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Regulatory Matters | 12 Months Ended
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Dec. 31, 2021
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] |
Regulatory Matters | Note 19. 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 year ended December 31, 2021, Pinnacle Bank paid $99.8 million in dividends to Pinnacle Financial. As of December 31, 2021, Pinnacle Bank could pay approximately $876.2 million of additional dividends to Pinnacle Financial without prior approval of the Commissioner of the TDFI. Since the fourth quarter of 2013, Pinnacle Financial has paid a quarterly common stock dividend. The board of directors of Pinnacle Financial has increased the dividend amount per share over time. The most recent increase occurred on January 18, 2022, when the board of directors increased the dividend to $0.22 per share from $0.18 per share. During the second quarter of 2020, the firm successfully issued 9.0 million depositary shares, each representing a 1/40th fractional interest in a share of Series B noncumulative, perpetual preferred stock (the "Series B Preferred Stock") in a registered public offering to both retail and institutional investors. Beginning in the third quarter of 2020, Pinnacle Financial began paying a quarterly dividend of $16.88 per share (or $0.422 per depositary share), on the Series B Preferred Stock. The amount and timing of all future dividend payments by Pinnacle Financial, if any, including dividends on Pinnacle Financial's Series B Preferred Stock, is subject to discretion of Pinnacle Financial's board of directors and will depend on Pinnacle Financial's receipt of dividends 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 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”), was delayed through December 31, 2021. As of January 1, 2022, the cumulative amount of the transition adjustments of $68.0 million became fixed and will be phased out of the regulatory capital calculations evenly over a three year period, with 75% recognized in 2022, 50% recognized in 2023, and 25% recognized in 2024. Beginning January 1, 2025, the temporary regulatory capital benefits will be fully reversed. Management believes, as of December 31, 2021, 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 Financial and Pinnacle Bank must maintain certain total, Tier 1, common equity Tier 1 and Tier 1 leverage capital 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 of 2.5% is not included in the required minimum ratios of the table presented below. Pinnacle Financial's and Pinnacle Bank's actual capital amounts and ratios are presented in the following table (in thousands):
| Actual |  | Minimum Capital Requirement |  | Minimum To Be Well-Capitalized
| Amount |  | Ratio |  | Amount |  | Ratio |  | Amount |  | Ratio
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |
Total capital to risk weighted assets: |  |  |  |  |  |  |  |  |  |  |
Pinnacle Financial | $ | 4,060,598 |  |  | 13.8 | % |  | $ | 2,347,963 |  |  | 8.0 | % |  | $ | 2,934,953 |  |  | 10.0 | %
Pinnacle Bank | $ | 3,670,111 |  |  | 12.6 | % |  | $ | 2,334,243 |  |  | 8.0 | % |  | $ | 2,917,804 |  |  | 10.0 | %
Tier 1 capital to risk weighted assets: |  |  |  |  |  |  |  |  |  |  |
Pinnacle Financial | $ | 3,425,751 |  |  | 11.7 | % |  | $ | 1,760,972 |  |  | 6.0 | % |  | $ | 2,347,963 |  |  | 8.0 | %
Pinnacle Bank | $ | 3,464,265 |  |  | 11.9 | % |  | $ | 1,750,683 |  |  | 6.0 | % |  | $ | 2,334,243 |  |  | 8.0 | %
Common equity Tier 1 capital: |  |  |  |  |  |  |  |  |  |  |
Pinnacle Financial | $ | 3,208,503 |  |  | 10.9 | % |  | $ | 1,320,729 |  |  | 4.5 | % |  | N/A |  | N/A
Pinnacle Bank | $ | 3,464,142 |  |  | 11.9 | % |  | $ | 1,313,012 |  |  | 4.5 | % |  | $ | 1,896,573 |  |  | 6.5 | %
Tier 1 capital to average assets (*): |  |  |  |  |  |  |  |  |  |  |
Pinnacle Financial | $ | 3,425,751 |  |  | 9.7 | % |  | $ | 1,412,747 |  |  | 4.0 | % |  | N/A |  | N/A
Pinnacle Bank | $ | 3,464,265 |  |  | 9.9 | % |  | $ | 1,406,063 |  |  | 4.0 | % |  | $ | 1,757,578 |  |  | 5.0 | %
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |
Total capital to risk weighted assets: |  |  |  |  |  |  |  |  |  |  |
Pinnacle Financial | $ | 3,678,405 |  |  | 14.3 | % |  | $ | 2,063,352 |  |  | 8.0 | % |  | $ | 2,579,190 |  |  | 10.0 | %
Pinnacle Bank | $ | 3,259,538 |  |  | 12.7 | % |  | $ | 2,055,892 |  |  | 8.0 | % |  | $ | 2,569,865 |  |  | 10.0 | %
Tier 1 capital to risk weighted assets: |  |  |  |  |  |  |  |  |  |  |
Pinnacle Financial | $ | 2,803,541 |  |  | 10.9 | % |  | $ | 1,547,514 |  |  | 6.0 | % |  | $ | 2,063,352 |  |  | 8.0 | %
Pinnacle Bank | $ | 2,933,674 |  |  | 11.4 | % |  | $ | 1,541,919 |  |  | 6.0 | % |  | $ | 2,055,892 |  |  | 8.0 | %
Common equity Tier 1 capital: |  |  |  |  |  |  |  |  |  |  |
Pinnacle Financial | $ | 2,586,292 |  |  | 10.0 | % |  | $ | 1,160,635 |  |  | 4.5 | % |  | N/A |  | N/A
Pinnacle Bank | $ | 2,933,551 |  |  | 11.4 | % |  | $ | 1,156,439 |  |  | 4.5 | % |  | $ | 1,670,412 |  |  | 6.5 | %
Tier 1 capital to average assets (*): |  |  |  |  |  |  |  |  |  |  |
Pinnacle Financial | $ | 2,803,541 |  |  | 8.6 | % |  | $ | 1,298,756 |  |  | 4.0 | % |  | N/A |  | N/A
Pinnacle Bank | $ | 2,933,674 |  |  | 9.1 | % |  | $ | 1,294,033 |  |  | 4.0 | % |  | $ | 1,617,541 |  |  | 5.0 | %
(*) Average assets for the above calculations were based on the most recent quarter. As noted above, 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 $217.1 million after deducting the underwriting discounts and offering expenses payable by Pinnacle Financial. The net proceeds were initially retained by Pinnacle Financial and the remaining net proceeds 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 dividend payments on the Series B Preferred Stock, and for other general corporate purposes.

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