Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

v3.3.1.900
INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2015
Income Tax Disclosure [Abstract]  
Components of Income Tax Expense (Benefit)
The components of income tax expense are as follows:
  
 
 
Year Ended December 31,
 
 
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
Current tax expense:
 
 
 
 
 
 
 
 
 
 
Federal
 
$
28,517
 
$
25,929
 
$
21,264
 
State
 
 
1,824
 
 
693
 
 
899
 
Total current tax expense
 
 
30,341
 
 
26,622
 
 
22,163
 
Deferred tax expense (benefit):
 
 
 
 
 
 
 
 
 
 
Federal
 
 
(3,277)
 
 
(3,778)
 
 
(1,616)
 
State
 
 
(1,599)
 
 
(1,243)
 
 
(189)
 
Total deferred tax expense
 
 
(4,876)
 
 
(5,021)
 
 
(1,805)
 
Total income tax expense
 
$
25,465
 
$
21,601
 
$
20,358
 
Effective Income Tax Rate Reconciliation
The Company’s total income tax expense differs from the amounts computed by applying the Federal income tax statutory rates to income before income taxes. A reconciliation of the differences is as follows:
 
 
 
Year Ended December 31, 2015
 
 
 
Amount
 
% of Pre-tax
Earnings
 
 
 
(In Thousands)
 
 
 
 
Income tax at statutory federal rate
 
$
31,152
 
 
35.00
%
Effect on rate of:
 
 
 
 
 
 
 
State income tax, net of federal tax effect
 
 
146
 
 
0.16
%
Tax-exempt income, net of expenses
 
 
(1,308)
 
 
(1.47)
%
Bank owned life insurance contracts
 
 
(917)
 
 
(1.03)
%
Incentive stock option expense
 
 
3
 
 
-
%
Federal tax credits
 
 
(3,600)
 
 
(4.04)
%
Other
 
 
(11)
 
 
(0.01)
%
Effective income tax and rate
 
$
25,465
 
 
28.61
%
 
 
 
Year Ended December 31, 2014
 
 
 
Amount
 
 % of Pre-tax
Earnings
 
 
 
(In Thousands)
 
 
 
 
Income tax at statutory federal rate
 
$
25,892
 
 
35.00
%
Effect on rate of:
 
 
 
 
 
 
 
State income tax, net of federal tax effect
 
 
(358)
 
 
(0.49)
%
Tax-exempt income, net of expenses
 
 
(1,316)
 
 
(1.78)
%
Bank owned life insurance contracts
 
 
(798)
 
 
(1.08)
%
Incentive stock option expense
 
 
(18)
 
 
(0.02)
%
Federal tax credits
 
 
(1,659)
 
 
(2.24)
%
Other
 
 
(142)
 
 
(0.19)
%
Effective income tax and rate
 
$
21,601
 
 
29.20
%
 
 
 
Year Ended December 31, 2013
 
 
 
Amount
 
 % of Pre-tax
Earnings
 
 
 
(In Thousands)
 
 
 
 
Income tax at statutory federal rate
 
$
21,691
 
 
35.00
%
Effect on rate of:
 
 
 
 
 
 
 
State income tax, net of federal tax effect
 
 
462
 
 
0.75
%
Tax-exempt income, net of expenses
 
 
(1,200)
 
 
(1.94)
%
Bank owned life insurance contracts
 
 
(698)
 
 
(1.13)
%
Incentive stock option expense
 
 
66
 
 
0.11
%
Other
 
 
37
 
 
0.06
%
Effective income tax and rate
 
$
20,358
 
 
32.85
%
Deferred Tax Assets and Liabilities
The components of net deferred tax asset are as follows:
 
 
 
December 31,
 
 
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
Deferred tax assets:
 
 
 
 
 
 
 
Allowance for loan losses
 
$
16,482
 
$
13,491
 
Other real estate owned
 
 
1,136
 
 
1,319
 
Nonqualified equity awards
 
 
1,576
 
 
1,594
 
Nonaccrual interest
 
 
441
 
 
444
 
State tax credits
 
 
2,313
 
 
987
 
Investments
 
 
1,826
 
 
667
 
Deferred loan fees
 
 
642
 
 
87
 
Reserve for unfunded commitments
 
 
190
 
 
-
 
Differences in amounts reflected in financial statements and income tax basis of assets acquired and liabilities assumed in acquisition
 
 
972
 
 
-
 
Acquired net operating losses
 
 
1,398
 
 
-
 
Other deferred tax assets
 
 
228
 
 
117
 
Total deferred tax assets
 
 
27,204
 
 
18,706
 
 
 
 
 
 
 
 
 
Deferred tax liabilities:
 
 
 
 
 
 
 
Net unrealized gain on securities available for sale
 
 
1,641
 
 
2,418
 
Depreciation
 
 
1,285
 
 
421
 
Prepaid expenses
 
 
202
 
 
151
 
Acquired intangible assets
 
 
651
 
 
-
 
Total deferred tax liabilities
 
 
3,779
 
 
2,990
 
Net deferred tax assets
 
$
23,425
 
$
15,716
 
Summary of the changes in the amount of unrecognized benefits
The following table presents a summary of the changes during 2015, 2014 and 2013 in the amount of unrecognized tax benefits that are included in the consolidated balance sheets.
 
 
 
2015
 
2014
 
2013
 
 
 
(In Thousands)
 
Balance, beginning of year
 
$
804
 
$
437
 
$
161
 
Increases related to prior year tax positions
 
 
369
 
 
367
 
 
276
 
Decreases related to prior year tax positions
 
 
-
 
 
-
 
 
-
 
Increases related to current year tax positions
 
 
-
 
 
-
 
 
-
 
Settlements
 
 
-
 
 
-
 
 
-
 
Lapse of statute
 
 
-
 
 
-
 
 
-
 
Balance, end of year
 
$
1,173
 
$
804
 
$
437