Parent Company Only Financial Information

12 Months Ended

Dec. 31, 2022

Condensed Financial Information Disclosure [Abstract]

Parent Company Only Financial Information

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, 2022 and 2021 and for each of the years in the three-year period ended December 31, 2022 (in thousands):

CONDENSED BALANCE SHEETS


	2022		2021
Assets:
Cash and cash equivalents	$	186,572	$	184,654
Investments in bank subsidiaries	5,626,844		5,329,003
Investments in consolidated subsidiaries	12,202		11,133
Investment in unconsolidated subsidiaries:
Statutory Trusts	3,995		3,995
Other investments	56,957		156,292
Current income tax receivable	33,870		29,609
Other assets	57,980		24,930
	$	5,978,420	$	5,739,616
Liabilities and shareholders' equity:

Subordinated debt and other borrowings	424,055		423,172
Other liabilities	34,973		5,837
Shareholders' equity	5,519,392		5,310,607
	$	5,978,420	$	5,739,616

CONDENSED STATEMENTS OF OPERATIONS


	2022		2021		2020
Revenues:
Income from bank subsidiaries	$	110,834	$	99,766	$	119,065
Income from nonbank subsidiaries	145		89		119
Income from equity method investment	33,817		33,169		22,587
Other income	6,478		14,945		3,861


	2022		2021		2020
Expenses:
Interest expense	18,590		22,903		23,877
Personnel expense, including stock compensation	39,552		24,952		18,737
Other expense	3,025		2,697		2,905
Income before income taxes and equity in undistributed income of subsidiaries	90,107		97,417		100,113
Income tax benefit	(8,444)		(3,088)		(5,370)
Income before equity in undistributed income of subsidiaries	98,551		100,505		105,483
Equity in undistributed income of bank subsidiaries	461,004		424,978		205,327
Equity in undistributed income of nonbank subsidiaries	1,187		1,840		1,511
Net income	$	560,742	$	527,323	$	312,321
Preferred stock dividends	15,192		15,192		7,596
Net income available to common shareholders	$	545,550	$	512,131	$	304,725

CONDENSED STATEMENTS OF CASH FLOWS


	2022		2021		2020
Operating activities:
Net income	$	560,742	$	527,323	$	312,321
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization and accretion	882		1,886		1,122
Stock-based compensation expense	39,552		24,952		18,737
Increase (decrease) in income tax payable, net	28,281		—		(2,467)
Deferred tax expense	1,760		2,850		3,876
Income from equity method investments, net	(33,817)		(33,169)		(22,587)
Dividends received from equity method investment	10,365		12,214		9,251
Excess tax benefit from stock compensation	(3,027)		(2,475)		(417)
Gain on other investments, net	(2,563)		(10,223)		(195)
Decrease (increase) in other assets	(32,609)		19,478		(39,981)
Increase (decrease) in other liabilities	3,881		2,032		(764)
Equity in undistributed income of bank subsidiaries	(461,004)		(424,978)		(205,327)
Equity in undistributed income of nonbank subsidiaries	(1,187)		(1,840)		(1,511)
Net cash provided by operating activities	111,256		118,050		72,058
Investing activities:
Investment in consolidated banking subsidiaries	—		—		—

Increase in other investments	(15,776)		(11,668)		(2,454)
Net cash used in investing activities	(15,776)		(11,668)		(2,454)
Financing activities:
Proceeds from subordinated debt and other borrowings, net of issuance costs	—		—		(93)
Repayment of subordinated debt and other borrowings	—		(120,000)		(80,000)

Issuance of common stock pursuant to restricted stock unit agreement, net of shares withheld for taxes	(5,462)		(3,790)		(2,488)
Exercise of common stock options, net of shares surrendered for taxes	(4,714)		(3,130)		(2,577)
Issuance of preferred stock, net of issuance costs	—		—		217,126
Repurchase of common stock	—		—		(50,790)

Common dividends paid	(68,194)		(55,504)		(49,389)
Preferred stock dividends paid	(15,192)		(15,192)		(7,596)
Net cash provided by (used in) financing activities	(93,562)		(197,616)		24,193
Net increase (decrease) in cash	1,918		(91,234)		93,797
Cash and cash equivalents, beginning of year	184,654		275,888		182,091
Cash and cash equivalents, end of year	$	186,572	$	184,654	$	275,888

The investment in BHG previously held by Pinnacle Financial was contributed to Pinnacle Bank in an amount of $134.7 million, net of deferred tax liabilities associated with the investment, effective September 30, 2022.

Pinnacle Bank is subject to restrictions on the payment of dividends to Pinnacle Financial under Tennessee banking laws. Pinnacle Bank paid dividends of $110.8 million, $99.8 million and $119.1 million, respectively, to Pinnacle Financial in each of the years ended December 31, 2022, 2021 and 2020.