relationships as of June 30, 2020 and December 31, 2019 is as follows (in thousands):
The effects of Pinnacle Financial's cash flow hedge relationships on the statement of comprehensive income (loss) during the three and six months ended June 30, 2020 and 2019 were as follows, net of tax (in thousands):
The cash flow hedges were determined to be highly effective during the periods presented and as a result qualify for hedge accounting treatment. The hedge would no longer be considered effective if a portion of the hedge becomes ineffective, the item hedged is no longer in existence or Pinnacle Financial discontinues hedge accounting. Pinnacle Financial expects the hedges at June 30, 2020 to continue to be highly effective and qualify for hedge accounting during the remaining terms of the original hedging transactions. Gains totaling $123,000 net of tax and losses totaling $1.7 million net of tax were reclassified from accumulated other comprehensive income (loss) into net income during the three and six months ended June 30, 2020, respectively, compared to losses totaling $73,000 net of tax and gains totaling $183,000 net of tax during the three and six months ended June 30, 2019, respectively. During the first quarter of 2020, loan interest rate floors entered into in the second quarter of 2019 with a notional amount totaling $1.3 billion and unrealized gains totaling $16.5 million were terminated. These unrealized gains are being amortized into income on a straight line basis through October 2021. Approximately $8.1 million in unrealized gains, net of tax, are expected to be reclassified from accumulated other comprehensive income (loss) into net income over the next twelve months related to terminated cash flow hedges. Derivatives designated as fair value hedges For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk are recognized in current earnings. The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings effect of the hedged item. Pinnacle Financial utilizes interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on the fair values of fixed rate callable available-for-sale securities. The hedging strategy converts the fixed interest rates to LIBOR-based variable interest rates. These derivatives are designated as partial term hedges of selected cash flows covering specified periods of time prior to the call dates of the hedged securities. A summary of Pinnacle Financial's fair value hedge relationships as of June 30, 2020 and December 31, 2019 is as follows (in thousands):
The effects of Pinnacle Financial's fair value hedge relationships on the income statement during the three and six months ended June 30, 2020 and 2019 were as follows (in thousands):
The following amounts were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges at June 30, 2020 and December 31, 2019 (in thousands):
During the three and six months ended June 30, 2020, amortization expense totaling $1.0 million and $2.1 million, respectively, related to previously terminated fair value hedges was recognized as a reduction to interest income on loans.
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Fair Value of Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present financial instruments measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019, by caption on the consolidated balance sheets and by FASB ASC 820 valuation hierarchy (as described above) (in thousands):
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Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | The following table presents assets measured at fair value on a nonrecurring basis as of June 30, 2020 and December 31, 2019 (in thousands):
(1) Amount is net of valuation allowance of $3.3 million at December 31, 2019 as required by ASC 310-10, "Receivables."
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Rollforward of the Balance Sheet Amounts, Unobservable Input Reconciliation | The table below includes a rollforward of the balance sheet amounts for the three and six months ended June 30, 2020 and June 30, 2019 (including the change in fair value) for financial instruments classified by Pinnacle Financial within Level 3 of the valuation hierarchy measured at fair value on a recurring basis including changes in fair value due in part to observable factors that are part of the valuation methodology (in thousands):
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Carrying Amounts, Estimated Fair Value and Placement in the Fair Value Hierarchy of Financial Instruments | The following tables present the carrying amounts, estimated fair value and placement in the fair value hierarchy of Pinnacle Financial's financial instruments at June 30, 2020 and December 31, 2019. This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash, cash equivalents, and restricted cash, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as non-interest bearing demand, interest-bearing demand, and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity (in thousands):
(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, including both commitments for unfunded loans and standby letters of credit. In making this evaluation, Pinnacle Financial utilizes credit loss expectations on funded loans from our allowance for credit losses methodology and evaluates the probability that the outstanding commitment will eventually become a funded loan. As a result, at June 30, 2020 and December 31, 2019, Pinnacle Financial included in other liabilities $20.8 million and $2.4 million, respectively, representing expected credit losses on off-balance sheet commitments, which are reflected in the estimated fair values of the related commitments. Also included in the fair values at June 30, 2020 and December 31, 2019 are unamortized fees related to these commitments of $1.4 million at both dates.
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Regulatory Matters (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Regulatory Capital Requirement | Management believes, as of June 30, 2020, that Pinnacle Financial and Pinnacle Bank met all capital adequacy requirements to which they are subject. To be categorized as well-capitalized under applicable banking regulations, Pinnacle Bank must maintain certain total risk-based, Tier 1 risk-based, common equity Tier 1 and Tier 1 leverage ratios as set forth in the following table and not be subject to a written agreement, order or directive to maintain a higher capital level. The capital conservation buffer is not included in the required ratios of the table presented below. Pinnacle Financial's and Pinnacle Bank's actual capital amounts and resulting ratios, not including the capital conservation buffer, are presented in the following table (in thousands):
(*) Average assets for the above calculations were based on the most recent quarter.
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Other borrowings (Tables) |
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Subordinated Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Borrowings | Pinnacle Financial has twelve wholly-owned subsidiaries that are statutory business trusts created for the exclusive purpose of issuing 30-year capital trust preferred securities, and Pinnacle Financial and Pinnacle Bank have entered into certain other subordinated debt agreements. On April 22, 2020, Pinnacle Financial established a credit facility with the Federal Reserve Bank in conjunction with the SBA Paycheck Protection Program, with available borrowing capacity equal to the outstanding balance of Paycheck Protection Program loans, which totaled approximately $2.2 billion at June 30, 2020. Pinnacle Financial also had a $75.0 million revolving credit facility with no outstanding borrowings as of June 30, 2020 that matured on July 24, 2020 and was not renewed. These instruments are outlined below as of June 30, 2020 (in thousands):
(1) Migrates to three month LIBOR + 3.128% beginning July 30, 2020 through the end of the term. (2) Migrates to three month LIBOR + 3.884% beginning November 16, 2021 through the end of the term. (3) Migrates to three month LIBOR + 2.775% beginning September 15, 2024 through the end of the term. (4) Borrowing capacity on the revolving credit facility is $75.0 million. At June 30, 2020, there were no amounts outstanding under this facility. An unused fee of 0.30% is assessed on the average daily unused amount of the line. This credit facility matured on July 24, 2020 and was not renewed.
|
Summary of Significant Accounting Policies - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jan. 01, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Sep. 30, 2018 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||||
Cash Transactions: | ||||||||||
Interest paid | $ 127,807 | $ 141,208 | ||||||||
Income taxes paid, net | 23,749 | 41,928 | ||||||||
Operating lease payments | 6,750 | 6,761 | ||||||||
Noncash Transactions: | ||||||||||
Loans charged-off to the allowance for credit losses | $ 9,002 | $ 8,480 | 20,695 | 14,548 | ||||||
Loans foreclosed upon and transferred to other real estate owned | 2,442 | 11,760 | ||||||||
Loans foreclosed upon and transferred to other assets | 25 | 93 | ||||||||
Fixed assets transferred to other real estate owned | 0 | 5,126 | ||||||||
Available-for-sale securities transferred to held-to-maturity portfolio | $ 179,800 | 873,613 | 0 | |||||||
Right of use assets recognized during the period in exchange for lease obligations | $ 79,900 | $ 2,928 | [1] | $ 82,856 | [1] | |||||
|
