Equity method investment

3 Months Ended

Mar. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

Note 2. Equity method investment

A summary of BHG's financial position as of March 31, 2024 and December 31, 2023 and results of operations as of and for the three months ended March 31, 2024 and 2023, were as follows (in thousands):


	As of
	March 31, 2024		December 31, 2023
Assets	$	3,948,225	$	4,304,835

Liabilities	3,369,034		3,749,821
Equity interests	579,191		555,014
Total liabilities and equity	$	3,948,225	$	4,304,835


	For the three months ended March 31,
	2024		2023
Revenues	$	277,260	$	301,951
Net income	$	32,803	$	46,643

At March 31, 2024, technology, trade name and customer relationship intangibles associated with Pinnacle Bank's investment in BHG, net of related amortization, totaled $5.9 million compared to $6.0 million as of December 31, 2023. Amortization expense of $59,000 was included for the three months ended March 31, 2024 compared to $87,000 for the same period in the prior year. Accretion income of $39,000 was included in the three months ended March 31, 2024 compared to $95,000 for the same period in the prior year.

During the three months ended March 31, 2024, Pinnacle Bank received dividends of $3.6 million from BHG compared to $24.0 million received during the three months ended March 31, 2023. Earnings from BHG are included in Pinnacle Financial's consolidated tax return. Profits from intercompany transactions are eliminated. During the three months ended March 31, 2024 and 2023, Pinnacle Bank purchased no loans from BHG. At March 31, 2024 and December 31, 2023, there were $245.8 million and $263.0 million, respectively, of BHG joint venture program loans held by Pinnacle Bank. These loans were purchased from BHG by Pinnacle Bank at par whereby BHG and Pinnacle Bank share proportionately in the credit risk of the acquired loans based on the rate on the loan and the rate of the purchase. The yield on this portfolio to Pinnacle Bank is anticipated to be between 4.50% and 6.00% per annum.