Income Taxes (Tables)

9 Months Ended

Sep. 30, 2019

Summary of Differences in Taxes from Continuing Operations Computed at Statutory Rate

Following is a summary of the major items comprising the differences in taxes from continuing operations computed at the federal statutory rate and as recorded in the consolidated statements of income:

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
(dollars in thousands)		2019				2018				2019				2018
Provision at statutory rate of 21%	$	17,437			$	11,901			$	48,245			$	33,171
Tax-exempt income:
Tax-exempt interest		(2,511	)			(2,179	)			(7,645	)			(6,607	)
Section 291/265 interest disallowance		113				84				346				220
Company-owned life insurance income		(568	)			(621	)			(1,806	)			(1,679	)
Tax-exempt income		(2,966	)			(2,716	)			(9,105	)			(8,066	)
State income taxes		1,496				2,091				5,053				4,307
Interim period effective rate adjustment		(1,598	)			(81	)			(557	)			944
Tax credit investments - federal		(2,443	)			(5,483	)			(3,577	)			(16,224	)
Other, net		1,328				(387	)			658				495
Income tax expense	$	13,254			$	5,325			$	40,717			$	14,627
Effective tax rate		16.0		%		9.4		%		17.7		%		9.3		%

Schedule of Significant Components of Net Deferred Tax Assets (Liabilities)

Significant components of net deferred tax assets (liabilities) were as follows at September 30, 2019 and December 31, 2018:

	September 30,			December 31,
(dollars in thousands)	2019			2018
Deferred Tax Assets
Allowance for loan losses, net of recapture	$	14,651		$	14,514
Benefit plan accruals		17,144			21,754
Alternative minimum tax credit		1,272			2,545
Net operating loss carryforwards		25,369			31,765
Federal tax credits		—			1,779
Deferred gain on securities		1,563			1,976
Acquired loans		18,872			26,956
Operating lease liabilities		28,460			—
Lease exit obligation		—			1,025
Unrealized losses on available-for-sale investment securities		—			11,853
Unrealized losses on held-to-maturity investment securities		1,869			2,497
Tax credit investments and other partnerships		1,501			3,004
Other real estate owned		156			144
Other, net		738			3,167
Total deferred tax assets		111,595			122,979
Deferred Tax Liabilities
Accretion on investment securities		(897	)		(595	)
Purchase accounting		(17,575	)		(18,100	)
Loan servicing rights		(6,104	)		(6,141	)
Premises and equipment		(11,840	)		(8,507	)
Prepaid expenses		(673	)		(681	)
Operating lease right-of-use assets		(27,348	)		—
Unrealized gains on available-for-sale investment securities		(18,152	)		—
Unrealized gains on hedges		(374	)		(358	)
Other, net		(2,109	)		(1,549	)
Total deferred tax liabilities		(85,072	)		(35,931	)
Net deferred tax assets	$	26,523		$	87,048