Summary of Significant Accounting Policies - Basic and Diluted Net Income Per Share Calculations (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Basic net income per common share calculation: | ||||
Numerator - Net income | $ 62,444 | $ 100,321 | $ 90,800 | $ 194,281 |
Denominator - Weighted average common shares outstanding (in shares) | 75,210,869 | 76,343,608 | 75,507,136 | 76,572,120 |
Basic net income per common share (in dollars per share) | $ 0.83 | $ 1.31 | $ 1.20 | $ 2.54 |
Diluted net income per common share calculation: | ||||
Numerator – Net income | $ 62,444 | $ 100,321 | $ 90,800 | $ 194,281 |
Denominator - Weighted average common shares outstanding (in shares) | 75,211,000 | 76,344,000 | 75,507,000 | 76,572,000 |
Dilutive shares contingently issuable (in shares) | 112,000 | 268,000 | 139,000 | 294,000 |
Weighted average diluted common shares outstanding (in shares) | 75,323,259 | 76,611,657 | 75,645,768 | 76,866,163 |
Diluted net income per common share (in dollars per share) | $ 0.83 | $ 1.31 | $ 1.20 | $ 2.53 |
Equity method investment - Financial Position and Results of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Schedule of Equity Method Investments [Line Items] | |||||
Assets | $ 33,342,112 | $ 33,342,112 | $ 27,805,496 | ||
Liabilities | 28,646,465 | 28,646,465 | 23,449,748 | ||
Liabilities and Equity | 33,342,112 | 33,342,112 | 27,805,496 | ||
Bankers Healthcare Group, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Assets | 1,268,208 | 1,268,208 | 840,398 | ||
Liabilities | 1,046,948 | 1,046,948 | 641,037 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 221,260 | 221,260 | 199,361 | ||
Liabilities and Equity | 1,268,208 | 1,268,208 | $ 840,398 | ||
Revenues | 92,790 | $ 107,982 | 190,734 | $ 170,799 | |
Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | $ 37,674 | $ 67,564 | $ 70,145 | $ 94,699 |
Equity method investment - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Schedule of Equity Method Investments [Line Items] | |||||
Technology, trade name and customer relationship intangibles | $ 47,131,000 | $ 47,131,000 | $ 51,130,000 | ||
Amortization of Intangible Assets | 2,479,000 | $ 2,271,000 | 4,999,000 | $ 4,582,000 | |
Dividends received from equity method investment | 7,957,000 | 40,914,000 | |||
Bankers Healthcare Group, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Technology, trade name and customer relationship intangibles | 8,200,000 | 8,200,000 | $ 8,800,000 | ||
Amortization of Intangible Assets | 293,000 | 475,000 | 587,000 | 950,000 | |
Accretion income | 541,000 | 660,000 | 1,100,000 | 1,300,000 | |
Dividends received from equity method investment | 0 | 28,200,000 | 8,000,000.0 | 40,900,000 | |
Loan face amount | $ 0 | $ 0 | $ 0 | $ 0 |
Loans and Allowance for Credit Losses - Financing Receivables Past Due (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Financing Receivable, Past Due [Line Items] | ||
Total past due | $ 51,659 | $ 62,338 |
Current | 22,468,641 | 19,725,538 |
Loans and Leases Receivable, Net of Deferred Income | 22,520,300 | 19,787,876 |
30-59 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 17,022 | 28,745 |
60-89 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 6,134 | 12,333 |
90 days or more past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 28,503 | 21,260 |
Commercial real estate- owner occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 8,630 | 6,958 |
Current | 2,699,676 | 2,662,808 |
Loans and Leases Receivable, Net of Deferred Income | 2,708,306 | 2,669,766 |
Commercial real estate- owner occupied | 30-59 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 2,446 | 2,307 |
Commercial real estate- owner occupied | 60-89 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 1,241 | 2,932 |
Commercial real estate- owner occupied | 90 days or more past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 4,943 | 1,719 |
Commercial real estate- Non-owner occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 10,590 | 10,613 |
Current | 5,373,428 | 5,028,839 |
Loans and Leases Receivable, Net of Deferred Income | 5,384,018 | 5,039,452 |
Commercial real estate- Non-owner occupied | 30-59 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 576 | 3,156 |
Commercial real estate- Non-owner occupied | 60-89 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 64 | 3,641 |
Commercial real estate- Non-owner occupied | 90 days or more past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 9,950 | 3,816 |
Consumer real estate – mortgage | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 10,792 | 21,107 |
Current | 3,031,812 | 3,047,518 |
Loans and Leases Receivable, Net of Deferred Income | 3,042,604 | 3,068,625 |
Consumer real estate – mortgage | 30-59 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 3,318 | 11,646 |
Consumer real estate – mortgage | 60-89 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 1,557 | 2,157 |
Consumer real estate – mortgage | 90 days or more past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 5,917 | 7,304 |
Construction and land development | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 4,213 | 3,590 |
Current | 2,570,281 | 2,426,893 |
Loans and Leases Receivable, Net of Deferred Income | 2,574,494 | 2,430,483 |
Construction and land development | 30-59 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 1,461 | 1,392 |
Construction and land development | 60-89 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 598 | 711 |
Construction and land development | 90 days or more past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 2,154 | 1,487 |
Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 15,283 | 17,316 |
Current | 8,501,050 | 6,272,980 |
Loans and Leases Receivable, Net of Deferred Income | 8,516,333 | 6,290,296 |
Commercial and industrial | 30-59 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 7,641 | 8,474 |
Commercial and industrial | 60-89 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 2,651 | 2,478 |
Commercial and industrial | 90 days or more past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 4,991 | 6,364 |
Consumer and other | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 2,151 | 2,754 |
Current | 292,394 | 286,500 |
Loans and Leases Receivable, Net of Deferred Income | 294,545 | 289,254 |
Consumer and other | 30-59 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 1,580 | 1,770 |
Consumer and other | 60-89 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | 23 | 414 |
Consumer and other | 90 days or more past due | ||
Financing Receivable, Past Due [Line Items] | ||
Total past due | $ 548 | $ 570 |
Loans and Allowance for Credit Losses - Allowance for Credit Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | $ 222,465 | $ 87,194 | $ 94,777 | $ 83,575 |
Impact of adopting ASC 326 | 38,102 | |||
Charged-off loans | (9,002) | (8,480) | (20,695) | (14,548) |
Recovery of previously charged-off loans | 3,617 | 4,344 | 5,155 | 6,847 |
Provision for Loan and Lease Losses | 68,292 | 7,195 | 168,033 | 14,379 |
Ending Balance | 285,372 | 90,253 | 285,372 | 90,253 |
Accounting Standards Update 2016-13 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Impact of adopting ASC 326 | 34,300 | |||
Commercial real estate- owner occupied | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 23,634 | 12,618 | 13,406 | 11,297 |
Impact of adopting ASC 326 | 264 | |||
Charged-off loans | 0 | (1,065) | (1,061) | (1,586) |
Recovery of previously charged-off loans | 80 | 16 | 225 | 76 |
Provision for Loan and Lease Losses | 15,089 | 605 | 25,969 | 2,387 |
Ending Balance | 38,803 | 12,174 | 38,803 | 12,174 |
Commercial real estate- Non-owner occupied | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 32,114 | 17,549 | 19,963 | 15,649 |
Impact of adopting ASC 326 | (4,740) | |||
Charged-off loans | (2) | 0 | (263) | (13) |
Recovery of previously charged-off loans | 106 | 876 | 199 | 888 |
Provision for Loan and Lease Losses | 36,208 | 227 | 53,267 | 2,128 |
Ending Balance | 68,426 | 18,652 | 68,426 | 18,652 |
Consumer real estate – mortgage | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 32,998 | 8,369 | 8,054 | 7,670 |
Impact of adopting ASC 326 | 21,029 | |||
Charged-off loans | (1,196) | (580) | (2,126) | (930) |
Recovery of previously charged-off loans | 484 | 372 | 674 | 741 |
Provision for Loan and Lease Losses | (2,928) | 328 | 1,727 | 1,008 |
Ending Balance | 29,358 | 8,489 | 29,358 | 8,489 |
Construction and land development | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 38,911 | 10,915 | 12,662 | 11,128 |
Impact of adopting ASC 326 | (3,144) | |||
Charged-off loans | 0 | (4) | 0 | (4) |
Recovery of previously charged-off loans | 50 | 19 | 93 | 141 |
Provision for Loan and Lease Losses | 2,936 | 276 | 32,286 | (59) |
Ending Balance | 41,897 | 11,206 | 41,897 | 11,206 |
Commercial and industrial | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 88,060 | 32,699 | 36,112 | 31,731 |
Impact of adopting ASC 326 | 23,040 | |||
Charged-off loans | (6,734) | (5,408) | (14,998) | (8,760) |
Recovery of previously charged-off loans | 2,249 | 2,744 | 2,997 | 4,342 |
Provision for Loan and Lease Losses | 17,035 | 7,401 | 53,459 | 10,123 |
Ending Balance | 100,610 | 37,436 | 100,610 | 37,436 |
Consumer and other | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 6,748 | 4,803 | 3,595 | 5,423 |
Impact of adopting ASC 326 | 2,638 | |||
Charged-off loans | (1,070) | (1,423) | (2,247) | (3,255) |
Recovery of previously charged-off loans | 648 | 317 | 967 | 659 |
Provision for Loan and Lease Losses | (48) | (1,583) | 1,325 | (713) |
Ending Balance | 6,278 | 2,114 | 6,278 | 2,114 |
Unallocated | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 0 | 241 | 985 | 677 |
