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Loans and Allowance for Loan Losses (Tables)
 9 Months Ended
Sep. 30, 2023
Receivables [Abstract]  
Schedule of Accounts, Notes, Loans and Financing Receivable
Loans at September 30, 2023 and December 31, 2022 were as follows (in thousands):
September 30, 2023December 31, 2022
Commercial real estate:
Owner occupied$3,944,616 $3,587,257
Non-owner occupied7,447,610 6,542,619
Consumer real estate – mortgage4,768,780 4,435,046
Construction and land development3,942,143 3,679,498
Commercial and industrial11,307,611 10,241,362
Consumer and other532,524 555,823
Subtotal$31,943,284 $29,041,605 
Allowance for credit losses(346,192)(300,665)
Loans, net$31,597,092 $28,740,940 
Loan Classification Categorized by Risk Rating Category
The table below presents loan balances classified within each risk rating category and the current period gross charge-offs by primary loan type and year of origination or most recent renewal as of September 30, 2023 (in thousands):
September 30, 202320232022202120202019PriorRevolving LoansTotal
Commercial real estate - owner occupied
Pass$564,968 $1,140,655 $869,651 $518,137 $299,408 $410,623 $47,514 $3,850,956 
Special Mention1,489 38,361 238 3,986 5,429 3,089 15,614 68,206 
Substandard (1)
5,528 8,940 3,043 1,662 569 621 — 20,363 
Substandard-nonaccrual986 660 — 2,360 — 1,085 — 5,091 
Doubtful-nonaccrual— — — — — — — — 
Total Commercial real estate - owner occupied$572,971 $1,188,616 $872,932 $526,145 $305,406 $415,418 $63,128 $3,944,616 
Current period gross charge-offs$— — — — — — — $— 
Commercial real estate - non-owner occupied
Pass$1,005,075 $2,663,004 $1,721,620 $779,796 $589,720 $458,572 $110,497 $7,328,284 
Special Mention3,174 30,455 — 6,788 218 7,348 — 47,983 
Substandard (1)
24,641 2,974 40,156 — 1,216 562 — 69,549 
Substandard-nonaccrual1,641 153 — — — — — 1,794 
Doubtful-nonaccrual— — — — — — — — 
Total Commercial real estate - non-owner occupied$1,034,531 $2,696,586 $1,761,776 $786,584 $591,154 $466,482 $110,497 $7,447,610 
Current period gross charge-offs$— — — — — — — $— 
Consumer real estate – mortgage
Pass$507,284 $990,832 $1,062,479 $455,584 $212,988 $329,196 $1,190,763 $4,749,126 
Special Mention— — — — — — — — 
Substandard (1)
— — — — — — — — 
Substandard-nonaccrual256 1,372 2,743 4,412 6,427 3,848 596 19,654 
Doubtful-nonaccrual— — — — — — — — 
Total Consumer real estate – mortgage$507,540 $992,204 $1,065,222 $459,996 $219,415 $333,044 $1,191,359 $4,768,780 
Current period gross charge-offs$— (85)(80)(6)(49)(378)— $(598)
Construction and land development
Pass$888,677 $1,843,853 $1,054,829 $69,024 $12,317 $7,138 $41,491 $3,917,329 
Special Mention3,419 16,107 887 4,318 — — — 24,731 
Substandard (1)
— — — — — 83 — 83 
Substandard-nonaccrual— — — — — — — — 
Doubtful-nonaccrual— — — — — — — — 
Total Construction and land development$892,096 $1,859,960 $1,055,716 $73,342 $12,317 $7,221 $41,491 $3,942,143 
Current period gross charge-offs$— — — — — (3)— $(3)
Commercial and industrial
Pass$3,094,118 $2,341,941 $1,229,428 $349,426 $240,221 $167,914 $3,675,820 $11,098,868 
Special Mention11,668 10,675 33,138 1,698 165 2,355 54,795 114,494 
Substandard (1)
11,538 1,208 1,154 1,974 1,494 9,068 51,484 77,920 
Substandard-nonaccrual8,624 4,524 1,786 96 377 388 534 16,329 
Doubtful-nonaccrual— — — — — — — — 
 Total Commercial and industrial$3,125,948 $2,358,348 $1,265,506 $353,194 $242,257 $179,725 $3,782,633 $11,307,611 
Current period gross charge-offs$(2,170)(20,287)(9,840)(686)(88)(301)(11,786)$(45,158)
Consumer and other
Pass$136,325 $32,958 $72,241 $40,743 $712 $752 $248,711 $532,442 
Special Mention— — — — — — — — 
Substandard (1)
— — — — — — — — 
September 30, 202320232022202120202019PriorRevolving LoansTotal
Substandard-nonaccrual— 5 — — — — 77 82 
Doubtful-nonaccrual— — — — — — — — 
Total Consumer and other$136,325 $32,963 $72,241 $40,743 $712 $752 $248,788 $532,524 
Current period gross charge-offs$(29)(436)(5,236)(2,183)(140)(64)(3,769)$(11,857)
Total loans
Pass$6,196,447 $9,013,243 $6,010,248 $2,212,710 $1,355,366 $1,374,195 $5,314,796 $31,477,005 
Special Mention19,750 95,598 34,263 16,790 5,812 12,792 70,409 255,414 
Substandard (1)
41,707 13,122 44,353 3,636 3,279 10,334 51,484 167,915 
Substandard-nonaccrual11,507 6,714 4,529 6,868 6,804 5,321 1,207 42,950 
Doubtful-nonaccrual— — — — — — — — 
Total loans$6,269,411 $9,128,677 $6,093,393 $2,240,004 $1,371,261 $1,402,642 $5,437,896 $31,943,284 
Current period gross charge-offs$(2,199)(20,808)(15,156)(2,875)(277)(746)(15,555)$(57,616)
(1) Potential problem loans represent those loans with a well-defined weakness and where information about possible credit problems of borrowers has caused management to have doubts about the borrower's ability to comply with present repayment terms. This definition is believed to be substantially consistent with the standards established by Pinnacle Bank's primary regulators for loans classified as substandard, excluding loan modifications made to borrowers experiencing financial difficulty. Potential problem loans, which are not included in nonaccrual loans, amounted to approximately $134.5 million at September 30, 2023, compared to $53.8 million at December 31, 2022.
