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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2021
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):
| 2021 |  | 2020 |  | 2019
Current tax expense : |  |  |  |  |
Federal | $ | 125,016 |  |  | $ | 98,082 |  |  | $ | 77,422 |
State | 11,798 |  |  | 19,270 |  |  | 4,538 |
Total current tax expense | 136,814 |  |  | 117,352 |  |  | 81,960 |
Deferred tax expense: |  |  |  |  |
Federal | (12,149) |  |  | (45,450) |  |  | 12,446 |
State | (83) |  |  | (12,865) |  |  | 2,250 |
Total deferred tax (benefit) expense | (12,232) |  |  | (58,315) |  |  | 14,696 |
Total income tax expense | $ | 124,582 |  |  | $ | 59,037 |  |  | $ | 96,656 |
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, 2021 is as follows (in thousands):
| 2021 |  | 2020 |  | 2019
Income tax expense at statutory rate | $ | 136,900 |  |  | $ | 77,985 |  |  | $ | 104,483 |
State excise tax expense, net of federal tax effect | 9,255 |  |  | 5,059 |  |  | 5,363 |
Tax-exempt securities | (15,243) |  |  | (13,706) |  |  | (11,078) |
Federal tax credits | (4,712) |  |  | (3,717) |  |  | (1,704) |
Bank owned life insurance | (4,413) |  |  | (4,759) |  |  | (3,646) |
Insurance premiums | (273) |  |  | (272) |  |  | (238) |
Excess tax benefits associated with equity compensation | (2,475) |  |  | (417) |  |  | (1,011) |
Other items | 5,543 |  |  | (1,136) |  |  | 4,487 |
Income tax expense | $ | 124,582 |  |  | $ | 59,037 |  |  | $ | 96,656 |
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, 2021 and 2020 are as follows (in thousands):
| 2021 |  | 2020
Deferred tax assets: |  |  |
Allowance for credit losses | $ | 66,785 |  |  | $ | 72,316 |
Loans | 14,778 |  |  | 14,694 |
Insurance | 759 |  |  | 690 |
Accrued liability for supplemental retirement agreements | 7,612 |  |  | 7,457 |
Restricted stock and stock options | 9,148 |  |  | 9,181 |
Equity method investment | — |  |  | 171 |
Lease liability | 26,476 |  |  | 23,894 |
Other real estate owned | 1,540 |  |  | 2,287 |
Net federal operating loss carryforward and credits | 1,271 |  |  | 1,796 |
Annual incentive compensation | 23,095 |  |  | 8,712 |
Partnership interests | 27,653 |  |  | 25,225 |
Allowance for off balance sheet credit exposures | 5,873 |  |  | 6,069 |
Other deferred tax assets | 1,941 |  |  | 2,559 |
Total deferred tax assets | 186,931 |  |  | 175,051 |
Deferred tax liabilities: |  |  |
Depreciation and amortization | 14,520 |  |  | 14,418 |
Core deposit and other intangible assets | 8,787 |  |  | 11,077 |
Securities | 21,680 |  |  | 34,373 |
Cash flow hedge | 9,890 |  |  | 19,627 |
REIT dividends | 1,222 |  |  | 1,366 |
FHLB related liabilities | 1,600 |  |  | 1,798 |
Equity method investment | 23 |  |  | — |
Right-of-use assets and other leasing transactions | 24,315 |  |  | 22,232 |
Subordinated debt | 1,791 |  |  | 1,920 |
Other deferred tax liabilities | 1,831 |  |  | 1,630 |
Total deferred tax liabilities | 85,659 |  |  | 108,441 |
Net deferred tax assets | $ | 101,272 |  |  | $ | 66,610 |
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):
| 2021 |  | 2020 |  | 2019
Balance at January 1, | $ | 9,658 |  |  | $ | 6,910 |  |  | $ | 5,083 |
Increases due to tax positions taken during the current year | 3,647 |  |  | 2,748 |  |  | 1,827 |
Increases due to tax positions taken during a prior year | — |  |  | — |  |  | — |
Decreases due to the lapse of the statute of limitations during the current year | (568) |  |  | — |  |  | — |
Decreases due to settlements with the taxing authorities during the current year | — |  |  | — |  |  | — |
Balance at December 31, | $ | 12,737 |  |  | $ | 9,658 |  |  | $ | 6,910 |

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