Income Taxes |
Note 12—Income Taxes
The provision for income taxes consists of the following:
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Years Ended December 31, |
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(Dollars in thousands)
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2012 |
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2011 |
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2010 |
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Current: |
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Federal |
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$ |
10,455 |
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$ |
19,597 |
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$ |
2,898 |
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State |
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1,351 |
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|
1,366 |
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|
2,069 |
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Total current tax expense |
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11,806 |
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20,963 |
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|
4,967 |
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Deferred: |
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Federal |
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3,161 |
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(9,798 |
) |
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23,211 |
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State |
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161 |
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(403 |
) |
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768 |
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Total deferred tax expense (benefit) |
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3,322 |
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(10,201 |
) |
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23,979 |
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Provision for income taxes |
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$ |
15,128 |
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$ |
10,762 |
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$ |
28,946 |
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The provision for income taxes differs from that computed by applying the federal statutory income tax rate of 35% to income before provision for income taxes, as indicated in the following analysis:
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Years Ended December 31, |
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(Dollars in thousands)
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2012 |
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2011 |
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2010 |
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Income taxes at federal statutory rate |
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$ |
15,806 |
|
$ |
11,675 |
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$ |
28,290 |
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Increase (reduction) of taxes resulting from: |
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State income taxes, net of federal tax benefit |
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983 |
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626 |
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1,844 |
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Tax-exempt interest |
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(1,436 |
) |
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(821 |
) |
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(834 |
) |
Income tax credits |
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(571 |
) |
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(584 |
) |
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(584 |
) |
Dividends received deduction |
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(3 |
) |
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(3 |
) |
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(2 |
) |
Other, net |
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349 |
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(131 |
) |
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232 |
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$ |
15,128 |
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$ |
10,762 |
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$ |
28,946 |
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The components of the net deferred tax asset, included in other assets are as follows:
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December 31, |
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(Dollars in thousands)
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2012 |
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2011 |
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Allowance for loan losses |
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$ |
16,597 |
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$ |
18,244 |
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Other-than-temporary impairment on securities |
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1,196 |
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|
120 |
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Share-based compensation |
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|
854 |
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|
785 |
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Pension plan and post-retirement benefits |
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2,067 |
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2,557 |
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Deferred compensation |
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2,572 |
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|
664 |
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Purchase accounting adjustments |
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42,815 |
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216 |
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Other real estate owned |
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8,214 |
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2,303 |
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Tax deductible goodwill |
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1,060 |
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— |
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Net operating loss carryforwards |
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6,870 |
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|
1,138 |
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Cash flow hedge |
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|
572 |
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— |
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Other |
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921 |
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673 |
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Total deferred tax assets |
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83,738 |
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26,700 |
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Gain on FDIC assisted transaction deferred for tax purposes |
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27,075 |
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17,080 |
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Unrealized gains on investment securities available for sale |
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5,294 |
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3,579 |
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Depreciation |
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3,556 |
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3,265 |
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Intangible assets |
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7,649 |
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1,483 |
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Deferred loan fees |
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1,740 |
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|
1,935 |
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Prepaid expense |
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295 |
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|
689 |
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Other |
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2,969 |
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|
211 |
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Total deferred tax liabilities |
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48,578 |
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28,242 |
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Net deferred tax asset (liability) before valuation allowance |
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35,160 |
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(1,542 |
) |
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Less, valuation allowance |
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(1,259 |
) |
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(1,138 |
) |
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Net deferred tax asset (liability) |
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$ |
33,901 |
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$ |
(2,680 |
) |
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At December 31, 2012, the Company had operating loss carryforwards for state income tax purposes of approximately $25.2 million available to offset future taxable income. The carryforwards expire in varying amounts through 2023. The valuation allowance is based on management's estimate of the ultimate realization of the parent company's deferred tax asset.
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