Income Taxes
 12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes
Note 15 Income Taxes            
             
The income tax expense (benefit) attributable to income from operations is summarized as follows:
 
(in thousands)   Current   Deferred Total
2014             
Federal $ 19,749  $ 2,915  $ 22,664 
State   624    2,116    2,740 
Total $ 20,373  $ 5,031  $ 25,404 
2013             
Federal $ 11,826  $ 7,138  $ 18,964 
State   933    880    1,813 
Total $ 12,759  $ 8,018  $ 20,777 
2012             
Federal $ 4,044  $ 6,602  $ 10,646 
State     116    328    444 
Total $ 4,160  $ 6,930  $ 11,090 

  

The primary reasons for the differences between income tax expense and the amount computed by applying the statutory federal income tax rate to earnings are as follows:
 
  2014  2013  2012 
Statutory federal income tax rate 35.0% 35.0% 35.0%
  State income taxes, net of federal benefit 2.3  1.6  0.6 
  Tax exempt income (2.5) (3.0) (3.9)
  Bank-owned life insurance income (0.8) (1.0) (1.5)
  Federal tax credit (1.0) (2.3) (4.8)
  All other (0.2) (1.3) 0.8 
Total 32.8% 29.0% 26.2%

 

 

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31 were as follows:

 

(in thousands)     2014       2013       2012  
Deferred tax assets:                        
Allowance for loan and lease losses   $ 11,276     $ 10,946     $ 9,628  
Interest income on nonperforming loans     395       1,712       1,749  
Compensation and benefits     13,081       12,448       11,151  
Purchase accounting adjustments     3,538       5,746       16,221  
Intangibles     0       95       392  
Liabilities held at fair value     364       497       706  
Tax credit carryforward     1,995       3,990       3,591  
Other     2,347       2,838       1,590  
Total   $ 32,996     $ 38,272     $ 45,028  
Deferred tax liabilities:                        
Prepaid pension   $ 9,377     $ 10,154     $ 8,477  
Depreciation     2,553       2,948       3,151  
Intangibles     236       0       0  
Other     1,741       1,050       1,262  
Total deferred tax liabilities   $ 13,907     $ 14,152     $ 12,890  
Net deferred tax asset at year-end   $ 19,089     $ 24,120     $ 32,138  
Net deferred tax asset at beginning of year   $ 24,120     $ 32,138     $ 10,488  
(Decrease) increase in net deferred tax asset     (5,031 )     (8,018 )     21,650  
Purchase accounting adjustments, net     0       0       28,580  
Deferred tax expense   $ 5,031     $ 8,018     $ 6,930  

 

This analysis does not include recorded deferred tax assets(liabilities) of ($1.8) million and $5.5 million as of December 31, 2014 and 2013, respectively, related to net unrealized holdings (gains) / losses in the available-for-sale securities portfolio. In addition, the analysis excludes the recorded deferred tax assets of $17.2 million and $11.2 million, as of December 31, 2014 and 2013, respectively, related to employee benefit plans.

 

Realization of deferred tax assets is dependent upon the generation of future taxable income or the existence of sufficient taxable income within the carry-back period. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, management considers the scheduled reversal of the deferred tax liabilities, the level of historical taxable income, and the projected future taxable income over the periods in which the temporary differences comprising the deferred tax assets will be deductible. Based on its assessment, management determined that no valuation allowance is necessary at December 31, 2014 and 2013.

 

At December 31, 2014 and December 31, 2013, the Company had no ASC 740-10 unrecognized tax benefits. The Company does not expect the total amount of unrecognized tax benefits to significantly increase within the next twelve months. The Company recognizes interest and penalties on unrecognized tax benefits in income tax expense in its Consolidated Statements of Income.

 

The Company is subject to U.S. federal income tax and income tax in various state jurisdictions. All tax years ending after December 31, 2010 are open to examination by the taxing authorities.