Note 21. Parent Company Only Financial Information

The following information presents the condensed balance sheets, statements of operations, and cash flows of Pinnacle Financial as of December 31, 2018 and 2017 and for each of the years in the three-year period ended December 31, 2018 (in thousands):

CONDENSED BALANCE SHEETS



	2018		2017
Assets:
Cash and cash equivalents	$	94,043	$	64,851
Investments in bank	4,096,349		3,855,483
Investments in consolidated subsidiaries	6,511		6,025
Investment in unconsolidated subsidiaries:
Statutory Trusts	3,995		3,995
Other investments	79,646		69,256
Current income tax receivable	19,032		20,017
Other assets	26,668		29,524
	$	4,326,244	$	4,049,151
Liabilities and stockholders' equity:
Income taxes payable to subsidiaries	—		24
Subordinated debt and other borrowings	357,153		337,818
Other liabilities	3,151		3,357
Stockholders' equity	3,965,940		3,707,952
	$	4,326,244	$	4,049,151

CONDENSED STATEMENTS OF OPERATIONS



	2018			2017			2016
Revenues:
Income from bank subsidiaries	$	83,090		63,100			27,663
Income from nonbank subsidiaries	1,214			297			5,198
Income from equity method investment	13,731			10,126			7,663
Other income	266			380			21
Expenses:
Interest expense	11,821			9,856			1,997
Personnel expense, including stock compensation	17,636			16,629			10,971
Other expense	7,194			8,076			3,653
Income before income taxes and equity in undistributed income of subsidiaries	61,650			39,342			23,924
Income tax benefit	(8,570		)	(12,748		)	(3,428		)
Income before equity in undistributed income of subsidiaries	70,220			52,090			27,352
Equity in undistributed income of bank subsidiaries	288,728			121,341			104,318
Equity in undistributed income (loss) of nonbank subsidiaries	492			548			(4,445		)
Net income	$	359,440		$	173,979		$	127,225

CONDENSED STATEMENTS OF CASH FLOWS



	2018			2017			2016
Operating activities:
Net income	$	359,440		$	173,979		$	127,225
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization and accretion	105			48			(144		)
Stock-based compensation expense	17,636			19,538			10,971
Increase (decrease) in income tax payable, net	(24		)	24			(12		)
Deferred tax expense	(549		)	5,919			1,025
Income from equity method investments, net	(13,731		)	(10,126		)	(7,663		)
Dividends received from equity method investment	5,872			5,655			3,255
Excess tax benefit from stock compensation	(2,966		)	(5,365		)	(4,604		)
Loss (gain) on other investments	(209		)	(350		)	497
Decrease (increase) in other assets	4,390			(3,989		)	2,636
Increase (decrease) in other liabilities	2,758			(9,194		)	3,157
Equity in undistributed income of bank subsidiary	(288,728		)	(121,341		)	(104,318		)
Equity in undistributed income of nonbank subsidiary	(492		)	(548		)	4,445
Net cash provided by operating activities	83,502			54,250			36,470
Investing activities:
Investment in consolidated banking subsidiaries	—			(182,288		)	(118,878		)
Increase in equity method investment	—			—			(11,400		)
Increase in other investments	(2,321		)	(815		)	(710		)
Net cash provided by (used in) investing activities	(2,321		)	(183,103		)	(130,988		)
Financing activities:
Net (decrease) increase in subordinated debt and other borrowings	19,230			(60		)	118,294
Proceeds from common stock issuance	—			192,194			—
Exercise of common stock options and stock appreciation rights, net of repurchase of restricted shares	(5,071		)	493			11,589
Repurchase of common stock	(20,694		)	—			—
Excess tax benefit from stock compensation	—			—			4,604
Common dividends paid	(45,454		)	(35,907		)	(24,725		)
Net cash provided by (used in) financing activities	(51,989		)	156,720			109,762
Net increase in cash	29,192			27,867			15,244
Cash and cash equivalents, beginning of year	64,851			36,984			21,740
Cash and cash equivalents, end of year	$	94,043		$	64,851		$	36,984

Pinnacle Bank is subject to restrictions on the payment of dividends to Pinnacle Financial under Tennessee banking laws. Pinnacle Bank paid dividends of $83.1 million, $63.1 million and $27.7 million, respectively to Pinnacle Financial in each of the years ended December 31, 2018, 2017 and 2016.