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Loans and Allowance for Loan Losses (Tables)
 6 Months Ended
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:
June 30, 2020December 31, 2019
Commercial real estate:
Owner occupied$2,708,306  $2,669,766  
Non-owner occupied5,384,018  5,039,452  
Consumer real estate – mortgage3,042,604  3,068,625  
Construction and land development2,574,494  2,430,483  
Commercial and industrial8,516,333  6,290,296  
Consumer and other294,545  289,254  
Subtotal$22,520,300  $19,787,876  
Allowance for credit losses(285,372) (94,777) 
Loans, net$22,234,928  $19,693,099  
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):
June 30, 202020202019201820172016PriorRevolving LoansTotal
Commercial real estate- owner occupied
Pass$342,164  $485,461  $509,788  $388,684  $389,384  $347,423  $64,075  $2,526,979  
Special Mention2,445  8,612  23,239  11,957  5,563  5,775  —  57,591  
Substandard (1)
18,292  6,902  6,877  18,256  12,685  3,880  45,038  111,930  
Substandard-nonaccrual821  442  2,138  2,611  1,595  4,089  110  11,806  
Doubtful-nonaccrual—  —  —  —  —  —  —  —  
Total Commercial real estate - owner occupied$363,722  $501,417  $542,042  $421,508  $409,227  $361,167  $109,223  $2,708,306  
Commercial real estate- Non-owner occupied
Pass$798,839  $1,154,829  $867,521  $623,990  $574,543  $476,052  $71,274  $4,567,048  
Special Mention46,818  170,003  95,155  163,384  174,600  136,136  284  786,380  
Substandard (1)
6,068  1,484  4,976  3,541  1,072  2,995  —  20,136  
Substandard-nonaccrual—  3,717  763  147  1,071  4,756  —  10,454  
Doubtful-nonaccrual—  —  —  —  —  —  —  —  
Total Commercial real estate - Non-owner occupied$851,725  $1,330,033  $968,415  $791,062  $751,286  $619,939  $71,558  $5,384,018  
Consumer real estate – mortgage
Pass$276,995  $590,211  $409,497  $200,643  $156,708  $387,684  $974,695  $2,996,433  
Special Mention493  2,697  3,314  645  —  1,025  8,739  16,913  
Substandard (1)
932  1,200  —  900  378  2,141  470  6,021  
Substandard-nonaccrual491  1,488  921  1,439  3,027  11,489  4,382  23,237  
Doubtful-nonaccrual—  —  —  —  —  —  —  —  
Total Consumer real estate – mortgage$278,911  $595,596  $413,732  $203,627  $160,113  $402,339  $988,286  $3,042,604  
Construction and land development
Pass$594,375  $1,216,171  $487,354  $126,976  $20,375  $11,501  $21,788  $2,478,540  
Special Mention6,750  32,465  47,324  —  4,243  —  —  90,782  
Substandard (1)
824  687  31  —  240  160  —  1,942  
Substandard-nonaccrual322  565  275  87  —  1,981  —  3,230  
Doubtful-nonaccrual—  —  —  —  —  —  —  —  
Total Construction and land development$602,271  $1,249,888  $534,984  $127,063  $24,858  $13,642  $21,788  $2,574,494  
Commercial and industrial
Pass$3,293,463  $1,359,904  $889,189  $436,566  $166,155  $114,273  $2,001,673  $8,261,223  
Special Mention11,101  54,226  15,780  16,176  7,897  1,958  22,232  129,370  
Substandard (1)
6,657  46,915  15,328  2,993  616  2,571  36,881  111,961  
Substandard-nonaccrual2,894  6,122  517  877  262  259  2,848  13,779  
Doubtful-nonaccrual—  —  —  —  —  —  —  —  
