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Income Taxes (Tables)

12 Months Ended

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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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of the change in unrecognized tax benefits.

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