Past Due Balances by Loan Classification
The table below presents the aging of past due balances by loan segment at September 30, 2023 and December 31, 2022 (in thousands):

September 30, 202330-59 days past due60-89 days past due90 days or more past dueTotal
past due		CurrentTotal loans
Commercial real estate:
Owner occupied$3,218 $202 $4,947 $8,367 $3,936,249 $3,944,616 
Non-owner occupied214 — 153 367 7,447,243 7,447,610 
Consumer real estate – mortgage3,361 16,926 9,767 30,054 4,738,726 4,768,780 
Construction and land development154 227 — 381 3,941,762 3,942,143 
Commercial and industrial14,889 4,521 18,012 37,422 11,270,189 11,307,611 
Consumer and other3,589 1,907 1,361 6,857 525,667 532,524 
Total$25,425 $23,783 $34,240 $83,448 $31,859,836 $31,943,284 
December 31, 2022
Commercial real estate:
Owner occupied$2,112 $615 $1,139 $3,866 $3,583,391 $3,587,257 
Non-owner occupied359 48 1,681 2,088 6,540,531 6,542,619 
Consumer real estate – mortgage13,635 83 9,094 22,812 4,412,234 4,435,046 
Construction and land development221 102 130 453 3,679,045 3,679,498 
Commercial and industrial15,457 13,713 9,428 38,598 10,202,764 10,241,362 
Consumer and other4,056 1,688 746 6,490 549,333 555,823 
Total$35,840 $16,249 $22,218 $74,307 $28,967,298 $29,041,605 
Details of Changes in the Allowance for Loan Losses The following table details the changes in the allowance for credit losses for the three and nine months ended September 30, 2023 and 2022, respectively, by loan classification (in thousands):
 Commercial real estate - owner occupiedCommercial real estate - non-owner occupiedConsumer
 real estate - mortgage		Construction and land developmentCommercial and industrialConsumer
and other		Total
Three months ended September 30, 2023:
Balance at June 30, 2023$26,497 $55,108 $59,374 $38,855 $148,418 $9,207 $337,459 
Charged-off loans— — (168)(3)(20,330)(4,208)(24,709)
Recovery of previously charged-off loans52 44 374 86 3,831 2,229 6,616 
Provision for credit losses on loans1,329 2,097 10,917 (1,908)12,383 2,008 26,826 
Balance at September 30, 2023$27,878 $57,249 $70,497 $37,030 $144,302 $9,236 $346,192 
Three months ended September 30, 2022:      
Balance at June 30, 2022$19,609 $52,547 $33,883 $28,681 $125,772 $11,991 $272,483 
Charged-off loans(447)(99)(155)— (13,029)(3,969)(17,699)
Recovery of previously charged-off loans1,039 — 426 15 2,869 2,367 6,716 
Provision for credit losses on loans(132)(1,884)1,311 (75)24,673 2,695 26,588 
Balance at September 30, 2022$20,069 $50,564 $35,465 $28,621 $140,285 $13,084 $288,088 
Nine months ended September 30, 2023:      
Balance at December 31, 2022$26,617 $40,479 $36,536 $36,114 $144,353 $16,566 $300,665 
Charged-off loans— — (598)(3)(45,158)(11,857)(57,616)
Recovery of previously charged-off loans66 1,233 1,989 337 11,959 6,877 22,461 
Provision for credit losses on loans1,195 15,537 32,570 582 33,148 (2,350)80,682 
Balance at September 30, 2023$27,878 $57,249 $70,497 $37,030 $144,302 $9,236 $346,192 
Nine months ended September 30, 2022:      
Balance at December 31, 2021$19,618 $58,504 $32,104 $29,429 $112,340 $11,238 $263,233 
Charged-off loans(1,412)(284)(409)(150)(22,684)(8,445)(33,384)
Recovery of previously charged-off loans1,373 247 1,298 164 10,393 5,091 18,566 
Provision for credit losses on loans490 (7,903)2,472 (822)40,236 5,200 39,673 
Balance at September 30, 2022$20,069 $50,564 $35,465 $28,621 $140,285 $13,084 $288,088 
Schedule of Collateral Dependent Loans Individually Evaluated for ACL The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, as of September 30, 2023 and December 31, 2022 (in thousands):
Real EstateBusiness AssetsOtherTotal
September 30, 2023
Commercial real estate:
Owner occupied$24,243 $— $— $24,243 
Non-owner occupied28,933 — — 28,933 
Consumer real estate – mortgage22,435 — — 22,435 
Construction and land development61 — — 61 
Commercial and industrial— 24,618 630 25,248 
