Securities (Tables)

12 Months Ended

Dec. 31, 2012

Securities [Abstract]

Summary of Amortized Cost and Fair Value of Available-for-sale and Held-to-maturity Securities

The amortized cost and fair value of securities available-for-sale and held-to-maturity at December 31, 2012 and 2011 are summarized as follows (in thousands):

	December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available-for-sale:
U.S. Government agency securities	$	110,817	$	49	$	414	$	110,452
Mortgage-backed securities		360,504		15,770		623		375,651
State and municipal securities		177,364		14,489		126		191,727
Agency-backed securities		17,361		-		9		17,352
Corporate notes		9,881		1,519		4		11,396
	$	675,927	$	31,827	$	1,176	$	706,578
Securities held-to-maturity:
State and municipal securities		575		8		-		583
	$	575	$	8	$	-	$	583

	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available-for-sale:
U.S. Government agency securities	$	41,978	$	344	$	9	$	42,313
Mortgage-backed securities		623,684		22,254		371		645,567
State and municipal securities		182,206		13,768		22		195,952
Corporate notes		9,687		1,443		-		11,130
	$	857,555	$	37,809	$	402	$	894,962
Securities held-to-maturity:
State and municipal securities		2,330		39		-		2,369
	$	2,330	$	39	$	-	$	2,369

Amortized Cost and Fair Value of Debt Securities by Contractual Maturity

The amortized cost and fair value of debt securities as of December 31, 2012 by contractual maturity are shown below. Actual maturities may differ from contractual maturities of mortgage-backed securities since the mortgages 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
	Amortized  Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	4,480	$	4,524	$	200	$	201
Due in one year to five years		34,791		36,140		375		382
Due in five years to ten years		125,863		133,944		-		-
Due after ten years		132,928		138,967		-		-
Mortgage-backed securities		360,504		375,651		-		-
Asset-backed securities		17,361		17,352		-		-
	$	675,927	$	706,578	$	575	$	583

Classification of Investments According to Term of Unrealized Losses of Less than Twelve Months or Twelve Months or Longer

At December 31, 2012 and 2011, included in securities were the following investments with unrealized losses.  The information below classifies these investments according to the term of the unrealized loss 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 December 31, 2012:
U.S. government agency securities	$	78,899	$	414	$	-	$	-	$	78,899	$	414
Mortgage-backed securities		40,988		623		-		-		40,988		623
State and municipal securities		5,179		126		-		-		5,179		126
Agency-backed securities		17,353		9						17,353		9
Corporate notes		162		4		-		-		162		4
Total temporarily-impaired securities	$	142,581	$	1,176	$	-	$	-	$	142,581	$	1,176
At December 31, 2011:
U.S. government agency securities	$	5,452	$	9	$	-	$	-	$	5,452	$	9
Mortgage-backed securities		41,598		341		17,826		30		59,424		371
State and municipal securities		1,967		17		1,205		5		3,172		22
Corporate notes		-		-		-		-		-		-
Total temporarily-impaired securities	$	49,017	$	367	$	19,031	$	35	$	68,048	$	402

Summary of Fair Value of Securities Sold, Gain or Loss Recognized and any Other-than-temporary Impairment Identified

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, raising funds for liquidity purposes and in the event of a bank merger where certain investment holdings acquired via the merger are outside of the firm's investment policy. Additionally, if an available-for-sale security loses its investment grade, 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 it becomes known. The table below shows the fair value of securities that have been sold during 2012 and the amount of gain or loss recognized on those securities (in thousands):

For the quarter ended,	Fair Value of securities sold			Gain recognized		Loss recognized		Net		Other-than-temporary impairment(OTTI)			Gain(loss) on the sale of securities, net of OTTI
March 31, 2012	$	14,360	(1)	$	148	$	-	$	148	$	34	(2)	$	114
June 30, 2012		18,273	(3)		99		-		99		-			99
September 30, 2012		2,791	(4)		7		-		7		57	(4)		(50	)
December 31, 2012		153,166	(5)		2,068		-		2,068		80	(6)		1,988

(1)   During the first quarter of 2012, Pinnacle Financial sold these securities due to their relatively short terms until maturity and a weighted average coupon of 0.50%.

(2)   During the first quarter of 2012, Pinnacle Financial determined four mortgage-backed securities were OTTI because of management's intent to sell them in the second quarter of 2012. The decision to sell was based on their relative underperformance compared to expectations. 

(3)   During the second quarter of 2012, Pinnacle Financial sold the four securities previously identified as OTTI in the first quarter. Additionally, two securities issued by municipalities in the state of California, which management believed could be adversely affected by state budgetary issues, were also sold during the second quarter.

(4)   During the third quarter of 2012, Pinnacle Financial determined one security was OTTI due to its distinct underperformance relative to the interest rate environment. Pinnacle Financial recognized approximately $57,000 in OTTI and the bond was subsequently sold for a gain of approximately $7,000.

(5)   During the fourth quarter of 2012, Pinnacle Financial decided to sell thirty bonds based on their relative underperformance compared to expectations.

(6)   During the fourth quarter, Pinnacle Financial determined four mortgage-backed securities were OTTI because of management's intent to sell them in the fourth quarter. The decision to sell was based on their relative underperformance compared to expectations.