Equity method investment

9 Months Ended

Sep. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

Note 2. Equity method investment

A summary of BHG's financial position as of September 30, 2022 and December 31, 2021 and results of operations as of and for the three and nine months ended September 30, 2022 and 2021, were as follows (in thousands):


	As of
	September 30, 2022		December 31, 2021
Assets	$	4,045,386	$	2,724,542

Liabilities	3,516,645		2,355,256
Equity interests	528,741		369,286
Total liabilities and equity	$	4,045,386	$	2,724,542


	For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021
Revenues	$	293,427	$	192,160	$	829,986	$	528,767
Net income	$	80,088	$	63,280	$	257,121	$	184,195

At September 30, 2022, technology, trade name and customer relationship intangibles, net of related amortization, totaled $6.4 million compared to $6.8 million as of December 31, 2021. Amortization expense of $128,000 and $384,000, respectively, was included for the three and nine months ended September 30, 2022 compared to $188,000 and $564,000, respectively, for the same periods in the prior year. Accretion income of $164,000 and $595,000, respectively, was included in the three and nine months ended September 30, 2022 compared to $349,000 and $1.2 million, respectively, for the same periods in the prior year.

During the three and nine months ended September 30, 2022, Pinnacle Financial and Pinnacle Bank received dividends of $18.6 million and $59.4 million, respectively, from BHG in the aggregate compared to $16.8 million and $66.2 million, respectively, during the three and nine months ended September 30, 2021. 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, 2022, Pinnacle Bank purchased loans from BHG of $49.6 million and $125.6 million, respectively, compared to loan purchases of $75.8 million and $200.7 million, respectively, during the three and nine months ended September 30, 2021. These loans were purchased at par pursuant to BHG's joint venture loan program whereby BHG and Pinnacle Bank 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 4.50% and 6.00% per annum. At September 30, 2022 and December 31, 2021, there were $374.3 million and $319.1 million, respectively, of BHG joint venture program loans held by Pinnacle Bank.