Equity method investment

9 Months Ended

Sep. 30, 2021

Equity Method Investments and Joint Ventures [Abstract]

Note 2. Equity method investment

A summary of BHG's financial position as of September 30, 2021 and December 31, 2020 and results of operations as of and for the three and nine months ended September 30, 2021 and 2020, were as follows (in thousands):


	As of
	September 30, 2021		December 31, 2020
Assets	$	2,443,304	$	1,330,317

Liabilities	2,110,765		1,088,135
Equity interests	332,539		242,182
Total liabilities and equity	$	2,443,304	$	1,330,317


	For the three months ended September 30,				For the nine months ended September 30,
	2021		2020		2021		2020
Revenues	$	192,160	$	128,510	$	528,767	$	319,244
Net income	$	63,280	$	51,459	$	184,195	$	121,604

At September 30, 2021, technology, trade name and customer relationship intangibles, net of related amortization, totaled $7.0 million compared to $7.6 million as of December 31, 2020. Amortization expense of $188,000 and $564,000, respectively, was included for the three and nine months ended September 30, 2021 compared to $293,000 and $880,000, respectively, for the same periods in the prior year. Accretion income of $349,000 and $1.2 million, respectively, was included in the three and nine months ended September 30, 2021 compared to $535,000 and $1.6 million, respectively, for the same periods in the prior year.

During the three and nine months ended September 30, 2021, Pinnacle Financial and Pinnacle Bank received dividends of $16.8 million and $66.2 million, respectively, from BHG in the aggregate. During the three and nine months ended September 30, 2020, Pinnacle Financial and Pinnacle Bank received dividends of $40.0 million and $48.0 million, respectively, from BHG in the aggregate. Earnings from BHG are included in Pinnacle Financial's consolidated tax return. Profits from intercompany transactions are eliminated. During the three and nine months ended September 30, 2021, Pinnacle Bank purchased $75.8 million and $200.7 million, respectively, of loans from BHG compared to purchases of $50.2 million for the three and nine months ended September 30, 2020. These loans were purchased at par pursuant to BHG's joint venture loan program whereby BHG and Pinnacle share proportionately in the credit risk of the acquired loans based on the rate on the loan and the rate of the purchase. The yield on this portfolio to Pinnacle Bank is anticipated to be between 4.75% and 5.00% per annum. At September 30, 2021 and December 31, 2020, there were $263.2 million and $95.8 million, respectively, of BHG joint venture program loans held by Pinnacle Bank.