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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Reconciliations of statutory U.S. federal income tax rates to our effective tax rate | Reconciliations of the statutory U.S. federal income tax rates to our effective tax rate for continuing operations follow:
Years ended December 31, |  | 2021 |  | 2020 |  | 2019
Statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State tax, net of federal benefit |  | 3.1 |  |  | 2.9 |  |  | 3.9 |
Business tax credits |  | (0.8) |  |  | (2.2) |  |  | (3.5) |
Reverse federal impact of indemnification adjustments |  | 0.1 |  |  | 0.2 |  |  | 0.3 |
Unrecognized tax benefits, U.S. federal and state, net of federal benefit |  | 0.4 |  |  | 0.7 |  |  | (0.1) |
Other, net |  | 0.9 |  |  | 1.1 |  |  | 0.7 |
Effective tax rate |  | 24.7 | % |  | 23.7 | % |  | 22.3 | %
Components of provision for income tax expense (benefit) | Income tax expense consists of:
As of December 31, (dollars in thousands) |  | 2021 |  | 2020 |  | 2019
Current provision (benefit): |  |  |  |  |  |
Federal |  | $ | 259,536 |  |  | $ | 172,153 |  |  | $ | 150,800 |
State |  | 64,843 |  |  | 28,387 |  |  | 24,378 |
Total current provision (benefit) |  | 324,379 |  |  | 200,540 |  |  | 175,178 |
Deferred provision (benefit): |  |  |  |  |  |
Federal |  | 47,240 |  |  | 58,003 |  |  | (8,240) |
State |  | 8,132 |  |  | 14,773 |  |  | (1,474) |
Total deferred provision (benefit) |  | 55,372 |  |  | 72,776 |  |  | (9,714) |
Provision for income tax expense |  | $ | 379,751 |  |  | $ | 273,316 |  |  | $ | 165,464 |
Schedule of deferred tax assets and liabilities | The tax effect of temporary differences that give rise to deferred tax assets and liabilities is summarized below.
As of December 31, (dollars in thousands) |  | 2021 |  | 2020
Deferred tax assets: |  |  |  |
Loan reserves |  | $ | 300,538 |  |  | $ | 356,296 |
Stock-based compensation plans |  | 10,174 |  |  | 10,914 |
Deferred revenue |  | 1,318 |  |  | 1,441 |
Operating loss carryovers |  | 394 |  |  | 83 |
Accrued expenses not currently deductible |  | 14,307 |  |  | 13,139 |
Net unrealized losses |  | — |  |  | 9,047 |
Unrecorded tax benefits |  | 11,016 |  |  | 6,997 |
Other |  | 1,097 |  |  | 1,003 |
Total deferred tax assets |  | 338,844 |  |  | 398,920 |
Deferred tax liabilities: |  |  |  |
Fixed assets |  | 10,131 |  |  | 11,098 |
Acquired intangible assets |  | 8,710 |  |  | 7,767 |
Market value adjustments on student loans, investments and derivatives |  | 33 |  |  | 5,651 |
Net unrealized gains |  | 6,459 |  |  | — |
Federal deferred for state receivable |  | 1,921 |  |  | 7,456 |
Student loan premiums and discounts, net |  | 12,396 |  |  | 11,336 |
Other |  | 363 |  |  | 307 |
Total deferred tax liabilities |  | 40,013 |  |  | 43,615 |
Net deferred tax assets |  | $ | 298,831 |  |  | $ | 355,305 |
Summary of changes in unrecognized tax benefits | The following table summarizes changes in unrecognized tax benefits:
As of December 31, (dollars in thousands) |  | 2021 |  | 2020 |  | 2019
Unrecognized tax benefits at beginning of year |  | $ | 63,134 |  |  | $ | 53,509 |  |  | $ | 52,159 |
Increases resulting from tax positions taken during a prior period |  | 1,496 |  |  | 12,723 |  |  | 12,333 |
Decreases resulting from tax positions taken during a prior period |  | (1,481) |  |  | (817) |  |  | (851) |
Increases resulting from tax positions taken during the current period |  | 20,743 |  |  | 7,815 |  |  | 4,572 |
Decreases related to settlements with taxing authorities |  | (3,682) |  |  | (148) |  |  | (8,670) |
Increases related to settlements with taxing authorities |  | 96 |  |  | — |  |  | — |
Reductions related to the lapse of statute of limitations |  | (4,978) |  |  | (9,948) |  |  | (6,034) |
Unrecognized tax benefits at end of year |  | $ | 75,328 |  |  | $ | 63,134 |  |  | $ | 53,509 |

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