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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Note 14. Income Taxes Income tax expense (benefit) included in net income consisted of the following components:
| Years Ended December 31, |
($ in thousands) | 2022 |  | 2021 |  | 2020 |
Included in net income |  |  |  |  |  |
Current federal | $ | 142,433 |  | $ | 86,858 |  | $ | (58,723 | )
Current state |  | 14,840 |  |  | 7,607 |  |  | (132 | )
Total current provision |  | 157,273 |  |  | 94,465 |  |  | (58,855 | )
Deferred federal |  | (23,556 | ) |  | 7,035 |  |  | (17,000 | )
Deferred state |  | 1,390 |  |  | 3,341 |  |  | (3,716 | )
Total deferred provision |  | (22,166 | ) |  | 10,376 |  |  | (20,716 | )
Total expense (benefit) included in net income | $ | 135,107 |  | $ | 104,841 |  | $ | (79,571 | )
Income tax expense (benefit) does not reflect the tax effects of amounts recognized in other comprehensive income and in AOCI, a separate component of stockholders’ equity. These amounts include unrealized gains and losses on securities available for sale or transferred to held to maturity, unrealized gains and losses on derivatives and hedging transactions, and valuation adjustments of defined benefit and other post-retirement benefit plans. Refer to Note 12 – Stockholders’ Equity for additional information. Temporary differences arise between the tax bases of assets or liabilities and their carrying amounts for financial reporting purposes. The expected tax effects from when these differences are resolved are recorded currently as deferred tax assets or liabilities. Significant components of the Company’s deferred tax assets and liabilities were as follows:
| December 31, |
($ in thousands) | 2022 |  | 2021 |
Deferred tax assets: |  |  |  |
Allowance for loan losses | $ | 77,045 |  | $ | 85,118 |
Loan purchase accounting adjustments |  | 485 |  |  | 1,838 |
Tax credit carryforward |  | — |  |  | 2,326 |
Federal/state net operating loss |  | 3,591 |  |  | 3,646 |
Lease liability |  | 26,207 |  |  | 27,553 |
Net unrealized losses on securities available-for-sale and cash flow hedges |  | 195,090 |  |  | — |
Derivatives |  | 38,082 |  |  | 1,735 |
Other |  | 10,085 |  |  | 8,883 |
Gross deferred tax assets |  | 350,585 |  |  | 131,099 |
State valuation allowance |  | (3,591 | ) |  | (3,646 | )
Net deferred tax assets | $ | 346,994 |  | $ | 127,453 |
Deferred tax liabilities: |  |  |  |
Employee compensation and benefits | $ | (8,399 | ) | $ | (11,137 | )
Net unrealized gains on securities available-for-sale an cash flow hedges |  | — |  |  | (10,136 | )
Fixed assets & intangibles |  | (26,589 | ) |  | (35,705 | )
Lease Financing |  | (52,385 | ) |  | (52,896 | )
Right-of-use Asset |  | (21,809 | ) |  | (23,075 | )
Other |  | (26,394 | ) |  | (13,938 | )
Gross deferred tax liabilities | $ | (135,576 | ) | $ | (146,887 | )
Net deferred tax asset (liability) | $ | 211,418 |  | $ | (19,434 | )
Reported income tax expense (benefit) differed from amounts computed by applying the statutory income tax rate of 21% for the years ended December 31, 2022, 2021 and 2020 to earnings or loss before income taxes. Historically, the primary differences have been due to tax-exempt income, federal and state tax credits and excess tax benefits from stock-based compensation. The year ended December 31, 2020 includes an incremental 14% tax benefit totaling $30.2 million associated with the five-year carryback of both the 2020 net operating loss (“NOL”) and the NOL attribute inherited from an acquired entity to a 35% statutory rate tax year, as allowed by provisions of the CARES Act. In addition, the 2021 effective tax rate was favorably impacted by a $4.9 million benefit associated with changing certain fixed asset tax elections that resulted in an increase in the 2020 NOL. The main source of tax credits has been investments in tax-advantaged securities and tax credit projects. These investments are made primarily in the markets we serve and directed at tax credits issued under the Federal and State New Market Tax Credit (“NMTC”) programs, Low-Income Housing Tax Credit (“LIHTC”) programs, as well as pre-2018 Qualified Zone Academy Bonds (“QZAB”), Qualified School Construction Bonds (“QSCB”). A summary of the factors that impacted income tax expense follows.
