Note 4. Securities

The amortized cost and fair value of securities available-for-sale and held-to-maturity at March 31, 2017 and December 31, 2016 are summarized as follows (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2017:
Securities available-for-sale:
U.S. Treasury securities	$	250	$	-	$	-	$	250
U.S. government agency securities		19,213		1		275		18,939
Mortgage-backed agency securities		1,240,671		4,205		17,899		1,226,977
State and municipal securities		247,210		4,611		2,824		248,997
Asset-backed securities		71,942		108		729		71,321
Corporate notes and other		13,245		152		105		13,292
	$	1,592,531	$	9,077	$	21,832	$	1,579,776
Securities held-to-maturity:
State and municipal securities	$	24,998	$	124	$	86	$	25,036
	$	24,998	$	124	$	86	$	25,036


December 31, 2016:
Securities available-for-sale:
U.S. Treasury securities	$	250	$	-	$	-	$	250
U.S. government agency securities		22,306		-		537		21,769
Mortgage-backed agency securities		988,008		4,304		15,686		976,626
State and municipal securities		211,581		4,103		2,964		212,720
Asset-backed securities		79,318		111		849		78,580
Corporate notes and other		8,608		39		46		8,601
	$	1,310,071	$	8,557		20,082	$	1,298,546
Securities held-to-maturity:
State and municipal securities	$	25,251	$	87	$	105	$	25,233
	$	25,251	$	87	$	105	$	25,233

At March 31, 2017, approximately $1.045 billion of securities within Pinnacle Financial's investment portfolio were pledged to secure either public funds and other deposits or securities sold under agreements to repurchase. At March 31, 2017, repurchase agreements comprised of secured borrowings totaled $71.2 million and were secured by $71.2 million of pledged U.S. government agency securities, municipal securities, asset backed securities, and corporate debentures. As the fair value of securities pledged to secure repurchase agreements may decline, Pinnacle Financial regularly evaluates its need to pledge additional securities to remain adequately secured.

The amortized cost and fair value of debt securities as of March 31, 2017 by contractual maturity are shown below. Actual maturities may differ from contractual maturities of mortgage- and asset-backed securities since the mortgages and assets underlying the securities may be called or prepaid with or without penalty. Therefore, these securities are not included in the maturity categories in the following summary (in thousands):

	Available-for-sale				Held-to-maturity
March 31, 2017:	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	2,519	$	2,536	$	445	$	445
Due in one year to five years		45,041		46,143		8,262		8,285
Due in five years to ten years		128,637		130,524		10,817		10,897
Due after ten years		103,721		102,275		5,474		5,409
Mortgage-backed securities		1,240,671		1,226,977		-		-
Asset-backed securities		71,942		71,321		-		-
	$	1,592,531	$	1,579,776	$	24,998	$	25,036

At March 31, 2017 and December 31, 2016, the following investments had unrealized losses. The table below classifies these investments according to the term of the unrealized losses of less than twelve months or twelve months or longer (in thousands):

	Investments with an Unrealized Loss of less than 12 months				Investments with an Unrealized Loss of 12 months or longer				Total Investments with an Unrealized Loss
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
At March 31, 2017

U.S. Treasury securities	$	-	$	-	$	-	$	-	$	-	$	-
U.S. government agency securities		749		1		12,995		274		13,744		275
Mortgage-backed securities		1,009,381		17,214		53,060		685		1,062,441		17,899
State and municipal securities		101,430		2,909		310		1		101,740		2,910
Asset-backed securities		11,008		24		25,928		705		36,936		729
Corporate notes		4,542		105		-		-		4,542		105
Total temporarily-impaired securities	$	1,127,110	$	20,253	$	92,293	$	1,665	$	1,219,403	$	21,918

At December 31, 2016

U.S. Treasury securities	$	-	$	-	$	-	$	-	$	-	$	-
U.S. government agency securities		-		-		20,820		537		20,820		537
Mortgage-backed securities		801,213		15,073		43,148		613		844,361		15,686
State and municipal securities		87,277		3,068		312		1		87,589		3,069
Asset-backed securities		14,510		32		34,097		817		48,607		849
Corporate notes		4,810		46		-		-		4,810		46
Total temporarily-impaired securities	$	907,810	$	18,219	$	98,377	$	1,968	$	1,006,187	$	20,187

The applicable dates for determining when securities are in an unrealized loss position are March 31, 2017 and December 31, 2016. As such, it is possible that a security had a market value that exceeded its amortized cost on other days during the past twelve-month periods ended March 31, 2017 and December 31, 2016, but is in the "Investments with an Unrealized Loss of less than 12 months" category above.

As shown in the tables above, including both available-for-sale and held-to-maturity investment securities, at March 31, 2017, Pinnacle Financial had approximately $21.9 million in unrealized losses on $1.219 billion of securities. The unrealized losses associated with these investment securities are driven by changes in interest rates and are not due to the credit quality of the securities. These securities will continue to be monitored as a part of Pinnacle Financial's ongoing impairment analysis. Management evaluates the financial performance of the issuers on a quarterly basis to determine if it is probable that the issuers can make all contractual principal and interest payments. Because Pinnacle Financial currently does not intend to sell those securities that have an unrealized loss at March 31, 2017, and it is not more-likely-than-not that Pinnacle Financial will be required to sell the securities before recovery of their amortized cost bases, which may be maturity, Pinnacle Financial does not consider these securities to be other-than-temporarily impaired at March 31, 2017.

Periodically, available-for-sale securities may be sold or the composition of the portfolio realigned to improve yields, quality or marketability, or to implement changes in investment or asset/liability strategy, including maintaining collateral requirements and raising funds for liquidity purposes. Additionally, if an available-for-sale security loses its investment grade or tax-exempt status, the underlying credit support is terminated or collection otherwise becomes uncertain based on factors known to management, Pinnacle Financial will consider selling the security, but will review each security on a case-by-case basis as these factors become known.

The carrying values of Pinnacle Financial's investment securities could decline in the future if the financial condition of issuers deteriorates and management determines it is probable that Pinnacle Financial will not recover the entire amortized cost bases of the securities. As a result, there is a risk that other-than-temporary impairment charges may occur in the future. Additionally, there is a risk that other-than-temporary impairment charges may occur in the future if management's intention to hold these securities to maturity and/or recovery changes.