Impact of adopting ASC 326 | (985) | |||
Charged-off loans | 0 | 0 | 0 | 0 |
Recovery of previously charged-off loans | 0 | 0 | 0 | 0 |
Provision for Loan and Lease Losses | 0 | (59) | 0 | (495) |
Ending Balance | $ 0 | $ 182 | $ 0 | $ 182 |
Loans and Allowance for Credit Losses - Details on Allowance for Loan Losses and Recorded Investment by Loan Classification and Impairment Evaluation Method (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
||
---|---|---|---|---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Collectively evaluated for impairment | $ 90,512 | |||||||
Individually evaluated for impairment | 3,280 | |||||||
Total allowance for loan losses | $ 285,372 | $ 222,465 | 94,777 | $ 90,253 | $ 87,194 | $ 83,575 | ||
Collectively evaluated for impairment | 19,708,817 | |||||||
Individually evaluated for impairment | 80,107 | 58,144 | ||||||
Loans and Leases Receivable, Net of Deferred Income | 22,520,300 | 19,787,876 | ||||||
Real Estate | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 64,981 | |||||||
Business Assets | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 14,769 | |||||||
Other | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 357 | |||||||
Loans acquired with deteriorated credit quality | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total allowance for loan losses | [1] | 0 | ||||||
Loans acquired with deteriorated credit quality | 20,915 | |||||||
Commercial real estate – mortgage | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Collectively evaluated for impairment | 32,134 | |||||||
Individually evaluated for impairment | 1,235 | |||||||
Total allowance for loan losses | 33,369 | |||||||
Collectively evaluated for impairment | 7,681,608 | |||||||
Individually evaluated for impairment | 18,122 | |||||||
Loans and Leases Receivable, Net of Deferred Income | 7,709,218 | |||||||
Commercial real estate – mortgage | Loans acquired with deteriorated credit quality | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total allowance for loan losses | [1] | 0 | ||||||
Loans acquired with deteriorated credit quality | 9,488 | |||||||
Commercial real estate- owner occupied | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total allowance for loan losses | 38,803 | 23,634 | 13,406 | 12,174 | 12,618 | 11,297 | ||
Individually evaluated for impairment | 16,215 | |||||||
Loans and Leases Receivable, Net of Deferred Income | 2,708,306 | 2,669,766 | ||||||
Commercial real estate- owner occupied | Real Estate | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 16,215 | |||||||
Commercial real estate- owner occupied | Business Assets | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 0 | |||||||
Commercial real estate- owner occupied | Other | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 0 | |||||||
Commercial real estate- Non-owner occupied | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total allowance for loan losses | 68,426 | 32,114 | 19,963 | 18,652 | 17,549 | 15,649 | ||
Individually evaluated for impairment | 14,447 | |||||||
Loans and Leases Receivable, Net of Deferred Income | 5,384,018 | 5,039,452 | ||||||
Commercial real estate- Non-owner occupied | Real Estate | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 14,447 | |||||||
Commercial real estate- Non-owner occupied | Business Assets | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 0 | |||||||
Commercial real estate- Non-owner occupied | Other | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 0 | |||||||
Consumer real estate – mortgage | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Collectively evaluated for impairment | 6,762 | |||||||
Individually evaluated for impairment | 1,292 | |||||||
Total allowance for loan losses | 29,358 | 32,998 | 8,054 | 8,489 | 8,369 | 7,670 | ||
Collectively evaluated for impairment | 3,036,922 | |||||||
Individually evaluated for impairment | 29,385 | 25,018 | ||||||
Loans and Leases Receivable, Net of Deferred Income | 3,042,604 | 3,068,625 | ||||||
Consumer real estate – mortgage | Real Estate | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 29,385 | |||||||
Consumer real estate – mortgage | Business Assets | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 0 | |||||||
Consumer real estate – mortgage | Other | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 0 | |||||||
Consumer real estate – mortgage | Loans acquired with deteriorated credit quality | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total allowance for loan losses | [1] | 0 | ||||||
Loans acquired with deteriorated credit quality | 6,685 | |||||||
Construction and land development | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Collectively evaluated for impairment | 12,629 | |||||||
Individually evaluated for impairment | 33 | |||||||
Total allowance for loan losses | 41,897 | 38,911 | 12,662 | 11,206 | 10,915 | 11,128 | ||
Collectively evaluated for impairment | 2,426,901 | |||||||
Individually evaluated for impairment | 4,452 | 561 | ||||||
Loans and Leases Receivable, Net of Deferred Income | 2,574,494 | 2,430,483 | ||||||
Construction and land development | Real Estate | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 4,452 | |||||||
Construction and land development | Business Assets | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 0 | |||||||
Construction and land development | Other | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 0 | |||||||
Construction and land development | Loans acquired with deteriorated credit quality | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total allowance for loan losses | [1] | 0 | ||||||
Loans acquired with deteriorated credit quality | 3,021 | |||||||
Commercial and industrial | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Collectively evaluated for impairment | 35,401 | |||||||
Individually evaluated for impairment | 711 | |||||||
Total allowance for loan losses | 100,610 | 88,060 | 36,112 | 37,436 | 32,699 | 31,731 | ||
Collectively evaluated for impairment | 6,274,280 | |||||||
Individually evaluated for impairment | 15,560 | 14,295 | ||||||
Loans and Leases Receivable, Net of Deferred Income | 8,516,333 | 6,290,296 | ||||||
Commercial and industrial | Real Estate | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 482 | |||||||
Commercial and industrial | Business Assets | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 14,769 | |||||||
Commercial and industrial | Other | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 309 | |||||||
Commercial and industrial | Loans acquired with deteriorated credit quality | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total allowance for loan losses | [1] | 0 | ||||||
Loans acquired with deteriorated credit quality | 1,721 | |||||||
Consumer and other | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Collectively evaluated for impairment | 3,586 | |||||||
Individually evaluated for impairment | 9 | |||||||
Total allowance for loan losses | 6,278 | 6,748 | 3,595 | 2,114 | 4,803 | 5,423 | ||
Collectively evaluated for impairment | 289,106 | |||||||
Individually evaluated for impairment | 48 | 148 | ||||||
Loans and Leases Receivable, Net of Deferred Income | 294,545 | 289,254 | ||||||
Consumer and other | Real Estate | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 0 | |||||||
Consumer and other | Business Assets | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 0 | |||||||
Consumer and other | Other | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Individually evaluated for impairment | 48 | |||||||
Consumer and other | Loans acquired with deteriorated credit quality | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total allowance for loan losses | [1] | 0 | ||||||
Loans acquired with deteriorated credit quality | 0 | |||||||
Unallocated | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Collectively evaluated for impairment | ||||||||
Individually evaluated for impairment | ||||||||
Total allowance for loan losses | $ 0 | $ 0 | 985 | $ 182 | $ 241 | $ 677 | ||
Unallocated | Loans acquired with deteriorated credit quality | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Total allowance for loan losses | ||||||||
|
Loans and Allowance for Credit Losses - Nonaccrual and Past Due Greater than 90 Days (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans | $ 62,562 | $ 61,605 |
Financing Receivable, Nonaccrual, No Allowance | 19,840 | |
Financing Receivable, 90 Days or More Past Due, Still Accruing | 1,982 | 1,615 |
Commercial real estate- owner occupied | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans | 11,806 | 11,654 |
Financing Receivable, Nonaccrual, No Allowance | 4,325 | |
Financing Receivable, 90 Days or More Past Due, Still Accruing | 0 | 0 |
Commercial real estate- Non-owner occupied | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans | 10,454 | 7,173 |
Financing Receivable, Nonaccrual, No Allowance | 7,540 | |
Financing Receivable, 90 Days or More Past Due, Still Accruing | 0 | 0 |
Consumer real estate – mortgage | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans | 23,237 | 24,667 |
Financing Receivable, Nonaccrual, No Allowance | 0 | |
Financing Receivable, 90 Days or More Past Due, Still Accruing | 18 | 168 |
Construction and land development | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans | 3,230 | 2,278 |
Financing Receivable, Nonaccrual, No Allowance | 1,222 | |
Financing Receivable, 90 Days or More Past Due, Still Accruing | 0 | 0 |
Commercial and industrial | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans | 13,780 | 15,685 |
