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Securities
 6 Months Ended
Jun. 30, 2022
Investments, Debt and Equity Securities [Abstract]  
Securities
Note 3.  Securities

The amortized cost and fair value of securities available-for-sale and held-to-maturity at June 30, 2022 and December 31, 2021 are summarized as follows (in thousands):
 Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value
June 30, 2022:    
Securities available-for-sale:    
U.S. Treasury securities$246,604 $184 $685 $246,103 
U.S. Government agency securities440,148 — 24,633 415,515 
Mortgage-backed securities1,524,170 685 127,177 1,397,678 
State and municipal securities1,558,987 4,741 78,341 1,485,387 
Asset-backed securities165,825 — 12,415 153,410 
Corporate notes and other117,162 490 6,407 111,245 
 $4,052,896 $6,100 $249,658 $3,809,338 
Securities held-to-maturity:    
U.S. Treasury securities$92,938 $— $4,748 $88,190 
U.S. Government agency securities328,982 — 16,433 312,549 
Mortgage-backed securities404,608 — 30,356 374,252 
State and municipal securities1,741,998 306 197,534 1,544,770 
Asset-backed securities163,210 — 11,827 151,383 
Corporate notes and other14,027 — 813 13,214 
 $2,745,763 $306 $261,711 $2,484,358 
Allowance for credit losses - securities held-to-maturity(1,208)
Securities held-to-maturity, net of allowance for credit losses$2,744,555 
December 31, 2021:    
Securities available-for-sale:    
U.S. Treasury securities$194,490 $— $881 $193,609 
U.S. Government agency securities634,611 2,359 4,961 632,009 
Mortgage-backed securities1,908,675 29,874 18,310 1,920,239 
State and municipal securities1,774,119 52,961 3,243 1,823,837 
Asset-backed securities232,294 60 2,785 229,569 
Corporate notes and other114,355 3,082 2,506 114,931 
 $4,858,544 $88,336 32,686 $4,914,194 
Securities held-to-maturity:    
U.S. Government agency securities11,920 — 37 11,883 
Mortgage-backed securities 106,555 86 196 106,445 
State and municipal securities 1,037,644 32,966 889 1,069,721 
$1,156,119 $33,052 $1,122 $1,188,049 
Allowance for credit losses - securities held-to-maturity(161)
Securities held-to-maturity, net of allowance for credit losses$1,155,958 
 
During the quarters ended March 31, 2022, March 31, 2020 and September 30, 2018, Pinnacle Financial transferred, at fair value, $1.1 billion, $873.6 million and $179.8 million, respectively, of securities from the available-for-sale portfolio to the held-to-maturity portfolio. The related net unrealized after tax losses of $1.5 million, net unrealized after tax gains of $69.0 million and net unrealized after tax losses of $2.2 million, respectively, remained in accumulated other comprehensive income (loss) and are being amortized over the remaining life of the transferred securities, offsetting the related amortization of discount or premium on the transferred securities. No gains or losses were recognized at the time of the transfer. At June 30, 2022, approximately $685.1 million 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 June 30, 2022, repurchase agreements comprised of secured borrowings totaled $199.6 million and were secured by $199.6 million of pledged U.S. government agency securities, mortgage-backed 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 June 30, 2022 by contractual maturity is 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-saleHeld-to-maturity
June 30, 2022:Amortized
Cost		Fair
Value		Amortized
 Cost		Fair
Value
Due in one year or less$34,637 $34,521 $1,979 $1,965 
Due in one year to five years169,777 171,874 317,795 300,462 
Due in five years to ten years374,434 359,517 112,841 109,314 
Due after ten years1,784,053 1,692,338 1,745,330 1,546,982 
Mortgage-backed securities1,524,170 1,397,678 404,608 374,252 
Asset-backed securities165,825 153,410 163,210 151,383 
 $4,052,896 $3,809,338 $2,745,763 $2,484,358 
At June 30, 2022 and December 31, 2021, the following available-for-sale securities 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 ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized
Losses
At June 30, 2022      
U.S. Treasury securities$182,142 $685 $— $— $182,142 $685 
U.S. Government agency securities386,971 22,017 28,543 2,616 415,514 24,633 
Mortgage-backed securities1,149,133 94,808 220,024 32,369 1,369,157 127,177 
State and municipal securities1,238,230 76,205 19,632 2,136 1,257,862 78,341 
Asset-backed securities149,344 12,045 4,066 370 153,410 12,415 
Corporate notes65,464 3,900 19,870 2,507 85,334 6,407 
Total temporarily-impaired securities$3,171,284 $209,660 $292,135 $39,998 $3,463,419 $249,658 
At December 31, 2021      
U.S. Treasury securities$178,610 $881 $— $— $178,610 $881 
U.S. Government agency securities353,951 2,987 54,266 1,974 408,217 4,961 
Mortgage-backed securities744,996 11,663 178,956 6,647 923,952 18,310 
State and municipal securities309,605 2,198 57,270 1,045 366,875 3,243 
Asset-backed securities198,349 2,595 6,513 190 204,862 2,785 
Corporate notes14,991 554 20,270 1,952 35,261 2,506 
Total temporarily-impaired securities$1,800,502 $20,878 $317,275 $11,808 $2,117,777 $32,686 

