Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Components of Provision for Income Taxes

The components of our provision for income taxes for 2013, 2012 and 2011 were as follows:



	Year ended December 31,
(Dollars in thousands)	2013		2012			2011
Current provision:
Federal	$	99,480	$	87,635		$	86,220
State	25,498		23,752			25,505
Deferred expense (benefit):
Federal	11,244		2,385			5,756
State	2,836		(503		)	1,606
Income tax expense	$	139,058	$	113,269		$	119,087

Reconciliation between Federal Statutory Income Tax Rate and Effective Income Tax Rate

Our effective tax rate is calculated by dividing income tax expense by the sum of income before income tax expense and the net income attributable to noncontrolling interests. The reconciliation between the federal statutory income tax rate and our effective income tax rate for 2013, 2012 and 2011, is as follows:



	December 31,
(Dollars in thousands)	2013		2012		2011
Federal statutory income tax rate	35.0	%	35.0	%	35.0	%
State income taxes, net of the federal tax effect	5.1		5.8		6.0
Meals and entertainment	0.5		0.5		0.5
Disallowed officer's compensation	0.1		0.1		0.1
Share-based compensation expense on incentive stock options and ESPP	(0.3	)	0.4		0.3
Tax-exempt interest income	(0.3	)	(0.4	)	(0.4	)
Low-income housing tax credits	(1.6	)	(1.2	)	(1.1	)
Other, net	0.7		(0.9	)	0.5
Effective income tax rate	39.2	%	39.3	%	40.9	%

Deferred Tax (Liabilities) Assets

Deferred tax assets and liabilities at December 31, 2013 and 2012, consisted of the following:



	December 31,
(Dollars in thousands)	2013			2012
Deferred tax assets:
Allowance for loan losses	$	69,616		$	53,953
Net unrealized losses on available-for-sale securities	27,686			—
Share-based compensation expense	14,535			11,478
Net operating loss	9,682			8,175
Loan fee income	7,804			10,356
State income taxes	6,194			7,042
Net unrealized losses on foreign currency translation	5,228			—
Other accruals not currently deductible	4,869			2,205
Premises and equipment and other intangibles	734			—
Research and development credit	324			364
Other	36			16
Deferred tax assets	146,708			93,589
Valuation allowance	(10,006		)	(8,539		)
Net deferred tax assets after valuation allowance	136,702			85,050

Deferred tax liabilities:
Non-marketable and other securities	(55,921		)	(23,363		)
Derivative equity warrant assets	(10,344		)	(5,566		)
FHLB stock dividend	(1,236		)	(1,252		)
Net unrealized gains on available-for-sale securities	—			(74,983		)
Premises and equipment and other intangibles	—			(5,466		)
Other	(964		)	—
Deferred tax liabilities	(68,465		)	(110,630		)
Net deferred tax assets (liabilities)	$	68,237		$	(25,580	)

Changes in Unrecognized Tax Benefit (Including Interest and Penalties)

A summary of changes in our unrecognized tax benefit (including interest and penalties) in 2013 is as follows:



(Dollars in thousands)	Reconciliation of Unrecognized Tax Benefit			Interest & Penalties			Total
Balance at December 31, 2012	$	284		$	160		$	444
Additions for tax positions for prior years	123			47			170
Reduction for tax positions for prior years	(10		)	(40		)	(50		)
Lapse of the applicable statute of limitations	(145		)	(76		)	(221		)
Balance at December 31, 2013	$	252		$	91		$	343