Financing Receivable, Nonaccrual, No Allowance | 6,753 | |
Financing Receivable, 90 Days or More Past Due, Still Accruing | 1,459 | 946 |
Consumer and other | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Nonaccrual loans | 55 | 148 |
Financing Receivable, Nonaccrual, No Allowance | 0 | |
Financing Receivable, 90 Days or More Past Due, Still Accruing | $ 505 | $ 501 |
Loans and Allowance for Credit Losses - Recorded Investment, Principal Balance and Related Allowance (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Financing Receivable, Impaired [Line Items] | |||||
Impaired Financing Receivable, Recorded Investment | $ 58,144,000 | ||||
Unpaid principal balances | 64,556,000 | ||||
Valuation allowance | 3,280,000 | ||||
Impaired Financing Receivable, Average Recorded Investment | $ 86,160,000 | $ 85,155,000 | |||
Impaired Financing Receivable, Interest Income, Cash Basis Method | $ 0 | 89,000 | $ 0 | 176,000 | |
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans | 854,000 | 1,400,000 | 1,600,000 | 2,600,000 | |
Currently performing impaired loans | $ 32,100,000 | $ 32,100,000 | 35,800,000 | ||
Impaired loans with an allowance: | |||||
Financing Receivable, Impaired [Line Items] | |||||
Impaired Financing Receivable, Recorded Investment | 35,758,000 | ||||
Unpaid principal balances | 40,305,000 | ||||
Valuation allowance | 3,280,000 | ||||
Impaired Financing Receivable, Average Recorded Investment | 48,494,000 | 47,261,000 | |||
Impaired Financing Receivable, Interest Income, Cash Basis Method | 0 | 0 | |||
Impaired loans with an allowance: | Commercial real estate – mortgage | |||||
Financing Receivable, Impaired [Line Items] | |||||
Impaired Financing Receivable, Recorded Investment | 9,998,000 | ||||
Unpaid principal balances | 10,983,000 | ||||
Valuation allowance | 1,235,000 | ||||
Impaired Financing Receivable, Average Recorded Investment | 15,589,000 | 15,097,000 | |||
Impaired Financing Receivable, Interest Income, Cash Basis Method | 0 | 0 | |||
Impaired loans with an allowance: | Consumer real estate – mortgage | |||||
Financing Receivable, Impaired [Line Items] | |||||
Impaired Financing Receivable, Recorded Investment | 20,996,000 | ||||
Unpaid principal balances | 23,105,000 | ||||
Valuation allowance | 1,292,000 | ||||
Impaired Financing Receivable, Average Recorded Investment | 22,219,000 | 21,434,000 | |||
Impaired Financing Receivable, Interest Income, Cash Basis Method | 0 | 0 | |||
Impaired loans with an allowance: | Construction and land development | |||||
Financing Receivable, Impaired [Line Items] | |||||
Impaired Financing Receivable, Recorded Investment | 542,000 | ||||
Unpaid principal balances | 654,000 | ||||
Valuation allowance | 33,000 | ||||
Impaired Financing Receivable, Average Recorded Investment | 747,000 | 692,000 | |||
Impaired Financing Receivable, Interest Income, Cash Basis Method | 0 | 0 | |||
Impaired loans with an allowance: | Commercial and industrial | |||||
Financing Receivable, Impaired [Line Items] | |||||
Impaired Financing Receivable, Recorded Investment | 4,074,000 | ||||
Unpaid principal balances | 5,381,000 | ||||
Valuation allowance | 711,000 | ||||
Impaired Financing Receivable, Average Recorded Investment | 9,718,000 | 9,563,000 | |||
Impaired Financing Receivable, Interest Income, Cash Basis Method | 0 | 0 | |||
Impaired loans with an allowance: | Consumer and other | |||||
Financing Receivable, Impaired [Line Items] | |||||
Impaired Financing Receivable, Recorded Investment | 148,000 | ||||
Unpaid principal balances | 182,000 | ||||
Valuation allowance | 9,000 | ||||
Impaired Financing Receivable, Average Recorded Investment | 221,000 | 475,000 | |||
Impaired Financing Receivable, Interest Income, Cash Basis Method | 0 | 0 | |||
Impaired loans without an allowance: | |||||
Financing Receivable, Impaired [Line Items] | |||||
Impaired Financing Receivable, Recorded Investment | 22,386,000 | ||||
Unpaid principal balances | 24,251,000 | ||||
Valuation allowance | 0 | ||||
Impaired Financing Receivable, Average Recorded Investment | 37,666,000 | 37,894,000 | |||
Impaired Financing Receivable, Interest Income, Cash Basis Method | 89,000 | 176,000 | |||
Impaired loans without an allowance: | Commercial real estate – mortgage | |||||
Financing Receivable, Impaired [Line Items] | |||||
Impaired Financing Receivable, Recorded Investment | 8,124,000 | ||||
Unpaid principal balances | 8,891,000 | ||||
Valuation allowance | 0 | ||||
Impaired Financing Receivable, Average Recorded Investment | 13,503,000 | 13,910,000 | |||
Impaired Financing Receivable, Interest Income, Cash Basis Method | 89,000 | 176,000 | |||
Impaired loans without an allowance: | Consumer real estate – mortgage | |||||
Financing Receivable, Impaired [Line Items] | |||||
Impaired Financing Receivable, Recorded Investment | 4,022,000 | ||||
Unpaid principal balances | 4,021,000 | ||||
Valuation allowance | 0 | ||||
Impaired Financing Receivable, Average Recorded Investment | 10,658,000 | 9,521,000 | |||
Impaired Financing Receivable, Interest Income, Cash Basis Method | 0 | 0 | |||
Impaired loans without an allowance: | Construction and land development | |||||
Financing Receivable, Impaired [Line Items] | |||||
Impaired Financing Receivable, Recorded Investment | 19,000 | ||||
Unpaid principal balances | 17,000 | ||||
Valuation allowance | 0 | ||||
Impaired Financing Receivable, Average Recorded Investment | 0 | 595,000 | |||
Impaired Financing Receivable, Interest Income, Cash Basis Method | 0 | 0 | |||
Impaired loans without an allowance: | Commercial and industrial | |||||
Financing Receivable, Impaired [Line Items] | |||||
Impaired Financing Receivable, Recorded Investment | 10,221,000 | ||||
Unpaid principal balances | 11,322,000 | ||||
Valuation allowance | 0 | ||||
Impaired Financing Receivable, Average Recorded Investment | 13,505,000 | 13,868,000 | |||
Impaired Financing Receivable, Interest Income, Cash Basis Method | 0 | 0 | |||
Impaired loans without an allowance: | Consumer and other | |||||
Financing Receivable, Impaired [Line Items] | |||||
Impaired Financing Receivable, Recorded Investment | 0 | ||||
Unpaid principal balances | 0 | ||||
Valuation allowance | $ 0 | ||||
Impaired Financing Receivable, Average Recorded Investment | 0 | 0 | |||
Impaired Financing Receivable, Interest Income, Cash Basis Method | $ 0 | $ 0 |
Loans and Allowance for Credit Losses - Rollforward of Purchase Credit Impaired Loans (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Gross Carrying Value | |
Gross carrying value, beginning balance | $ 29,544 |
Reclassification of discount to allowance for credit losses | 0 |
Year-to-date settlements | 3,152 |
Gross carrying value, ending balance | 26,392 |
Accretable Yield | |
Accretable yield, beginning balance | (4,801) |
Reclassification of discount to allowance for credit losses | 0 |
Year-to-date settlements | 1,939 |
Accretable yield, ending balance | (2,862) |
Nonaccretable Yield | |
Nonaccretable yield, beginning balance | (3,828) |
Reclassification of discount to allowance for credit losses | 3,828 |
Year-to-date settlements | 0 |
Nonaccretable yield, ending balance | 0 |
Net Carrying Value | |
Net carrying value, beginning balance | 20,915 |
Reclassification of discount to allowance for credit losses | 3,828 |
Year-to-date settlements | 1,213 |
Net carrying value, ending balance | $ 23,530 |
Loans and Allowance for Credit Losses - Troubled Debt Restructurings (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||
Troubled debt restructurings performing as of restructure date | $ 3,300 | $ 3,300 | $ 4,900 | ||
Number of contracts | 0 | 3 | 1 | 3 | |
Pre Modification Outstanding Recorded Investment | $ 0 | $ 2,130 | $ 807 | $ 2,130 | |
Post Modification Outstanding Recorded Investment, net of related allowance | $ 0 | $ 1,441 | $ 807 | $ 1,441 | |
Financing Receivable, Troubled Debt Restructuring, Subsequent Default, Number of Contracts | 0 | 0 | |||
Commercial real estate – mortgage | |||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||
Number of contracts | 0 | 0 | |||
Pre Modification Outstanding Recorded Investment | $ 0 | $ 0 | |||
Post Modification Outstanding Recorded Investment, net of related allowance | $ 0 | $ 0 | |||
Commercial real estate- owner occupied | |||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||
Number of contracts | 0 | 0 | |||
Pre Modification Outstanding Recorded Investment | $ 0 | $ 0 | |||
Post Modification Outstanding Recorded Investment, net of related allowance | $ 0 | $ 0 | |||
Commercial real estate- Non-owner occupied | |||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||
Number of contracts | 0 | 0 | |||
Pre Modification Outstanding Recorded Investment | $ 0 | $ 0 | |||
Post Modification Outstanding Recorded Investment, net of related allowance | $ 0 | $ 0 | |||
Consumer real estate – mortgage | |||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||
Number of contracts | 0 | 1 | 1 | 1 | |
Pre Modification Outstanding Recorded Investment | $ 0 | $ 712 | $ 807 | $ 712 | |
Post Modification Outstanding Recorded Investment, net of related allowance | $ 0 | $ 626 | $ 807 | $ 626 | |
Construction and land development | |||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||
Number of contracts | 0 | 1 | 0 | 1 | |
Pre Modification Outstanding Recorded Investment | $ 0 | $ 21 | $ 0 | $ 21 | |
Post Modification Outstanding Recorded Investment, net of related allowance | $ 0 | $ 19 | $ 0 | $ 19 | |
Commercial and industrial | |||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||
Number of contracts | 0 | 1 | 0 | 1 | |
