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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Note 10. Income Taxes Income tax expense attributable to continuing operations for each of the years ended December 31 is as follows (in thousands):
| 2019 |  | 2018 |  | 2017
Current tax expense : |  |  |  |  |
Federal | $ | 77,422 |  |  | $ | 73,921 |  |  | $ | 63,496 |
State | 4,538 |  |  | 4,822 |  |  | 860 |
Total current tax expense | 81,960 |  |  | 78,743 |  |  | 64,356 |
Deferred tax expense: |  |  |  |  |
Federal | 12,446 |  |  | 10,162 |  |  | 26,339 |
State | 2,250 |  |  | 1,603 |  |  | 1,826 |
Deferred tax revaluation expense | — |  |  | — |  |  | 31,486 |
Total deferred tax expense | 14,696 |  |  | 11,765 |  |  | 59,651 |
Total income tax expense | $ | 96,656 |  |  | $ | 90,508 |  |  | $ | 124,007 |
Pinnacle Financial's income tax expense differs from the amounts computed by applying the Federal income tax statutory rates of 21% to income before income taxes for 2019 and 2018 and 35% for 2017. A reconciliation of the differences for each of the years in the three-year period ended December 31, 2019 is as follows (in thousands):
| 2019 |  | 2018 |  | 2017
Income tax expense at statutory rate | $ | 104,483 |  |  | $ | 94,489 |  |  | $ | 104,295 |
State excise tax expense, net of federal tax effect | 5,363 |  |  | 5,076 |  |  | 1,746 |
Tax-exempt securities | (11,078) |  |  | (7,222) |  |  | (5,666) |
Federal tax credits | (1,704) |  |  | (845) |  |  | (434) |
Bank owned life insurance | (3,646) |  |  | (2,764) |  |  | (2,778) |
Insurance premiums | (238) |  |  | (112) |  |  | (283) |
Revaluation of deferred tax assets and liabilities due to Tax Cuts and Jobs Act | — |  |  | — |  |  | 31,486 |
Excess tax benefits associated with equity compensation | (1,011) |  |  | (2,966) |  |  | (5,366) |
Other items | 4,487 |  |  | 4,852 |  |  | 1,007 |
Income tax expense | $ | 96,656 |  |  | $ | 90,508 |  |  | $ | 124,007 |
Pinnacle Financial's effective tax rate for 2019 and 2018 differs from the Federal income tax rates primarily due to a state excise tax expense, investments in bank qualified municipal securities, tax benefits of Pinnacle Bank's real estate investment trust subsidiary, and tax benefits associated with share-based compensation, bank owned life insurance, and our captive insurance subsidiary, offset in part by the limitation on deductibility of meals and entertainment expense, and for 2019 and 2018, non-deductible executive compensation and FDIC premiums. Pinnacle Financial recognized a charge of $31.5 million in 2017 resulting from the revaluation of its deferred tax assets in accordance with the Tax Cuts and Jobs Act which reduced the corporate Federal tax rate from 35% to 21% effective January 1, 2018. The components of deferred income taxes included in other assets in the accompanying consolidated balance sheets at December 31, 2019 and 2018 are as follows (in thousands):
| 2019 |  | 2018
Deferred tax assets: |  |  |
Loan loss allowance | $ | 23,051 |  |  | $ | 20,449 |
Loans | 20,808 |  |  | 29,453 |
Insurance | 673 |  |  | 1,955 |
Accrued liability for supplemental retirement agreements | 7,308 |  |  | 6,231 |
Restricted stock and stock options | 10,515 |  |  | 9,026 |
Securities | — |  |  | 15,974 |
Cash flow hedge | 1,373 |  |  | 459 |
Equity method investment | 425 |  |  | 602 |
Lease liability | 22,782 |  |  | 2,099 |
Other real estate owned | 691 |  |  | 1,158 |
Net federal operating loss carryforward and credits | 5,954 |  |  | 13,754 |
Annual incentive compensation | 12,626 |  |  | 9,996 |
Other deferred tax assets | 1,810 |  |  | 3,343 |
Total deferred tax assets | 108,016 |  |  | 114,499 |
Deferred tax liabilities: |  |  |
Depreciation and amortization | 12,455 |  |  | 11,769 |
Core deposit and other intangible assets | 13,253 |  |  | 11,475 |
Securities | 6,978 |  |  | — |
REIT dividends | 1,650 |  |  | 1,589 |
FHLB related liabilities | 925 |  |  | 925 |
Right-of-use assets and other leasing transactions | 21,169 |  |  | 639 |
Subordinated debt | 2,050 |  |  | 1,134 |
Partnership interests | 3,534 |  |  | 459 |
Other deferred tax liabilities | 1,875 |  |  | 1,758 |
Total deferred tax liabilities | 63,889 |  |  | 29,748 |
Net deferred tax assets | $ | 44,127 |  |  | $ | 84,751 |
At December 31, 2019, the Company had federal and state loss and tax credit carryforwards resulting from acquisitions of approximately $14.7 million that expire at various dates from 2028 to 2034. ASC 740, Income Taxes, defines the threshold for recognizing the benefits of tax return positions in the financial statements as "more-likely-than-not" to be sustained by the taxing authority. This section also provides guidance on the derecognition, measurement and classification of income tax uncertainties, along with any related interest and penalties, and includes guidance concerning accounting for income tax uncertainties in interim periods. A reconciliation of the beginning and ending unrecognized tax benefit related to state uncertain tax positions is as follows (in thousands):
| 2019 |  | 2018 |  | 2017
Balance at January 1, | $ | 5,083 |  |  | $ | 2,838 |  |  | $ | 1,274 |
Increases due to tax positions taken during the current year | 1,827 |  |  | 2,245 |  |  | 1,564 |
Increases due to tax positions taken during a prior year | — |  |  | — |  |  | — |
Decreases due to the lapse of the statute of limitations during the current year | — |  |  | — |  |  | — |
Decreases due to settlements with the taxing authorities during the current year | — |  |  | — |  |  | — |
Balance at December 31, | $ | 6,910 |  |  | $ | 5,083 |  |  | $ | 2,838 |
Pinnacle Financial's policy is to recognize interest and/or penalties related to income tax matters in income tax expense. No interest and penalties were recorded for the year ended December 31, 2019.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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