Mortgage Servicing Rights

9 Months Ended

Sep. 30, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

Servicing Assets at Fair Value Disclosure

Note 5. Mortgage Servicing Rights

On March 31, 2024, Pinnacle Financial recognized a mortgage servicing asset totaling $11.8 million related to a commercial mortgage loan portfolio. Upon the sale of these commercial loans, the rights to service loans (MSRs) are capitalized and represent the fair value of future net servicing fees from servicing activities associated with these commercial mortgage loans. Pinnacle Financial has elected to account for this class of MSRs under the fair value measurement method. Pinnacle Financial recognizes MSRs upon the sale of commercial mortgage loans to external third parties when it retains the obligation to service the loans. MSRs are included in other assets on the consolidated balance sheets with any subsequent changes in fair value being recognized in other noninterest income. The MSR asset fair value is determined using a discounted cash flow model which incorporates key assumptions such as prepayment speeds, interest rates, discount rates, and other economic factors.

The following is a summary of the changes in the carrying value of MSRs, accounted for at fair value, for the three and nine months ended September 30, 2025 and 2024 (in thousands):


	Three months ended September 30				Nine months ended September 30
	2025		2024		2025		2024
Fair value, beginning of period	$	10,903	$	11,301	$	11,854	$	—
Initial recognition of servicing asset	—		—		—		11,812
Additions from loans sold with servicing retained	254		32		435		170
Estimate of changes in fair value due to:
Payoffs, paydowns, and repurchases	(218)		(48)		(653)		(212)
Changes in valuation inputs or assumptions	(255)		(327)		(952)		(812)
Fair value, end of period	$	10,684	$	10,958	$	10,684	$	10,958