XML 27 R12.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Loans and Allowance for Loan Losses | 3 Months Ended
--- | ---
Mar. 31, 2018
Receivables [Abstract] |
Loans and Allowance for Loan Losses | Note 5. Loans and Allowance for Loan 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 five loan categories: commercial real estate mortgage, consumer real estate mortgage, construction and land development, commercial and industrial, and consumer and other.
• | Commercial real estate mortgage loans. Commercial real estate mortgage loans are categorized as such based on investor exposures where repayment is largely dependent upon the operation, refinance, or sale of the underlying real estate. Commercial real estate mortgage also includes owner occupied commercial real estate which shares a similar risk profile to Pinnacle Financial's commercial and industrial products.
• | Consumer real estate mortgage loans. Consumer real estate mortgage consists primarily of loans secured by 1-4 residential properties, including home equity lines of credit.
• | Construction and land development loans. Construction and land development loans include loans where the repayment is dependent on the successful operation of the related real estate project. Construction and land development loans include 1-4 family construction projects and commercial construction endeavors such as warehouses, apartments, office and retail space and land acquisition and development.
• | Commercial and industrial loans. Commercial and industrial loans include loans to business enterprises issued for commercial, industrial and/or other professional purposes.
• | Consumer and other loans. Consumer and other loans include all loans issued to individuals not included in the consumer real estate mortgage classification. Examples of consumer and other loans are automobile loans, credit cards and loans to finance education, among others.
Commercial loans receive risk ratings assigned by a financial advisor and approved by a senior credit officer 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. Pinnacle Financial believes that its categories follow those used by Pinnacle Bank's primary regulators. At March 31, 2018, approximately 81.1% 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. 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 that every risk rated loan of $1.0 million or more be subject to a formal credit risk review process by the assigned financial advisor. 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. The following table presents Pinnacle Financial's loan balances by primary loan classification and the amount within each risk rating category. Pass rated loans include all credits other than those included in special mention, substandard, substandard-nonaccrual and doubtful-nonaccrual which are defined as follows:
• | Special mention loans have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in Pinnacle Financial's credit position at some future date.
• | Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize collection of the debt. Substandard loans are characterized by the distinct possibility that Pinnacle Financial 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 following table outlines the amount of each loan classification categorized into each risk rating category as of March 31, 2018 and December 31, 2017 (in thousands):
| Commercial real estate - mortgage | Consumer real estate - mortgage | Construction and land development | Commercial and industrial | Consumer and other | Total
March 31, 2018 |  |  |  |  |  |
Pass | $ | 6,628,989 |  | $ | 2,533,268 |  | $ | 2,081,071 |  | $ | 4,360,699 |  | $ | 362,599 |  | $ | 15,966,626 |
Special Mention | 76,856 |  | 11,661 |  | 4,149 |  | 33,524 |  | 746 |  | 126,936 |
Substandard (1) | 63,343 |  | 17,307 |  | 7,037 |  | 74,491 |  | 75 |  | 162,253 |
Substandard-nonaccrual | 25,100 |  | 18,530 |  | 3,618 |  | 22,172 |  | 782 |  | 70,202 |
Doubtful-nonaccrual | — |  | — |  | — |  | — |  | — |  | — |
Total loans | $ | 6,794,288 |  | $ | 2,580,766 |  | $ | 2,095,875 |  | $ | 4,490,886 |  | $ | 364,202 |  | $ | 16,326,017 |
December 31, 2017 |  |  |  |  |  |
Pass | $ | 6,487,368 |  | $ | 2,503,688 |  | $ | 1,880,704 |  | $ | 4,014,656 |  | $ | 351,359 |  | $ | 15,237,775 |
Special Mention | 94,134 |  | 18,356 |  | 8,148 |  | 46,898 |  | 1,177 |  | 168,713 |
Substandard (1) | 72,044 |  | 21,053 |  | 13,468 |  | 62,529 |  | 79 |  | 169,173 |
Substandard-nonaccrual | 16,064 |  | 18,117 |  | 5,968 |  | 17,258 |  | 48 |  | 57,455 |
Doubtful-nonaccrual | — |  | — |  | — |  | — |  | — |  | — |
Total loans | $ | 6,669,610 |  | $ | 2,561,214 |  | $ | 1,908,288 |  | $ | 4,141,341 |  | $ | 352,663 |  | $ | 15,633,116 |
(1) | Potential problem loans represent those loans with a well-defined weakness and where information about possible credit problems of borrowers has caused management to have doubts about the borrower's ability to comply with present repayment terms. This definition is believed to be substantially consistent with the standards established by Pinnacle Bank's primary regulators for loans classified as substandard, excluding the impact of nonaccrual loans and troubled debt restructurings. Potential problem loans, which are not included in nonaccrual loans, amounted to approximately $158.1 million at March 31, 2018, compared to $164.0 million at December 31, 2017.
