INCOME TAXES

12 Months Ended

Dec. 31, 2011

INCOME TAXES

INCOME TAXES

NOTE 14—INCOME TAXES

        The following table presents the components of income tax benefit (expense) for the years indicated:

	Year Ended December 31,
	2011			2010			2009
	(In thousands)
Current Income Taxes:
Federal	$	(15,129	)	$	7,912		$	10,716
State		(9,562	)		(3,557	)		(528	)
Total current income tax (expense) benefit		(24,691	)		4,355			10,188
Deferred Income Taxes:
Federal		(11,726	)		27,263			(4,100	)
State		(383	)		15,096			1,713
Total deferred income tax (expense) benefit		(12,109	)		42,359			(2,387	)
Total income tax (expense) benefit	$	(36,800	)	$	46,714		$	7,801

        The following table presents a reconciliation of the recorded income tax benefit (expense) to the amount of taxes computed by applying the applicable statutory Federal income tax rate of 35% to earnings or loss before income taxes:

	Year Ended December 31,
	2011			2010		2009
	(In thousands)
Computed expected income tax (expense) benefit at Federal statutory rate	$	(30,626	)	$	38,056	$	6,003
State tax (expense) benefit, net of federal tax benefit		(6,464	)		7,500		770
Increase in cash surrender value of life insurance		504			486		553
Tax credits		556			523		690
Other, net		(770	)		149		(215	)
Recorded income tax (expense) benefit	$	(36,800	)	$	46,714	$	7,801

        The Company had net income taxes receivable of $14.6 million and $20.5 million at December 31, 2011 and 2010, respectively, on its consolidated balance sheets.

        The Company had available at December 31, 2011, approximately $1.1 million of unused Federal net operating loss carryforwards that may be applied against future taxable income through 2030. The Company had available at December 31, 2011, approximately $90.7 million of unused state net operating loss carryforwards that may be applied against future taxable income through 2032. Utilization of the net operating loss and other carryforwards are subject to annual limitations set forth in Section 382 of the Internal Revenue Code.

        The following table presents the tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities as of the dates indicated:

	December 31,
	2011		2010
	(In thousands)
Deferred Tax Assets:
Book allowance for loan losses in excess of tax specific charge-offs	$	39,520	$	43,757
Interest on nonaccrual loans		641		1,986
Deferred compensation		3,999		4,216
Net operating losses		6,467		15,890
Premises and equipment, principally due to differences in depreciation		5,526		5,284
OREO valuation allowance		9,689		8,949
Assets acquired in FDIC-assisted acquisition		23,364		32,650
State tax benefit		3,311		—
Accrued liabilities		9,550		8,137
Other		5,336		7,544
Goodwill		4,764		5,991
Gross deferred tax assets		112,167		134,404
Deferred Tax Liabilities:
Core deposit and customer relationship intangibles		4,504		8,061
Deferred loan fees and costs		76		154
Unrealized gain on securities available-for-sale		16,513		2,885
FHLB stock and dividends		7,709		7,709
Unrealized income from FDIC-assisted acquisition		35,427		41,261
Gross deferred tax liabilities		64,229		60,070
Total net deferred tax asset	$	47,938	$	74,334

        Based upon our taxpaying history and estimates of taxable income over the years in which the items giving rise to the deferred tax assets are deductible, management believes it is more likely than not the Company will realize the benefits of these deductible differences.

        We adopted the provisions of ASC Topic 740, "Income Taxes," which relate to the accounting for uncertainty in income taxes recognized in an enterprise's financial statements on January 1, 2007. ASC Topic 740 prescribes a threshold and a measurement process for recognizing in the financial statements a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

        Our evaluation of tax positions was performed for those tax years which remain open to audit. As of December 31, 2011, all the federal returns filed since 2008 and state returns filed since 2007 are subject to adjustment upon audit.

        The following table presents a reconciliation of unrecognized net tax benefit positions for the year ended December 31, 2011:

	Unrecognized Tax Benefit Positions
	(In thousands)
Balance as of December 31, 2010	$	117
Reductions due to lapse of statutes of limitations		(117	)
Balance as of December 31, 2011	$	—

        While it is expected that the amount of unrecognized tax benefits may change in the next twelve months, the Company does not expect this change to have a material impact on the results of operations or the financial position of the Company. We may from time to time be assessed interest or penalties by taxing authorities, although any such assessments historically have been minimal and immaterial to our financial results. In the event we are assessed for interest and/or penalties, such amounts will be classified in the financial statements as income tax expense.