Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Provision for Income Tax Expense

The provision for income tax expense consisted of the following for the years ended December 31:



(in thousands)	2019			2018			2017
Current expense (benefit)	$	114,221		$	(115,195	)	$	84,827
Deferred expense	30,703			153,518			71,257
Tax credits	(4,363		)	(5,179		)	(5,618		)
Items charged to shareholders' equity	(25,123		)	(866		)	—
	$	115,438		$	32,278		$	150,466

Reconciliation of Effective Tax Rate

The provision for federal income taxes differs from the amount computed by applying the federal income tax statutory rate of 21 percent for the years ended December 31, 2019 and 2018 and 35 percent for the year ended December 31, 2017 on income before income tax expense as indicated in the following analysis for the years ended December 31:



(in thousands)	2019			2018			2017
Federal tax based on statutory rate	$	104,914		$	84,531		$	102,508
Increase (decrease) resulting from:
Effect of tax-exempt income	(6,314		)	(5,801		)	(9,435		)
Interest and other nondeductible expenses	10,429			6,464			9,605
State taxes, net of federal benefit	18,073			12,459			6,970
Tax credits	(4,363		)	(5,179		)	(5,618		)
Other ⁽¹⁾	(7,301		)	(60,196		)	46,436
	$	115,438		$	32,278		$	150,466
Effective tax rate	23.1		%	8.0		%	51.4		%

⁽¹⁾ The composition of other items resulting in a net tax benefit of $7.3 million for the year ended December 31, 2019 included $3.5 million in an unrecognized state tax credit, $2.3 million related to the remeasurement of deferred tax assets as a result of state statutory rate changes and changes to the state nexus, and $0.9 million related to equity based compensation.

Deferred Tax Assets and Liabilities

Significant components of deferred tax assets and liabilities at December 31 were as follows:



(in thousands)	2019			2018
Deferred tax assets:
NOL and credit carryforward	$	18,061		$	42,837
Allowance for credit losses	38,384			38,571
Deferred compensation	6,807			5,482
Basis difference in acquired assets and liabilities	8,967			9,228
OREO	1,234			32
Other	46,259			19,395
Gross deferred tax assets	119,712			115,545
Deferred tax liabilities:
Unrealized gains on loans and securities	(64,535		)	(98,807		)
Premises and equipment	(7,941		)	(10,626		)
Acquisition intangibles	(11,789		)	(9,757		)
Deferred loan costs	(6,834		)	(5,814		)
Basis difference in acquired assets and liabilities	(12,488		)	(17,628		)
Lease receivable	(79,795		)	(37,844		)
Other	(38,449		)	(6,485		)
Gross deferred tax liabilities	(221,831		)	(186,961		)
Net deferred tax liabilities	$	(102,119	)	$	(71,416	)