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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income tax expense (benefit) attributable to continuing operations | Income tax expense attributable to continuing operations for each of the years ended December 31 is as follows (in thousands):
| 2020 |  | 2019 |  | 2018
Current tax expense : |  |  |  |  |
Federal | $ | 98,082 |  |  | $ | 77,422 |  |  | $ | 73,921 |
State | 19,270 |  |  | 4,538 |  |  | 4,822 |
Total current tax expense | 117,352 |  |  | 81,960 |  |  | 78,743 |
Deferred tax expense: |  |  |  |  |
Federal | (45,450) |  |  | 12,446 |  |  | 10,162 |
State | (12,865) |  |  | 2,250 |  |  | 1,603 |
Total deferred tax (benefit) expense | (58,315) |  |  | 14,696 |  |  | 11,765 |
Total income tax expense | $ | 59,037 |  |  | $ | 96,656 |  |  | $ | 90,508 |
Income tax rate reconciliation | Pinnacle Financial's income tax expense differs from the amounts computed by applying the Federal income tax statutory rate of 21% to income before income taxes. A reconciliation of the differences for each of the years in the three-year period ended December 31, 2020 is as follows (in thousands):
| 2020 |  | 2019 |  | 2018
Income tax expense at statutory rate | $ | 77,985 |  |  | $ | 104,483 |  |  | $ | 94,489 |
State excise tax expense, net of federal tax effect | 5,059 |  |  | 5,363 |  |  | 5,076 |
Tax-exempt securities | (13,706) |  |  | (11,078) |  |  | (7,222) |
Federal tax credits | (3,717) |  |  | (1,704) |  |  | (845) |
Bank owned life insurance | (4,759) |  |  | (3,646) |  |  | (2,764) |
Insurance premiums | (272) |  |  | (238) |  |  | (112) |
Excess tax benefits associated with equity compensation | (417) |  |  | (1,011) |  |  | (2,966) |
Other items | (1,136) |  |  | 4,487 |  |  | 4,852 |
Income tax expense | $ | 59,037 |  |  | $ | 96,656 |  |  | $ | 90,508 |
Components of deferred income taxes included in other assets | The components of deferred income taxes included in other assets in the accompanying consolidated balance sheets at December 31, 2020 and 2019 are as follows (in thousands):
| 2020 |  | 2019
Deferred tax assets: |  |  |
Allowance for credit losses | $ | 72,316 |  |  | $ | 23,051 |
Loans | 14,694 |  |  | 20,808 |
Insurance | 690 |  |  | 673 |
Accrued liability for supplemental retirement agreements | 7,457 |  |  | 7,308 |
Restricted stock and stock options | 9,181 |  |  | 10,515 |
Cash flow hedge | — |  |  | 1,373 |
Equity method investment | 171 |  |  | 425 |
Lease liability | 23,894 |  |  | 22,782 |
Other real estate owned | 2,287 |  |  | 691 |
Net federal operating loss carryforward and credits | 1,796 |  |  | 5,954 |
Annual incentive compensation | 8,712 |  |  | 12,626 |
Partnership interests | 25,225 |  |  | — |
Allowance for off balance sheet credit exposures | 6,069 |  |  | 618 |
Other deferred tax assets | 2,559 |  |  | 2,501 |
Total deferred tax assets | 175,051 |  |  | 109,325 |
Deferred tax liabilities: |  |  |
Depreciation and amortization | 14,418 |  |  | 12,455 |
Core deposit and other intangible assets | 11,077 |  |  | 13,253 |
Securities | 34,373 |  |  | 8,287 |
Cash flow hedge | 19,627 |  |  | — |
REIT dividends | 1,366 |  |  | 1,650 |
FHLB related liabilities | 1,798 |  |  | 925 |
Right-of-use assets and other leasing transactions | 22,232 |  |  | 21,169 |
Subordinated debt | 1,920 |  |  | 2,050 |
Partnership interests | — |  |  | 3,534 |
Other deferred tax liabilities | 1,630 |  |  | 1,875 |
Total deferred tax liabilities | 108,441 |  |  | 65,198 |
Net deferred tax assets | $ | 66,610 |  |  | $ | 44,127 |
Rollforward of uncertain tax positions | A reconciliation of the beginning and ending unrecognized tax benefit related to state uncertain tax positions is as follows (in thousands):
| 2020 |  | 2019 |  | 2018
Balance at January 1, | $ | 6,910 |  |  | $ | 5,083 |  |  | $ | 2,838 |
Increases due to tax positions taken during the current year | 2,748 |  |  | 1,827 |  |  | 2,245 |
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, | $ | 9,658 |  |  | $ | 6,910 |  |  | $ | 5,083 |

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