Income Tax

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Tax [Text Block]

Income Tax

The components of income tax expense are as follows:

	Years Ended December 31,
	2021		2020		2019
	(in thousands)
Current expense:
Federal	$	50,708	$	44,094	$	40,471
State	9,610		7,822		6,359
Total current tax expense	$	60,318	$	51,916	$	46,830
Deferred tax expense (benefit):
Federal	$	(5,445)	$	(12,078)	$	60
State	(1,184)		(1,690)		270
Total deferred tax expense (benefit)	(6,629)		(13,768)		330
Total	$	53,689	$	38,148	$	47,160

Significant components of the Company’s deferred tax assets and liabilities are as follows:

	December 31,
	2021		2020
	(in thousands)
Deferred tax assets:
ACL	$	39,378	$	36,906
Lease liability	15,973		15,823
Deferred compensation	14,887		11,658
Stock options and restricted stock	3,186		2,599
OREO	50		16
Nonaccrual interest	118		102
Net operating losses and credit carryforwards	2,898		3,304
Other	1,824		278
Total deferred tax assets	78,314		70,686
Deferred tax liabilities:
Asset purchase tax basis difference	(5,052)		(6,590)
Right of use asset	(14,510)		(14,501)
FHLB stock dividends	(810)		(789)
Deferred loan fees	(5,957)		(5,695)
Unrealized gain on investment securities	(7,254)		(49,837)
Unrealized gain on equity securities	(3,231)		(3,147)
Purchase accounting	(14,211)		(7,526)
Depreciation	(3,304)		(2,427)
Cash flow hedge	(5,280)		(7,591)
Other	(130)		(112)
Total deferred tax liabilities	(59,739)		(98,215)
Net deferred tax asset (liability)	$	18,575	$	(27,529)

A reconciliation of the Company’s effective income tax rate with the federal statutory tax rate is as follows:

	Years Ended December 31,
	2021				2020				2019
	Amount		Percent		Amount		Percent		Amount		Percent
	(dollars in thousands)
Income tax based on statutory rate	$	53,867	21	%	$	40,402	21	%	$	50,738	21	%
Increase (decrease) resulting from:
Tax exempt instruments	(6,306)		(2)	%	(5,987)		(3)	%	(6,771)		(3)	%
Bank owned life insurance	(1,444)		(1)	%	(1,348)		(1)	%	(1,963)		(1)	%
State income tax, net of federal benefit	7,892		3	%	4,844		3	%	5,134		2	%
Other, net	(320)		—	%	237		—	%	22		1	%
Income tax provision	$	53,689	21	%	$	38,148	20	%	$	47,160	20	%

As of December 31, 2021 and 2020, we had no unrecognized tax benefits. Our policy is to recognize interest and penalties on unrecognized tax benefits in “Provision for income taxes” in the Consolidated Statements of Income. There were no amounts related to interest and penalties recognized for the years ended December 31, 2021 and 2020. As a result of recent acquisitions, the Company has net operating loss carryforwards in the federal, Idaho and Oregon jurisdictions of $11.3 million, $8.4 million and $61 thousand, respectively, which begin to expire in 2024.

On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company has evaluated the impact of the CARES Act and determined that none of the changes would result in a material income tax benefit to the Company.

On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law and extends several provisions of the CARES Act. The Company has determined that neither this Act nor changes to income tax laws or regulations in other jurisdictions have a significant impact on our effective tax rate.