Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Components of Provision for Income Taxes

The components of our provision for income taxes for 2015, 2014 and 2013 were as follows:



	Year ended December 31,
(Dollars in thousands)	2015			2014			2013
Current provision:
Federal	$	191,194		$	181,011		$	105,616
State	50,815			45,488			26,204
Deferred (benefit) expense:
Federal	(11,270		)	(36,067		)	11,960
State	(1,985		)	(6,924		)	3,050
Income tax expense (1)	$	228,754		$	183,508		$	146,830

Reconciliation between Federal Statutory Income Tax Rate and Effective Income Tax Rate

Our effective tax rate is calculated by dividing income tax expense by the sum of income before income tax expense and the net income attributable to noncontrolling interests. The reconciliation between the federal statutory income tax rate and our effective income tax rate for 2015, 2014 and 2013, is as follows:



	December 31,
(Dollars in thousands)	2015		2014		2013
Federal statutory income tax rate	35.0	%	35.0	%	35.0	%
State income taxes, net of the federal tax effect	5.7		5.6		5.2
Meals and entertainment	0.3		0.3		0.4
Disallowed officer's compensation	0.3		0.3		0.1
Share-based compensation expense on incentive stock options and ESPP	—		0.2		(0.3	)
Tax-exempt interest income	(0.2	)	(0.3	)	(0.3	)
Low-income housing tax credits	(0.5	)	(0.5	)	(0.4	)
Valuation allowance benefit	(0.4	)	—		—
Other, net	(0.3	)	0.4		0.9
Effective income tax rate (1)	39.9	%	41.0	%	40.6	%

Deferred Tax Assets (Liabilities)

Deferred tax assets and liabilities at December 31, 2015 and 2014, consisted of the following:



	December 31,
(Dollars in thousands)	2015			2014
Deferred tax assets:
Allowance for loan losses	$	102,410		$	80,554
Loan fee income	13,770			9,738
Other accruals not currently deductible	12,163			7,601
Share-based compensation expense	11,979			15,249
State income taxes	11,933			9,428
Net operating loss	4,406			8,641
Premises and equipment and other intangibles	1,748			1,344
Net unrealized losses on foreign currency translation	664			802
Research and development credit	324			324
Other	1,957			2,983
Deferred tax assets	161,354			136,664
Valuation allowance	(4,730		)	(8,965		)
Net deferred tax assets after valuation allowance	156,624			127,699

Deferred tax liabilities:
Non-marketable and other securities (1)	(35,721		)	(31,800		)
Derivative equity warrant assets	(31,955		)	(19,090		)
Net unrealized gains on available-for-sale securities	(10,199		)	(29,600		)
FHLB stock dividend	(1,247		)	(1,230		)
Other	(3,561		)	—
Deferred tax liabilities (1)	(82,683		)	(81,720		)
Net deferred tax assets (1)	$	73,941		$	45,979

Changes in Unrecognized Tax Benefit (Including Interest and Penalties)

A summary of changes in our unrecognized tax benefit (including interest and penalties) in 2015 is as follows:



(Dollars in thousands)	Reconciliation of Unrecognized Tax Benefit			Interest & Penalties			Total
Balance at December 31, 2014	$	3,397		$	100		$	3,497
Additions for tax positions for current year	1,208			—			1,208
Additions for tax positions for prior years	—			228			228
Reduction for tax positions for prior years	(1,228		)	(22		)	(1,250		)
Lapse of the applicable statute of limitations	(20		)	(5		)	(25		)
Balance at December 31, 2015	$	3,357		$	301		$	3,658