Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Components of Income Tax Expense

(Dollar amounts in thousands)


	Years Ended December 31,
	2019		2018		2017
Current income tax expense (benefit):
Federal	$	50,141	$	13,497	$	93,540
State	5,116		(619)		104
Total	55,257		12,878		93,644
Deferred income tax expense (benefit):
Federal	(1,879)		14,489		(12,219)
State	12,823		11,820		8,142
Total	10,944		26,309		(4,077)
Total income tax expense	$	66,201	$	39,187	$	89,567

Components of Effective Tax Rate

(Dollar amounts in thousands)


	Years Ended December 31,
	2019						2018						2017
	Amount		% of Pretax Income		Amount		% of Pretax Income		Amount		% of Pretax Income
Statutory federal income tax	$	55,847	21.0		$	41,382	21.0		$	65,784	35.0
Increase (decrease) in income taxes resulting from:
State income tax, net of federal income tax effect	14,172		5.3		8,846		4.5		5,069		2.7
Tax-exempt income, net of interest expense disallowance	(3,234)		(1.2)		(3,104)		(1.6)		(5,065)		(2.7)
Deferred tax asset revaluation	—		—		(8,721)		(4.4)		23,709		12.6
Other	(584)		(0.2)		784		0.4		70		0.1
Total	$	66,201	24.9	%	$	39,187	19.9	%	$	89,567	47.7	%

Deferred Tax Assets and Liabilities

(Dollar amounts in thousands)


	As of December 31,
	2019		2018
Deferred tax assets:
Lease liability	33,871		$	—
Allowance for credit losses	21,010		19,591
Federal net operating loss ("NOL") carryforwards	19,505		8,871
Non-equity based compensation	7,115		2,210
Equity based compensation	5,043		3,971

OREO	1,996		1,460
Alternative minimum tax ("AMT") and other credit carryforwards	368		244
Deferred gain on sale-leaseback transaction	—		13,752
State NOL carryforwards	—		6,240
Deferred incentives	—		1,382
Property valuation adjustments	—		1,214


Other	6,988		5,232
Total deferred tax assets	95,896		64,167
Deferred tax liabilities:
Right-of-use asset	(29,611)		—
Accrued retirement benefits	(8,453)		(8,502)
Fixed assets	(5,648)		(7,322)
Deferred loan fees and costs	(5,445)		(4,985)



Acquisition adjustments	(1,261)		(686)
Other	(2,821)		(2,823)
Total deferred tax liabilities	(53,239)		(24,318)
Deferred tax valuation allowance	—		—
Net deferred tax assets	42,657		39,849
Tax effect of adjustments related to other comprehensive income (loss)	725		20,280
Net deferred tax assets including adjustments	$	43,382	$	60,129
NOL carryforwards available to offset future taxable income:
Federal gross NOL carryforwards, begin to expire in 2030	$	92,880	$	42,242
Illinois gross NOL carryforwards	—		209,802
Indiana gross NOL carryforwards	—		14,260
Wisconsin gross NOL carryforwards	—		1,212
AMT credits	204		—

Rollforward of Unrecognized Tax Benefits

(Dollar amounts in thousands)


	Years Ended December 31,
	2019		2018		2017
Beginning balance	$	16,350	$	16,248	$	2,039
Additions for tax positions relating to the current year	1,158		1,209		845
Additions for tax positions relating to prior years	—		582		13,389
Reductions for tax positions relating to prior years	(224)		(60)		(25)
Reductions for settlements with taxing authorities	(900)		(1,629)		—
Ending balance	$	16,384	$	16,350	$	16,248
Interest and penalties not included above⁽¹⁾:
Interest expense (income), net of tax effect, and penalties	$	38	$	(21)	$	118
Accrued interest and penalties, net of tax effect, at end of year	208		170		191

⁽¹⁾Included in income tax expense in the Consolidated Statements of Income.