Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Components of Income Tax Expense

The components of the provision for income taxes for the years ended December 31, 2018, 2017 and 2016 were as follows, in thousands:



	2018		2017		2016
Current:
Federal	$	16,769	$	25,532	$	23,724
State	8,686		5,025		5,670
Total current	$	25,455	$	30,557	$	29,394
Deferred:
Federal	$	2,615	$	12,370	$	5,497
State	145		893		1,665
Total deferred	$	2,760	$	13,263	$	7,162
Total income tax expense	$	28,215	$	43,820	$	36,556

Schedule of Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities at December 31, 2018 and 2017, with the 2017 amounts adjusted for the impact of the Tax Cuts and Jobs Act, were as follows, in thousands:



	2018			2017
Deferred tax assets:
Tax effect of net unrealized loss on securities available for sale reflected in stockholders’ equity	$	11,148		$	8,320
Tax effect of net unrealized loss on derivatives reflected in stockholders’ equity	—			60
Allowance for loan losses	16,682			14,221
Deferred compensation	7,042			4,240
Organization and acquisitions costs	319			369
Net operating loss carryforwards	14,495			16,580
Non-accrual loan interest	863			710
OREO write-downs	1,469			1,835
Rehab tax credit projects	5,254			4,303
Mortgage repurchase obligation	69			68
Other	1,892			1,974
Gross deferred tax assets	59,233			52,680
Valuation allowance	(12,125		)	(10,493		)
Gross deferred tax assets	$	47,108		$	42,187



Deferred tax liabilities:
Tax effect of net unrealized gain on derivatives reflected in stockholders’ equity	$	(160	)	$	—
Securities	(2,332		)	(478		)
Premises, furniture and equipment	(6,514		)	(5,798		)
Tax bad debt reserves	(427		)	(428		)
Purchase accounting	(6,339		)	(4,417		)
Prepaid expenses	(203		)	(526		)
Mortgage servicing rights	(7,933		)	(7,045		)
Deferred loan fees	(3,321		)	(2,651		)
Other	(380		)	(255		)
Gross deferred tax liabilities	$	(27,609	)	$	(21,598	)
Net deferred tax asset	$	19,499		$	20,589

Schedule of Effective Income Tax Rate Reconciliation

The actual income tax expense from continuing operations differs from the expected amounts for the years ended December 31, 2018, 2017, and 2016, (computed by applying the U.S. federal corporate tax rate of 21% for 2018 income before income taxes and 35% for 2017 and 2016 income before income taxes) are as follows, in thousands:



	2018			2017			2016
Computed "expected" tax on net income	$	30,495		$	41,682		$	40,917
Increase (decrease) resulting from:
Nontaxable interest income	(4,423		)	(9,282		)	(7,960		)
State income taxes, net of federal tax benefit	6,976			3,846			4,768
Tax credits	(4,085		)	(2,390		)	(1,375		)
Valuation allowance	23			405			368
Excess tax benefit on stock compensation	(657		)	(1,130		)	—
Deferred tax adjustment due to Tax Cuts and Jobs Act enactment	—			10,396			—
Other	(114		)	293			(162		)
Income taxes	$	28,215		$	43,820		$	36,556
Effective tax rates	19.4		%	36.8		%	31.3		%