Pre Modification Outstanding Recorded Investment | $ 0 | $ 1,397 | $ 0 | $ 1,397 | |
Post Modification Outstanding Recorded Investment, net of related allowance | $ 0 | $ 796 | $ 0 | $ 796 | |
Consumer and other | |||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||||
Number of contracts | 0 | 0 | 0 | 0 | |
Pre Modification Outstanding Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Post Modification Outstanding Recorded Investment, net of related allowance | $ 0 | $ 0 | $ 0 | $ 0 |
Loans and Allowance for Credit Losses - Industry Classification System (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Lessors of nonresidential buildings | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Outstanding Principal Balances | $ 3,780,487 | |
Unfunded Commitments | 907,096 | |
Total exposure | 4,687,583 | $ 4,578,116 |
Lessors of residential buildings | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Outstanding Principal Balances | 1,046,928 | |
Unfunded Commitments | 773,602 | |
Total exposure | 1,820,530 | 1,599,837 |
New Housing For-Sale Builders | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Outstanding Principal Balances | 529,797 | |
Unfunded Commitments | 608,139 | |
Total exposure | 1,137,936 | 1,090,603 |
Hotels (except Casino Hotels) and Motels | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Outstanding Principal Balances | 874,824 | |
Unfunded Commitments | 155,778 | |
Total exposure | $ 1,030,602 | $ 967,771 |
Income Taxes - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Income Tax Contingency [Line Items] | |||||
Unrecognized Tax Benefits | $ 6,900,000 | $ 6,900,000 | $ 6,900,000 | ||
Interest and penalties | $ 0 | $ 0 | |||
Effective income tax rate (as percent) | 15.20% | 19.60% | 9.50% | 19.60% | |
Federal and State income tax statutory rate (as percent) | 26.14% | 26.14% | |||
Excess tax benefit | $ (272,000) | $ (68,000) | $ 590,000 | $ 701,000 | |
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | $ 22,400,000 |
Commitments and Contingent Liabilities (Details) - USD ($) $ in Millions |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2020 |
Jan. 01, 2020 |
Dec. 31, 2019 |
|
Loss Contingencies [Line Items] | |||
Off-Balance Sheet, Credit Loss, Liability | $ 20.8 | $ 8.8 | $ 2.4 |
Commitments | |||
Loss Contingencies [Line Items] | |||
Amount of commitment | 8,700.0 | ||
Home Equity Line of Credit | |||
Loss Contingencies [Line Items] | |||
Amount of commitment | $ 1,100.0 | ||
Standby letter of credit | |||
Loss Contingencies [Line Items] | |||
Expiry period of standby letter of credit, maximum | 2 years | ||
Amount of commitment | $ 213.3 |
Stock Options and Restricted Shares - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jul. 31, 2015 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 4,148 | $ 5,501 | $ 5,160 | $ 4,913 | $ 9,649 | $ 10,073 | |
Remaining Share-Based Compensation on Unvested Restricted Stock Awards | $ 45,100 | $ 45,100 | |||||
Weighted Average Remaining Period of Sharebased Compensation Expense | 2 years 21 days | ||||||
2018 Equity Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for issuances (in shares) | 838,996 | 838,996 | |||||
BNC Bancorp 2013 Omnibus Stock Incentive Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for issuances (in shares) | 0 | 0 | |||||
Plans other than 2018 Omnibus Equity Incentive Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for issuances (in shares) | 0 | 0 | |||||
CapitalMark Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for issuances (in shares) | 0 | 0 | |||||
Shares acquired in period (in shares) | 858,000 |
Stock Options and Restricted Shares - Common Stock Options (Details) - Common stock options $ / shares in Units, $ in Thousands |
6 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2020
USD ($)
$ / shares
shares
|
Dec. 31, 2019
USD ($)
$ / shares
shares
|
|||||||
Number | ||||||||
Outstanding, beginning balance (in shares) | 119,274 | |||||||
Granted (in shares) | 0 | |||||||
Exercised (in shares) | (9,787) | |||||||
Forfeited (in shares) | 0 | |||||||
Outstanding, ending balance (in shares) | 109,487 | 119,274 | ||||||
Additional disclosures | ||||||||
Options exercisable (in shares) | 109,487 | |||||||
Weighted-average exercise price of options outstanding (in dollars per share) | $ / shares | $ 23.44 | $ 23.45 | ||||||
Weighted-average contractual remaining term for options outstanding | 2 years 4 months 6 days | 2 years 10 months 6 days | ||||||
Aggregate intrinsic value | $ | $ 2,031 | [1] | $ 4,837 | [2] | ||||
Weighted- average exercise price of options exercisable (in dollars per share) | $ / shares | $ 23.44 | |||||||
Weighted-average contractual remaining term for options exercisable | 2 years 4 months 6 days | |||||||
Aggregate intrinsic value of options exercisable | $ | $ 2,031 | [1] | ||||||
Quoted closing price of common stock (in dollars per share) | $ / shares | $ 41.99 | $ 64.00 | ||||||
Number of awards used in aggregate intrinsic value (in shares) | 109,487 | 119,274 | ||||||
|
Stock Options and Restricted Shares - Unvested Restricted Awards (Details) - Restricted stock |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2020
$ / shares
shares
| ||||
Number | ||||
Unvested, beginning of period (in shares) | 555,296 | |||
Shares awarded (in shares) | 249,545 | |||
Restrictions lapsed and shares released to associates/directors (in shares) | (167,615) | |||
Shares forfeited (in shares) | (12,586) | [1] | ||
Unvested, end of period (in shares) | 624,640 | |||
Grant Date Weighted-Average Cost | ||||
Unvested, beginning of period (in dollars per share) | $ / shares | $ 57.04 | |||
Shares awarded (in dollars per share) | $ / shares | 58.07 | |||
Restricted lapsed and shares released to associates/directors (in dollars per share) | $ / shares | 55.90 | |||
Shares forfeited (in dollars per share) | $ / shares | 59.97 | |||
Unvested, end of period (in dollars per share) | $ / shares | $ 57.70 | |||
Shares forfeited due to failure to meet performance targets (in shares) | 0 | |||
|
Stock Options and Restricted Shares - Restricted Shares Awarded (Details) |
6 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020
shares
| ||||||||||
Time Based Awards | Associates | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares awarded | 231,020 | [1],[2] | ||||||||
Restrictions Lapsed and shares released to participants | 97 | [1],[2] | ||||||||
Shares Forfeited by participants | 2,973 | [1],[2],[3] | ||||||||
Shares Unvested | 227,950 | [1],[2] | ||||||||
Time Based Awards | Associates | Minimum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting Period in years | 3 years | |||||||||
Time Based Awards | Associates | Maximum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting Period in years | 5 years | |||||||||
Outside Director Awards | Outside directors | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting Period in years | 1 year | [1],[4] | ||||||||
Shares awarded | 18,525 | [1],[4] | ||||||||
Restrictions Lapsed and shares released to participants | 0 | [1],[4] | ||||||||
Shares Forfeited by participants | 0 | [1],[3],[4] | ||||||||
Shares Unvested | 18,525 | [1],[4] | ||||||||
|
Stock Options and Restricted Shares - Restricted Share Unit Awards Outstanding (Details) |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2020
shares
| ||||
2020 Restricted granted shares | Tranche 2020 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 3 years | |||
2020 Restricted granted shares | Tranche 2021 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 2 years | |||
2020 Restricted granted shares | Tranche 2022 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 1 year | |||
2020 Restricted granted shares | Named Executive Officers (NEOs) | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 136,137 | [1] | ||
2020 Restricted granted shares | Named Executive Officers (NEOs) | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 204,220 | [1] | ||
2020 Restricted granted shares | Leadership Team other than NEOs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 59,648 | |||
2019 Restricted granted shares | Tranche 2019 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 3 years | |||
2019 Restricted granted shares | Tranche 2020 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 2 years | |||
2019 Restricted granted shares | Tranche 2021 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 1 year | |||
2019 Restricted granted shares | Named Executive Officers (NEOs) | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 166,211 | [1] | ||
2019 Restricted granted shares | Named Executive Officers (NEOs) | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 249,343 | [1] | ||
2019 Restricted granted shares | Leadership Team other than NEOs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 52,244 | |||
2018 Restricted granted shares | Tranche 2018 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 3 years | |||
2018 Restricted granted shares | Tranche 2019 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 2 years | |||
2018 Restricted granted shares | Tranche 2020 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 1 year | |||
2018 Restricted granted shares | Named Executive Officers (NEOs) | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 96,878 | [1] | ||
2018 Restricted granted shares | Named Executive Officers (NEOs) | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 145,339 | [1] | ||
2018 Restricted granted shares | Leadership Team other than NEOs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 25,990 | |||