The applicable dates for determining when available-for-sale securities were in an unrealized loss position were June 30, 2022 and December 31, 2021. As such, it is possible that an available-for-sale security had a market value less than its amortized cost on other days during the twelve-month periods ended June 30, 2022 and December 31, 2021, but is not in the "Investments with an Unrealized Loss of less than 12 months" category above.

As shown in the tables above, at June 30, 2022, Pinnacle Financial had approximately $249.7 million in unrealized losses on approximately $3.5 billion of available-for-sale securities. For any securities classified as available-for-sale that are in an unrealized loss position at the balance sheet date, Pinnacle Financial assesses whether or not it intends to sell the security, or more likely than not will be required to sell the security, before recovery of its amortized cost basis which would require a write-down to fair value through net income. Because Pinnacle Financial currently does not intend to sell those available-for-sale securities that have an unrealized loss at June 30, 2022, 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 has determined that no write-down is necessary. In addition, Pinnacle Financial evaluates whether any portion of the decline in fair value of available-for-sale securities is the result of credit deterioration, which would require the recognition of an allowance for credit losses. Such evaluations consider the extent to which the amortized cost of the security exceeds its fair value, changes in credit ratings and any other known adverse conditions related to the specific security. The unrealized losses associated with available-for-sale securities at June 30, 2022 are driven by changes in interest rates and are not due to the credit quality of the securities, and accordingly, no allowance for credit losses is considered necessary related to available-for-sale securities at June 30, 2022. These securities will continue to be monitored as a part of Pinnacle Financial's ongoing evaluation of credit quality. 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.

The allowance for credit losses on held-to-maturity securities is measured on a collective basis by major security type. Pinnacle Financial has a zero loss expectation for U.S. treasury securities in addition to U.S. Government agency securities and mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and accordingly, no allowance for credit losses is estimated for these securities. Credit losses on held-to-maturity state and municipal securities and corporate notes and other securities are estimated using third-party probability of default and loss given default models driven primarily by macroeconomic factors over a reasonable and supportable period of eighteen months with a twelve month reversion to average loss factors. At June 30, 2022 and December 31, 2021, the estimated allowance for credit losses on these held-to-maturity securities was $1.2 million and $161,000, respectively, with the change driven largely by the increase in the balance of held-to-maturity securities and by changes in macroeconomic forecasts.
Pinnacle Financial utilizes bond credit ratings assigned by third party ratings agencies to monitor the credit quality of debt securities held-to-maturity. At June 30, 2022, all debt securities classified as held-to-maturity were rated A or higher by the ratings agencies. Updated credit ratings are obtained as they become available from the ratings agencies.

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 or preparing for anticipated changes in market interest rates. 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. During the six months ended June 30, 2022, $2.9 million of available-for-sale securities were sold resulting in gross realized losses of $61,000. During the six months ended June 30, 2021, $2.2 million of available-for-sale securities were sold resulting in gross realized gains of $366,000.

Pinnacle Financial has entered into various fair value hedging transactions to mitigate the impact of changing interest rates on the fair values of available for sale securities. See Note 8. Derivative Instruments for disclosure of the gains and losses recognized on derivative instruments and the cumulative fair value hedging adjustments to the carrying amount of the hedged securities.