Loans acquired with deteriorated credit quality are recorded pursuant to the provisions of ASC 310-30, and are referred to as purchase credit impaired loans. The following table provides a rollforward of purchase credit impaired loans from December 31, 2017 through March 31, 2018 (in thousands):
| Gross Carrying Value | Accretable Yield | Nonaccretable Yield | Net Carrying Value
December 31, 2017 | $ | 74,324 |  | $ | (132 | ) | $ | (31,537 | ) | $ | 42,655 |
Acquisition | — |  | — |  | — |  | — |
Year-to-date settlements | (5,298 | ) | 23 |  | 1,491 |  | (3,784 | )
March 31, 2018 | $ | 69,026 |  | $ | (109 | ) | $ | (30,046 | ) | $ | 38,871 |
Certain of these loans have been deemed to be collateral dependent and as such, no accretable yield has been recorded for these loans. 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. For the three months ended March 31, 2018, the average balance of impaired loans was $105.0 million compared to $41.1 million for the same period in 2017. Pinnacle Financial's policy is that 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 the above mentioned loans were placed on nonaccrual status, Pinnacle Financial reversed all previously accrued interest income against current year earnings. Pinnacle Financial's policy is that 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 months ended March 31, 2018 compared to approximately $49,000 during the three months ended March 31, 2017. Had these nonaccruing loans been on accruing status, interest income would have been higher by $1.4 million for the three months ended March 31, 2018 compared to $640,000 higher for the three months ended March 31, 2017. The following table details the recorded investment, unpaid principal balance and related allowance of Pinnacle Financial's impaired loans at March 31, 2018 and December 31, 2017 by loan classification (in thousands):
| At March 31, 2018 |  | At December 31, 2017
| Recorded investment | Unpaid principal balances | Related allowance |  | Recorded investment | Unpaid principal balances | Related allowance
Collateral dependent impaired loans: |  |  |  |  |  |
Commercial real estate – mortgage | $ | 36,258 |  | $ | 43,809 |  | $ | 778 |  |  | $ | 33,073 |  | $ | 40,771 |  | $ | 38 |
Consumer real estate – mortgage | 5,166 |  | 7,233 |  | — |  |  | 6,314 |  | 8,560 |  | 115 |
Construction and land development | 5,939 |  | 11,537 |  | — |  |  | 8,513 |  | 14,115 |  | 6 |
Commercial and industrial | 8,716 |  | 14,374 |  | 1,262 |  |  | 2,812 |  | 8,435 |  | 362 |
Consumer and other | — |  | — |  | — |  |  | — |  | — |  | — |
Total | $ | 56,079 |  | $ | 76,953 |  | $ | 2,040 |  |  | $ | 50,712 |  | $ | 71,881 |  | $ | 521 |
Cash flow dependent impaired loans: |  |  |  |  |  |  |  |  |  |  |
Commercial real estate – mortgage | $ | 6,808 |  | $ | 9,106 |  | $ | 93 |  |  | $ | 5,944 |  | $ | 8,237 |  | $ | 95 |
Consumer real estate – mortgage | 20,200 |  | 23,370 |  | 296 |  |  | 19,904 |  | 23,387 |  | 411 |
Construction and land development | 1,017 |  | 1,883 |  | 13 |  |  | 3,222 |  | 4,184 |  | 12 |
Commercial and industrial | 23,451 |  | 26,595 |  | 152 |  |  | 21,852 |  | 26,058 |  | 1,278 |
Consumer and other | 782 |  | 810 |  | 210 |  |  | — |  | — |  | — |
Total | $ | 52,258 |  | $ | 61,764 |  | $ | 764 |  |  | $ | 50,922 |  | $ | 61,866 |  | $ | 1,796 |
Total impaired loans | $ | 108,337 |  | $ | 138,717 |  | $ | 2,804 |  |  | $ | 101,634 |  | $ | 133,747 |  | $ | 2,317 |
