Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of components of income tax expenses

The following table presents the components of income tax expense for the years ended December 31, 2018, 2017 and 2016:




($ in thousands)	Year Ended December 31,
($ in thousands)	2018			2017			2016
Current income tax expense:
Federal	$	63,035		$	120,968		$	63,642
State	64,917			72,837			48,558
Foreign	3,513			1,815			1,345
Total current income tax expense	131,465			195,620			113,545
Deferred income tax (benefit) expense:
Federal	(11,870		)	40,057			25,296
State	(4,600		)	(6,201		)	1,883
Foreign	—			—			(213		)
Total deferred income tax (benefit) expense	(16,470		)	33,856			26,966
Income tax expense	$	114,995		$	229,476		$	140,511

Schedule of reconciliation of the federal statutory rate to the effective income tax rate

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




	Year Ended December 31,
	2018		2017		2016
Federal income tax provision at statutory rate	21.0	%	35.0	%	35.0	%
State franchise taxes, net of federal tax effect	5.8		5.9		6.1
Tax Cuts and Jobs Act of 2017 (the “Tax Act”)	0.1		4.5		—
Tax credits, net of amortization	(13.3	)	(15.1	)	(18.3	)
Other, net	0.4		0.9		1.8
Effective tax rate	14.0	%	31.2	%	24.6	%

Schedule of tax effects of temporary differences that give rise to a significant portion of the deferred tax assets (liabilities)

The tax effects of temporary differences that give rise to a significant portion of deferred tax assets and liabilities as of December 31, 2018 and 2017 are presented below:




($ in thousands)	December 31,
	2018												2017
	Federal			State			Foreign			Total			Federal			State			Foreign			Total
Deferred tax assets:
Allowance for loan losses and OREO reserves	$	66,510		$	30,366		$	1,366		$	98,242		$	62,942		$	28,857		$	1,365		$	93,164
Tax credit carryforwards	24,116			2,715			—			26,831			—			—			—			—
Unrealized losses on securities	13,127			7,106			—			20,233			10,730			5,354			—			16,084
Deferred compensation	13,081			5,919			—			19,000			11,483			5,220			—			16,703
Interest income on nonaccrual loans	5,922			2,680			—			8,602			5,396			2,451			—			7,847
State taxes	4,898			—			—			4,898			5,217			—			—			5,217
Mortgage servicing assets	1,406			605			—			2,011			2,727			1,206			—			3,933
Fixed assets	(1,047		)	1,932			—			885			—			—			—			—
Other, net	2,027			5,422			97			7,546			744			5,481			97			6,322
Total gross deferred tax assets	130,040			56,745			1,463			188,248			99,239			48,569			1,462			149,270
Valuation allowance	—			(128		)	—			(128		)	—			(256		)	—			(256		)
Total deferred tax assets, net of valuation allowance	$	130,040		$	56,617		$	1,463		$	188,120		$	99,239		$	48,313		$	1,462		$	149,014
Deferred tax liabilities:
Equipment financing	$	(26,040	)	$	(4,483	)	$	—		$	(30,523	)	$	(21,844	)	$	(3,760	)	$	—		$	(25,604	)
Investments in qualified affordable housing partnerships, tax credit and other investments, net	(31,098		)	3,806			—			(27,292		)	(10,838		)	7,025			—			(3,813		)
Core deposit intangibles	(3,048		)	(1,494		)	—			(4,542		)	(4,408		)	(2,117		)	—			(6,525		)
Acquired loans and OREO	(1,293		)	(318		)	(406		)	(2,017		)	(2,252		)	(754		)	(406		)	(3,412		)
FHLB stock dividends	(1,285		)	(581		)	—			(1,866		)	(1,285		)	(583		)	—			(1,868		)
Acquired debt	(1,219		)	(552		)	—			(1,771		)	(1,273		)	(578		)	—			(1,851		)
Prepaid expenses	(831		)	(376		)	—			(1,207		)	(4,142		)	(1,517		)	—			(5,659		)
Fixed assets	—			—			—			—			(2,671		)	914			—			(1,757		)
Other, net	(923		)	(338		)	—			(1,261		)	(510		)	(609		)	—			(1,119		)
Total gross deferred tax liabilities	$	(65,737	)	$	(4,336	)	$	(406	)	$	(70,479	)	$	(49,223	)	$	(1,979	)	$	(406	)	$	(51,608	)
Net deferred tax assets	$	64,303		$	52,281		$	1,057		$	117,641		$	50,016		$	46,334		$	1,056		$	97,406

Summary of the activities related to unrecognized tax position

The following table presents the activities related to the Company’s unrecognized tax position for the years ended December 31, 2018, 2017 and 2016:




($ in thousands)	Year Ended December 31,
($ in thousands)	2018			2017		2016
Beginning Balance	$	10,419		$	10,419	$	7,125
Additions for tax positions related to prior years	—			—		5,819
Deductions for tax positions related to prior years	(3,969		)	—		—
Settlements with taxing authorities	(2,072		)	—		(2,525		)
Ending Balance	$	4,378		$	10,419	$	10,419