Consumer and other— — — — 
Total $75,672 $24,618 $630 $100,920 
December 31, 2022
Commercial real estate:
Owner occupied$10,804 $— $— $10,804 
Non-owner occupied4,795 — — 4,795 
Consumer real estate – mortgage22,466 — — 22,466 
Construction and land development299 — — 299 
Commercial and industrial— 12,327 — 12,327 
Consumer and other— — 2 2 
Total $38,364 $12,327 $2 $50,693 
Modifications
The following table shows the amortized cost basis of the loans modified to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2023 (all of which modifications occurred in the three months ended September 30, 2023), disaggregated by class of loans and type of modification granted and describes the financial effect of the modifications made to borrowers experiencing financial difficulty (in thousands):
Three and nine months ended September 30, 2023
Payment DelayTerm ExtensionCombination¹
Total%Total%Total%Total
Commercial real estate:
Owner occupied$— — %$5,528 0.14 %$— — %$5,528 
Non-owner occupied11,165 0.15 %— — %13,476 0.18 %24,641 
Consumer real estate – mortgage— — %— — %— — %— 
Construction and land development— — %— — %— — %— 
Commercial and industrial— — %3,225 0.03 %— — %3,225 
Consumer and other— — %— — %— — %— 
Total $11,165 $8,753 $13,476 $33,394 
¹ The combination includes payment delay, term extension, and an interest rate reduction.

Three and nine months ended September 30, 2023
Financial Effect
Payment Delay:
Non-owner occupiedImplemented interest-only payments until loan maturity
Term Extension:
Owner OccupiedAdded a weighted average 0.25 years to the term of the modified loans
Commercial and industrialAdded a weighted average 0.25 years to the term of the modified loans
Combination:
Non-owner OccupiedReduced weighted average contractual interest rate by 0.55%, added a weighted average 2 years to the term, and implemented an alternative payment schedule until loan maturity
Financing Receivable, Nonaccrual The table below presents the amortized cost basis of loans on nonaccrual status and loans past due 90 or more days and still accruing interest at September 30, 2023 and December 31, 2022. Also presented is the balance of loans on nonaccrual status at September 30, 2023 for which there was no related allowance for credit losses recorded (in thousands):
September 30, 2023December 31, 2022
Total nonaccrual loansNonaccrual loans with no allowance for credit lossesLoans past due 90 or more days and still accruingTotal nonaccrual loansNonaccrual loans with no allowance for credit lossesLoans past due 90 or more days and still accruing
Commercial real estate:
Owner occupied$5,091 $2,339 $— $1,882 $— $— 
Non-owner occupied1,794 1,641 — 2,244 1,040 — 
Consumer real estate – mortgage19,654 1,299 — 17,330 — — 
Construction and land development— — — 231 — — 
Commercial and industrial16,329 — 3,608 16,345 8,003 3,663 
Consumer and other82 — 1,361 84 — 743 
Total$42,950 $5,279 $4,969 $38,116 $9,043 $4,406 
Summary of Loan Portfolio Credit Risk Exposure
Pinnacle Financial analyzes its commercial loan portfolio to determine if a concentration of credit risk exists to any industries. Pinnacle Financial utilizes broadly accepted industry classification systems in order to classify borrowers into various industry classifications. Pinnacle Financial has a credit exposure (loans outstanding plus unfunded lines of credit) exceeding 25% of Pinnacle Bank's total risk-based capital to borrowers in the following industries at September 30, 2023 with the comparative exposures for December 31, 2022 (in thousands):
 September 30, 2023 
 Outstanding Principal BalancesUnfunded CommitmentsTotal exposureTotal Exposure at December 31, 2022
Lessors of nonresidential buildings$4,672,499 $1,545,847 $6,218,346 $7,058,045 
Lessors of residential buildings1,793,549 1,296,827 3,090,376 3,725,186 
New Housing For-Sale Builders547,566 918,711 1,466,277 1,763,089 
Music Publishers744,947 477,077 1,222,024 1,127,636