The following table details the average recorded investment and the amount of interest income recognized on a cash basis for the three months ended March 31, 2018 and 2017, respectively, on Pinnacle Financial's impaired loans that remain on the balance sheets as of such date (in thousands):
|  | For the three months ended March 31,
|  | 2018 | 2017
|  | Average recorded investment | Interest income recognized | Average recorded investment | Interest income recognized
Collateral dependent impaired loans: |  |  |  |  |
Commercial real estate – mortgage |  | $ | 34,666 |  | $ | — |  | $ | 2,100 |  | $ | — |
Consumer real estate – mortgage |  | 5,740 |  | — |  | 2,216 |  | — |
Construction and land development |  | 7,226 |  | — |  | 2,078 |  | 49 |
Commercial and industrial |  | 5,764 |  | — |  | 6,312 |  | — |
Consumer and other |  | — |  | — |  | — |  | — |
Total |  | $ | 53,396 |  | $ | — |  | $ | 12,706 |  | $ | 49 |
Cash flow dependent impaired loans: |  |  |  |  |  |  |  |  |
Commercial real estate – mortgage |  | $ | 6,376 |  | $ | — |  | $ | 2,597 |  | $ | — |
Consumer real estate – mortgage |  | 19,941 |  | — |  | 9,393 |  | — |
Construction and land development |  | 2,120 |  | — |  | 3,288 |  | — |
Commercial and industrial |  | 22,669 |  | — |  | 12,440 |  | — |
Consumer and other |  | 487 |  | — |  | 689 |  | — |
Total |  | $ | 51,593 |  | $ | — |  | $ | 28,407 |  | $ | — |
Total impaired loans |  | $ | 104,989 |  | $ | — |  | $ | 41,113 |  | $ | 49 |
At March 31, 2018 and December 31, 2017, there were $6.1 million and $6.6 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 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 months ended March 31, 2018 and 2017 (dollars in thousands):
|  | Three months ended March 31,
2018 |  | Number of contracts |  | Pre Modification Outstanding Recorded Investment |  | Post Modification Outstanding Recorded Investment, net of related allowance
Commercial real estate – mortgage |  | — |  |  | $ | — |  |  | $ | — |
Consumer real estate – mortgage |  | — |  |  | — |  |  | — |
Construction and land development |  | — |  |  | — |  |  | — |
Commercial and industrial |  | — |  |  | — |  |  | — |
Consumer and other |  | — |  |  | — |  |  | — |
|  | — |  |  | $ | — |  |  | $ | — |
2017 |  |  |  |  |  |  |  |  |
Commercial real estate – mortgage |  | — |  |  | $ | — |  |  | $ | — |
Consumer real estate – mortgage |  | — |  |  | — |  |  | — |
Construction and land development |  | — |  |  | — |  |  | — |
Commercial and industrial |  | 1 |  |  | 3,457 |  |  | 3,457 |
Consumer and other |  | — |  |  | — |  |  | — |
|  | 1 |  |  | $ | 3,457 |  |  | $ | 3,457 |
During the three months ended March 31, 2018 and 2017, Pinnacle Financial did not have any troubled debt restructurings that subsequently defaulted within twelve months of the restructuring. At March 31, 2018 and 2017, the allowance for loan losses included no allowance and $44,000, respectively, specifically related to accruing troubled debt restructurings, which are classified as impaired loans pursuant to U.S. GAAP, but which loans continued to accrue interest at contractual rates at those dates. In addition to the loan metrics above, 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 March 31, 2018 with the comparative exposures for December 31, 2017 (in thousands):
| March 31, 2018 |  |
| Outstanding Principal Balances |  | Unfunded Commitments |  | Total exposure |  | Total Exposure at December 31, 2017
Lessors of nonresidential buildings | $ | 2,879,195 |  |  | $ | 691,591 |  |  | $ | 3,570,786 |  |  | $ | 2,810,951 |
Lessors of residential buildings | 929,097 |  |  | 275,564 |  |  | 1,204,661 |  |  | 884,244 |
