Note 11 - Income Taxes

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Text Block]

. Income Taxes

For the years ended

December

31,

2016,

2015,

and

2014,

the current and deferred amounts of the income tax expense are summarized as follows:

	Year Ended December 31,
	2016		2015			2014
	(In thousands)
Current:

Federal	$	28,788	$	31,587		$	36,180
State		22,364		26,396			14,481
Total Current	$	51,152	$	57,983		$	50,661

Deferred:

Federal	$	11,775	$	3,738		$	23,783
State		4,174		(1,734	)		7,521
Total Deferred	$	15,949	$	2,004		$	31,304

Total income tax expense	$	67,101	$	59,987		$	81,965

Temporary differences between the amounts reported in the financial statements and the tax basis of assets and liabilities give rise to deferred taxes. Net deferred tax assets at

December

31,

2016,

and at

December

31,

2015,

are included in other assets in the accompanying Consolidated Balance Sheets and are as follows:

	As of December 31,
	2016			2015
	(In thousands)
Deferred Tax Assets
Loan loss allowance, due to differences in computation of bad debts	$	51,192		$	59,639
Share-based compensation		4,729			7,513
Accrual for bonuses		6,095			4,984
Non-accrual interest		4,246			4,929
Accrual for litigation		-			3,209
Write-down on equity securities and venture capital investments		4,437			3,981
Depreciation and amortization		8,334			2,917
State tax		6,426			4,802
Unrealized loss on interest rate swaps		1,763			2,173
Unrealized loss on securities available-for-sale, net		1,121			3,940
Other, net		3,598			2,127
Gross deferred tax assets		91,941			100,214

Deferred Tax Liabilities
Deferred loan costs		(8,695	)		-
Investment in affordable housing partnerships		(2,659	)		(1,444	)
Basis difference in acquired assets		(4,841	)		(4,947	)
Dividends on Federal Home Loan Bank common stock		(1,322	)		(1,322	)
Other, net		(3,228	)		(1,937	)
Gross deferred tax liabilities		(20,745	)		(9,650	)
Net deferred tax assets	$	71,196		$	90,564

Amounts for the current year are based upon estimates and assumptions and could vary from amounts shown on the tax returns as filed.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not the Company will realize all benefits related to these deductible temporary differences

The Company had income tax refunds receivables of

$14.6

million at

December

31,

2016,

and

$28.9

million at

December

31,

2015.

These income tax receivables are included in other assets in the accompanying Consolidated Balance Sheets.

At both

December

31,

2016

and

2015,

there were

unrecognized tax benefits. The Company’s tax returns are open for audits by the Internal Revenue Service back to

2013

and by the California Franchise Tax Board back to

2012.

It is reasonably possible that unrecognized tax benefits could change significantly over the next

twelve

months. The Company does not expect that any such changes would have a material impact on its annual effective tax rate.

Income tax expense results in effective tax rates that differ from the statutory Federal income tax rate for the years indicated as follows:

	Year Ended December 31,
	2016					2015					2014
	(Dollars in thousands)
Tax provision at Federal statutory rate	$	84,770		35.0	%	$	77,384		35.0	%	$	76,928		35.0	%
State income taxes, net of Federal income tax benefit		17,250		7.1			14,656		6.6			14,324		6.6
Low income housing and other tax credits		(37,901	)	(15.6	)		(30,986	)	(14.0	)		(10,014	)	(4.6	)
Non-deductible stock options expense		3,469		1.4			-		-			-		-
Other, net		(487	)	(0.2	)		(1,067	)	(0.5	)		727		0.3
Total income tax expense	$	67,101		27.7	%	$	59,987		27.1	%	$	81,965		37.3	%