NOTE 14—INCOME TAXES

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

	Year Ended December 31,

	2012			2011			2010
	(In thousands)
Current Income Taxes:
Federal	$	(24,177	)	$	(15,129	)	$	7,912
State		(1,825	)		(9,562	)		(3,557	)

Total current income tax (expense) benefit		(26,002	)		(24,691	)		4,355

Deferred Income Taxes:
Federal		(2,550	)		(11,726	)		27,263
State		(8,143	)		(383	)		15,096

Total deferred income tax (expense) benefit		(10,693	)		(12,109	)		42,359

Total income tax (expense) benefit	$	(36,695	)	$	(36,800	)	$	46,714

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,

	2012			2011			2010
	(In thousands)
Computed expected income tax (expense) benefit at Federal statutory rate	$	(32,724	)	$	(30,626	)	$	38,056
State tax (expense) benefit, net of federal tax benefit		(6,479	)		(6,464	)		7,500
Tax-exempt interest		1,847			406			37
Increase in cash surrender value of life insurance		442			504			486
Tax credits		1,313			556			523
Other, net		(1,094	)		(1,176	)		112

Recorded income tax (expense) benefit	$	(36,695	)	$	(36,800	)	$	46,714

The Company had net income taxes receivable of $30.0 million and $14.6 million at December 31, 2012 and 2011, respectively, on its consolidated balance sheets.

The Company had available at December 31, 2012, approximately $142,000 of unused federal net operating loss carryforwards that may be applied against future taxable income through 2022. The Company had available at December 31, 2012, approximately $6.2 million of unused state net operating loss carryforwards that may be applied against future taxable income through 2031. 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,

	2012		2011
	(In thousands)
Deferred Tax Assets:
Book allowance for loan losses in excess of tax specific charge-offs	$	31,602	$	39,520
Interest on nonaccrual loans		473		641
Deferred compensation		3,727		3,999
Net operating losses		560		6,467
Premises and equipment, principally due to differences in depreciation		2,457		5,526
OREO valuation allowance		7,398		9,689
Assets acquired in FDIC-assisted acquisition		19,170		23,364
State tax benefit		247		3,311
Accrued liabilities		10,126		9,550
Other		10,374		5,336
Goodwill		3,846		4,764

Gross deferred tax assets		89,980		112,167

Deferred Tax Liabilities:
Core deposit and customer relationship intangibles		5,004		4,504
Deferred loan fees and costs		296		76
Unrealized gain on securities available-for-sale		23,824		16,513
FHLB stock and dividends		7,557		7,709
Unrealized income from FDIC-assisted acquisition		23,614		35,427

Gross deferred tax liabilities		60,295		64,229

Total net deferred tax asset	$	29,685	$	47,938

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.

Our evaluation of tax positions was performed for those tax years which remain open to audit. As of December 31, 2012, all the federal returns filed since 2008 and state returns filed since 2008 are subject to adjustment upon audit.

We had no unrecognized net tax benefit positions at December 31, 2012 and 2011, respectively. The unrecognized tax benefit of $117,000 at December 31, 2010 was reduced in 2011 due to lapse of statute. 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.