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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes |
11. | INCOME TAXES
The current and deferred amounts of income tax expense consist of the following.
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (Dollars in thousands) |
Current provision: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 48,328 |  |  | $ | 51,564 |  |  | $ | 31,055 |
State |  |  | 28,469 |  |  |  | 29,487 |  |  |  | 20,546 |
|  |  | 76,797 |  |  |  | 81,051 |  |  |  | 51,601 |
Deferred provision: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (2,997 | ) |  |  | 486 |  |  |  | 5,158 |
State |  |  | (1,439 | ) |  |  | 1,710 |  |  |  | 2,353 |
|  |  | (4,436 | ) |  |  | 2,196 |  |  |  | 7,511 |
Total |  |  | $72,361 |  |  | $ | 83,247 |  |  | $ | 59,112 |
Income tax asset consists of the following .
|  | December 31, |
|  | 2020 |  |  | 2019 |
|  | (Dollars in thousands) |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | 5,408 |  |  | $ | 5,890 |
State |  |  | 2,610 |  |  |  | 3,456 |
|  |  | 8,018 |  |  |  | 9,346 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | 14,779 |  |  |  | 17,580 |
State |  |  | 6,743 |  |  |  | 8,661 |
|  |  | 21,522 |  |  |  | 26,241 |
Total |  | $ | 29,540 |  |  | $ | 35,587 |
Temporary differences between the amounts reported in the financial statements and the tax bases of assets and liabilities resulted in deferred taxes. The components of the net deferred tax asset are as follows.
|  | December 31, |
|  | 2020 |  |  | 2019 |
|  | (Dollars in thousands) |
Deferred tax assets: |  |  |  |  |  |  |  |
Bad debt and credit loss deduction |  | $ | 32,671 |  |  | $ | 24,282 |
Net operating loss carryforward |  |  | 10 |  |  |  | 75 |
Deferred compensation |  |  | 6,607 |  |  |  | 6,942 |
PCI loans |  |  | 663 |  |  |  | 2,299 |
California franchise tax |  |  | 4,584 |  |  |  | 4,281 |
Accrued expense |  |  | 4,662 |  |  |  | 4,831 |
Acquired loan discounts |  |  | 9,709 |  |  |  | 15,180 |
Lease liability |  |  | 6,369 |  |  |  | 6,175 |
Other, net |  |  | 3,865 |  |  |  | 1,453 |
Gross deferred tax asset |  |  | 69,140 |  |  |  | 65,518 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  |  | 2,675 |  |  |  | 3,895 |
Intangibles - acquisitions |  |  | 15,376 |  |  |  | 16,941 |
FHLB Stock |  |  | 2,525 |  |  |  | 2,525 |
Deferred income |  |  | 3,544 |  |  |  | 3,055 |
Right of use asset |  |  | 6,080 |  |  |  | 5,893 |
Unrealized gain on investment securities, net |  |  | 17,418 |  |  |  | 6,968 |
Gross deferred tax liability |  |  | 47,618 |  |  |  | 39,277 |
Net deferred tax asset |  | $ | 21,522 |  |  | $ | 26,241 |
Annual Effective Tax Rate The annual consolidated effective tax rate for the periods presented, is reconciled to the U.S. statutory income rate as follows.
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | Amount |  |  | Percent |  |  | Amount |  |  | Percent |  |  | Amount |  |  | Percent |
|  | (Dollars in thousands) |
Federal income tax at statutory rate |  | $ | 52,399 |  |  |  | 21.0 | % |  | $ | 61,126 |  |  |  | 21.0 | % |  | $ | 44,334 |  |  |  | 21.0 | %
State franchise taxes, net of federal benefit |  |  | 20,950 |  |  |  | 8.4 | % |  |  | 24,430 |  |  |  | 8.4 | % |  |  | 17,905 |  |  |  | 8.5 | %
Tax-exempt income |  |  | (3,191 | ) |  |  | (1.3 | %) |  |  | (3,081 | ) |  |  | (1.1 | %) |  |  | (2,991 | ) |  |  | (1.4 | %)
Tax credits |  |  | (1,946 | ) |  |  | (0.8 | %) |  |  | (2,153 | ) |  |  | (0.7 | %) |  |  | (1,451 | ) |  |  | (0.7 | %)
Other, net |  |  | 4,149 |  |  |  | 1.7 | % |  |  | 2,925 |  |  |  | 1.0 | % |  |  | 1,315 |  |  |  | 0.6 | %
Provision for income taxes |  | $ | 72,361 |  |  |  | 29.0 | % |  | $ | 83,247 |  |  |  | 28.6 | % |  | $ | 59,112 |  |  |  | 28.0 | %
There were no significant unrecognized tax benefits at December 31, 2020 and 2019. We do not expect the total amount of unrecognized tax benefits to significantly increase or decrease within the next twelve months. The Company is subject to federal income tax and franchise tax of the state of California. Our federal income tax returns for the years ended December 31, 2015 through 2020 are open to audit by the federal authorities and our California state tax returns for the years ended December 31, 2015 through 2020 are open to audit by state authorities.

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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=84230637&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=116825942&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=84230637&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=116825942&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=84230637&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 + Details
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