The amortized cost and fair value of securities available-for-sale and held-to-maturity at June 30, 2023 and December 31, 2022 are summarized as follows (in thousands):


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2023:
Securities available-for-sale:
U.S. Treasury securities	$	209,688	$	1	$	1,076	$	208,613
U.S. Government agency securities	307,438		—		25,384		282,054
Mortgage-backed securities	1,087,782		191		138,599		949,374
State and municipal securities	1,580,228		25,238		58,826		1,546,640
Asset-backed securities	177,629		—		15,768		161,861
Corporate notes and other	491,244		33		48,539		442,738
	$	3,854,009	$	25,463	$	288,192	$	3,591,280
Securities held-to-maturity:
U.S. Treasury securities	$	90,526	$	—	$	5,964	$	84,562
U.S. Government agency securities	364,513		—		26,900		337,613
Mortgage-backed securities	390,269		562		39,390		351,441
State and municipal securities	1,902,318		3,712		191,339		1,714,691
Asset-backed securities	198,805		—		18,553		180,252
Corporate notes and other	87,454		—		9,958		77,496
	$	3,033,885	$	4,274	$	292,104	$	2,746,055
Allowance for credit losses - securities held-to-maturity	(1,708)
Securities held-to-maturity, net of allowance for credit losses	$	3,032,177


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	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

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, 2023, approximately $1.9 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 June 30, 2023, repurchase agreements comprised of secured borrowings totaled $163.8 million and were secured by $163.8 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 the customers with whom it has entered into the repurchase agreements for the customers to remain adequately secured.

The amortized cost and fair value of debt securities as of June 30, 2023 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-sale				Held-to-maturity
June 30, 2023:	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	11,051	$	12,204	$	—	$	—
Due in one year to five years	122,244		131,874		417,617		387,461
Due in five years to ten years	674,899		609,675		133,168		120,335
Due after ten years	1,780,404		1,726,292		1,894,026		1,706,566
Mortgage-backed securities	1,087,782		949,374		390,269		351,441
Asset-backed securities	177,629		161,861		198,805		180,252
	$	3,854,009	$	3,591,280	$	3,033,885	$	2,746,055

At June 30, 2023 and December 31, 2022, 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 Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
At June 30, 2023
U.S. Treasury securities	$	26,629	$	131	$	175,219	$	945	$	201,848	$	1,076
U.S. Government agency securities	26,524		225		255,530		25,159		282,054		25,384
Mortgage-backed securities	73,079		2,031		849,254		136,568		922,333		138,599
State and municipal securities	422,950		5,014		301,326		53,812		724,276		58,826
Asset-backed securities	44,924		1,013		116,573		14,755		161,497		15,768
Corporate notes	58,103		1,444		375,083		47,095		433,186		48,539
Total temporarily-impaired securities	$	652,209	$	9,858	$	2,072,985	$	278,334	$	2,725,194	$	288,192

At 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	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

The applicable dates for determining when available-for-sale securities were in an unrealized loss position were June 30, 2023 and December 31, 2022. 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, 2023 and December 31, 2022, 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, 2023, Pinnacle Financial had approximately $288.2 million in unrealized losses on approximately $2.7 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, 2023, 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, 2023 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, 2023. 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, 2023 and December 31, 2022, the estimated allowance for credit losses on these held-to-maturity securities was $1.7 million and $1.6 million, respectively, with the change driven largely 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, 2023, 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, 2023, $173.5 million of available-for-sale securities were sold resulting in gross realized gains of $13,000 and gross realized losses of $10.0 million. 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.

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 9. 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.