Hotels (except Casino Hotels) and Motels | 678,619 |  |  | 195,623 |  |  | 874,242 |  |  | 628,991 |
Additionally, 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 March 31, 2018 and December 31, 2017, Pinnacle Bank’s construction and land development loans as a percentage of total risk-based capital were 96.1% and 89.4%, respectively. Non-owner occupied commercial real estate and multifamily loans (including construction and land development loans) as a percentage of total risk-based capital were 306.2% and 297.1% as of March 31, 2018 and December 31, 2017, 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 March 31, 2018 Pinnacle Bank slightly exceeded the 300% guideline and has established what it believes to be appropriate controls to monitor Pinnacle Bank's lending in this area. The table below presents past due balances by loan classification and segment at March 31, 2018 and December 31, 2017, allocated between accruing and nonaccrual status (in thousands):
| Accruing |  | Nonaccruing |  |
March 31, 2018 | 30-89 days past due and accruing |  | 90 days or more past due and accruing |  | Total past due and accruing |  | Current and accruing |  | Purchase credit impaired |  | Nonaccrual (1) |  | Nonaccruing purchase credit impaired |  | Total loans
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-occupied | $ | 3,805 |  |  | $ | 5 |  |  | $ | 3,810 |  |  | $ | 2,398,599 |  |  | $ | 4,430 |  |  | $ | 19,935 |  |  | $ | 1,172 |  |  | $ | 2,427,946 |
All other | 6,678 |  |  | 132 |  |  | 6,810 |  |  | 4,343,636 |  |  | 11,903 |  |  | 1,206 |  |  | 2,787 |  |  | 4,366,342 |
Consumer real estate – mortgage | 13,367 |  |  | 19 |  |  | 13,386 |  |  | 2,544,825 |  |  | 4,024 |  |  | 11,336 |  |  | 7,195 |  |  | 2,580,766 |
Construction and land development | 606 |  |  | 3 |  |  | 609 |  |  | 2,088,310 |  |  | 3,339 |  |  | 381 |  |  | 3,236 |  |  | 2,095,875 |
Commercial and industrial | 9,262 |  |  | 589 |  |  | 9,851 |  |  | 4,458,161 |  |  | 702 |  |  | 22,090 |  |  | 82 |  |  | 4,490,886 |
Consumer and other | 4,816 |  |  | 383 |  |  | 5,199 |  |  | 358,221 |  |  | — |  |  | 781 |  |  | 1 |  |  | 364,202 |
Total | $ | 38,534 |  |  | $ | 1,131 |  |  | $ | 39,665 |  |  | $ | 16,191,752 |  |  | $ | 24,398 |  |  | $ | 55,729 |  |  | $ | 14,473 |  |  | $ | 16,326,017 |
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-occupied | $ | 6,772 |  |  | $ | 104 |  |  | $ | 6,876 |  |  | $ | 2,435,819 |  |  | $ | 4,820 |  |  | $ | 11,395 |  |  | $ | 1,105 |  |  | $ | 2,460,015 |
All other | 16,559 |  |  | — |  |  | 16,559 |  |  | 4,177,454 |  |  | 12,018 |  |  | 704 |  |  | 2,860 |  |  | 4,209,595 |
Consumer real estate – mortgage | 14,835 |  |  | 1,265 |  |  | 16,100 |  |  | 2,521,748 |  |  | 5,249 |  |  | 9,320 |  |  | 8,797 |  |  | 2,561,214 |
Construction and land development | 4,136 |  |  | 146 |  |  | 4,282 |  |  | 1,894,560 |  |  | 3,478 |  |  | 2,878 |  |  | 3,090 |  |  | 1,908,288 |
Commercial and industrial | 7,406 |  |  | 1,348 |  |  | 8,754 |  |  | 4,114,127 |  |  | 1,154 |  |  | 17,222 |  |  | 84 |  |  | 4,141,341 |
Consumer and other | 6,311 |  |  | 1,276 |  |  | 7,587 |  |  | 345,076 |  |  | — |  |  | — |  |  | — |  |  | 352,663 |
Total | $ | 56,019 |  |  | $ | 4,139 |  |  | $ | 60,158 |  |  | $ | 15,488,784 |  |  | $ | 26,719 |  |  | $ | 41,519 |  |  | $ | 15,936 |  |  | $ | 15,633,116 |
(1) | Approximately $56.3 million and $45.8 million of nonaccrual loans as of March 31, 2018 and December 31, 2017, respectively, were performing pursuant to their contractual terms at those dates.
