Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) included on the consolidated statements of income for the years ended December 31, 2022, 2021, and 2020 are presented below:


(in thousands)	2022		2021		2020
Current
Federal	$	167,255	$	153,911	$	187,741
State	28,152		29,982		9,421
Total current income tax expense	195,407		183,893		197,162
Deferred
Federal	11,570		28,873		(90,777)
State	(702)		16,127		4,585
Total deferred income tax expense (benefit)	10,868		45,000		(86,192)
Total income tax expense	$	206,275	$	228,893	$	110,970

Schedule of Effective Income Tax Rate Reconciliation

Income tax expense as shown on the consolidated statements of income differed from the federal statutory rate for the years ended December 31, 2022, 2021, and 2020. A reconciliation of the differences is presented below:


	Years Ended December 31,
(dollars in thousands)	2022			2021			2020
Income tax expense at statutory federal income tax rate	$	202,477		$	207,765		$	101,779
Increase (decrease) resulting from:
State income tax expense, net of federal income tax benefit	21,981			38,452			11,168
Income not subject to tax	(9,346)			(10,455)			(9,207)
Low income housing tax credits and other tax benefits, net of amortization	(6,336)			(4,858)			(2,611)
FDIC premiums	5,517			4,111			4,744
General business tax credits	(3,293)			(3,727)			(657)
Excess tax benefit from share-based compensation	(3,153)			(3,084)			311
Executive compensation	2,152			1,096			1,501
Goodwill impairment	—			—			9,424
Other, net	(3,724)			(407)			(5,482)
Total income tax expense	$	206,275		$	228,893		$	110,970
Effective tax rate	21.4		%	23.1		%	22.9		%

Schedule of Deferred Tax Assets and Liabilities

The components of the Company's deferred tax assets and liabilities at December 31, 2022 and 2021 are presented below:


(in thousands)	2022		2021
Deferred tax assets
Net unrealized losses on investment securities available for sale and cash flow hedges	$	455,744	$	19,261
Allowance for credit losses	121,941		112,180
Lease liability	107,818		102,412
Employee benefits and deferred compensation	42,746		36,701
Net operating loss carryforwards	23,590		23,897
Tax credit carryforwards	14,553		15,870
Unrealized losses on fair value hedges	11,101		—
Miscellaneous accrued expenses	5,125		3,870
Fair value of investment securities and loans	2,019		6,439
Non-performing loan interest	2,695		2,621
Deferred revenue	—		14,616
Other	6,585		6,182
Total gross deferred tax assets	793,917		344,049
Less valuation allowance	(19,114)		(19,003)
Total deferred tax assets	774,803		325,046
Deferred tax liabilities
Right-of-use asset	(102,945)		(98,773)
Excess tax over financial statement depreciation	(23,762)		(27,355)
Purchase accounting intangibles	(15,224)		(14,820)
Deferred loan fees	(15,901)		—
Unrealized gain on hedged liabilities	(11,101)		—
Prepaid expense	(4,947)		(4,631)
Other properties held for sale	(2,828)		(5,345)
Other	(2,778)		(5,071)
Total gross deferred tax liabilities	(179,486)		(155,995)
Net deferred tax assets	$	595,317	$	169,051

Schedule of Net Operating Loss and Tax Credit Carryforward

Federal and state NOLs and tax credit carryforwards as of December 31, 2022 are summarized in the following table on a tax effected basis.


Tax Carryforwards	As of December 31, 2022
(in thousands)	Expiration Dates	Deferred Tax Asset, Before Valuation Allowance		Valuation Allowance		Net Deferred Tax Asset Balance
Net operating losses - federal	2027-2033	$	18,969	$	(15,544)	$	3,425
Net operating losses - states(1)	2027-2042	4,621		(3,570)		1,051
Other credits - states	2023-2032	14,553		—		14,553

(1) Included in this balance are state NOLs that can be carried forward indefinitely and have no expiration date.

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized income tax benefits is as follows (unrecognized state income tax benefits are not adjusted for the federal income tax impact).


	Years Ended December 31,
(in thousands)	2022		2021		2020
Balance at January 1,	$	25,104	$	20,250	$	20,994
Additions based on income tax positions related to current year	649		3,754		461
Additions for income tax positions of prior years(1)	247		1,379		147

Reductions for income tax positions of prior years	(1,215)		(200)		(327)
Statute of limitation expirations	(2,002)		(79)		(820)
Settlements	(383)		—		(205)
Balance at December 31,	$	22,400	$	25,104	$	20,250

(1) Includes deferred tax benefits that could reduce future tax liabilities.