XML 43 R19.htm IDEA: XBRL DOCUMENT v3.22.0.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
    The provision for income taxes is comprised of the following components:
 Years Ended December 31
 202120202019
 (Dollars in thousands)
Current expense
Federal$21,539 $32,171 $27,980 
State11,054 17,004 14,359 
Total current expense32,593 49,175 42,339 
Deferred expense (benefit)
Federal3,032 (10,872)9,080 
State58 (6,634)1,514 
Total deferred expense (benefit)3,090 (17,506)10,594 
Total expense$35,683 $31,669 $52,933 
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
 202120202019
 (Dollars in thousands)
Computed statutory federal income tax provision$32,902 21.00 %$32,096 21.00 %$45,803 21.00 %
State taxes, net of federal tax benefit8,754 5.59 %8,147 5.33 %12,262 5.63 %
CARES Act - net operating loss carryback (1)— — %(4,809)(3.15)%— — %
Change in valuation allowance26 0.02 %— — %17 0.01 %
Increase in cash surrender value of life insurance (1,405)(0.90)%(1,345)(0.88)%(1,144)(0.52)%
Low Income Housing Project Investments(2,308)(1.47)%(1,851)(1.21)%(1,696)(0.78)%
Merger and other related costs (non-deductible)630 0.40 %— — %582 0.27 %
New Markets Tax Credits— — %— — %(2,675)(1.23)%
Nontaxable interest, net(1,022)(0.65)%(723)(0.47)%(757)(0.35)%
Stock-based compensation(372)(0.24)%(1,067)(0.70)%(824)(0.38)%
Other, net(1,522)(0.97)%1,221 0.80 %1,365 0.63 %
Total expense$35,683 22.78 %$31,669 20.72 %$52,933 24.28 %
    
(1)On March 27, 2020 the CARES Act was signed into law, allowing the Company to realize a $4.8 million discrete tax benefit. This discrete benefit was associated with revised net operating loss (NOL) carryback provisions. The difference in enacted tax rates between the year of carryback versus carryforward resulted in a benefit recognized in income during the period that included the enactment date. Accordingly, the discrete benefit was fully recognized during the first quarter of 2020.
The tax-effected components of the net deferred tax asset at December 31 of the years presented were as follows:
20212020
 (Dollars in thousands)
Deferred tax assets
Accrued expenses not deducted for tax purposes$15,909 $13,804 
Allowance for credit losses41,541 32,265 
Employee and director equity compensation1,489 1,548 
Foreign Tax Credit Carryforward89 89 
Loan basis difference fair value adjustment2,286 4,791 
Net operating loss carry-forward637 226 
Net unrealized loss on securities available for sale2,921 — 
Operating lease liability17,970 15,846 
Other1,188 999 
Gross deferred tax assets$84,030 $69,568 
Valuation allowance(306)(280)
Total deferred tax assets net of valuation allowance$83,724 $69,288 
Deferred tax liabilities
Core deposit and other intangibles$5,927 $4,344 
Deferred loan fees, net6,107 336 
Derivatives fair value adjustment5,536 13,036 
Fixed assets18,437 7,786 
Goodwill11,249 10,947 
Net unrealized gain on securities available for sale— 4,152 
Prepaid pension3,296 3,404 
Right of use asset16,829 12,979 
Other1,825 1,573 
Gross deferred tax liabilities$69,206 $58,557 
Total net deferred tax asset$14,518 $10,731 
Deferred tax assets are to be reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of the tax benefit depends upon the existence of sufficient taxable income in future periods.
At December 31, 2021, the Company had a foreign tax credit carryforward with a related deferred tax asset of $89,000, which if not utilized, will expire in 2026. The Company does not expect to utilize this deferred tax asset prior to the statute expiration and has recorded a partial valuation allowance against this asset. Additionally, the Company has a state net operating loss carryforward totaling $251,000, which if not utilized, will expire in 2041. The Company has recorded a full valuation allowance against this state net operating loss carryforward. In total, the Company recorded a valuation allowance of $306,000 at December 31, 2021.
Uncertainty in Income Taxes
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction as well as in various states.  The Company is subject to U.S. federal, state and local income tax examinations by tax authorities for the 2018 through 2020 tax years including any related income tax filings from its recent acquisitions.  The Company believes that its income tax returns have been filed based upon applicable statutes, regulations and case law in effect at the time of filing, however, the Internal Revenue Service ("IRS") and /or state jurisdictions could disagree with the Company's interpretation upon examination. 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, 2019$532 
Reduction of tax positions for prior years(58)
Balance at December 31, 2020474 
Reduction of tax positions for prior years(29)
Increase for current year tax positions2,433 
Balance at December 31, 2021$2,878 
Increases to the Company's unrealized tax positions occur as a result of accruing for any unrecognized tax benefit, as well the accrual of interest and penalties related to prior year positions. Decreases in the Company's unrealized tax positions occur as a result of the statute of limitation lapsing on prior year positions and/or settlements relating to outstanding positions. The table above does not include the indirect federal benefit of state tax positions of approximately $604,000.