The following table details the changes in the allowance for loan losses for the three months ended March 31, 2018 and 2017, respectively, by loan classification (in thousands):
| Commercial real estate - mortgage | Consumer real estate - mortgage | Construction and land development | Commercial and industrial | Consumer and other | Unallocated | Total
Three months ended March 31, 2018: |  |  |  |  |  |  |
Balance at December 31, 2017 | $ | 21,188 |  | $ | 5,031 |  | $ | 8,962 |  | $ | 24,863 |  | $ | 5,874 |  | $ | 1,322 |  | $ | 67,240 |
Charged-off loans | (728 | ) | (336 | ) | (2 | ) | (2,540 | ) | (5,063 | ) | — |  | (8,669 | )
Recovery of previously charged-off loans | 1,396 |  | 666 |  | 565 |  | 888 |  | 1,187 |  | — |  | 4,702 |
Provision for loan losses | 832 |  | (261 | ) | 591 |  | 3,437 |  | 3,478 |  | (1,146 | ) | 6,931 |
Balance at March 31, 2018 | $ | 22,688 |  | $ | 5,100 |  | $ | 10,116 |  | $ | 26,648 |  | $ | 5,476 |  | $ | 176 |  | $ | 70,204 |
Three months ended March 31, 2017: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at December 31, 2016 | $ | 13,655 |  | $ | 6,564 |  | $ | 3,624 |  | $ | 24,743 |  | $ | 9,520 |  | $ | 874 |  | $ | 58,980 |
Charged-off loans | — |  | (61 | ) | — |  | (1,158 | ) | (3,943 | ) | — |  | (5,162 | )
Recovery of previously charged-off loans | 6 |  | 170 |  | 33 |  | 140 |  | 532 |  | — |  | 881 |
Provision for loan losses | 507 |  | 546 |  | 784 |  | (813 | ) | 2,368 |  | 259 |  | 3,651 |
Balance at March 31, 2017 | $ | 14,168 |  | $ | 7,219 |  | $ | 4,441 |  | $ | 22,912 |  | $ | 8,477 |  | $ | 1,133 |  | $ | 58,350 |
The following table details the allowance for loan losses and recorded investment in loans by loan classification and by impairment evaluation method as of March 31, 2018 and December 31, 2017, respectively (in thousands):
| Commercial real estate - mortgage | Consumer real estate - mortgage | Construction and land development | Commercial and industrial | Consumer and other | Unallocated | Total
March 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for Loan Losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for impairment | $ | 21,817 |  | $ | 4,804 |  | $ | 10,103 |  | $ | 25,234 |  | $ | 5,266 |  |  |  | $ | 67,224 |
Individually evaluated for impairment | 764 |  | 269 |  | 11 |  | 1,412 |  | 210 |  |  |  | 2,666 |
Loans acquired with deteriorated credit quality (1) | 107 |  | 27 |  | 2 |  | 2 |  | — |  |  |  | 138 |
Total allowance for loan losses | $ | 22,688 |  | $ | 5,100 |  | $ | 10,116 |  | $ | 26,648 |  | $ | 5,476 |  | $ | 176 |  | $ | 70,204 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for impairment | $ | 6,751,222 |  | $ | 2,555,400 |  | $ | 2,088,919 |  | $ | 4,458,719 |  | $ | 363,420 |  |  |  | $ | 16,217,680 |
Individually evaluated for impairment | 22,773 |  | 14,148 |  | 381 |  | 31,383 |  | 781 |  |  |  | 69,466 |
Loans acquired with deteriorated credit quality | 20,293 |  | 11,218 |  | 6,575 |  | 784 |  | 1 |  |  |  | 38,871 |
Total loans | $ | 6,794,288 |  | $ | 2,580,766 |  | $ | 2,095,875 |  | $ | 4,490,886 |  | $ | 364,202 |  |  |  | $ | 16,326,017 |
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for Loan Losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for impairment | $ | 20,753 |  | $ | 4,460 |  | $ | 8,879 |  | $ | 23,181 |  | $ | 5,874 |  |  |  | $ | 63,147 |
Individually evaluated for impairment | 95 |  | 410 |  | 66 |  | 1,627 |  | — |  |  |  | 2,198 |
Loans acquired with deteriorated credit quality(1) | 340 |  | 161 |  | 17 |  | 55 |  | — |  |  |  | 573 |
Total allowance for loan losses | $ | 21,188 |  | $ | 5,031 |  | $ | 8,962 |  | $ | 24,863 |  | $ | 5,874 |  | $ | 1,322 |  | $ | 67,240 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for impairment | $ | 6,630,593 |  | $ | 2,534,996 |  | $ | 1,896,553 |  | $ | 4,116,677 |  | $ | 352,663 |  |  |  | $ | 15,531,482 |
