Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

The income tax provision included in the consolidated statements of income was as follows for the periods presented ($ in thousands):

	Years Ended December 31,
	2019			2018		2017
Current
Federal	$	20,068		$	4,532	$	16,959
State		7,145			5,997		5,687
Deferred
Federal		(3,104	)		9,392		7,280
State		(776	)		2,348		1,820
Income tax provision excluding deferred tax asset revaluation and reversal of valuation allowance		23,333			22,269		31,746

Deferred tax expense (benefit) - re-measurement of deferred tax assets		—			—		25,619
Deferred tax expense (benefit) - reversal of valuation allowance		—			—		(8,650	)
Income tax provision	$	23,333		$	22,269	$	48,715

Income Tax Reconciliation

For the periods presented, the income tax provision differs from the amount computed by applying the statutory federal income tax rate in effect for each respective period to income before income taxes as a result of the following ($ in thousands):

	Years Ended December 31,
	2019			2018			2017
Income tax computed at statutory tax rate	$	36,497		$	36,089		$	54,021
Tax exempt interest		(4,951	)		(4,533	)		(7,611	)
Nondeductible interest expense		564			416			407
State income taxes, net		5,645			4,738			3,697
Income tax credits, net		(13,473	)		(15,404	)		(15,793	)
Death benefit gains		(123	)		(268	)		(3,268	)
Reversal of valuation allowance		—			—			(8,650	)
Re-measurement of deferred tax assets		—			—			25,619
Other		(826	)		1,231			293
Income tax provision	$	23,333		$	22,269		$	48,715

Deferred Tax Assets and Liabilities

Temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities gave rise to the following net deferred tax assets at December 31, 2019 and 2018, which are included in other assets on the accompanying consolidated balance sheets ($ in thousands):

	December 31,
	2019		2018
Deferred tax assets:
Loan purchase accounting	$	845	$	1,564
Other real estate		5,845		7,284
Allowance for loan losses		21,774		20,638
Deferred compensation		16,498		15,607
Financing and operating lease liabilities		10,469		—
Realized built-in losses		11,431		12,182
Securities		3,028		3,929
Pension and other postretirement benefit plans		5,194		4,108
Interest on nonaccrual loans		942		806
Unrealized losses on securities available for sale		—		10,679
Stock-based compensation		2,527		2,192
Federal carryovers		—		1,606
Other		8,790		9,179
Gross deferred tax asset		87,343		89,774

Deferred tax liabilities:
Goodwill and other identifiable intangibles		15,336		16,229
Premises and equipment		11,913		12,109
Financing and operating lease right-of-use assets		10,127		—
Mortgage servicing rights		11,002		14,415
Securities		2,115		1,519
Other		5,192		5,600
Gross deferred tax liability		55,685		49,872
Net deferred tax asset	$	31,658	$	39,902

Changes in Unrecognized Tax Benefits

The following table provides a summary of the changes during the 2019 calendar year in the amount of unrecognized tax benefits that are included in other liabilities in the consolidated balance sheet ($ in thousands):

Balance at January 1, 2019	$	1,249
Change due to tax positions taken during the current year		279
Change due to tax positions taken during a prior year		134
Change due to the lapse of applicable statute of limitations during the current year		(138	)
Change due to settlements with taxing authorities during the current year		—
Balance at December 31, 2019	$	1,524

Accrued interest, net of federal benefit, at December 31, 2019	$	271

Unrecognized tax benefits that would impact the effective tax rate, if recognized, at December 31, 2019	$	1,218