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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES At December 31, 2021, 2020 and 2019 income tax expense consisted of the following:
(Dollars in thousands) | 2021 |  | 2020 |  | 2019
Current tax expense |  |  |  |  |
Federal | $ | 140,405 |  |  | $ | 137,162 |  |  | $ | 68,984 |
State | 21,383 |  |  | 14,532 |  |  | 11,095 |
Total current tax expense | 161,788 |  |  | 151,694 |  |  | 80,079 |
Deferred tax (benefit) expense |  |  |  |  |
Federal | (6,234) |  |  | (28,535) |  |  | 50,522 |
State | (1,352) |  |  | 3,000 |  |  | 4,076 |
Total deferred tax (benefit) expense | (7,586) |  |  | (25,535) |  |  | 54,598 |
Total income tax expense | $ | 154,202 |  |  | $ | 126,159 |  |  | $ | 134,677 |
Income tax expense differed from the amounts computed by applying the statutory federal income tax rate of 21% to pretax income as a result of the following:
(Dollars in thousands) | 2021 |  | 2020 |  | 2019
Income taxes at federal statutory rates | $ | 147,349 |  |  | $ | 129,755 |  |  | $ | 124,330 |
Increase (reduction) in income taxes resulting from: |  |  |  |  |
Nontaxable income on loans, leases and investments, net of nondeductible expenses | (1,523) |  |  | (1,581) |  |  | (1,639) |
Excess tax benefits of compensation | 1,507 |  |  | 1,146 |  |  | 1,070 |
State and local income taxes, including any change in valuation allowance, net of federal income tax benefit | 15,825 |  |  | 13,850 |  |  | 11,985 |
Tax credits net of amortization | (5,078) |  |  | (5,367) |  |  | (4,474) |
Repayment of claim of right income | (2,254) |  |  | (13,926) |  |  | — |
Other, net | (1,624) |  |  | 2,282 |  |  | 3,405 |
Total income tax expense | $ | 154,202 |  |  | $ | 126,159 |  |  | $ | 134,677 |
The net deferred tax liability included the following components at December 31, 2021, and 2020:
(Dollars in thousands) | 2021 |  | 2020
Allowance for credit losses | $ | 39,759 |  |  | $ | 52,293 |
Operating lease liabilities | 14,267 |  |  | 15,737 |
Executive separation from service agreements | 7,835 |  |  | 8,989 |
Net operating loss carryforwards | 7,843 |  |  | 9,545 |
Net unrealized loss included in accumulated other comprehensive income (loss) | 4,630 |  |  | — |
Accelerated depreciation | 3,645 |  |  | — |
Employee compensation | 18,860 |  |  | 16,083 |
Other reserves | 6,135 |  |  | 5,376 |
Other | 5,845 |  |  | 6,898 |
Deferred tax asset | 108,819 |  |  | 114,921 |
Accelerated depreciation | — |  |  | 14,984 |
Lease financing activities | 7,725 |  |  | 15,265 |
Operating lease assets | 13,996 |  |  | 15,670 |
Net unrealized gain on securities included in accumulated other comprehensive income (loss) | — |  |  | 24,857 |
Net deferred loan fees and costs | 14,662 |  |  | 13,975 |
Intangible assets | 14,257 |  |  | 13,012 |
Security, loan and debt valuations | 5,960 |  |  | 2,051 |
FDIC assisted transactions timing differences | — |  |  | 2,393 |
Pension assets | 64,068 |  |  | 44,549 |
Other | 20,998 |  |  | 10,193 |
Deferred tax liability | 141,666 |  |  | 156,949 |
Net deferred tax liability | $ | (32,847) |  |  | $ | (42,028) |
At December 31, 2021, the gross tax benefit related to net operating loss carryforwards was $34.7 million and $15.9 million related to federal and state taxes, respectively. The carryforwards expire in years beginning in 2030 and 2024 for federal and state taxes, respectively. 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, 2021 or 2020 to reduce BancShares’ gross deferred tax asset to the amount more likely than not to be realized. Income tax expense for 2021 and 2020 was favorably impacted by $2.3 million and $13.9 million, respectively, due to BancShares’ decision in the second quarter of 2020 to utilize an allowable alternative for computing its 2021 and 2020 federal income tax liability. The allowable alternative provides BancShares the ability to use the federal income tax rate for certain current year deductible amounts related to prior year FDIC-assisted acquisitions that was applicable when these amounts were originally subjected to tax. BancShares regularly adjusts its net deferred tax liability as a result of changes in tax rates in the states where it files tax returns. These changes in tax rates did not have a material impact on tax expense in 2021, 2020 or 2019. BancShares federal income tax returns for 2018 through 2020 remain open for examination by the Internal Revenue Service. Generally, BancShares is no longer subject to examination by state and local taxing authorities for taxable years prior to 2016. The following table provides a roll forward of BancShares’ gross unrecognized tax benefits, excluding interest and penalties, during the years ended December 31, 2021, 2020 and 2019:
(Dollars in thousands) | 2021 |  | 2020 |  | 2019
Unrecognized tax benefits at the beginning of the year | $ | 31,375 |  |  | $ | 32,226 |  |  | $ | 28,255 |
Additions (reductions) related to tax positions taken in prior year | (321) |  |  | 153 |  |  | (683) |
Additions related to tax positions taken in current year | 1,373 |  |  | 1,295 |  |  | 6,554 |
Settlements | (1,601) |  |  | (1,516) |  |  | — |
Reductions related to lapse of statute of limitations | (394) |  |  | (783) |  |  | (1,900) |
Unrecognized tax benefits at the end of the year | $ | 30,432 |  |  | $ | 31,375 |  |  | $ | 32,226 |
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. It is reasonably possible that these uncertain state tax positions will be either settled or resolved in the next twelve months. A range of the reasonably possible change cannot be made. BancShares recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. Accruals and releases of interest and penalties resulted in a benefit of $381 thousand and $135 thousand for the years ended December 31, 2021 and 2019, respectively, and an expense of $467 thousand for the year ended December 31, 2020. BancShares had $515 thousand and $896 thousand accrued for the payment of interest and penalties as of December 31, 2021 and 2020, respectively.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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