INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

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, 2019, 2018 and 2017 (in thousands):



	Years Ended December 31
	2019		2018		2017
Current
Federal	$	25,278	$	21,869	$	30,961
State	2,494		4,130		3,085
Total Current	27,772		25,999		34,046

Deferred
Federal	7,738		2,021		58,646
State	1,344		575		(2,204		)
Total Deferred	9,082		2,596		56,442

Provision for income taxes	$	36,854	$	28,595	$	90,488

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, 2019, 2018 and 2017:



	Years Ended December 31
	2019		2018		2017
Federal income tax statutory rate	21.0	%	21.0	%	35.0	%
Increase (decrease) in tax rate due to:
Tax-exempt interest	(2.2	)	(2.0	)	(2.6	)
Investment in life insurance	(0.5	)	(0.6	)	(1.1	)
State income taxes, net of federal tax offset	2.0		2.3		2.0
Tax credits	(1.2	)	(0.8	)	(0.6	)
Merger and acquisition costs	0.1		0.1		—
Valuation reserve release	—		(2.5	)	—
Federal law change	—		—		28.2
State audits and amended returns	(0.5	)	—		—
Other	1.4		(0.2	)	(1.1	)
Effective income tax rate	20.1	%	17.3	%	59.8	%

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, 2019 and 2018 (in thousands):



	December 31
	2019			2018
Deferred tax assets:
Loan loss and REO	$	24,285		$	24,156
Deferred compensation	17,470			15,991
Net operating loss carryforward	32,093			37,828
Federal and state tax credits	7,517			7,614
State net operating losses	5,632			6,105
Loan discount	5,466			5,756
Lease liability	15,485			—
Unrealized loss on securities - available for sale	349			983
Total deferred tax assets	108,297			98,433
Deferred tax liabilities:
Depreciation	(5,373		)	(3,771		)
Deferred loan fees, servicing rights and loan origination costs	(11,525		)	(10,197		)
Intangibles	(7,756		)	(8,428		)
Right of use asset	(14,531		)	—
Financial instruments accounted for under fair value accounting	(1,143		)	(833		)
Other	(8,146		)	—
Total deferred tax liabilities	(48,474		)	(23,229		)
Deferred income tax asset	59,823			75,204
Valuation allowance	(184		)	(184		)
Deferred tax asset, net	$	59,639		$	75,020

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, 2019 and 2018 (in thousands):



	December 31, 2019		December 31, 2018
Tax credit investments	$	29,620	$	17,360
Unfunded commitments—tax credit investments	20,235		12,726

The following table presents other information related to the Company's tax credit investments for the years ended December 31, 2019, 2018 and 2017 (in thousands):



	For the years ended December 31,
	2019		2018		2017
Tax credits and other tax benefits recognized	$	1,916	$	1,456	$	1,140
Tax credit amortization expense included in provision for income taxes	1,633		1,151		1,144