Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Components of Consolidated Income Tax Expense

The components of consolidated income tax expense are as follows:

	2017		2016		2015
			(in thousands)
Current tax expense
Federal	$	17,835	$	17,401	$	21,076
State		6,650		7,121		7,139
	$	24,485		24,522		28,215
Deferred tax expense
Federal		11,418		2,735		408
State		1,055		455		273
		12,473		3,190		681
Total tax expense	$	36,958	$	27,712	$	28,896

Schedule of Components of Investments in Qualified Affordable Housing Projects

The Company recognized, as components of tax expense, tax credits and other tax benefits, and amortization expense relating to our investments in Qualified Affordable Housing Projects as followers for the periods indicated:

Year ended December 31,	2017			2016			2015
				(in thousands)
Tax credits and other tax benefits – decrease in tax expense	$	(1,753	)	$	(954	)	$	(354	)
Amortization – increase in tax expense	$	1,611		$	757		$	277

Reconciliation of Effective Tax Rate and Statutory Federal Income Tax Rate

The effective tax rate and the statutory federal income tax rate are reconciled as follows:

	Years Ended December 31,
	2017			2016			2015
Federal statutory income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal tax benefit		6.9			6.8			6.6
Tax Cuts and Jobs Act impact on deferred re-measurement		9.6			—			—
Tax-exempt interest on municipal obligations		(1.9	)		(1.8	)		(0.7	)
Tax-exempt life insurance related income		(1.3	)		(1.3	)		(1.3	)
Equity compensation		(1.2	)		—			—
Low income housing tax credit benefits		(2.3	)		(1.3	)		(0.4	)
Low income housing tax credit amortization		2.1			0.8			—
Non-deductible joint beneficiary agreement expense		0.1			0.1			0.1
Non-deductible merger expense		0.2			—			—
Other		0.5			(0.1	)		0.4
Effective Tax Rate		47.7	%		38.2	%		39.7	%

Company's Net Deferred Tax Asset Recorded in Other Assets

The temporary differences, tax effected, which give rise to the Company’s net deferred tax asset recorded in other assets are as follows as of December 31 for the years indicated:

	2017			2016
	(in thousands)
Deferred tax assets:
Allowance for losses and reserve for unfunded commitments	$	9,900		$	14,809
Deferred compensation		1,953			2,743
Accrued pension liability		6,835			9,220
Accrued bonus		171			1,727
Other accrued expenses		522			781
Unfunded status of the supplemental retirement plans		1,582			1,982
State taxes		1,397			2,257
Share based compensation		1,322			2,063
Nonaccrual interest		282			408
OREO write downs		59			132
Indemnification asset		—			313
Acquisition cost basis		2,187			3,996
Unrealized loss on securities		1,008			3,730
Tax credits		581			491
Net operating loss carryforwards		1,801			3,354
Other		508			981
Total deferred tax assets		30,108			48,987
Deferred tax liabilities:
Securities income		(958	)		(1,362	)
Depreciation		(1,987	)		(3,032	)
Merger related fixed asset valuations		(30	)		(54	)
Securities accretion		(315	)		(478	)
Mortgage servicing rights valuation		(1,943	)		(2,710	)
Core deposit intangible		(916	)		(1,813	)
Junior subordinated debt		(1,783	)		(2,616	)
Prepaid expenses and other		(479	)		(723	)
Total deferred tax liability		(8,411	)		(12,788	)
Net deferred tax asset	$	21,697		$	36,199

Summary of Changes in Unrecognized Tax Benefit (Including Interest and Penalties)

A summary of changes in the Company’s unrecognized tax benefit (including interest and penalties) in 2017 is as follows:

(in thousands)	UTB			Interest/Penalties			Total
As of December 31, 2016	$	114		$	7		$	121
Lapse of the applicable statute of limitations		(54	)		(5	)		(59	)
As of December 31, 2017	$	60		$	2		$	62