Individually evaluated for impairment | 18,214 |  | 12,172 |  | 5,167 |  | 23,426 |  | — |  |  |  | 58,979 |
Loans acquired with deteriorated credit quality | 20,803 |  | 14,046 |  | 6,568 |  | 1,238 |  | — |  |  |  | 42,655 |
Total loans | $ | 6,669,610 |  | $ | 2,561,214 |  | $ | 1,908,288 |  | $ | 4,141,341 |  | $ | 352,663 |  |  |  | $ | 15,633,116 |
(1) Loans acquired with deteriorated credit quality are recorded at fair value at the time of acquisition. An allowance for loan losses is recorded resulting from subsequent credit deterioration. The adequacy of the allowance for loan losses is assessed at the end of each calendar quarter. The level of the allowance is based upon evaluation of the loan portfolio, current asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrowers' ability to repay (including the timing of future payment), the estimated value of any underlying collateral, composition of the loan portfolio, economic conditions, historical loss experience, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. The allowance for loan losses for purchased loans is calculated similarly to the method utilized for legacy Pinnacle Bank loans. Pinnacle Financial's accounting policy is to compare the computed allowance for loan losses for purchased loans on a loan-by-loan basis to any remaining fair value adjustment. If the computed allowance is greater than the remaining fair value adjustment, the excess is added to the allowance for loan losses by a charge to the provision for loan losses. At March 31, 2018, Pinnacle Bank had granted loans and other extensions of credit amounting to approximately $24.6 million to current directors, executive officers, and their related entities, of which $14.4 million had been drawn upon. At December 31, 2017, Pinnacle Bank had granted loans and other extensions of credit amounting to approximately $26.4 million to directors, executive officers, and their related entities, of which approximately $16.1 million had been drawn upon. None of these loans to directors, executive officers, and their related entities were impaired at March 31, 2018 or December 31, 2017. At March 31, 2018, Pinnacle Financial had approximately $18.6 million in commercial loans held for sale compared to $25.5 million at December 31, 2017, which included loans previously held in Pinnacle Bank's commercial loan portfolio that it has elected to sell, as well as 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 March 31, 2018, Pinnacle Financial had approximately $99.6 million of mortgage loans held-for-sale compared to approximately $102.7 million at December 31, 2017. Total loan volumes sold during the three months ended March 31, 2018 were approximately $147.1 million compared to approximately $160.7 million for the three months ended March 31, 2017. During the three months ended March 31, 2018, Pinnacle Financial recognized $3.7 million in gains on the sale of these loans, net of commissions paid, compared to $4.2 million, net of commissions paid, during the three months ended March 31, 2017. 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.

X
- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=66008989&loc=d3e5066-111524 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(4)) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.6-04(6)) -URI http://asc.fasb.org/extlink&oid=6488278&loc=d3e603758-122996 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(3)) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=66008989&loc=d3e5162-111524 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.7-03(a)(5)) -URI http://asc.fasb.org/extlink&oid=6879938&loc=d3e572229-122910 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.9-03(7)) -URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=66008989&loc=d3e5074-111524 + Details
Name: | us-gaap_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_ReceivablesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration