Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Income tax expense (benefit) attributable to continuing operations

Income tax expense (benefit) attributable to continuing operations for each of the years ended December 31 is as follows (in thousands):

	2016		2015		2014
Current tax expense :
Federal	$	49,769	$	41,721	$	34,068
State		-		48		719
Total current tax expense		49,769		41,769		34,787
Deferred tax expense (benefit):
Federal		12,776		4,963		(1,260	)
State		1,614		857		1,655
Total deferred tax expense		14,390		5,820		395
Total income tax expense	$	64,159	$	47,589	$	35,182

Income tax rate reconciliation

Pinnacle Financial's income tax expense (benefit) differs from the amounts computed by applying the Federal income tax statutory rates of 35% to income (loss) before income taxes. A reconciliation of the differences for each of the years in the three-year period ended December 31, 2016 is as follows (in thousands):

	2016			2015			2014

Income tax expense at statutory rate	$	66,984		$	50,084		$	36,978
State excise tax expense, net of federal tax effect		1,049			588			1,827
Tax-exempt securities		(2,510	)		(2,543	)		(2,675	)
Federal tax credits		(282	)		-			-
Bank owned life insurance		(1,242	)		(892	)		(849	)
Insurance premiums		(159	)		(306	)		(401	)
Change in uncertain tax positions		-			-			392
Other items		319			658			(90	)
Income tax expense	$	64,159		$	47,589		$	35,182

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, 2016 and 2015 are as follows (in thousands):

	2016		2015
Deferred tax assets:
Loan loss allowance	$	22,308	$	24,959
Loans		15,534		11,568
Insurance		869		823
Accrued liability for supplemental retirement agreements		5,587		2,476
Restricted stock and stock options		8,643		4,824
Securities		4,275		-
Cash flow hedge		1,520		949
Other real estate owned		149		587
Other deferred tax assets		7,897		2,905
Total deferred tax assets		66,782		49,091

Deferred tax liabilities:
Depreciation and amortization		5,823		6,273
Core deposit intangible asset		5,621		3,786
Securities		-		2,337
REIT dividends		4,602		1,772
FHLB related liabilities		285		1,385
Mortgage servicing rights		-		2,468
Other deferred tax liabilities		679		473
Total deferred tax liabilities		17,010		18,494
Net deferred tax assets	$	49,772	$	30,597

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):

	2016		2015			2014
Balance at January 1,	$	134	$	391		$	-
Increases due to tax positions taken during the current year		1,140		(257	)		-
Increases due to tax positions taken during a prior year		-		-			391
Decreases due to the lapse of the statute of limitations during the current year		-		-			-
Decreases due to settlements with the taxing authorities during the current year		-		-			-
Balance at December 31,	$	1,274	$	134		$	391