Note 22. 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, 2014 and 2013 and for each of the years in the three-year period ended December 31, 2014:

CONDENSED BALANCE SHEETS

	2014			2013
Assets:
Cash and cash equivalents	$	36,496,871		$	21,095,990
Investments in consolidated subsidiaries		850,583,226			788,522,316
Investment in unconsolidated subsidiaries:
PNFP Statutory Trust I		310,000			310,000
PNFP Statutory Trust II		619,000			619,000
PNFP Statutory Trust III		619,000			619,000
PNFP Statutory Trust IV		928,000			928,000
Other investments		5,253,681			4,146,126
Current income tax receivable		(181,129	)		553,401
Other assets		4,492,924			5,638,884
	$	899,121,573		$	822,432,717
Liabilities and stockholders' equity:
Subordinated debt and other borrowings		96,158,292			98,658,292
Other liabilities		269,900			66,764
Stockholders' equity		802,693,381			723,707,661
	$	899,121,573		$	822,432,717

CONDENSED STATEMENTS OF OPERATIONS

	2014			2013			2012
Revenues	$	906,935		$	266,472		$	157,443
Expenses:
Interest expense		2,488,046			2,729,843			2,689,197
Stock-based compensation expense		5,308,167			4,082,132			3,664,494
Other expense		768,089			770,252			778,947
Loss before income taxes and equity in undistributed income (loss) of subsidiaries		(7,657,367	)		(7,315,755	)		(6,975,195	)
Income tax benefit		(3,065,606	)		(2,869,605	)		(2,736,020	)
(Loss) income before equity in undistributed income of subsidiaries and accretion on preferred stock discount		(4,591,761	)		(4,446,150	)		(4,239,175	)
Equity in undistributed income of subsidiaries		75,062,928			62,172,351			46,123,056
Net income		70,471,167			57,726,201			41,883,881
Preferred stock dividends		-			-			1,660,868
Accretion on preferred stock discount		-			-			2,153,172
Net income available to common stockholders	$	70,471,167		$	57,726,201		$	38,069,841

CONDENSED STATEMENTS OF CASH FLOWS

	2014			2013			2012
Operating activities:
Net income	$	70,471,167		$	57,726,201		$	41,883,881
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense		5,308,166			4,082,132			3,664,494
Loss (gain) on other investments		(710,015	)		22,484			138,020
Increase (decrease) in income tax payable, net		-			80,532			169,016
Decrease (increase) in other assets		1,853,608			1,608,121			(912,116	)
Increase (decrease) in other liabilities		203,141			9,286			(8,176	)
Excess tax benefit from stock compensation		(1,698,521	)		(389,415	)		(36,071	)
Deferred tax expense		26,878			(453,661	)		(75,427	)
Equity in undistributed income of subsidiaries		(75,062,928	)		(62,172,351	)		(46,123,056	)
Net cash provided by (used in) operating activities		391,497			513,329			(1,299,435	)
Investing activities:
Investment in consolidated subsidiaries:
Banking subsidiaries		21,185,000			14,910,000			27,210,000
Other subsidiaries		-			-			-
Investments in other entities		(397,540	)		(954,249	)		47,804
Net cash provided by investing activities		20,787,460			13,955,751			27,257,804
Financing activities:
Net (decrease) increase in subordinated debt and other borrowings		(2,500,000	)		(7,500,000	)		23,682,291
Repurchase of common stock warrants		-			-			(755,000	)
Exercise of common stock options		6,421,689			2,894,908			1,616,643
Preferred dividends paid		-			-			(2,127,604	)
Common dividends paid		(11,398,285	)		(2,814,691	)		-
Excess tax benefit from stock compensation arrangements		1,698,521			389,415			36,071
Repurchase of preferred shares outstanding		-			-			(71,250,000	)
Net cash used in financing activities		(5,778,076	)		(7,030,368	)		(48,797,599	)
Net increase (decrease) in cash		15,400,881			7,438,712			(22,839,230	)
Cash and cash equivalents, beginning of year		21,095,990			13,657,278			36,496,508
Cash and cash equivalents, end of year	$	36,496,871		$	21,095,990		$	13,657,278

Pinnacle Bank is subject to restrictions on the payment of dividends to Pinnacle Financial under Tennessee banking laws. Pinnacle Bank paid dividends of $21.2 million, $14.9 million and $27.2 million, respectively to Pinnacle Financial in each of the years ended December 31, 2014, 2013 and 2012.