INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Components of Income Tax Expense (Benefit)

The following table presents the components of the provision for income taxes included in the Consolidated Statements of Operations for the years ended December 31, 2018, 2017 and 2016 (in thousands):



	Years Ended December 31
	2018		2017			2016
Current
Federal	$	21,869	$	30,961		$	29,787
State	4,130		3,085			2,477
Total Current	25,999		34,046			32,264

Deferred
Federal	2,021		58,646			9,908
State	575		(2,204		)	2,083
Total Deferred	2,596		56,442			11,991

Provision for income taxes	$	28,595	$	90,488		$	44,255

Schedule of Effective Income Tax Rate Reconciliation

The following table presents the reconciliation of the federal statutory rate to the actual effective rate for the years ended December 31, 2018, 2017 and 2016:



	Years Ended December 31
	2018		2017		2016
Federal income tax statutory rate	21.0	%	35.0	%	35.0	%
Increase (decrease) in tax rate due to:
Tax-exempt interest	(2.0	)	(2.6	)	(2.6	)
Investment in life insurance	(0.6	)	(1.1	)	(1.2	)
State income taxes, net of federal tax offset	2.3		2.0		2.2
Tax credits	(0.8	)	(0.6	)	(0.8	)
Merger and acquisition costs	0.1		—		—
Valuation reserve release	(2.5	)	—		—
Federal law change	—		28.2		—
Other	(0.2	)	(1.1	)	1.5
Effective income tax rate	17.3	%	59.8	%	34.1	%

Schedule of Net Deferred Tax Asset

The following table reflects the effect of temporary differences that gave rise to the components of the net deferred tax asset as of December 31, 2018 and 2017 (in thousands):



	December 31
	2018			2017
Deferred tax assets:
Loan loss and REO	$	24,156		$	22,294
Deferred compensation	15,991			13,045
Net operating loss carryforward	37,828			43,721
Federal and state tax credits	7,614			7,614
State net operating losses	6,105			6,706
Loan discount	5,756			4,736
Other	983			4,326
Total deferred tax assets	98,433			102,442
Deferred tax liabilities:
Depreciation	(3,771		)	(1,343		)
Deferred loan fees, servicing rights and loan origination costs	(10,196		)	(9,564		)
Intangibles	(8,428		)	(5,690		)
Financial instruments accounted for under fair value accounting	(833		)	(9,702		)
Other	—			(325		)
Total deferred tax liabilities	(23,228		)	(26,624		)
Deferred income tax asset	75,205			75,818
Valuation allowance	(184		)	(4,391		)
Deferred tax asset, net	$	75,021		$	71,427

Schedule of Affordable Housing Tax Credit Information

The following table presents the balances of the Company's tax credit investments and related unfunded commitments at December 31, 2018 and 2017 (in thousands):



	December 31, 2018		December 31, 2017
Tax credit investments	$	17,360	$	7,311
Unfunded commitments—tax credit investments	12,726		4,417

The following table presents other information related to the Company's tax credit investments for the years ended December 31, 2018, 2017 and 2016 (in thousands):



	For the years ended December 31,
	2018		2017		2016
Tax credits and other tax benefits recognized	$	1,456	$	1,140	$	1,136
Tax credit amortization expense included in provision for income taxes	1,151		1,144		672