2017 Restricted granted shares | Tranche 2017 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 3 years | |||
2017 Restricted granted shares | Tranche 2018 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 2 years | |||
2017 Restricted granted shares | Tranche 2019 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 1 year | |||
2017 Restricted granted shares | Named Executive Officers (NEOs) | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 72,537 | [1] | ||
2017 Restricted granted shares | Named Executive Officers (NEOs) | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 109,339 | [1] | ||
2017 Restricted granted shares | Leadership Team other than NEOs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 24,916 | |||
2016 Restricted granted shares | Tranche 2016 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 3 years | |||
2016 Restricted granted shares | Tranche 2017 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 2 years | |||
2016 Restricted granted shares | Tranche 2018 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Service period per tranche (in years) | 2 years | |||
Subsequent holding period per tranche (in years) | 1 year | |||
2016 Restricted granted shares | Named Executive Officers (NEOs) | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 73,474 | [1] | ||
2016 Restricted granted shares | Named Executive Officers (NEOs) | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 110,223 | [1] | ||
2016 Restricted granted shares | Leadership Team other than NEOs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 26,683 | |||
2015 Restricted granted shares | Leadership Team other than NEOs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares awarded (in shares) | 129,723 | |||
Share-based Payment Arrangement, Shares Withheld for Tax Withholding Obligation | 43,996 | |||
|
Derivative Instruments - Non-hedge Derivatives (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
Sep. 30, 2019 |
|
Derivative [Line Items] | ||||||
Notional Amount | $ 1,300,000 | |||||
Not Designated as Hedging Instrument | ||||||
Derivative [Line Items] | ||||||
Notional Amount | $ 3,053,030 | $ 3,053,030 | $ 2,592,778 | |||
Estimated Fair Value | (1,345) | (1,345) | $ (208) | |||
Derivative, Gain (Loss) on Derivative, Net | (794) | $ (89) | $ (1,137) | $ (102) | ||
Not Designated as Hedging Instrument | Assets | ||||||
Derivative [Line Items] | ||||||
Description of Location of Interest Rate Derivatives on Balance Sheet | Other assets | Other assets | ||||
Notional Amount | 1,526,515 | $ 1,526,515 | $ 1,296,389 | |||
Estimated Fair Value | 122,073 | $ 122,073 | $ 43,507 | |||
Not Designated as Hedging Instrument | Liabilities | ||||||
Derivative [Line Items] | ||||||
Description of Location of Interest Rate Derivatives on Balance Sheet | Other liabilities | Other liabilities | ||||
Notional Amount | 1,526,515 | $ 1,526,515 | $ 1,296,389 | |||
Estimated Fair Value | $ (123,418) | $ (123,418) | $ (43,715) |
Derivative Instruments - Hedge Derivatives (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
Sep. 30, 2019 |
|
Derivative [Line Items] | ||||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | $ 16,500,000 | |||||
Net loss (gain) on cash flow hedges reclassified from other comprehensive income into net income, net of tax | (123,000) | $ 73,000 | $ 1,702,000 | $ (183,000) | ||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | 8,100,000 | |||||
Notional Amount | $ 1,300,000,000 | |||||
Not Designated as Hedging Instrument | ||||||
Derivative [Line Items] | ||||||
Notional Amount | 3,053,030,000 | 3,053,030,000 | $ 2,592,778,000 | |||
Hedging derivative | Cash flow hedge | ||||||
Derivative [Line Items] | ||||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | $ 6,459,000 | 6,944,000 | $ 70,228,000 | 6,421,000 | ||
Hedging derivative | Fair value hedge | Securities | ||||||
Derivative [Line Items] | ||||||
Weighted Average Remaining Maturity | 6 years 6 months 14 days | |||||
Pay Rate (as percent) | 3.08% | 3.08% | ||||
Derivative, Type of Interest Rate Paid on Swap | 3 month LIBOR | |||||
Forecasted Notional Amount | $ 477,905,000 | $ 477,905,000 | 477,905,000 | |||
Fair Value Hedge Assets | (82,210,000) | (82,210,000) | (40,778,000) | |||
Derivative Instruments and Hedges, Assets | 591,147,000 | $ 591,147,000 | 551,789,000 | |||
Description of Location of Interest Rate Fair Value Hedge Derivative on Balance Sheet | Other liabilities | |||||
Increase (Decrease) in Fair Value of Hedged Item in Interest Rate Fair Value Hedge | 2,559,000 | 15,963,000 | $ 41,432,000 | 26,243,000 | ||
Gain (Loss) on Fair Value Hedges Recognized in Earnings | (2,559,000) | (15,963,000) | (41,432,000) | (26,243,000) | ||
Fair Value Hedging Adjustment | 82,210,000 | 82,210,000 | 40,778,000 | |||
Hedging derivative | Fair value hedge | Loans | ||||||
Derivative [Line Items] | ||||||
Increase (Decrease) in Fair Value of Hedged Item in Interest Rate Fair Value Hedge | 0 | 2,061,000 | 0 | 6,915,000 | ||
Gain (Loss) on Fair Value Hedges Recognized in Earnings | 0 | (2,061,000) | 0 | (6,915,000) | ||
Amortization expense, reduction to interest income on loans | 1,000,000.0 | 2,100,000 | ||||
Pay fixed and receive variable swaps | Not Designated as Hedging Instrument | ||||||
Derivative [Line Items] | ||||||
Notional Amount | 1,526,515,000 | 1,526,515,000 | 1,296,389,000 | |||
Pay variable and receive fixed swaps | Not Designated as Hedging Instrument | ||||||
Derivative [Line Items] | ||||||
Notional Amount | 1,526,515,000 | 1,526,515,000 | 1,296,389,000 | |||
Asset derivatives | Hedging derivative | Cash flow hedge | ||||||
Derivative [Line Items] | ||||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | $ 6,318,000 | 7,924,000 | $ 71,667,000 | 7,924,000 | ||
Description of Location of Interest Rate Cash Flow Hedge Derivative on Balance Sheet | Other assets | |||||
Weighted Average Remaining Maturity | 4 years 5 months 8 days | |||||
Pay Rate (as percent) | 0.00% | 0.00% | ||||
Receive Rate | 2.25% minus 1 month LIBOR | |||||
Forecasted Notional Amount | $ 1,500,000,000 | $ 1,500,000,000 | 2,800,000,000 | |||
Cash Flow Hedges Derivative Instruments at Fair Value, Net | 142,560,000 | 142,560,000 | 87,422,000 | |||
Liability derivatives | Hedging derivative | Cash flow hedge | ||||||
Derivative [Line Items] | ||||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | $ 141,000 | $ (980,000) | $ (1,439,000) | $ (1,503,000) | ||
Description of Location of Interest Rate Cash Flow Hedge Derivative on Balance Sheet | Other liabilities | |||||
Weighted Average Remaining Maturity | 1 year 10 months 6 days | |||||
Pay Rate (as percent) | 3.09% | 3.09% | ||||
Receive Rate | 3 month LIBOR | |||||
Forecasted Notional Amount | $ 99,000,000 | $ 99,000,000 | 99,000,000 | |||
Cash Flow Hedges Derivative Instruments at Fair Value, Net | $ (5,261,000) | $ (5,261,000) | $ (3,312,000) |
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
||
---|---|---|---|---|
Fair Value Assets And Liabilities Measured On Nonrecurring Basis [Abstract] | ||||
Valuation allowance | $ 3,280 | |||
Recurring | ||||
Assets, Fair Value Disclosure [Abstract] | ||||
U.S. Treasury securities | $ 72,612 | 72,867 | ||
U.S. government agency securities | 76,311 | 79,692 | ||
Mortgage-backed securities | 1,738,446 | 1,463,907 | ||
State and municipal securities | 1,179,729 | 1,714,453 | ||
Agency-backed securities | 140,415 | 152,972 | ||
Corporate notes and other | 102,765 | 56,104 | ||
Total investment securities available-for-sale | 3,310,278 | 3,539,995 | ||
Other Investments | 66,276 | 63,291 | ||
Other assets | 280,593 | 134,040 | ||
Total assets at fair value | 3,657,147 | 3,737,326 | ||
Liabilities at fair value: [Abstract] | ||||
Other liabilities | 212,810 | 87,613 | ||
Total liabilities at fair value | 212,810 | 87,613 | ||
Recurring | Quoted market prices in an active market (Level 1) | ||||
Assets, Fair Value Disclosure [Abstract] | ||||
U.S. Treasury securities | 0 | 0 | ||
U.S. government agency securities | 0 | 0 | ||
Mortgage-backed securities | 0 | 0 | ||
State and municipal securities | 0 | 0 | ||
Agency-backed securities | 0 | 0 | ||
Corporate notes and other | 0 | 0 | ||
Total investment securities available-for-sale | 0 | 0 | ||
Other Investments | 0 | 0 | ||
Other assets | 0 | 0 | ||
Total assets at fair value | 0 | 0 | ||
Liabilities at fair value: [Abstract] | ||||
Other liabilities | 0 | 0 | ||
Total liabilities at fair value | 0 | 0 | ||
Recurring | Models with significant observable market parameters (Level 2) | ||||
Assets, Fair Value Disclosure [Abstract] | ||||
U.S. Treasury securities | 72,612 | 72,867 | ||
U.S. government agency securities | 76,311 | 79,692 | ||
Mortgage-backed securities | 1,738,446 | 1,463,907 | ||
State and municipal securities | 1,164,434 | 1,698,550 | ||
Agency-backed securities | 140,415 | 152,972 | ||
Corporate notes and other | 102,765 | 56,104 | ||
Total investment securities available-for-sale | 3,294,983 | 3,524,092 | ||
Other Investments | 25,664 | 25,135 | ||
Other assets | 280,593 | 134,040 | ||
Total assets at fair value | 3,601,240 | 3,683,267 | ||
Liabilities at fair value: [Abstract] | ||||
Other liabilities | 212,810 | 87,613 | ||
Total liabilities at fair value | 212,810 | 87,613 | ||
Recurring | Models with significant unobservable market parameters (Level 3) | ||||
Assets, Fair Value Disclosure [Abstract] | ||||
U.S. Treasury securities | 0 | 0 | ||
U.S. government agency securities | 0 | 0 | ||
Mortgage-backed securities | 0 | 0 | ||
State and municipal securities | 15,295 | 15,903 | ||
Agency-backed securities | 0 | 0 | ||
Corporate notes and other | 0 | 0 | ||
