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Securities | 12 Months Ended
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Dec. 31, 2022
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, 2022 and 2021 are summarized as follows (in thousands):
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
December 31, 2022 |  |  |  |  |  |  |
Securities available-for-sale: |  |  |  |  |  |  |
U.S Treasury securities | $ | 196,151 |  |  | $ | — |  |  | $ | 1,967 |  |  | $ | 194,184 |
U.S. Government agency securities | 432,475 |  |  | — |  |  | 36,318 |  |  | 396,157 |
Mortgage-backed securities | 1,114,948 |  |  | 211 |  |  | 143,583 |  |  | 971,576 |
State and municipal securities | 1,478,310 |  |  | 12,553 |  |  | 78,557 |  |  | 1,412,306 |
Asset-backed securities | 134,386 |  |  | — |  |  | 16,983 |  |  | 117,403 |
Corporate notes and other | 515,221 |  |  | 41 |  |  | 48,018 |  |  | 467,244 |
| $ | 3,871,491 |  |  | $ | 12,805 |  |  | $ | 325,426 |  |  | $ | 3,558,870 |
Securities held-to-maturity: |  |  |  |  |  |  |
U.S Treasury securities | $ | 92,738 |  |  | $ | — |  |  | $ | 6,472 |  |  | $ | 86,266 |
U.S. Government agency securities | 374,255 |  |  | — |  |  | 27,860 |  |  | 346,395 |
Mortgage-backed securities | 413,119 |  |  | 52 |  |  | 41,593 |  |  | 371,578 |
State and municipal securities | 1,927,778 |  |  | 2,216 |  |  | 233,564 |  |  | 1,696,430 |
Asset-backed securities | 184,241 |  |  | — |  |  | 18,573 |  |  | 165,668 |
Corporate notes and other | 88,527 |  |  | — |  |  | 9,918 |  |  | 78,609 |
| $ | 3,080,658 |  |  | $ | 2,268 |  |  | $ | 337,980 |  |  | $ | 2,744,946 |
Allowance for credit losses - securities held-to-maturity | (1,608) |  |  |  |  |  |  |
Securities held-to-maturity, net of allowance for credit losses | $ | 3,079,050 |  |  |  |  |  |  |
December 31, 2021 |  |  |  |  |  |  |
Securities available-for-sale: |  |  |  |  |  |  |
U.S Treasury securities | $ | 194,490 |  |  | $ | — |  |  | $ | 881 |  |  | $ | 193,609 |
U.S. Government agency securities | 634,611 |  |  | 2,359 |  |  | 4,961 |  |  | 632,009 |
Mortgage-backed securities | 1,908,675 |  |  | 29,874 |  |  | 18,310 |  |  | 1,920,239 |
State and municipal securities | 1,774,119 |  |  | 52,961 |  |  | 3,243 |  |  | 1,823,837 |
Asset-backed securities | 232,294 |  |  | 60 |  |  | 2,785 |  |  | 229,569 |
Corporate notes and other | 114,355 |  |  | 3,082 |  |  | 2,506 |  |  | 114,931 |
| $ | 4,858,544 |  |  | $ | 88,336 |  |  | $ | 32,686 |  |  | $ | 4,914,194 |
Securities held-to-maturity: |  |  |  |  |  |  |
U.S. Government agency securities | 11,920 |  |  | — |  |  | 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 years ended December 31, 2022, 2020 and 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 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, 2022, approximately $724.0 million 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, 2022, repurchase agreements comprised of secured borrowings totaled $194.9 million and were secured by $194.9 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 for the counterparty to remain adequately secured. The amortized cost and fair value of debt securities as of December 31, 2022 by contractual maturity is 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 | $ | 12,329 |  |  | $ | 12,234 |  |  | $ | 1,994 |  |  | $ | 1,981 |
Due in one year to five years | 186,874 |  |  | 193,512 |  |  | 427,894 |  |  | 396,683 |
Due in five years to ten years | 725,776 |  |  | 654,799 |  |  | 133,681 |  |  | 120,245 |
Due after ten years | 1,697,178 |  |  | 1,609,346 |  |  | 1,919,729 |  |  | 1,688,791 |
Mortgage-backed securities | 1,114,948 |  |  | 971,576 |  |  | 413,119 |  |  | 371,578 |
Asset-backed securities | 134,386 |  |  | 117,403 |  |  | 184,241 |  |  | 165,668 |
| $ | 3,871,491 |  |  | $ | 3,558,870 |  |  | $ | 3,080,658 |  |  | $ | 2,744,946 |
At December 31, 2022 and 2021, included in securities available-for-sale 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, 2022 |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities | $ | 192,188 |  |  | $ | 1,963 |  |  | $ | 1,997 |  |  | $ | 4 |  |  | $ | 194,185 |  |  | $ | 1,967 |
U.S. Government agency securities | 46,062 |  |  | 2,224 |  |  | 350,094 |  |  | 34,094 |  |  | 396,156 |  |  | 36,318 |