 Total Commercial and industrial$3,314,115  $1,467,167  $920,814  $456,612  $174,930  $119,061  $2,063,634  $8,516,333  
Consumer and other
Pass$47,178  $29,683  $9,739  $10,453  $6,082  $2,962  $188,337  $294,434  
Special Mention—  —  —  —  —  —  9  9  
Substandard (1)
—  —  —  —  —  —  47  47  
Substandard-nonaccrual—  —  4  43  5  3  —  55  
Doubtful-nonaccrual—  —  —  —  —  —  —  —  
Total Consumer and other$47,178  $29,683  $9,743  $10,496  $6,087  $2,965  $188,393  $294,545  
Total loans
Pass$5,353,014  $4,836,259  $3,173,088  $1,787,312  $1,313,247  $1,339,895  $3,321,842  $21,124,657  
Special Mention67,607  268,003  184,812  192,162  192,303  144,894  31,264  1,081,045  
June 30, 202020202019201820172016PriorRevolving LoansTotal
Substandard (1)
32,773  57,188  27,212  25,690  14,991  11,747  82,436  252,037  
Substandard-nonaccrual4,528  12,334  4,618  5,204  5,960  22,577  7,340  62,561  
Doubtful-nonaccrual—  —  —  —  —  —  —  —  
Total loans$5,457,922  $5,173,784  $3,389,730  $2,010,368  $1,526,501  $1,519,113  $3,442,882  $22,520,300  

The following table outlines the risk category of loans as of December 31, 2019 (in thousands):

 Commercial real estate - mortgageConsumer real estate - mortgageConstruction and land developmentCommercial and industrialConsumer and otherTotal
December 31, 2019      
Pass$7,499,725  $3,019,203  $2,422,347  $6,069,757  $288,361  $19,299,393  
Special Mention51,147  13,787  2,816  79,819  698  148,267  
Substandard (1)
139,518  10,969  3,042  125,035  47  278,611  
Substandard-nonaccrual18,828  24,666  2,278  15,685  148  61,605  
Doubtful-nonaccrual—  —  —  —  —  —  
Total loans$7,709,218  $3,068,625  $2,430,483  $6,290,296  $289,254  $19,787,876  
(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.
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):
June 30, 202030-59 days past due60-89 days past due90 days or more past dueTotal past dueCurrentTotal loans
Commercial real estate:
Owner-occupied$2,446  $1,241  $4,943  $8,630  $2,699,676  $2,708,306  
Non-owner occupied576  64  9,950  10,590  5,373,428  5,384,018  
Consumer real estate – mortgage3,318  1,557  5,917  10,792  3,031,812  3,042,604  
Construction and land development1,461  598  2,154  4,213  2,570,281  2,574,494  
Commercial and industrial7,641  2,651  4,991  15,283  8,501,050  8,516,333  
Consumer and other1,580  23  548  2,151  292,394  294,545  
Total$17,022  $6,134  $28,503  $28,503  $51,659  $22,468,641  $22,520,300  
December 31, 2019
Commercial real estate:
Owner-occupied$2,307  $2,932  $1,719  $6,958  $2,662,808  $2,669,766  
Non-owner occupied3,156  3,641  3,816  10,613  5,028,839  5,039,452  
Consumer real estate – mortgage11,646  2,157  7,304  21,107  3,047,518  3,068,625  
Construction and land development1,392  711  1,487  3,590  2,426,893  2,430,483  
Commercial and industrial8,474  2,478  6,364  17,316  6,272,980  6,290,296  
Consumer and other1,770  414  570  2,754  286,500  289,254  
Total$28,745  $12,333  $21,260  $21,260  $62,338  $19,725,538  $19,787,876  
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):
 Commercial real estate - Owner occupiedCommercial real estate - Non-owner occupiedConsumer
