Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Summary of Differences in Taxes from Continuing Operations Computed at Statutory Rate

Following is a summary of the major items comprising the differences in taxes from continuing operations computed at the federal statutory rate and as recorded in the consolidated statement of income:

	Years Ended December 31,
(dollars in thousands)	2019				2018				2017
Provision at statutory rate (1)	$	60,975			$	43,823			$	59,032
Tax-exempt income:
Tax-exempt interest		(10,243	)			(9,021	)			(15,026	)
Section 291/265 interest disallowance		435				321				289
Company-owned life insurance income		(2,423	)			(2,223	)			(3,029	)
Tax-exempt income		(12,231	)			(10,923	)			(17,766	)
State income taxes		6,720				5,621				998
Tax credit investments - federal		(4,411	)			(21,576	)			(8,500	)
Revaluation of deferred tax assets		—				—				39,300
Other, net		1,097				905				(125	)
Income tax expense	$	52,150			$	17,850			$	72,939
Effective tax rate		18.0		%		8.6		%		43.3		%

(1)

The statutory rate in effect was 21% for 2019 and 2018, compared to 35% for 2017.

Provision for Income Taxes

The provision for income taxes consisted of the following components for the years ended December 31:

	Years Ended December 31,
(dollars in thousands)	2019		2018			2017
Income taxes currently payable:
Federal	$	22,908	$	12,256		$	—
State		4,490		4,601			—
Deferred income taxes related to:
Federal		20,402		(1,513	)		31,915
Revaluation of deferred tax assets		—		—			39,300
State		4,350		2,506			1,724
Deferred income tax expense		24,752		993			72,939
Income tax expense	$	52,150	$	17,850		$	72,939

Schedule of Significant Components of Net Deferred Tax Assets (Liabilities)

Significant components of net deferred tax assets (liabilities) were as follows at December 31:

(dollars in thousands)	2019			2018
Deferred Tax Assets
Allowance for loan losses, net of recapture	$	14,179		$	14,514
Benefit plan accruals		19,673			21,754
Alternative minimum tax credit		1,272			2,545
Net operating loss carryforwards		25,336			31,765
Federal tax credits		—			1,779
Deferred gain on securities		3,754			1,976
Acquired loans		16,784			26,956
Operating lease liabilities		26,503			—
Lease exit obligation		—			1,025
Unrealized losses on available-for-sale investment securities		—			11,853
Unrealized losses on held-to-maturity investment securities		—			2,497
Tax credit investments and other partnerships		1,765			3,004
Other real estate owned		141			144
Other, net		591			3,167
Total deferred tax assets		109,998			122,979
Deferred Tax Liabilities
Accretion on investment securities		—			(595	)
Purchase accounting		(17,564	)		(18,100	)
Loan servicing rights		(6,289	)		(6,141	)
Premises and equipment		(12,167	)		(8,507	)
Prepaid expenses		(973	)		(681	)
Operating lease right-of-use assets		(25,448	)		—
Unrealized gains on available-for-sale investment securities		(15,751	)		—
Unrealized gains on hedges		(78	)		(358	)
Other, net		(2,023	)		(1,549	)
Total deferred tax liabilities		(80,293	)		(35,931	)
Net deferred tax assets	$	29,705		$	87,048