Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Components of Provision for Income Taxes

The components of our provision for income taxes for 2014, 2013 and 2012 were as follows:



	Year ended December 31,
(Dollars in thousands)	2014			2013		2012
Current provision:
Federal	$	172,492		$	99,480	$	87,635
State	44,666			25,498		23,752
Deferred expense (benefit):
Federal	(36,197		)	11,244		2,385
State	(7,199		)	2,836		(503		)
Income tax expense	$	173,762		$	139,058	$	113,269

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 2014, 2013 and 2012, is as follows:



	December 31,
(Dollars in thousands)	2014		2013		2012
Federal statutory income tax rate	35.0	%	35.0	%	35.0	%
State income taxes, net of the federal tax effect	5.6		5.1		5.8
Meals and entertainment	0.3		0.5		0.5
Disallowed officer's compensation	0.3		0.1		0.1
Share-based compensation expense on incentive stock options and ESPP	0.1		(0.3	)	0.4
Tax-exempt interest income	(0.3	)	(0.3	)	(0.4	)
Low-income housing tax credits	(1.8	)	(1.6	)	(1.2	)
Other, net	0.5		0.7		(0.9	)
Effective income tax rate	39.7	%	39.2	%	39.3	%

Deferred Tax (Liabilities) Assets

Deferred tax assets and liabilities at December 31, 2014 and 2013, consisted of the following:



	December 31,
(Dollars in thousands)	2014			2013
Deferred tax assets:
Allowance for loan losses	$	80,554		$	69,616
Share-based compensation expense	15,249			14,535
Loan fee income	9,738			7,804
State income taxes	9,428			6,194
Net operating loss	8,641			9,682
Other accruals not currently deductible	7,601			4,869
Premises and equipment and other intangibles	1,344			734
Net unrealized losses on foreign currency translation	802			5,228
Research and development credit	324			324
Net unrealized losses on available-for-sale securities	—			27,686
Other	2,983			36
Deferred tax assets	136,664			146,708
Valuation allowance	(8,965		)	(10,006		)
Net deferred tax assets after valuation allowance	127,699			136,702

Deferred tax liabilities:
Net unrealized gains on available-for-sale securities	(29,600		)	—
Non-marketable and other securities	(27,858		)	(55,921		)
Derivative equity warrant assets	(19,090		)	(10,344		)
FHLB stock dividend	(1,230		)	(1,236		)
Other	—			(964		)
Deferred tax liabilities	(77,778		)	(68,465		)
Net deferred tax assets	$	49,921		$	68,237

Changes in Unrecognized Tax Benefit (Including Interest and Penalties)

A summary of changes in our unrecognized tax benefit (including interest and penalties) in 2014 is as follows:



(Dollars in thousands)	Reconciliation of Unrecognized Tax Benefit			Interest & Penalties			Total
Balance at December 31, 2013	$	252		$	91		$	343
Additions for tax positions for current year	2,879			—			2,879
Additions for tax positions for prior years	349			47			396
Lapse of the applicable statute of limitations	(83		)	(38		)	(121		)
Balance at December 31, 2014	$	3,397		$	100		$	3,497