Total investment securities available-for-sale | 15,295 | 15,903 | ||
Other Investments | 40,612 | 38,156 | ||
Other assets | 0 | 0 | ||
Total assets at fair value | 55,907 | 54,059 | ||
Liabilities at fair value: [Abstract] | ||||
Other liabilities | 0 | 0 | ||
Total liabilities at fair value | 0 | 0 | ||
Nonrecurring | ||||
Assets, Fair Value Disclosure [Abstract] | ||||
Total assets at fair value | 58,488 | 61,965 | ||
Fair Value Assets And Liabilities Measured On Nonrecurring Basis [Abstract] | ||||
Other real estate owned | 22,080 | 29,487 | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | [1] | 36,408 | 32,478 | |
Nonrecurring | Quoted market prices in an active market (Level 1) | ||||
Assets, Fair Value Disclosure [Abstract] | ||||
Total assets at fair value | 0 | 0 | ||
Fair Value Assets And Liabilities Measured On Nonrecurring Basis [Abstract] | ||||
Other real estate owned | 0 | 0 | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | [1] | 0 | 0 | |
Nonrecurring | Models with significant observable market parameters (Level 2) | ||||
Assets, Fair Value Disclosure [Abstract] | ||||
Total assets at fair value | 0 | 0 | ||
Fair Value Assets And Liabilities Measured On Nonrecurring Basis [Abstract] | ||||
Other real estate owned | 0 | 0 | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | [1] | 0 | 0 | |
Nonrecurring | Models with significant unobservable market parameters (Level 3) | ||||
Assets, Fair Value Disclosure [Abstract] | ||||
Total assets at fair value | 58,488 | 61,965 | ||
Fair Value Assets And Liabilities Measured On Nonrecurring Basis [Abstract] | ||||
Other real estate owned | 22,080 | 29,487 | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | [1] | $ 36,408 | $ 32,478 | |
|
Fair Value of Financial Instruments - Rollforward of Balance Sheet Amounts Within Level 3 Valuation Hierarchy (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Assets measured on recurring basis, unobservable input reconciliation, calculation [Roll Forward] | ||||
Transfers out of Level 3 | $ 0 | |||
Recurring | Other assets | ||||
Assets measured on recurring basis, unobservable input reconciliation, calculation [Roll Forward] | ||||
Fair value, beginning of period | $ 39,756 | $ 28,107 | 38,156 | $ 26,422 |
Total realized gains (losses) included in income | (278) | 481 | (452) | 929 |
Changes in unrealized gains/losses included in other comprehensive income for assets and liabilities still held at period-end | 0 | 0 | 0 | 0 |
Purchases | 1,366 | 3,518 | 3,727 | 5,188 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | (232) | (584) | (819) | (1,017) |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair value, end of period | 40,612 | 31,522 | 40,612 | 31,522 |
Total realized gains (losses) included in income related to financial assets and liabilities still on the consolidated balance sheet at period-end | (278) | 481 | (452) | 929 |
Recurring | Available-for-sale Securities | ||||
Assets measured on recurring basis, unobservable input reconciliation, calculation [Roll Forward] | ||||
Fair value, beginning of period | 14,767 | 13,730 | 15,903 | 14,595 |
Total realized gains (losses) included in income | 27 | 29 | 55 | 59 |
Changes in unrealized gains/losses included in other comprehensive income for assets and liabilities still held at period-end | 501 | 1,504 | 480 | 1,008 |
Purchases | 0 | 0 | 0 | 0 |
Issuances | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | (1,143) | (399) |
Transfers out of Level 3 | 0 | 0 | 0 | 0 |
Fair value, end of period | 15,295 | 15,263 | 15,295 | 15,263 |
Total realized gains (losses) included in income related to financial assets and liabilities still on the consolidated balance sheet at period-end | $ 27 | $ 29 | $ 55 | $ 59 |
Fair Value of Financial Instruments - Carrying Amount and Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
||||
---|---|---|---|---|---|---|
Financial assets: | ||||||
Securities held-to-maturity | $ 1,061,233 | $ 201,217 | ||||
Off-balance sheet instruments: | ||||||
Commitments to extend credit | [1] | 20,800 | 2,400 | |||
Standby letters of credit | [1] | 1,400 | 1,400 | |||
Quoted market prices in an active market (Level 1) | ||||||
Financial assets: | ||||||
Securities held-to-maturity | 0 | 0 | ||||
Loans, net | 0 | 0 | ||||
Consumer loans held-for-sale | 0 | 0 | ||||
Commercial loans held-for-sale | 0 | 0 | ||||
Financial liabilities: | ||||||
Deposits and securities sold under agreements to repurchase | 0 | 0 | ||||
Federal Home Loan Bank advances | 0 | 0 | ||||
Subordinated debt and other borrowings | 0 | 0 | ||||
Off-balance sheet instruments: | ||||||
Commitments to extend credit | [1] | 0 | 0 | |||
Models with significant observable market parameters (Level 2) | ||||||
Financial assets: | ||||||
Securities held-to-maturity | 1,061,233 | 201,217 | ||||
Loans, net | 0 | 0 | ||||
Consumer loans held-for-sale | 71,409 | 82,986 | ||||
Commercial loans held-for-sale | 16,660 | 17,836 | ||||
Financial liabilities: | ||||||
Deposits and securities sold under agreements to repurchase | 0 | 0 | ||||
Federal Home Loan Bank advances | 0 | 0 | ||||
Subordinated debt and other borrowings | 0 | 0 | ||||
Off-balance sheet instruments: | ||||||
Commitments to extend credit | [1] | 0 | 0 | |||
Models with significant unobservable market parameters (Level 3) | ||||||
Financial assets: | ||||||
Securities held-to-maturity | 0 | 0 | ||||
Loans, net | 22,534,896 | 19,717,845 | ||||
Consumer loans held-for-sale | 0 | 0 | ||||
Commercial loans held-for-sale | 0 | 0 | ||||
Financial liabilities: | ||||||
Deposits and securities sold under agreements to repurchase | 24,880,600 | 19,647,392 | ||||
Federal Home Loan Bank advances | 1,936,334 | 2,078,514 | ||||
Subordinated debt and other borrowings | 728,610 | 712,220 | ||||
Off-balance sheet instruments: | ||||||
Commitments to extend credit | [1] | 22,238 | 3,786 | |||
Carrying/ Notional Amount | ||||||
Financial assets: | ||||||
Securities held-to-maturity | 1,048,035 | 188,996 | ||||
Loans, net | 22,234,928 | 19,693,099 | ||||
Consumer loans held-for-sale | 69,443 | 81,820 | ||||
Commercial loans held-for-sale | 16,201 | 17,585 | ||||
Financial liabilities: | ||||||
Deposits and securities sold under agreements to repurchase | 25,716,382 | 20,307,382 | ||||
Federal Home Loan Bank advances | 1,787,551 | 2,062,534 | ||||
Subordinated debt and other borrowings | 717,043 | 749,080 | ||||
Off-balance sheet instruments: | ||||||
Commitments to extend credit | [1] | 8,898,952 | 8,141,920 | |||
Estimated Fair Value | ||||||
Financial assets: | ||||||
Securities held-to-maturity | [2] | 1,061,233 | 201,217 | |||
Loans, net | [2] | 22,534,896 | 19,717,845 | |||
Consumer loans held-for-sale | [2] | 71,409 | 82,986 | |||
Commercial loans held-for-sale | [2] | 16,660 | 17,836 | |||
Financial liabilities: | ||||||
Deposits and securities sold under agreements to repurchase | [2] | 24,880,600 | 19,647,392 | |||
Federal Home Loan Bank advances | [2] | 1,936,334 | 2,078,514 | |||
Subordinated debt and other borrowings | [2] | 728,610 | 712,220 | |||
Off-balance sheet instruments: | ||||||
Commitments to extend credit | [1],[2] | $ 22,238 | $ 3,786 | |||
|
Regulatory Matters (Details) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020
USD ($)
$ / shares
shares
|
Jun. 30, 2020
USD ($)
$ / shares
|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
|
|||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||||||
Preceding period of retained earnings used in calculation of dividend payable | 2 years | |||||
Retained earnings | $ 1,218,367 | $ 1,218,367 | $ 1,184,183 | |||
Quarterly common stock dividend (in dollar per share) | $ / shares | $ 0.16 | $ 0.16 | ||||
Minimum To Be Well-Capitalized Under Prompt Corrective Action Regulations | ||||||
Issuance of preferred stock, net of issuance costs | $ 217,632 | $ 0 | ||||
Depositary Shares | shares | 9,000 | |||||
Pinnacle Financial | ||||||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||||||
Cash dividends paid to Pinnacle Financial by Pinnacle Bank | 94,100 | |||||
Actual | ||||||
Total capital to risk weighted assets | $ 3,499,695 | 3,499,695 | 3,159,375 | |||
Tier I capital to risk weighted assets | 2,601,104 | 2,601,104 | 2,319,234 | |||
Common Equity Tier I capital to risk weighted assets | 2,383,349 | 2,383,349 | 2,319,112 | |||
Tier I capital to average assets | [1] | $ 2,601,104 | $ 2,601,104 | $ 2,319,234 | ||
Actual | ||||||
Total capital to risk weighted assets (as percent) | 0.140 | 0.140 | 0.132 | |||
Tier I capital to risk weighted assets (as percent) | 0.104 | 0.104 | 0.097 | |||
Common Equity Tier I capital to risk weighted assets (as percent) | 0.096 | 0.096 | 0.097 | |||
Tier I capital to average assets (as percent) | [1] | 0.084 | 0.084 | 0.091 | ||
Minimum Capital Requirement | ||||||
Total capital to risk weighted assets | $ 1,995,003 | $ 1,995,003 | $ 1,912,885 | |||
Tier I capital to risk weighted assets | 1,496,252 | 1,496,252 | 1,434,664 | |||
Common Equity Tier I capital | 1,122,189 | 1,122,189 | 1,075,998 | |||
Tier I capital to average assets | [1] | $ 1,231,757 | $ 1,231,757 | $ 1,021,836 | ||
Minimum Capital Requirement | ||||||
Total capital to risk weighted assets (as percent) | 0.080 | 0.080 | 0.080 | |||
Tier I capital to risk weighted assets (as percent) | 0.060 | 0.060 | 0.060 | |||
Common Equity Tier I capital to risk weighted assets (as percent) | 0.045 | 0.045 | 0.045 | |||
Tier I capital to average assets (as percent) | [1] | 0.040 | 0.040 | 0.040 | ||
Minimum To Be Well-Capitalized Under Prompt Corrective Action Regulations | ||||||
