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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES At December 31, 2019, 2018 and 2017 income tax expense consisted of the following:
(Dollars in thousands) | 2019 |  | 2018 |  | 2017
Current tax expense |  |  |  |  |
Federal | $ | 68,984 |  |  | $ | 95,151 |  |  | $ | 87,992 |
State | 11,095 |  |  | 21,523 |  |  | 6,116 |
Total current tax expense | 80,079 |  |  | 116,674 |  |  | 94,108 |
Deferred tax expense (benefit) |  |  |  |  |
Federal | 50,522 |  |  | (10,944 | ) |  | 115,392 |
State | 4,076 |  |  | (2,433 | ) |  | 10,446 |
Total deferred tax expense (benefit) | 54,598 |  |  | (13,377 | ) |  | 125,838 |
Total income tax expense | $ | 134,677 |  |  | $ | 103,297 |  |  | $ | 219,946 |
Income tax expense differed from the amounts computed by applying the statutory federal income tax rate of 21% for 2019 and 2018 and 35% for 2017 to pretax income as a result of the following:
(Dollars in thousands) | 2019 |  | 2018 |  | 2017
Income taxes at federal statutory rates | $ | 124,330 |  |  | $ | 105,758 |  |  | $ | 190,294 |
Increase (reduction) in income taxes resulting from: |  |  |  |  |
Nontaxable income on loans, leases and investments, net of nondeductible expenses | (1,639 | ) |  | (1,796 | ) |  | (2,525 | )
Excess tax benefits of compensation | 1,070 |  |  | 371 |  |  | — |
State and local income taxes, including any change in valuation allowance, net of federal income tax benefit | 11,985 |  |  | 15,081 |  |  | 10,765 |
Effect of federal rate change | — |  |  | (15,736 | ) |  | 25,762 |
Tax credits net of amortization | (4,474 | ) |  | (2,891 | ) |  | (4,840 | )
Other, net | 3,405 |  |  | 2,510 |  |  | 490 |
Total income tax expense | $ | 134,677 |  |  | $ | 103,297 |  |  | $ | 219,946 |
The net deferred tax asset included the following components at December 31, 2019, and 2018:
(Dollars in thousands) | 2019 |  | 2018
Allowance for loan and lease losses | $ | 53,073 |  |  | $ | 53,391 |
Operating lease liabilities | 17,752 |  |  | — |
Executive separation from service agreements | 12,334 |  |  | 7,927 |
Net operating loss carryforwards | 11,085 |  |  | 6,862 |
Net unrealized loss included in comprehensive income | — |  |  | 32,663 |
Employee compensation | 13,313 |  |  | 11,145 |
FDIC assisted transactions timing differences | 8,678 |  |  | 7,622 |
Other reserves | 5,001 |  |  | 5,574 |
Other | 10,698 |  |  | 9,555 |
Deferred tax asset | 131,934 |  |  | 134,739 |
Accelerated depreciation | 51,249 |  |  | 4,987 |
Lease financing activities | 8,101 |  |  | 12,674 |
Operating lease assets | 17,837 |  |  | — |
Net unrealized gain on securities included in accumulated other comprehensive loss | 1,821 |  |  | — |
Net deferred loan fees and costs | 11,781 |  |  | 10,651 |
Intangible assets | 9,148 |  |  | 11,713 |
Security, loan and debt valuations | 5,767 |  |  | 4,557 |
Pension liability | 5,079 |  |  | 6,287 |
Other | 15,993 |  |  | 1,722 |
Deferred tax liability | 126,776 |  |  | 52,591 |
Net deferred tax asset | $ | 5,158 |  |  | $ | 82,148 |
At December 31, 2019, $48.3 million of existing gross deferred tax assets related to federal net operating loss carryforwards and $24.6 million to state net operating loss carryforwards which expire in years beginning in 2024. The net operating losses were obtained through various acquisitions and are subject to the annual limitations set forth by Internal Revenue Code Section 382. No valuation allowance was necessary as of December 31, 2019 and 2018, to reduce BancShares’ gross deferred tax asset to the amount more likely than not to be realized. BancShares regularly adjusts its net deferred tax asset as a result of changes in tax rates in the state where it files tax returns. These changes in tax rates did not have a material impact on tax expense in 2019, 2018, or 2017. BancShares’ and its subsidiaries’ federal income tax returns for 2016 through 2018 remain open for examination. Generally, BancShares is no longer subject to examination by state and local taxing authorities for taxable years prior to 2014. The following table provides a rollforward of BancShares’ gross unrecognized tax benefits, excluding interest and penalties, during the years ended December 31, 2019, 2018 and 2017:
(Dollars in thousands) | 2019 |  | 2018 |  | 2017
Unrecognized tax benefits at the beginning of the year | $ | 28,255 |  |  | $ | 29,004 |  |  | $ | 28,879 |
Reductions related to tax positions taken in prior year | (683 | ) |  | (1,054 | ) |  | (44 | )
Additions related to tax positions taken in current year | 6,554 |  |  | 1,433 |  |  | 169 |
Reductions related to lapse of statute of limitations | (1,900 | ) |  | (1,128 | ) |  | — |
Unrecognized tax benefits at the end of the year | $ | 32,226 |  |  | $ | 28,255 |  |  | $ | 29,004 |
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 consolidated financial statements. BancShares does not expect the unrecognized tax benefits to change significantly during 2020. BancShares recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. For the years ended December 31, 2019, 2018 and 2017, BancShares recorded $429 thousand, $564 thousand and $450 thousand, respectively 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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