XML 29 R16.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2021
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):
| 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 |
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 |
Pinnacle Financial's effective tax rate differs from the Federal income tax rates primarily due to state excise tax expense, investments in bank-qualified tax-exempt municipal securities, tax benefits from Pinnacle Bank's real estate investment trust and municipal investment subsidiaries, and tax benefits associated with share-based compensation, bank owned life insurance, and Pinnacle Financial's captive insurance subsidiary, offset in part by the limitation on deductibility of meals and entertainment expense, non-deductible FDIC insurance premiums and non-deductible executive compensation. 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 |
At December 31, 2021, the Company had federal and state loss carryforwards resulting from acquisitions of approximately $5.7 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):
| 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 |
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, 2021. Pinnacle Financial recognized $571,000 in interest and penalties for the year ended December 31, 2020. No interest and penalties were recorded for the year ended December 31, 2019.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration