Federal Home Loan Bank Advances

12 Months Ended

Dec. 31, 2015

Federal Home Loan Bank Advances [Abstract]

Federal Home Loan Bank Advances

Note 10.  Federal Home Loan Bank Advances

Pinnacle Bank is a member of the Federal Home Loan Bank of Cincinnati (FHLB) and as a result, is eligible for advances from the FHLB pursuant to the terms of various borrowing agreements, which assist Pinnacle Bank in the funding of its home mortgage and commercial real estate loan portfolios.  Pinnacle Bank has pledged certain qualifying residential mortgage loans and, pursuant to a blanket lien, certain qualifying commercial mortgage loans with an aggregate carrying value of approximately $1.7 billion as collateral under the borrowing agreements with the FHLB.

At December 31, 2015 and 2014, Pinnacle Financial had received advances from the FHLB totaling $300.3 million and $195.4 million, respectively. Pinnacle Financial  recorded FHLB advances received in conjunction with the acquisitions of CapitalMark and Magna. However, these advances were redeemed at the time of acquisition resulting in no on-going impact to Pinnacle Financial as the Day 1 fair value adjustment offset against the cost to redeem these advances. Additionally, Pinnacle Financial recognized a discount on FHLB advances in conjunction with previous acquisitions. At December 31, 2015, there was no remaining discount. The remaining discount was $91,000 at December 31, 2014. At December 31, 2015, the scheduled maturities of these advances and interest rates are as follows (in thousands):

	Scheduled Maturities		Weighted average interest rates
2016	$	300,000		0.50	%
2017		-		0.00	%
2018		4		2.00	%
2019		-		0.00	%
2020		236		2.25	%
Thereafter		65		3.03	%
	$	300,305
Weighted average interest rate				0.50	%

During 2013, Pinnacle Bank restructured approximately $35.0 million of FHLB advances to reduce its ongoing funding costs.  This restructuring was undertaken to reduce the weighted average interest rates on those FHLB advances from 1.79%, which was significantly higher than the rate for replacement funding. Other than the interest rates, the terms of the replacement advances are similar to those of the advances restructured.  This restructuring resulted in a one-time charge of $877,000 during the first quarter of 2013. No restructuring of FHLB advances occurred during the years ended December 31, 2014 or December 31, 2015.

At December 31, 2015, Pinnacle Bank had accommodations which allow it to borrow from the Federal Reserve Bank of Atlanta's discount window and purchase Federal funds from several of its correspondent banks on an overnight basis at prevailing overnight market rates.  These accommodations are subject to various restrictions as to their term and availability, and in most cases, must be repaid within less than a month.  At December 31, 2015, there was no balance owed to the Federal Reserve Bank or other correspondents under these agreements. At December 31, 2015, Pinnacle Bank had approximately $2.1 billion in additional borrowing capacity with the FHLB, the Federal Reserve Bank discount window, and other correspondent banks with whom Pinnacle Bank has arranged lines of credit.  At December 31, 2015, Pinnacle Bank was not carrying any balances with the Federal Reserve Bank discount window or correspondent banks under these arrangements and was carrying a balance of $300.3 million with the FHLB.