Regulatory Matters

12 Months Ended

Dec. 31, 2012

Regulatory Matters [Abstract]

Regulatory Matters

Note 21.  Regulatory Matters

Under Tennessee banking law, Pinnacle Bank is subject to restrictions on the payment of dividends to Pinnacle Financial, which are similar to those applicable to national banks.  Pursuant to Tennessee banking law, Pinnacle Bank may not, without the prior consent of the TDFI, pay any dividends to Pinnacle Financial in a calendar year in excess of the total of Pinnacle Bank's net income for that year plus the retained net income for the preceding two years.  As of December 31, 2012, Pinnacle Bank could pay approximately $39.1 million of dividends to Pinnacle Financial without prior TDFI approval. Pinnacle Financial has not paid any cash dividends on its common stock since inception, however, its growth plan may provide the opportunity for it to consider a sustainable dividend program at some point in the future.

 Pinnacle Financial and Pinnacle Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions, by regulators that, if undertaken, could have a direct material effect on the financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, Pinnacle Financial and Pinnacle Bank must meet specific capital guidelines that involve quantitative measures of the assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices.

Quantitative measures established by regulation to ensure capital adequacy require Pinnacle Financial and Pinnacle Bank to maintain minimum amounts and ratios of Total and Tier I capital to risk-weighted assets and for Pinnacle Bank of Tier I capital to average assets. Management believes, as of December 31, 2012, that Pinnacle Financial and Pinnacle Bank met all capital adequacy requirements to which they are subject.  To be categorized as well-capitalized under applicable banking regulations, Pinnacle Financial and Pinnacle Bank must maintain minimum Total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the following table and not be subject to a written agreement, order or directive to maintain a higher capital level.  Pinnacle Financial's and Pinnacle Bank's actual capital amounts and ratios are presented in the following table (in thousands):

	Actual					Minimum Capital Requirement					Minimum To Be Well-Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
At December 31, 2012
Total capital to risk weighted assets:
Pinnacle Financial	$	552,021		13.0	%	$	339,151		8.0	%	$	425,748		10.0	%
Pinnacle Bank	$	545,615		12.9	%	$	338,548		8.0	%	$	425,005		10.0	%
Tier I capital to risk weighted assets:
Pinnacle Financial	$	498,802		11.8	%	$	169,575		4.0	%	$	255,449		6.0	%
Pinnacle Bank	$	492,489		11.6	%	$	169,274		4.0	%	$	255,003		6.0	%
Tier I capital to average assets (*):
Pinnacle Financial	$	498,802		10.6	%	$	188,695		4.0	%		N/A		N/A
Pinnacle Bank	$	492,489		10.5	%	$	187,981		4.0	%	$	234,976		5.0	%
At December 31, 2011
Total capital to risk weighted assets:
Pinnacle Financial	$	579,877		15.3	%	$	302,433		8.0	%	$	380,799		10.0	%
Pinnacle Bank	$	528,436		14.0	%	$	301,838		8.0	%	$	380,063		10.0	%
Tier I capital to risk weighted assets:
Pinnacle Financial	$	523,277		13.8	%	$	151,216		4.0	%	$	228,479		6.0	%
Pinnacle Bank	$	471,928		12.5	%	$	150,919		4.0	%	$	228,038		6.0	%
Tier I capital to average assets (*):
Pinnacle Financial	$	523,277		11.4	%	$	184,138		4.0	%		N/A		N/A
Pinnacle Bank	$	471,928		10.3	%	$	183,431		4.0	%	$	229,289		5.0	%

(*) Average assets for the above calculations were based on the most recent quarter.

As noted above, Pinnacle Bank had 10.5% of Tier 1 capital to average assets and 12.9% of total capital to risk-weighted assets at December 31, 2012.  At December 31, 2012, Pinnacle Financial has $13.7 million of cash available, if required, for further capital support of Pinnacle Bank.