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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

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):

			2023						2022						2021
Current tax expense :
Federal			$	67,711					$	104,141					$	125,016
State			11,775						12,870						11,798
Total current tax expense			79,486						117,011						136,814
Deferred tax expense (benefit):
Federal			67,446						15,082						(12,149)
State			4,922						4,658						(83)
Total deferred tax (benefit) expense			72,368						19,740						(12,232)
Total income tax expense			$	151,854					$	136,751					$	124,582

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, 2023 is as follows (in thousands):

			2023						2022						2021
Income tax expense at statutory rate			$	149,941					$	146,474					$	136,900
State excise tax expense, net of federal tax effect			13,191						13,847						9,255
Non-deductible executive compensation			5,186						5,481						2,149
Tax-exempt securities			(21,663)						(18,730)						(15,243)
Federal tax credits			(5,238)						(5,019)						(4,712)
Bank owned life insurance income			(4,324)						(4,599)						(4,413)
Bank owned life insurance surrender			8,572						—						—
Non-deductible FDIC assessment			5,361						2,331						1,697
Insurance premiums			—						(36)						(273)
Excess tax benefits associated with equity compensation			(208)						(3,027)						(2,475)
Other items			1,036						29						1,697
Income tax expense			$	151,854					$	136,751					$	124,582

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, 2023 and 2022 are as follows (in thousands):

			2023						2022
Deferred tax assets:
Allowance for credit losses			$	86,911					$	77,015
Loans			4,659						10,576
Insurance			784						817
Accrued liability for supplemental retirement agreements			7,005						7,595
Restricted stock and stock options			6,251						7,795
Securities			49,331						67,286
Lease liability			76,918						35,589
Other real estate owned			750						1,526
Net federal operating loss carryforward and credits			1,064						1,168
Annual incentive compensation			11,842						21,322
Partnership interests			13,541						31,559
Allowance for off balance sheet credit exposures			4,367						6,527
Tax credit investments			—						8,282
FDIC special assessment			7,250						—
Other deferred tax assets			2,532						3,267
Total deferred tax assets			273,205						280,324

			2023						2022
Deferred tax liabilities:
Depreciation and amortization			23,140						17,723
Core deposit and other intangible assets			6,087						9,070
Cash flow hedge			836						6,854
REIT dividends			2,604						2,338
FHLB related liabilities			125						328
Equity method investment			42						76
Right-of-use assets and other leasing transactions			74,068						33,157
Leases			67,711						35,547
Subordinated debt			1,412						1,662
Tax credit investments			7,614						—
Other deferred tax liabilities			2,356						2,054
Total deferred tax liabilities			185,995						108,809
Net deferred tax assets			$	87,210					$	171,515

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, 2023 is as follows (in thousands):

			2023						2022						2021
Balance at January 1,			$	15,752					$	12,737					$	9,658
Increases due to tax positions taken during the current year			642						3,721						3,647
Increases due to tax positions taken during a prior year			—						—						—
Decreases due to the lapse of the statute of limitations during the current year			(1,340)						(706)						(568)
Decreases due to settlements with the taxing authorities during the current year			(6,248)						—						—
Balance at December 31,			$	8,806					$	15,752					$	12,737

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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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