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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2022
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):
| 2022 |  | 2021 |  | 2020
Current tax expense : |  |  |  |  |
Federal | $ | 104,141 |  |  | $ | 125,016 |  |  | $ | 98,082 |
State | 12,870 |  |  | 11,798 |  |  | 19,270 |
Total current tax expense | 117,011 |  |  | 136,814 |  |  | 117,352 |
Deferred tax expense (benefit): |  |  |  |  |
Federal | 15,082 |  |  | (12,149) |  |  | (45,450) |
State | 4,658 |  |  | (83) |  |  | (12,865) |
Total deferred tax (benefit) expense | 19,740 |  |  | (12,232) |  |  | (58,315) |
Total income tax expense | $ | 136,751 |  |  | $ | 124,582 |  |  | $ | 59,037 |
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, 2022 is as follows (in thousands):
| 2022 |  | 2021 |  | 2020
Income tax expense at statutory rate | $ | 146,474 |  |  | $ | 136,900 |  |  | $ | 77,985 |
State excise tax expense, net of federal tax effect | 13,847 |  |  | 9,255 |  |  | 5,059 |
Non-deductible executive compensation | 5,481 |  |  | 2,149 |  |  | 1,297 |
Tax-exempt securities | (18,730) |  |  | (15,243) |  |  | (13,706) |
Federal tax credits | (5,019) |  |  | (4,712) |  |  | (3,717) |
Bank owned life insurance | (4,599) |  |  | (4,413) |  |  | (4,759) |
Insurance premiums | (36) |  |  | (273) |  |  | (272) |
Excess tax benefits associated with equity compensation | (3,027) |  |  | (2,475) |  |  | (417) |
Other items | 2,360 |  |  | 3,394 |  |  | (2,433) |
Income tax expense | $ | 136,751 |  |  | $ | 124,582 |  |  | $ | 59,037 |
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, 2022 and 2021 are as follows (in thousands):
| 2022 |  | 2021
Deferred tax assets: |  |  |
Allowance for credit losses | $ | 77,015 |  |  | $ | 66,785 |
Loans | 10,576 |  |  | 14,778 |
Insurance | 817 |  |  | 759 |
Accrued liability for supplemental retirement agreements | 7,595 |  |  | 7,612 |
Restricted stock and stock options | 7,795 |  |  | 9,148 |
Securities | 67,286 |  |  | — |
Lease liability | 35,589 |  |  | 26,476 |
Other real estate owned | 1,526 |  |  | 1,540 |
Net federal operating loss carryforward and credits | 1,168 |  |  | 1,271 |
Annual incentive compensation | 21,322 |  |  | 23,095 |
Partnership interests | 31,559 |  |  | 27,653 |
Allowance for off balance sheet credit exposures | 6,527 |  |  | 5,873 |
Tax credit investments | 8,282 |  |  | — |
Other deferred tax assets | 3,267 |  |  | 1,941 |
Total deferred tax assets | 280,324 |  |  | 186,931 |
| 2022 |  | 2021
Deferred tax liabilities: |  |  |
Depreciation and amortization | 17,723 |  |  | 14,520 |
Core deposit and other intangible assets | 9,070 |  |  | 8,787 |
Securities | — |  |  | 21,680 |
Cash flow hedge | 6,854 |  |  | 9,890 |
REIT dividends | 2,338 |  |  | 1,222 |
FHLB related liabilities | 328 |  |  | 1,600 |
Equity method investment | 76 |  |  | 23 |
Right-of-use assets and other leasing transactions | 33,157 |  |  | 24,315 |
Leases | 35,547 |  |  | — |
Subordinated debt | 1,662 |  |  | 1,791 |
Other deferred tax liabilities | 2,054 |  |  | 1,831 |
Total deferred tax liabilities | 108,809 |  |  | 85,659 |
Net deferred tax assets | $ | 171,515 |  |  | $ | 101,272 |
Rollforward of uncertain tax positions | A reconciliation of the beginning and ending unrecognized tax benefit related to state uncertain tax positions for each of the years in the three-year period ended December 31, 2022 is as follows (in thousands):
| 2022 |  | 2021 |  | 2020
Balance at January 1, | $ | 12,737 |  |  | $ | 9,658 |  |  | $ | 6,910 |
Increases due to tax positions taken during the current year | 3,721 |  |  | 3,647 |  |  | 2,748 |
Increases due to tax positions taken during a prior year | — |  |  | — |  |  | — |
Decreases due to the lapse of the statute of limitations during the current year | (706) |  |  | (568) |  |  | — |
Decreases due to settlements with the taxing authorities during the current year | — |  |  | — |  |  | — |
Balance at December 31, | $ | 15,752 |  |  | $ | 12,737 |  |  | $ | 9,658 |

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