Mortgage-backed securities | 390,014 |  |  | 34,106 |  |  | 570,601 |  |  | 109,477 |  |  | 960,615 |  |  | 143,583 |
State and municipal securities | 568,691 |  |  | 18,863 |  |  | 304,451 |  |  | 59,694 |  |  | 873,142 |  |  | 78,557 |
Asset-backed securities | 513 |  |  | 5 |  |  | 116,442 |  |  | 16,978 |  |  | 116,955 |  |  | 16,983 |
Corporate notes and other | 259,453 |  |  | 20,260 |  |  | 207,326 |  |  | 27,758 |  |  | 466,779 |  |  | 48,018 |
Total temporarily-impaired securities | $ | 1,456,921 |  |  | $ | 77,421 |  |  | $ | 1,550,911 |  |  | $ | 248,005 |  |  | $ | 3,007,832 |  |  | $ | 325,426 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities | $ | 178,610 |  |  | $ | 881 |  |  | $ | — |  |  | $ | — |  |  | $ | 178,610 |  |  | $ | 881 |
U.S. Government agency securities | 365,833 |  |  | 3,024 |  |  | 54,266 |  |  | 1,974 |  |  | 420,099 |  |  | 4,998 |
Mortgage-backed securities | 825,664 |  |  | 11,859 |  |  | 178,956 |  |  | 6,647 |  |  | 1,004,620 |  |  | 18,506 |
State and municipal securities | 363,102 |  |  | 2,665 |  |  | 57,270 |  |  | 1,045 |  |  | 420,372 |  |  | 3,710 |
Asset-backed securities | 198,349 |  |  | 2,595 |  |  | 6,513 |  |  | 190 |  |  | 204,862 |  |  | 2,785 |
Corporate notes and other | 14,991 |  |  | 554 |  |  | 20,270 |  |  | 1,952 |  |  | 35,261 |  |  | 2,506 |
Total temporarily-impaired securities | $ | 1,946,549 |  |  | $ | 21,578 |  |  | $ | 317,275 |  |  | $ | 11,808 |  |  | $ | 2,263,824 |  |  | $ | 33,386 |
The applicable date for determining when securities are in an unrealized loss position is December 31, 2022 and 2021. 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, 2022 and 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 December 31, 2022 and 2021, Pinnacle Financial had unrealized losses of $325.4 million and $33.4 million on $3.0 billion and $2.3 billion, respectively, of securities. The unrealized losses associated with $1.1 billion, $873.6 million and $179.8 million of securities transferred from the available-for-sale portfolio to the held-to-maturity portfolio during the years ended December 31, 2022, 2020 and 2018, respectively, represent unrealized losses since the date of purchase, independent of the impact associated with changes in the cost basis upon transfer between portfolios. As described in Note 1. Summary of Significant Accounting Policies, 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, as of December 31, 2022, did not intend to sell those securities that had an unrealized loss at December 31, 2022, and at December 31, 2022 it was 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 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 securities at December 31, 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 December 31, 2022. These securities will continue to be monitored as a part of Pinnacle Financial's ongoing evaluation of credit quality. The allowance for credit losses on held-to-maturity securities is measured on a collective basis by major security type as described in Note 1. Summary of Significant Accounting Policies. Pinnacle Financial has a zero loss expectation for 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 municipal securities are estimated using 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. The allowance for credit losses on held-to-maturity securities totaled $1.6 million and $161,000, at December 31, 2022 and 2021, respectively. Pinnacle Financial utilizes bond credit ratings assigned by third party ratings agencies to monitor the credit quality of debt securities held-to-maturity. At December 31, 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. 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 years ended December 31, 2022, 2021 and 2020, available-for-sale securities of approximately $29.5 million, $37.5 million and $145.6 million, respectively, were sold, resulting in gross realized gains of $292,000, $769,000 and $2.2 million, and gross realized losses of $136,000, $10,000 and $1.2 million, respectively. 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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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI https://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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