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Securities | 9 Months Ended
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Sep. 30, 2019
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 September 30, 2019 and December 31, 2018 are summarized as follows (in thousands):
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
September 30, 2019: |  |  |  |  |  |  |
Securities available-for-sale: |  |  |  |  |  |  |
U.S. Treasury securities | $ | 48,635 |  |  | $ | 31 |  |  | $ | 4 |  |  | $ | 48,662 |
U.S. government agency securities | 92,668 |  |  | 412 |  |  | 834 |  |  | 92,246 |
Mortgage-backed securities | 1,318,953 |  |  | 19,229 |  |  | 3,665 |  |  | 1,334,517 |
State and municipal securities | 1,658,734 |  |  | 54,839 |  |  | 13,687 |  |  | 1,699,886 |
Asset-backed securities | 163,334 |  |  | 601 |  |  | 1,202 |  |  | 162,733 |
Corporate notes and other | 55,667 |  |  | 565 |  |  | 841 |  |  | 55,391 |
| $ | 3,337,991 |  |  | $ | 75,677 |  |  | $ | 20,233 |  |  | $ | 3,393,435 |
Securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |
State and municipal securities | $ | 189,684 |  |  | $ | 13,137 |  |  | $ | — |  |  | $ | 202,821 |
| $ | 189,684 |  |  | $ | 13,137 |  |  | $ | — |  |  | $ | 202,821 |
December 31, 2018: |  |  |  |  |  |  |
Securities available-for-sale: |  |  |  |  |  |  |
U.S. Treasury securities | $ | 30,325 |  |  | $ | — |  |  | $ | 25 |  |  | $ | 30,300 |
U.S. government agency securities | 71,456 |  |  | 49 |  |  | 1,346 |  |  | 70,159 |
Mortgage-backed securities | 1,336,469 |  |  | 3,110 |  |  | 28,634 |  |  | 1,310,945 |
State and municipal securities | 1,259,267 |  |  | 1,126 |  |  | 30,739 |  |  | 1,229,654 |
Asset-backed securities | 379,107 |  |  | 820 |  |  | 4,345 |  |  | 375,582 |
Corporate notes and other | 69,399 |  |  | 170 |  |  | 2,523 |  |  | 67,046 |
| $ | 3,146,023 |  |  | $ | 5,275 |  |  | 67,612 |  |  | $ | 3,083,686 |
Securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |
State and municipal securities | $ | 194,282 |  |  | $ | 152 |  |  | $ | 1,303 |  |  | $ | 193,131 |
| $ | 194,282 |  |  | $ | 152 |  |  | $ | 1,303 |  |  | $ | 193,131 |
At September 30, 2019, approximately $1.2 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 September 30, 2019, repurchase agreements comprised of secured borrowings totaled $95.4 million and were secured by $95.4 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 September 30, 2019 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
September 30, 2019: | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Due in one year or less | $ | 63,488 |  |  | $ | 63,507 |  |  | $ | 1,394 |  |  | $ | 1,394 |
Due in one year to five years | 16,772 |  |  | 16,986 |  |  | — |  |  | — |
Due in five years to ten years | 106,774 |  |  | 107,322 |  |  | 5,775 |  |  | 5,877 |
Due after ten years | 1,668,670 |  |  | 1,708,370 |  |  | 182,515 |  |  | 195,550 |
Mortgage-backed securities | 1,318,953 |  |  | 1,334,517 |  |  | — |  |  | — |
Asset-backed securities | 163,334 |  |  | 162,733 |  |  | — |  |  | — |
| $ | 3,337,991 |  |  | $ | 3,393,435 |  |  | $ | 189,684 |  |  | $ | 202,821 |
At September 30, 2019 and December 31, 2018, 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 September 30, 2019 |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities | $ | 9,622 |  |  | $ | 4 |  |  | $ | — |  |  | $ | — |  |  | $ | 9,622 |  |  | $ | 4 |
U.S. government agency securities | 2,942 |  |  | 5 |  |  | 33,247 |  |  | 829 |  |  | 36,189 |  |  | 834 |
Mortgage-backed securities | 116,784 |  |  | 515 |  |  | 210,395 |  |  | 3,150 |  |  | 327,179 |  |  | 3,665 |
