Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present the financial instruments carried at fair value on a recurring basis as of December 31, 2022 and 2021, by caption on the consolidated balance sheets and by FASB ASC 820 valuation hierarchy (as described above) (in thousands):

	Total carrying value in the consolidated balance sheet		Quoted market prices in an active market (Level 1)		Models with significant observable market parameters (Level 2)		Models with significant unobservable market parameters (Level 3)
December 31, 2022
Investment securities available-for-sale:
U.S. treasury securities	$	194,184	$	—	$	194,184	$	—
U.S. government agency securities	396,157		—		396,157		—
Mortgage-backed securities	971,576		—		971,576		—
State and municipal securities	1,412,306		—		1,411,677		629
Asset-backed securities	117,403		—		117,403		—
Corporate notes and other	467,244		—		467,244		—
Total investment securities available-for-sale	3,558,870		—		3,558,241		629
Other investments	153,011		—		22,029		130,982
Other assets	190,629		—		190,629		—
Total assets at fair value	$	3,902,510	$	—	$	3,770,899	$	131,611
Other liabilities	$	96,483	$	—	$	96,483	$	—
Total liabilities at fair value	$	96,483	$	—	$	96,483	$	—
December 31, 2021
Investment securities available-for-sale:
U.S. treasury securities	$	193,609	$	—	$	193,609	$	—
U.S. government agency securities	632,009		—		632,009		—
Mortgage-backed securities	1,920,239		—		1,920,239		—
State and municipal securities	1,823,837		—		1,823,009		828
Asset-backed securities	229,569		—		229,569		—
Corporate notes and other	114,931		—		114,931		—
Total investment securities available-for-sale	4,914,194		—		4,913,366		828
Other investments	125,969		—		24,973		100,996
Other assets	57,441		—		57,441		—
Total assets at fair value	$	5,097,604	$	—	$	4,995,780	$	101,824
Other liabilities	$	80,106	$	—	$	80,106	$	—
Total liabilities at fair value	$	80,106	$	—	$	80,106	$	—

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following table presents assets measured at fair value on a nonrecurring basis as of December 31, 2022 and 2021 (in thousands):

December 31, 2022	Total carrying value in the consolidated balance sheet		Quoted market prices in an active market (Level 1)		Models with significant observable market parameters (Level 2)		Models with significant unobservable market parameters (Level 3)
Other real estate owned	$	7,952	$	—	$	—	$	7,952
Collateral dependent loans (1)	33,767		—		—		33,767
Total	$	41,719	$	—	$	—	$	41,719
December 31, 2021
Other real estate owned	$	8,537	$	—	$	—	$	8,537
Collateral dependent loans (1)	30,799		—		—		30,799
Total	$	39,336	$	—	$	—	$	39,336

(1)The carrying values of collateral dependent loans at December 31, 2022 and 2021 are net of valuation allowances of $6.5 million and $1.7 million, respectively.

Rollforward of the Balance Sheet Amounts, Unobservable Input Reconciliation

	For the year ended December 31,
	2022						2021
	Available-for-sale Securities		Other investments		Other  liabilities		Available-for-sale Securities		Other investments		Other  liabilities
Fair value, Jan. 1	$	828	$	100,996	$	—	$	15,497	$	47,759	$	—
Total net realized gains included in income	7		10,605		—		1,302		23,109		—
Change in unrealized gains/losses included in other comprehensive income (loss)	(48)		—		—		(3,184)		—		—
Purchases	—		33,208		—		—		45,986		—
Issuances	—		—		—		—		—		—
Settlements	(158)		(13,827)		—		(12,787)		(15,858)		—
Transfers out of Level 3	—		—		—		—		—		—
Fair value, Dec. 31	$	629	$	130,982	$	—	$	828	$	100,996	$	—
Total realized gains included in income	$	7	$	10,605	$	—	$	1,302	$	23,109	$	—

Carrying Amounts, Estimated Fair Value and Placement in the Fair Value Hierarchy of Financial Instruments

The following table presents the carrying amounts, estimated fair value and placement in the fair value hierarchy of Pinnacle Financial's financial instruments at December 31, 2022 and 2021. This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash, cash equivalents, interest-bearing due from banks and restricted cash, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as non-interest bearing demand, interest-bearing demand, and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity (in thousands).

	Carrying/ Notional Amount		Estimated Fair Value (1)		Quoted market prices in an active market (Level 1)		Models with significant observable market parameters (Level 2)		Models with significant unobservable market parameters (Level 3)
December 31, 2022
Financial assets:
Securities purchased with agreement to resell	$	513,276	$	440,390	$	—	$	—	$	440,390
Securities held-to-maturity	3,079,050		2,744,946		—		2,744,946		—
Loans, net	28,740,940		27,901,662		—		—		27,901,662
Consumer loans held-for-sale	42,237		42,353		—		42,353		—
Commercial loans held-for-sale	21,093		21,151		—		21,151		—
Financial liabilities:
Deposits and securities sold under agreements to repurchase	35,156,148		34,435,447		—		—		34,435,447
Federal Home Loan Bank advances	464,436		477,673		—		—		477,673
Subordinated debt and other borrowings	424,055		430,884		—		—		430,884
Off-balance sheet instruments:
Commitments to extend credit (2)	16,224,349		26,780		—		—		26,780

	Carrying/ Notional Amount		Estimated Fair Value (1)		Quoted market prices in an active market (Level 1)		Models with significant observable market parameters (Level 2)		Models with significant unobservable market parameters (Level 3)
December 31, 2021
Financial assets:
Securities purchased with agreement to resell	$	1,000,000	$	980,543	$	—	$	—	$	980,543
Securities held-to-maturity	1,155,958		1,188,049		—		1,188,049		—
Loans, net	23,151,029		23,223,299		—		—		23,223,299
Consumer loans held-for-sale	45,806		46,288		—		46,288		—
Commercial loans held-for-sale	17,685		17,871		—		17,871		—
Financial liabilities:
Deposits and securities sold under agreements to repurchase	31,457,092		30,812,222		—		—		30,812,222
Federal Home Loan Bank advances	888,681		1,006,866		—		—		1,006,866
Subordinated debt and other borrowings	423,172		479,879		—		—		479,879
Off-balance sheet instruments:
Commitments to extend credit (2)	13,063,942		24,351		—		—		24,351

(1)Estimated fair values are consistent with an exit-price concept. The assumptions used to estimate the fair values are intended to approximate those that a market-participant would realize in a hypothetical orderly transaction.

(2)At the end of each period, Pinnacle Financial evaluates the inherent risks of the outstanding off-balance sheet commitments, including both commitments for unfunded loans and standby letters of credit. In making this evaluation, Pinnacle Financial utilizes credit loss expectations on funded loans from our allowance for credit losses methodology and evaluates the probability that the outstanding commitment will eventually become a funded loan. As a result, at December 31, 2022 and 2021, Pinnacle Financial included in other liabilities $25.0 million and $22.5 million, respectively, representing expected credit losses on off-balance sheet commitments, which are reflected in the estimated fair values of the related commitments. Also included in the fair values at December 31, 2022 and 2021, are unamortized fees related to these commitments of $1.8 million and $1.9 million, respectively.