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Securities | 12 Months Ended
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Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract] |
Securities | Note 4. Securities The amortized cost and fair value of securities available-for-sale and held-to-maturity at December 31, 2019 and 2018 are summarized as follows (in thousands):
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
December 31, 2019 |  |  |  |  |  |  |
Securities available-for-sale: |  |  |  |  |  |  |
U.S Treasury securities | $ | 72,862 |  |  | $ | 19 |  |  | $ | 14 |  |  | $ | 72,867 |
U.S. Government agency securities | 80,096 |  |  | 306 |  |  | 710 |  |  | 79,692 |
Mortgage-backed securities | 1,458,894 |  |  | 12,789 |  |  | 7,776 |  |  | 1,463,907 |
State and municipal securities | 1,669,606 |  |  | 52,096 |  |  | 7,249 |  |  | 1,714,453 |
Asset-backed securities | 153,963 |  |  | 302 |  |  | 1,293 |  |  | 152,972 |
Corporate notes | 56,212 |  |  | 635 |  |  | 743 |  |  | 56,104 |
| $ | 3,491,633 |  |  | $ | 66,147 |  |  | $ | 17,785 |  |  | $ | 3,539,995 |
Securities held-to-maturity: |  |  |  |  |  |  |
State and municipal securities | 188,996 |  |  | 12,221 |  |  | — |  |  | 201,217 |
| $ | 188,996 |  |  | $ | 12,221 |  |  | $ | — |  |  | $ | 201,217 |
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 | 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 |
In 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. At December 31, 2019, approximately $1.1 billion of Pinnacle Financial's investment portfolio was pledged to secure public funds and other deposits and securities sold under agreements to repurchase. At December 31, 2019, repurchase agreements comprised of secured borrowings totaled $126.4 million and were secured by $126.4 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 for the counterparty to remain adequately secured. The amortized cost and fair value of debt securities as of December 31, 2019 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 | $ | 72,914 |  |  | $ | 72,916 |  |  | $ | 1,062 |  |  | $ | 1,062 |
Due in one year to five years | 12,879 |  |  | 13,083 |  |  | — |  |  | — |
Due in five years to ten years | 103,099 |  |  | 103,584 |  |  | 5,772 |  |  | 5,860 |
Due after ten years | 1,689,884 |  |  | 1,733,533 |  |  | 182,162 |  |  | 194,295 |
Mortgage-backed securities | 1,458,894 |  |  | 1,463,907 |  |  | — |  |  | — |
Asset-backed securities | 153,963 |  |  | 152,972 |  |  | — |  |  | — |
| $ | 3,491,633 |  |  | $ | 3,539,995 |  |  | $ | 188,996 |  |  | $ | 201,217 |
At December 31, 2019 and 2018, 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
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities | $ | 40,505 |  |  | $ | 14 |  |  | $ | — |  |  | $ | — |  |  | $ | 40,505 |  |  | $ | 14 |
U.S. government agency securities | 1,222 |  |  | 1 |  |  | 30,892 |  |  | 709 |  |  | 32,114 |  |  | 710 |
Mortgage-backed securities | 458,881 |  |  | 5,102 |  |  | 163,767 |  |  | 2,674 |  |  | 622,648 |  |  | 7,776 |
State and municipal securities | 204,958 |  |  | 1,938 |  |  | 244,884 |  |  | 5,311 |  |  | 449,842 |  |  | 7,249 |
Asset-backed securities | 75,488 |  |  | 796 |  |  | 59,816 |  |  | 497 |  |  | 135,304 |  |  | 1,293 |
Corporate notes | — |  |  | — |  |  | 16,908 |  |  | 743 |  |  | 16,908 |  |  | 743 |
Total temporarily-impaired securities | $ | 781,054 |  |  | $ | 7,851 |  |  | $ | 516,267 |  |  | $ | 9,934 |  |  | $ | 1,297,321 |  |  | $ | 17,785 |
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 |
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 date for determining when securities are in an unrealized loss position is December 31, 2019 and 2018. As such, it is possible that a security had a market value less than its amortized cost on other days during the twelve-month periods ended December 31, 2019 and 2018, but is not in the "Investments with an Unrealized Loss of less than 12 months" category above. As shown in the table above, at December 31, 2019 and 2018, Pinnacle Financial had unrealized losses of $17.8 million and $71.7 million on $1.3 billion and $2.7 billion, respectively, of available-for-sale and held-to-maturity securities. The unrealized losses associated with the $179.8 million of municipal securities transferred from the available-for-sale portfolio to the held-to-maturity portfolio in 2018 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 the investment securities are primarily driven by changes in interest rates and typically are not due to the credit quality of the securities. The securities will continue to be monitored as a part of our ongoing impairment analysis, but are expected to perform even if the rating agencies reduce the credit rating of the bond issuers. 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 these securities 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 December 31, 2019. 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. Consistent with the investment policy, in 2019 available-for-sale securities of approximately $737.7 million were sold and net unrealized losses, net of tax, of $4.4 million 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 the securities' 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 14. 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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