State and municipal securities | 214,033 |  |  | 1,874 |  |  | 383,023 |  |  | 11,813 |  |  | 597,056 |  |  | 13,687 |
Asset-backed securities | 69,921 |  |  | 699 |  |  | 57,709 |  |  | 503 |  |  | 127,630 |  |  | 1,202 |
Corporate notes | 14,959 |  |  | 120 |  |  | 12,053 |  |  | 721 |  |  | 27,012 |  |  | 841 |
Total temporarily-impaired securities | $ | 428,261 |  |  | $ | 3,217 |  |  | $ | 696,427 |  |  | $ | 17,016 |  |  | $ | 1,124,688 |  |  | $ | 20,233 |
At December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities | $ | 30,054 |  |  | $ | 22 |  |  | $ | 246 |  |  | $ | 3 |  |  | $ | 30,300 |  |  | $ | 25 |
U.S. government agency securities | 13,697 |  |  | 328 |  |  | 42,539 |  |  | 1,018 |  |  | 56,236 |  |  | 1,346 |
Mortgage-backed securities | 203,299 |  |  | 2,134 |  |  | 882,231 |  |  | 26,500 |  |  | 1,085,530 |  |  | 28,634 |
| 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
State and municipal securities | 1,044,757 |  |  | 30,780 |  |  | 198,610 |  |  | 4,078 |  |  | 1,243,367 |  |  | 34,858 |
Asset-backed securities | 268,677 |  |  | 4,118 |  |  | 11,828 |  |  | 227 |  |  | 280,505 |  |  | 4,345 |
Corporate notes | 26,272 |  |  | 1,538 |  |  | 25,915 |  |  | 985 |  |  | 52,187 |  |  | 2,523 |
Total temporarily-impaired securities | $ | 1,586,756 |  |  | $ | 38,920 |  |  | $ | 1,161,369 |  |  | $ | 32,811 |  |  | $ | 2,748,125 |  |  | $ | 71,731 |
The applicable dates for determining when securities were in an unrealized loss position were September 30, 2019 and December 31, 2018. As such, it is possible that a security had a market value less than its amortized cost on other days during the past twelve-month pe riods ended September 30, 2019 and December 31, 2018, but is not in the "Investments with an Unrealized Loss of less t han 12 months" category above. As shown in the tables above, including both available-for-sale and held-to-maturity investment securities, at September 30, 2019, Pinnacle Financial had approximately $20.2 million in unrealized losses on $1.1 billion of securities. The unrealized losses associated with $179.8 million of municipal securities transferred from the available-for-sale portfolio to the held-to-maturity portfolio in 2018 described below represent unrealized losses since the date of purchase, independent of the impact associated with changes in the cost basis upon transfer between portfolios. 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 September 30, 2019, 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 September 30, 2019. In the third quarter of 2018, Pinnacle Financial transferred, at fair value, $179.8 million of municipal securities from the available-for-sale portfolio to the held-to-maturity portfolio. The related net unrealized after tax losses of $2.2 million remained in accumulated other comprehensive income (loss) and will be amortized over the remaining life of the securities, offsetting the related amortization of discount on the transferred securities. No gains or losses were recognized at the time of the transfer. 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. Consistent with the investment policy, during the three and nine months ended September 30, 2019 available-for-sale securities of approximately $149.4 million and $626.1 million, respectively, were sold and net unrealized gains, net of tax, of $308,000 and net unrealized losses, net of tax, of $4.4 million, respectively, were reclassified from accumulated other comprehensive income into net income. 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. 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.

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