Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

The components of income tax expense were as follows:


	For the Years Ended December 31,
(amounts in thousands)	2019		2018		2017
Current
Federal	$	2,973	$	4,509	$	24,258
State	5,304		5,547		5,666
Total current expense	8,277		10,056		29,924

Deferred
Federal	13,175		9,702		14,885
State	1,341		(399)		233
Total deferred expense	14,516		9,303		15,118

Income tax expense	$	22,793	$	19,359	$	45,042

Schedule of Income (Loss) Before Income Tax Expense (Benefit)

Effective tax rates differ from the federal statutory rate of 21% at December 31, 2019 and December 31, 2018, and 35% at December 31, 2017, which was applied to income before income tax expense, due to the following:


	For the Years Ended December 31,
	2019						2018						2017
(amounts in thousands)	Amount		% of pretax income		Amount		% of pretax income		Amount		% of pretax income
Federal income tax at statutory rate	$	21,445	21.00	%	$	19,121	21.00	%	$	43,357	35.00	%
State income tax, net of federal benefit	5,249		5.14		4,067		4.47		3,835		3.10
Tax-exempt interest, net of disallowance	(385)		(0.38)		(360)		(0.40)		(381)		(0.31)
Bank-owned life insurance	(1,677)		(1.64)		(1,547)		(1.70)		(2,675)		(2.16)
Tax credits	(1,266)		(1.24)		(444)		(0.49)		—		—
Equity-based compensation	132		0.13		(547)		(0.60)		(10,741)		(8.67)
Non-deductible executive compensation	440		0.43		230		0.25		654		0.53
Unrecorded basis difference in foreign subsidiaries	(144)		(0.14)		343		0.38		4,527		3.65
Enactment of federal tax reform	—		—		(21)		(0.02)		5,505		4.44
Other	(1,001)		(0.98)		(1,483)		(1.63)		961		0.78
Effective income tax rate	$	22,793	22.32	%	$	19,359	21.26	%	$	45,042	36.36	%

Components of Net Deferred Tax Assets (Liabilities)

The following represents Customers' deferred tax asset and liabilities as December 31, 2019 and 2018:


	December 31,
(amounts in thousands)	2019		2018
Deferred tax assets
Allowance for loan and lease losses	$	14,616	$	10,449
Net unrealized losses on securities	—		7,639


Net operating losses	1,494		1,212


Compensation and benefits	5,839		6,234

Cash flow hedge	5,557		324


Section 197 intangibles	1,196		923
Deferred income	1,182		640
Lease liability	5,523		—
Other	1,307		2,766
Total gross deferred tax assets	36,714		30,187
Less: valuation allowance	(486)		—
Net deferred tax assets	36,228		30,187
Deferred tax liabilities
Fair value adjustments on acquisitions	(506)		(569)

Bank premises and equipment	(6,074)		(884)
Tax qualified lease adjustments	(30,496)		(17,786)
Right of use asset	(5,232)		—
Net unrealized gains on securities	(5,020)		—
Other	(640)		(746)
Total deferred tax liabilities	(47,968)		(19,985)
Net deferred tax asset/(liability)	$	(11,740)	$	10,202