real estate - mortgage		Construction and land developmentCommercial and industrialConsumer
and other		UnallocatedTotal
Three months ended June 30, 2020:
Balance at March 31, 2020$23,634  $32,114  $32,998  $38,911  $88,060  $6,748  $—  $222,465  
Charged-off loans—  (2) (1,196) —  (6,734) (1,070) —  (9,002) 
Recovery of previously charged-off loans80  106  484  50  2,249  648  —  3,617  
Provision for credit losses on loans15,089  36,208  (2,928) 2,936  17,035  (48) —  68,292  
Balance at June 30, 2020$38,803  $68,426  $29,358  $41,897  $100,610  $6,278  $—  $285,372  
Three months ended June 30, 2019:       
Balance at March 31, 2019$12,618  $17,549  $8,369  $10,915  $32,699  $4,803  $241  $87,194  
Charged-off loans(1,065) —  (580) (4) (5,408) (1,423) —  (8,480) 
Recovery of previously charged-off loans16  876  372  19  2,744  317  —  4,344  
Provision for credit losses on loans605  227  328  276  7,401  (1,583) (59) 7,195  
Balance at June 30, 2019$12,174  $18,652  $8,489  $11,206  $37,436  $2,114  $182  $90,253  
Six months ended June 30, 2020:       
Balance at December 31, 2019$13,406  $19,963  $8,054  $12,662  $36,112  $3,595  $985  $94,777  
Impact of adopting ASC 326264  (4,740) 21,029  (3,144) 23,040  2,638  (985) 38,102  
Charged-off loans(1,061) (263) (2,126) —  (14,998) (2,247) —  (20,695) 
Recovery of previously charged-off loans225  199  674  93  2,997  967  —  5,155  
Provision for credit losses on loans25,969  53,267  1,727  32,286  53,459  1,325  —  168,033  
Balance at June 30, 2020$38,803  $68,426  $29,358  $41,897  $100,610  $6,278  $—  $285,372  
Six months ended June 30, 2019:       
Balance at December 31, 2018$11,297  $15,649  $7,670  $11,128  $31,731  $5,423  $677  $83,575  
Charged-off loans(1,586) (13) (930) (4) (8,760) (3,255) —  (14,548) 
Recovery of previously charged-off loans76  888  741  141  4,342  659  —  6,847  
Provision for credit losses on loans2,387  2,128  1,008  (59) 10,123  (713) (495) 14,379  
Balance at June 30, 2019$12,174  $18,652  $8,489  $11,206  $37,436  $2,114  $182  $90,253  

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):
 Commercial real estate - mortgageConsumer
real estate - mortgage		Construction and land developmentCommercial and industrialConsumer
and other		UnallocatedTotal
December 31, 2019       
Allowance for Loan Losses:       
Collectively evaluated for impairment$32,134  $6,762  $12,629  $35,401  $3,586  $90,512  
Individually evaluated for impairment1,235  1,292  33  711  9  3,280  
Loans acquired with deteriorated credit quality(1)
—  —  —  —  —  —  
Total allowance for loan losses$33,369  $8,054  $12,662  $36,112  $3,595  $985  $94,777  
Loans:       
Collectively evaluated for impairment$7,681,608  $3,036,922  $2,426,901  $6,274,280  $289,106   $19,708,817  
Individually evaluated for impairment18,122  25,018  561  14,295  148   58,144  
Loans acquired with deteriorated credit quality9,488  6,685  3,021  1,721  —   20,915  
Total loans$7,709,218  $3,068,625  $2,430,483  $6,290,296  $289,254   $19,787,876  
(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.