| Years Ended December 31,
| 2022 | 2021 | 2020 |  |
($ in thousands) | Amount |  | % |  |  | Amount |  | % |  |  | Amount |  | % |  |
Taxes computed at statutory rate | $ | 138,431 |  |  | 21.0 |  | % | $ | 119,292 |  |  | 21.0 |  | % | $ | (26,196 | ) |  | 21.0 |  | %
Increases (decreases) in taxes resulting from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
State income taxes, net of federal income tax benefit |  | 13,272 |  |  | 2.0 |  |  |  | 9,048 |  |  | 1.6 |  |  |  | (1,269 | ) |  | 1.0 |  |
Tax-exempt interest |  | (8,612 | ) |  | (1.3 | ) |  |  | (9,100 | ) |  | (1.6 | ) |  |  | (10,444 | ) |  | 8.4 |  |
Life insurance contracts |  | (1,812 | ) |  | (0.3 | ) |  |  | (2,653 | ) |  | (0.5 | ) |  |  | (4,857 | ) |  | 3.9 |  |
Tax credits |  | (8,039 | ) |  | (1.2 | ) |  |  | (7,889 | ) |  | (1.4 | ) |  |  | (8,072 | ) |  | 6.5 |  |
Employee share-based compensation |  | (2,084 | ) |  | (0.3 | ) |  |  | (1,671 | ) |  | (0.3 | ) |  |  | 1,351 |  |  | (1.1 | ) |
FDIC assessment disallowance |  | 1,836 |  |  | 0.3 |  |  |  | 1,609 |  |  | 0.3 |  |  |  | 2,094 |  |  | (1.7 | ) |
Net operating loss carryback under CARES act |  | 238 |  |  | — |  |  |  | (4,948 | ) |  | (0.9 | ) |  |  | (30,167 | ) |  | 24.2 |  |
Other, net |  | 1,877 |  |  | 0.3 |  |  |  | 1,153 |  |  | 0.3 |  |  |  | (2,011 | ) |  | 1.6 |  |
Income tax expense | $ | 135,107 |  |  | 20.5 |  | % | $ | 104,841 |  |  | 18.5 |  | % | $ | (79,571 | ) |  | 63.8 |  | %
The Company had approximately $61.0 million in state net operating loss carryforwards that originated in the tax years 2003 through 2020 and begin expiring in 2032. A $61.0 million gross state valuation allowance has been established for all non-bank entity level state NOL carryforwards, which translates to a net $3.6 million valuation allowance in the Company’s deferred tax inventory. The impact of this valuation allowance is not material to the financial statements. The tax benefit of a position taken or expected to be taken in a tax return should be recognized when it is more likely than not that the position will be sustained on its technical merits. The liability for unrecognized tax benefits was immaterial as of December 31, 2022, 2021 and 2020. The Company does not expect the liability for unrecognized tax benefits to change significantly during 2023. The Company recognizes interest and penalties, if any, related to income tax matters in income tax expense, and the amounts recognized during 2022, 2021 and 2020 were insignificant. The Company and its subsidiaries file a consolidated U.S. federal income tax return, as well as filing various state returns. Generally, the federal returns for years prior to 2019 are no longer subject to examination. However, as a result of the 2020 federal NOL carryback, the 2015 to 2018 returns may still be subject to examination by the IRS. State returns that are open to examination vary by jurisdiction and are generally open three to four years.

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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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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