INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2020

The provision for income taxes is comprised of the following components:


	Years Ended December 31
	2020		2019		2018
	(Dollars in thousands)
Current expense
Federal	$	32,171	$	27,980	$	25,129
State	17,004		14,359		13,672
Total current expense	49,175		42,339		38,801
Deferred expense (benefit)
Federal	(10,872)		9,080		(3,080)
State	(6,634)		1,514		(1,417)
Total deferred expense (benefit)	(17,506)		10,594		(4,497)
Total expense	$	31,669	$	52,933	$	34,304

Schedule of Income Tax Rate Reconciliation

The difference between the statutory federal income tax rate and the effective income tax rate reported for the last three years is detailed below:


	Years Ended December 31
	2020				2019				2018
	(Dollars in thousands)
Computed statutory federal income tax provision	$	32,096	21.00	%	$	45,803	21.00	%	$	32,744	21.00	%
State taxes, net of federal tax benefit	8,147		5.33	%	12,262		5.63	%	9,633		6.18	%
CARES Act - net operating loss carryback	(4,809)		(3.15)	%	—		—	%	—		—	%
Low Income Housing Project Investments	(1,851)		(1.21)	%	(1,696)		(0.78)	%	(1,030)		(0.66)	%
Increase in cash surrender value of life insurance	(1,345)		(0.88)	%	(1,144)		(0.52)	%	(1,160)		(0.74)	%
Stock-based compensation	(1,067)		(0.70)	%	(824)		(0.38)	%	(885)		(0.57)	%
Nontaxable interest, net	(723)		(0.47)	%	(757)		(0.35)	%	(566)		(0.36)	%
Change in valuation allowance	—		—	%	17		0.01	%	49		0.03	%

New Markets Tax Credits	—		—	%	(2,675)		(1.23)	%	(3,960)		(2.54)	%
Merger and other related costs (non-deductible)	—		—	%	582		0.27	%	130		0.08	%
Other, net	1,221		0.80	%	1,365		0.63	%	(651)		(0.42)	%
Total expense	$	31,669	20.72	%	$	52,933	24.28	%	$	34,304	22.00	%

Schedule of Net Deferred Tax Asset

The tax-effected components of the net deferred tax asset at December 31 of the years presented were as follows:


	2020		2019
	(Dollars in thousands)
Deferred tax assets
Accrued expenses not deducted for tax purposes	$	13,804	$	13,855
Allowance for credit losses	32,265		18,993


Employee and director equity compensation	1,548		1,708

Foreign Tax Credit Carryforward	89		—
Loan basis difference fair value adjustment	4,791		6,804
Net operating loss carry-forward	226		2,546

Operating lease liability	15,846		16,393


Other	999		1,311
Gross deferred tax assets	$	69,568	$	61,610
Valuation allowance	(280)		(187)
Total deferred tax assets net of valuation allowance	$	69,288	$	61,423
Deferred tax liabilities
Core deposit and other intangibles	$	4,344	$	5,802
Deferred loan fees, net	336		4,944
Derivatives fair value adjustment	13,036		6,461
Fixed assets	7,786		8,194
Goodwill	10,947		10,645

Net unrealized gain on securities available for sale	4,152		—

Prepaid pension	3,404		3,487
Right of use asset	12,979		15,911
Other	1,573		3,965
Gross deferred tax liabilities	$	58,557	$	59,409
Total net deferred tax asset	$	10,731	$	2,014

Reconciliation of Unrecognized Tax Benefits

The Company accounts for uncertainties in income taxes by providing a tax reserve for certain positions. The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits:


	(Dollars in thousands)
Balance at December 31, 2018	$	215
Reduction of tax positions for prior years	(127)

Increase for current year tax positions	444
Balance at December 31, 2019	532
Reduction of tax positions for prior years	(58)


Balance at December 31, 2020	$	474