Total capital to risk weighted assets | $ 2,493,754 | $ 2,493,754 | $ 2,391,106 | |||
Tier I capital to risk weighted assets | $ 1,995,003 | $ 1,995,003 | $ 1,912,885 | |||
Minimum To Be Well-Capitalized Under Prompt Corrective Action Regulations | ||||||
Total capital to risk weighted assets (as percent) | 0.100 | 0.100 | 0.100 | |||
Tier I capital to risk weighted assets (as percent) | 0.080 | 0.080 | 0.080 | |||
Pinnacle Bank | ||||||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||||||
Retained earnings | $ 619,200 | $ 619,200 | ||||
Actual | ||||||
Total capital to risk weighted assets | 3,078,671 | 3,078,671 | $ 2,906,853 | |||
Tier I capital to risk weighted assets | 2,729,080 | 2,729,080 | 2,679,713 | |||
Common Equity Tier I capital to risk weighted assets | 2,728,958 | 2,728,958 | 2,679,590 | |||
Tier I capital to average assets | [1] | $ 2,729,080 | $ 2,729,080 | $ 2,679,713 | ||
Actual | ||||||
Total capital to risk weighted assets (as percent) | 0.124 | 0.124 | 0.122 | |||
Tier I capital to risk weighted assets (as percent) | 0.110 | 0.110 | 0.112 | |||
Common Equity Tier I capital to risk weighted assets (as percent) | 0.110 | 0.110 | 0.112 | |||
Tier I capital to average assets (as percent) | [1] | 0.089 | 0.089 | 0.105 | ||
Minimum Capital Requirement | ||||||
Total capital to risk weighted assets | $ 1,988,337 | $ 1,988,337 | $ 1,906,839 | |||
Tier I capital to risk weighted assets | 1,491,253 | 1,491,253 | 1,430,129 | |||
Common Equity Tier I capital | 1,118,439 | 1,118,439 | 1,072,597 | |||
Tier I capital to average assets | [1] | $ 1,226,324 | $ 1,226,324 | $ 1,019,210 | ||
Minimum Capital Requirement | ||||||
Total capital to risk weighted assets (as percent) | 0.080 | 0.080 | 0.080 | |||
Tier I capital to risk weighted assets (as percent) | 0.060 | 0.060 | 0.060 | |||
Common Equity Tier I capital to risk weighted assets (as percent) | 0.045 | 0.045 | 0.045 | |||
Tier I capital to average assets (as percent) | [1] | 0.040 | 0.040 | 0.040 | ||
Minimum To Be Well-Capitalized Under Prompt Corrective Action Regulations | ||||||
Total capital to risk weighted assets | $ 2,485,421 | $ 2,485,421 | $ 2,383,549 | |||
Tier I capital to risk weighted assets | 1,988,337 | 1,988,337 | 1,906,839 | |||
Common Equity Tier I capital to risk weighted assets | 1,615,524 | 1,615,524 | 1,549,307 | |||
Tier I capital to average assets | [1] | $ 1,532,905 | $ 1,532,905 | $ 1,274,012 | ||
Minimum To Be Well-Capitalized Under Prompt Corrective Action Regulations | ||||||
Total capital to risk weighted assets (as percent) | 0.100 | 0.100 | 0.100 | |||
Tier I capital to risk weighted assets (as percent) | 0.080 | 0.080 | 0.080 | |||
Common Equity Tier I capital to risk weighted assets (as percent) | 0.065 | 0.065 | 0.065 | |||
Tier I capital to average assets (as percent) | [1] | 0.050 | 0.050 | 0.050 | ||
|
Other borrowings (Details) |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
subsidiary
|
Dec. 31, 2019
USD ($)
|
|||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of wholly owned subsidiaries | subsidiary | 12 | |||||||||||
Term | 30 years | |||||||||||
Loans and Leases Receivable, Net of Deferred Income | $ 22,520,300,000 | $ 19,787,876,000 | ||||||||||
Total Debt Outstanding | 717,043,000 | 749,080,000 | ||||||||||
Debt issuance costs and fair value adjustments | (13,034,000) | |||||||||||
Proceeds from Issuance of Debt | $ 296,500,000 | |||||||||||
Paycheck Protection Program [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Loans and Leases Receivable, Net of Deferred Income | 2,200,000,000 | |||||||||||
Revolving credit facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 75,000,000 | |||||||||||
Date Established | Apr. 22, 2020 | |||||||||||
Maturity | Jul. 24, 2020 | |||||||||||
Total Debt Outstanding | [1] | $ 0 | ||||||||||
Interest Rate (as percent) | [1] | |||||||||||
Coupon Structure | 30-day LIBOR + 1.50% | |||||||||||
Line of credit outstanding | $ 0 | |||||||||||
Unused fee, percentage | 0.30% | |||||||||||
Paycheck Protection Program Liquidity Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Apr. 22, 2020 | |||||||||||
Maturity | Sep. 30, 2020 | |||||||||||
Total Debt Outstanding | $ 47,082,000 | |||||||||||
Interest Rate (as percent) | 0.35% | |||||||||||
Coupon Structure | Fixed | |||||||||||
Pinnacle Statutory Trust I | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Dec. 29, 2003 | |||||||||||
Maturity | Dec. 30, 2033 | |||||||||||
Total Debt Outstanding | $ 10,310,000 | |||||||||||
Interest Rate (as percent) | 3.10% | |||||||||||
Coupon Structure | 30-day LIBOR + 2.80% | |||||||||||
Pinnacle Statutory Trust II | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Sep. 15, 2005 | |||||||||||
Maturity | Sep. 30, 2035 | |||||||||||
Total Debt Outstanding | $ 20,619,000 | |||||||||||
Interest Rate (as percent) | 1.71% | |||||||||||
Coupon Structure | 30-day LIBOR + 1.40% | |||||||||||
Pinnacle Statutory Trust III | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Sep. 07, 2006 | |||||||||||
Maturity | Sep. 30, 2036 | |||||||||||
Total Debt Outstanding | $ 20,619,000 | |||||||||||
Interest Rate (as percent) | 1.96% | |||||||||||
Coupon Structure | 30-day LIBOR + 1.65% | |||||||||||
Pinnacle Statutory Trust IV | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Oct. 31, 2007 | |||||||||||
Maturity | Sep. 30, 2037 | |||||||||||
Total Debt Outstanding | $ 30,928,000 | |||||||||||
Interest Rate (as percent) | 3.16% | |||||||||||
Coupon Structure | 30-day LIBOR + 2.85% | |||||||||||
BNC Capital Trust I | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Apr. 03, 2003 | |||||||||||
Maturity | Apr. 15, 2033 | |||||||||||
Total Debt Outstanding | $ 5,155,000 | |||||||||||
Interest Rate (as percent) | 4.47% | |||||||||||
Coupon Structure | 30-day LIBOR + 3.25% | |||||||||||
BNC Capital Trust II | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Mar. 11, 2004 | |||||||||||
Maturity | Apr. 07, 2034 | |||||||||||
Total Debt Outstanding | $ 6,186,000 | |||||||||||
Interest Rate (as percent) | 4.07% | |||||||||||
Coupon Structure | 30-day LIBOR + 2.85% | |||||||||||
BNC Capital Trust III | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Sep. 23, 2004 | |||||||||||
Maturity | Sep. 23, 2034 | |||||||||||
Total Debt Outstanding | $ 5,155,000 | |||||||||||
Interest Rate (as percent) | 3.62% | |||||||||||
Coupon Structure | 30-day LIBOR + 2.40% | |||||||||||
BNC Capital Trust IV | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Sep. 27, 2006 | |||||||||||
Maturity | Dec. 31, 2036 | |||||||||||
Total Debt Outstanding | $ 7,217,000 | |||||||||||
Interest Rate (as percent) | 2.01% | |||||||||||
Coupon Structure | 30-day LIBOR + 1.70% | |||||||||||
Valley Financial Trust I | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Jun. 26, 2003 | |||||||||||
Maturity | Jun. 26, 2033 | |||||||||||
Total Debt Outstanding | $ 4,124,000 | |||||||||||
Interest Rate (as percent) | 4.33% | |||||||||||
Coupon Structure | 30-day LIBOR + 3.10% | |||||||||||
Valley Financial Trust II | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Sep. 26, 2005 | |||||||||||
Maturity | Dec. 15, 2035 | |||||||||||
Total Debt Outstanding | $ 7,217,000 | |||||||||||
Interest Rate (as percent) | 1.80% | |||||||||||
Coupon Structure | 30-day LIBOR + 1.49% | |||||||||||
Valley Financial Trust III | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Dec. 15, 2006 | |||||||||||
Maturity | Jan. 30, 2037 | |||||||||||
Total Debt Outstanding | $ 5,155,000 | |||||||||||
Interest Rate (as percent) | 2.49% | |||||||||||
Coupon Structure | 30-day LIBOR + 1.73% | |||||||||||
Southcoast Capital Trust III | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Aug. 05, 2005 | |||||||||||
Maturity | Sep. 30, 2035 | |||||||||||
Total Debt Outstanding | $ 10,310,000 | |||||||||||
Interest Rate (as percent) | 1.81% | |||||||||||
Coupon Structure | 30-day LIBOR + 1.50% | |||||||||||
Pinnacle Bank Subordinated Notes (2015) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Jul. 30, 2015 | |||||||||||
Maturity | Jul. 30, 2025 | |||||||||||
Total Debt Outstanding | [2] | $ 60,000,000 | ||||||||||
Interest Rate (as percent) | [2] | 4.88% | ||||||||||
Coupon Structure | three month LIBOR + 3.128% | |||||||||||
Pinnacle Bank Subordinated Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Mar. 10, 2016 | |||||||||||
Maturity | Jul. 30, 2025 | |||||||||||
Total Debt Outstanding | [2] | $ 70,000,000 | ||||||||||
Interest Rate (as percent) | [2] | 4.88% | ||||||||||
Coupon Structure | three month LIBOR + 3.128% | |||||||||||
Pinnacle Financial Subordinated Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Nov. 16, 2016 | |||||||||||
Maturity | Nov. 16, 2026 | |||||||||||
Total Debt Outstanding | [3] | $ 120,000,000 | ||||||||||
Interest Rate (as percent) | [3] | 5.25% | ||||||||||
Coupon Structure | three month LIBOR + 3.884% | |||||||||||
Pinnacle Financial Notes 2019 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Date Established | Sep. 11, 2019 | |||||||||||
Maturity | Sep. 15, 2029 | |||||||||||
Total Debt Outstanding | [4] | $ 300,000,000 | ||||||||||
Interest Rate (as percent) | [4] | 4.13% | ||||||||||
Coupon Structure | three month LIBOR + 2.775% | |||||||||||
Subordinated Debt Due 2023 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayments of Subordinated Debt | $ 8,800,000 | |||||||||||
BNC Subordinated Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayments of Subordinated Debt | $ 60,000,000.0 | |||||||||||
Avenue Subordinated Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayments of Subordinated Debt | $ 20,000,000.0 | |||||||||||
|
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