Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Summary of components of income tax provision

The following presents a summary of income tax provision follows for the years ended December 31:



	Current		Deferred		Total
	(Dollars in thousands)
2019
Federal	$	31,969	$	874	$	32,843
State	21,806		661		22,467
	$	53,775	$	1,535	$	55,310
2018
Federal	$	35,401	$	2,336	$	37,737
State	27,749		406		28,155
	$	63,150	$	2,742	$	65,892
2017
Federal	$	64,910	$	31,464	$	96,374
State	24,739		3,276		28,015
	$	89,649	$	34,740	$	124,389

Reconciliation of effective tax rate

A reconciliation of the difference between the federal statutory income tax rate and the effective tax rate is shown in the following table for the years indicated:



	Year Ended December 31,
	2019		2018		2017
Statutory tax rate	21.00	%	21.00	%	35.00	%
State taxes-net of federal tax effect	8.73	%	8.56	%	7.04	%
Rate change - federal and state	—	%	0.17	%	9.36	%
CRA investment tax credit	(4.93	)%	(3.96	)%	(3.50	)%
Bank owned life insurance	(0.06	)%	(0.20	)%	(0.09	)%
Tax exempt municipal bonds and loans	(0.22	)%	(0.21	)%	(0.45	)%
Nondeductible transaction costs	—	%	—	%	(0.02	)%
Changes in uncertain tax positions	(0.79	)%	—	%	—	%
Other	0.71	%	0.43	%	(0.19	)%
Effective income tax rate	24.44	%	25.79	%	47.15	%

Components of deferred tax assets and liabilities

Deferred tax assets and liabilities at December 31, 2019 and 2018 were comprised of the following:



	At December 31,
	2019			2018
	(Dollars in thousands)
Deferred tax assets:
Purchase accounting fair value adjustment	$	10,441		$	16,239
Statutory bad debt deduction less than financial statement provision	23,588			22,904
Net operating loss carry-forward	1,834			2,092
Investment security provision	474			593
State tax deductions	3,810			4,240
Accrued compensation	151			148
Deferred compensation	94			175
Mark to market on loans held for sale	913			260
Depreciation	788			202
Nonaccrual loan interest	5,550			6,027
Other real estate owned	533			585
Unrealized loss on securities available for sale	—			13,631
Non-qualified stock option and restricted share expense	2,348			1,420
Goodwill	31			117
Lease expense	—			60
Lease expense - ROU asset	614			—
Other	2,162			2,013
Total deferred tax assets	$	53,331		$	70,706
Deferred tax liabilities:
FHLB stock dividends	$	(408	)	$	(617	)
Deferred loan costs	(7,441		)	(6,816		)
State taxes deferred and other	(2,516		)	(2,655		)
Prepaid expenses	(1,359		)	(1,802		)
Amortization of intangibles	(3,837		)	(4,524		)
Unrealized gain on securities available for sale	(4,084		)	—
Other	(2,023		)	(3,379		)
Total deferred tax liabilities	$	(21,668	)	$	(19,793	)
Net deferred tax assets	$	31,663		$	50,913

Summary of net operating loss carryforwards

A summary of the Company’s net operating loss carry-forwards is as follows:



	Federal					State
	Remaining Amount		Expires	Annual Limitation		Remaining Amount		Expires	Annual Limitation
	Remaining Amount		Expires	Annual Limitation		Remaining Amount		Expires	Annual Limitation
	(Dollars in thousands)
2019
Saehan Bank (acquired by Wilshire)	$	2,488	2030	$	226	$	2,488	2030	$	226
Pacific International Bank	5,249		2032	420		—		N/A	—
Total	$	7,737		$	646	$	2,488		$	226

2018
Saehan Bank (acquired by Wilshire)	$	2,714	2030	$	226	$	2,714	2030	$	226
Korea First Bank of New York	494		2019	497		—		N/A	—
Pacific International Bank	5,669		2032	420		—		N/A	—
Total	$	8,877		$	1,143	$	2,714		$	226

Reconciliation of beginning and ending amount of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2019 and 2018 is as follows:



	Year Ended December 31,
	2019			2018
	(Dollars in thousands)
Balance at January 1,	$	2,314		$	2,125
Additions based on tax positions related to prior years	—			247
Settlements with taxing authorities	(2,173		)	(58		)
Balance at December 31,	$	141		$	2,314