Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of components of income tax expense

The following presents the components of income tax expense for the years ended December 31:


	2020		2019		2018
	(Dollars in thousands)
Current income tax provision:
Federal	$	32,129	$	34,124	$	19,787
State	22,743		16,415		13,178
Total current income tax provision	54,872		50,539		32,965
Deferred income tax (benefit) provision:
Federal	(26,554)		4,645		8,142
Effect of the Tax Act	—		—		(1,441)
State	(16,068)		2,851		2,574
Total deferred income tax (benefit) provision	(42,622)		7,496		9,275
Total income tax provision	$	12,250	$	58,035	$	42,240

Schedule of reconciliation from statutory federal income taxes to the Company's effective income taxes

A reconciliation from statutory federal income taxes, which are based on a statutory rate of 21% for 2020, 2019, and 2018, to the Company’s total effective income tax provisions for the years ended December 31 is as follows:


	2020		2019		2018
	(Dollars in thousands)
Statutory federal income tax provision	$	15,246	$	45,729	$	34,803
State taxes, net of federal income tax effect	4,757		15,764		12,724
Cash surrender life insurance	(1,163)		(565)		(582)
Tax exempt interest	(4,073)		(1,503)		(1,135)
Non-deductible merger costs	703		—		375
LIHTC investments	(2,259)		(1,570)		(761)
Effect of the Tax Act	—		—		(1,441)
Stock-based compensation shortfall (windfall) tax impact	407		(728)		(1,811)
Effect of the CARES Act	(2,636)		—		—
Section 162(m) of the Internal Revenue Code	968		530		145
Other	300		378		(77)
Total income tax provision	$	12,250	$	58,035	$	42,240

Schedule of deferred tax assets (liabilities) comprised of the temporary differences between the financial statement carrying amounts and the tax basis of assets

Deferred tax assets (liabilities) were comprised of the following temporary differences between the financial statement carrying amounts and the tax basis of assets at December 31:


	2020		2019
	(Dollars in thousands)
Deferred tax assets:
Accrued expenses	$	1,307	$	2,126
Net operating loss	6,614		4,765
Allowance for credit losses, net of bad debt charge-offs	85,700		10,415
Deferred compensation	3,489		3,616
State taxes	4,395		3,746

Loan discount	32,484		11,634
Stock-based compensation	4,618		3,535

Operating lease liabilities	24,463		13,334
Federal and state credit carryovers	3,750		416
Other	1,782		—
Total deferred tax assets	168,602		53,587
Deferred tax liabilities:
Operating lease right-of-use assets	$	(21,756)	$	(12,382)
Deferred FDIC gain	(108)		(228)
Core deposit intangibles	(21,828)		(22,415)
Loan origination costs	(5,176)		(4,828)
Depreciation	(6,551)		(1,814)
Unrealized gain on available for sale securities	(24,127)		(8,639)
Other	—		(4,652)
Total deferred tax liabilities	(79,546)		(54,958)
Valuation allowance	—		—
Net deferred tax asset (liabilities)	$	89,056	$	(1,371)

Reconciliation of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2020 and 2019 is as follows:


	2020		2019
	(Dollars in thousands)
Balance at January 1,	$	2,906	$	2,906
Increases based on tax positions related to prior years	233		—
Decreases related to lapse of statute of limitation	(2,884)		—
Balance at December 31,	$	255	$	2,906