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:
June 30, 2020Real EstateBusiness AssetsOtherTotal
Commercial real estate:
Owner-occupied16,215  —  —  16,215  
Non-owner occupied14,447  —  —  14,447  
Consumer real estate – mortgage29,385  —  —  29,385  
Construction and land development4,452  —  —  4,452  
Commercial and industrial482  14,769  309  15,560  
Consumer and other—  —  48  48  
Total $64,981  $14,769  $357  $80,107  
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):
June 30, 2020December 31, 2019
Total nonaccrual loansNonaccrual loans with no allowance for credit lossesLoans past due 90 or more days and still accruingTotal nonaccrual loansLoans past due 90 or more days and still accruing
Commercial real estate:
Owner-occupied$11,806  $4,325  $—  $11,654  $—  
Non-owner occupied10,454  7,540  —  7,173  —  
Consumer real estate – mortgage23,237  —  18  24,667  168  
Construction and land development3,230  1,222  —  2,278  —  
Commercial and industrial13,780  6,753  1,459  15,685  946  
Consumer and other55  —  505  148  501  
Total$62,562  $19,840  $1,982  $61,605  $1,615  
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):
 At December 31, 2019
 Recorded investmentUnpaid principal balancesRelated allowance
Impaired loans with an allowance:   
Commercial real estate – mortgage$9,998  $10,983  $1,235  
Consumer real estate – mortgage20,996  23,105  1,292  
Construction and land development542  654  33  
Commercial and industrial4,074  5,381  711  
Consumer and other148  182  9  
Total$35,758  $40,305  $3,280  
Impaired loans without an allowance:   
Commercial real estate – mortgage$8,124  $8,891  $—  
Consumer real estate – mortgage4,022  4,021  —  
Construction and land development19  17  —  
Commercial and industrial10,221  11,322  —  
Consumer and other—  —  —  
Total$22,386  $24,251  $—  
Total impaired loans$58,144  $64,556  $3,280  
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):
 Three months ended Six months ended
 Average recorded investmentInterest income recognizedAverage recorded investmentInterest income recognized
Impaired loans with an allowance:  
Commercial real estate – mortgage$15,589  $—  $15,097  $—  
Consumer real estate – mortgage22,219  —  21,434  —  
Construction and land development747  —  692  —  
Commercial and industrial9,718  —  9,563  —  
Consumer and other221  —  475  —  
Total$48,494  $—  $47,261  $—  
Impaired loans without an allowance:    
Commercial real estate – mortgage$13,503  $89  $13,910  $176  
Consumer real estate – mortgage10,658  —  9,521  —  
Construction and land development—  —  595  —  
Commercial and industrial13,505  —  13,868  —  
Consumer and other—  —  —  —  
Total$37,666  $89  $37,894  $176  
Total impaired loans$86,160  $89  $85,155  $176  
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):
 Gross Carrying ValueAccretable
Yield		Nonaccretable
Yield		Net Carrying
Value
December 31, 2019$29,544  $(4,801) $(3,828) $20,915  
Reclassification of discount to allowance for credit losses—  —  3,828  3,828  
Year-to-date settlements(3,152) 1,939  —  (1,213) 
June 30, 2020$26,392  $(2,862) $—  $23,530  
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):
Three Months Ended
June 30,		Six Months Ended
June 30,
Number
of contracts		Pre Modification Outstanding Recorded InvestmentPost Modification Outstanding Recorded Investment, net of related allowanceNumber
of contracts		Pre Modification Outstanding Recorded InvestmentPost Modification Outstanding Recorded Investment, net of related allowance
2020
Commercial real estate:
Owner-occupied—  $—  $—  —  $—  $—  
Non-owner occupied—  —  —  —  —  —  
Consumer real estate – mortgage—  —  —  1  807  807  
Construction and land development—  —  —  —  —  —  
Commercial and industrial—  —  —  —  —  —  
Consumer and other—  —  —  —  —  —  
—  $—  $—  1  $807  $807  
2019
Commercial real estate:—  $—  $—  —  $—  $—  
Consumer real estate – mortgage1  712  626  1  712  626  
Construction and land development1  21  19  1  21  19  
Commercial and industrial1  1,397  796  1  1,397  796  
Consumer and other—  —  —  —  —  —  
3  $2,130  $1,441  3  $2,130  $1,441  
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):
 June 30, 2020 
 Outstanding Principal BalancesUnfunded CommitmentsTotal exposureTotal Exposure at
December 31, 2019
Lessors of nonresidential buildings$3,780,487  $907,096  $4,687,583  $4,578,116  
Lessors of residential buildings1,046,928  773,602  1,820,530  1,599,837  
New Housing For-Sale Builders529,797  608,139  1,137,936  1,090,603  
Hotels (except Casino Hotels) and Motels874,824  155,778  1,030,602  967,771