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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES At December 31, income tax expense consisted of the following:
(Dollars in thousands) | 2017 |  | 2016 |  | 2015
Current tax expense |  |  |  |  |
Federal | $ | 87,992 |  |  | $ | 84,946 |  |  | $ | 105,367 |
State | 6,116 |  |  | 7,493 |  |  | 16,111 |
Total current tax expense | 94,108 |  |  | 92,439 |  |  | 121,478 |
Deferred tax expense (benefit) |  |  |  |  |
Federal | 115,392 |  |  | 23,144 |  |  | (2,758 | )
State | 10,446 |  |  | 10,002 |  |  | 3,308 |
Total deferred tax expense | 125,838 |  |  | 33,146 |  |  | 550 |
Total income tax expense | $ | 219,946 |  |  | $ | 125,585 |  |  | $ | 122,028 |
Income tax expense differed from the amounts computed by applying the federal income tax rate of 35 percent to pretax income as a result of the following:
(Dollars in thousands) | 2017 |  | 2016 |  | 2015
Income taxes at federal statutory rates | $ | 190,294 |  |  | $ | 122,874 |  |  | $ | 116,345 |
Increase (reduction) in income taxes resulting from: |  |  |  |  |
Nontaxable income on loans, leases and investments, net of nondeductible expenses | (2,525 | ) |  | (2,901 | ) |  | (3,020 | )
State and local income taxes, including change in valuation allowance, net of federal income tax benefit | 10,765 |  |  | 11,372 |  |  | 12,622 |
Effect of federal rate change | 25,762 |  |  | — |  |  | — |
Acquisition stock settlement | — |  |  | (98 | ) |  | — |
Tax credits net of amortization | (4,840 | ) |  | (4,138 | ) |  | (3,060 | )
Other, net | 490 |  |  | (1,524 | ) |  | (859 | )
Total income tax expense | $ | 219,946 |  |  | $ | 125,585 |  |  | $ | 122,028 |
The net deferred tax asset included the following components at December 31:
(Dollars in thousands) | 2017 |  | 2016
Allowance for loan and lease losses | $ | 50,853 |  |  | $ | 80,939 |
Pension liability | 704 |  |  | 15,679 |
Executive separation from service agreements | 8,548 |  |  | 14,278 |
Federal net operating loss carryforward | 2,685 |  |  | 5,019 |
Net unrealized loss on securities included in accumulated other comprehensive loss | 10,849 |  |  | 26,832 |
Accelerated depreciation | — |  |  | 133 |
FDIC assisted transactions timing differences | — |  |  | 52,579 |
Other reserves | 5,570 |  |  | 10,504 |
Other | 10,116 |  |  | 26,663 |
Deferred tax asset | 89,325 |  |  | 232,626 |
Accelerated depreciation | 7,562 |  |  | — |
Lease financing activities | 9,131 |  |  | 11,651 |
Net deferred loan fees and costs | 8,708 |  |  | 10,867 |
Intangible assets | 12,252 |  |  | 6,335 |
Security, loan and debt valuations | 7,018 |  |  | 22,656 |
FDIC assisted transactions timing differences | 1,113 |  |  | — |
Other | 4,565 |  |  | 8,501 |
Deferred tax liability | 50,349 |  |  | 60,010 |
Net deferred tax asset | $ | 38,976 |  |  | $ | 172,616 |
At December 31, 2017, $12.8 million of existing gross deferred tax assets relate to net operating loss carryforwards which expire in years beginning in 2024 through 2034. The net operating losses were acquired through the acquisition of Cordia and are subject to the annual limitation set forth by Internal Revenue Code Section 382. No valuation allowance was necessary as of December 31, 2017 to reduce BancShares’ gross deferred tax asset to the amount that is more likely than not to be realized. The Tax Act was enacted on December 22, 2017. The SEC issued Staff Accounting Bulletin No. 118 to address uncertainty in applying ASC Topic 740 in the reporting period in which the Tax Act was enacted. The Tax Act included a reduction to the corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. Tax expense was increased in the fourth quarter by a provisional $25.8 million to reflect the Tax Act changes. This increase includes additional tax expense related to our investments in low income housing tax credits and revaluation of the deferred tax asset for items charged or credited directly to AOCI. The revaluation of the deferred tax asset related to items that are charged or credited directly to AOCI was a component of 2017 income tax expense and recognized in continuing operations as required by ASC Topic 740. The ultimate impact may differ from this provisional amount due to additional analysis, changes in interpretations and assumptions and additional regulatory guidance that may be issued. The provisional amount is expected to be finalized when the 2017 U.S. Corporate income tax return is filed in 2018. During the second quarter of 2017 and third quarter of 2016, BancShares adjusted its net deferred tax asset as a result of reductions in the North Carolina corporate income tax rate that were enacted June 28, 2017 and July 23, 2013, respectively. The lower corporate income tax rate resulted in a reduction in the deferred tax asset and an increase in income tax expense in 2017 and 2016. The lower state corporate income tax rate did not have a material impact on income tax expense. BancShares and its subsidiaries' federal income tax returns for 2014 through 2016 remain open for examination. Generally, the state jurisdictions in which BancShares files income tax returns are subject to examination for a period up to four years after returns are filed. BancShares' state tax returns are currently under exam by North Carolina for 2012 through 2015, California for 2011 through 2015 and Florida for 2012 through 2013. The following table provides a rollforward of Bancshares’ gross unrecognized tax benefits, excluding interest and penalties, during the years ended December 31:
(Dollars in thousands) | 2017 |  | 2016 |  | 2015
Unrecognized tax benefits at the beginning of the year | $ | 28,879 |  |  | $ | 5,975 |  |  | $ | 3,865 |
Reductions related to tax positions taken in prior year | — |  |  | (327 | ) |  | (79 | )
Additions related to tax positions taken in current year | 125 |  |  | 23,231 |  |  | 2,189 |
Unrecognized tax benefits at the end of the year | $ | 29,004 |  |  | $ | 28,879 |  |  | $ | 5,975 |
All of the unrecognized tax benefits, if recognized, would affect Bancshares’ effective tax rate. BancShares has unrecognized tax benefits relating to uncertain state tax positions in North Carolina and other state jurisdictions resulting from tax filings submitted to the states. No tax benefit has been recorded for these uncertain tax positions in the financial statements. Bancshares does not expect the unrecognized tax benefits to change significantly during 2018. BancShares recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. For the years ended December 31, 2017, 2016 and 2015, Bancshares recorded $450 thousand, $357 thousand and $298 thousand which primarily represent accrued interest.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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