Securities

9 Months Ended

Sep. 30, 2025

Investments, Debt and Equity Securities [Abstract]

Note 3. Securities

The amortized cost and fair value of securities available-for-sale and held-to-maturity at September 30, 2025 and December 31, 2024 are summarized as follows (in thousands):


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2025:
Securities available-for-sale:
U.S. Treasury securities	$	1,606,437	$	46	$	12,925	$	1,593,558
U.S. Government agency securities	219,925		18		16,127		203,816
Mortgage-backed securities	2,684,056		12,604		78,470		2,618,190
State and municipal securities	1,774,299		3,994		87,755		1,690,538
Asset-backed securities	195		—		—		195
Corporate notes and other	314,816		1,976		11,283		305,509
	$	6,599,728	$	18,638	$	206,560	$	6,411,806


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2025:
Securities held-to-maturity:
U.S. Treasury securities	$	19,912	$	—	$	448	$	19,464
U.S. Government agency securities	255,676		—		6,440		249,236
Mortgage-backed securities	352,571		530		20,455		332,646
State and municipal securities	1,828,121		778		181,161		1,647,738
Asset-backed securities	120,815		22		2,862		117,975
Corporate notes and other	69,414		—		4,405		65,009
	$	2,646,509	$	1,330	$	215,771	$	2,432,068
Allowance for credit losses - securities held-to-maturity	(1,707)
Securities held-to-maturity, net of allowance for credit losses	$	2,644,802


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2024:
Securities available-for-sale:
U.S. Treasury securities	$	1,419,727	$	28	$	14,277	$	1,405,478
U.S. Government agency securities	238,636		2		24,572		214,066
Mortgage-backed securities	2,068,950		976		107,567		1,962,359
State and municipal securities	1,537,910		15,382		46,735		1,506,557
Asset-backed securities	45,280		85		27		45,338
Corporate notes and other	476,900		107		28,436		448,571
	$	5,787,403	$	16,580	221,614		$	5,582,369
Securities held-to-maturity:
U.S Treasury securities	$	19,841	$	—	$	954	$	18,887
U.S. Government agency securities	315,286		—		13,719		301,567
Mortgage-backed securities	366,029		6		34,573		331,462
State and municipal securities	1,854,942		1,956		178,744		1,678,154
Asset-backed securities	161,957		41		6,920		155,078
Corporate notes	82,551		—		7,447		75,104
	$	2,800,606	$	2,003	$	242,357	$	2,560,252
Allowance for credit losses - securities held-to-maturity	(1,707)
Securities held-to-maturity, net of allowance for credit losses	$	2,798,899

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, on these transferred securities 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 September 30, 2025, approximately $3.8 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, 2025, repurchase agreements comprised of secured borrowings totaled $325.6 million and were secured by $325.6 million of pledged U.S. government agency securities, mortgage-backed securities, municipal securities, asset-backed securities and corporate notes. 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 September 30, 2025 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
September 30, 2025:	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	254,717	$	254,763	$	19,912	$	19,464
Due in one year to five years	153,534		148,861		301,156		292,411
Due in five years to ten years	343,759		329,620		69,337		64,814
Due after ten years	3,163,467		3,060,177		1,782,718		1,604,758
Mortgage-backed securities	2,684,056		2,618,190		352,571		332,646
Asset-backed securities	195		195		120,815		117,975
	$	6,599,728	$	6,411,806	$	2,646,509	$	2,432,068

At September 30, 2025 and December 31, 2024, 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 September 30, 2025
U.S. Treasury securities	$	226,406	$	3,684	$	1,111,559	$	9,241	$	1,337,965	$	12,925
U.S. Government agency securities	1,251		4		198,385		16,123		199,636		16,127
Mortgage-backed securities	530,173		1,955		916,298		76,515		1,446,471		78,470
State and municipal securities	411,231		20,562		991,290		67,193		1,402,521		87,755
Asset-backed securities	195		—		—		—		195		—
Corporate notes	17,033		39		146,695		11,244		163,728		11,283
Total temporarily-impaired securities	$	1,186,289	$	26,244	$	3,364,227	$	180,316	$	4,550,516	$	206,560

At December 31, 2024
U.S. Treasury securities	$	1,123,453	$	12,223	$	177,930	$	2,054	$	1,301,383	$	14,277
U.S. Government agency securities	2,347		18		210,127		24,554		212,474		24,572
Mortgage-backed securities	990,956		9,211		607,659		98,356		1,598,615		107,567
State and municipal securities	446,241		5,590		348,807		41,145		795,048		46,735
Asset-backed securities	30,369		27		—		—		30,369		27
Corporate notes	131,073		1,215		274,601		27,221		405,674		28,436
Total temporarily-impaired securities	$	2,724,439	$	28,284	$	1,619,124	$	193,330	$	4,343,563	$	221,614

The applicable dates for determining when available-for-sale securities were in an unrealized loss position were September 30, 2025 and December 31, 2024. 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 September 30, 2025 and December 31, 2024, but is not included in the "Investments with an Unrealized Loss of less than 12 months" category above.

As shown in the tables above, at September 30, 2025, Pinnacle Financial had approximately $206.6 million in unrealized losses on approximately $4.6 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 September 30, 2025, 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 September 30, 2025 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 September 30, 2025. 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 twenty-four months with an eight month reversion to average loss factors. At both September 30, 2025 and December 31, 2024, the estimated allowance for credit losses on these held-to-maturity securities was $1.7 million.

Pinnacle Financial utilizes bond credit ratings assigned by third party ratings agencies to monitor the credit quality of debt securities held-to-maturity. At September 30, 2025, 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 three months ended September 30, 2025, no available for sale securities were sold. During the nine months ended September 30, 2025, $188.5 million of available-for-sale securities were sold resulting in gross realized gains of $42,000 and gross realized losses of $12.6 million. During the three months ended September 30, 2024, no available for sale securities were sold. During the nine months ended September 30, 2024, $822.7 million of available-for-sale securities were sold resulting in gross realized gains of $86,000 and gross realized losses of $72.2 million.

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.