Restricted Cash Balances

12 Months Ended

Dec. 31, 2020

Cash and Cash Equivalents [Abstract]

Restricted Cash Balances

Note 3.  Restricted Cash Balances

Regulation D of the Federal Reserve Act requires that banks maintain reserve balances with the Federal Reserve Bank based principally on the type and amount of their deposits. At our option, Pinnacle Financial maintains additional balances to compensate for clearing and other services. For the years ended December 31, 2020 and 2019, the average daily balance maintained at the Federal Reserve was approximately $2.2 billion and $330.9 million, respectively.

Restricted cash included on the consolidated balance sheets was $223.8 million and $137.0 million at December 31, 2020 and 2019, respectively. This restricted cash is maintained at banks as collateral primarily for our derivative portfolio.

Pinnacle Financial maintains some of its cash in bank deposit accounts at financial institutions other than Pinnacle Bank that, at times, may exceed federally insured limits. Pinnacle Financial may lose all uninsured balances if one of the correspondent banks fails without warning. Pinnacle Financial has not experienced any losses in such accounts. Pinnacle Financial believes it is not exposed to any significant credit risk on cash and cash equivalents.