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Income Taxes
12 Months Ended
Dec. 31, 2012
Income Taxes  
Income Taxes

Note 12—Income Taxes

        The provision for income taxes consists of the following:

 
  Years Ended December 31,  
(Dollars in thousands)
  2012   2011   2010  

Current:

                   

Federal

  $ 10,455   $ 19,597   $ 2,898  

State

    1,351     1,366     2,069  
               

Total current tax expense

    11,806     20,963     4,967  
               

Deferred:

                   

Federal

    3,161     (9,798 )   23,211  

State

    161     (403 )   768  
               

Total deferred tax expense (benefit)

    3,322     (10,201 )   23,979  
               

Provision for income taxes

  $ 15,128   $ 10,762   $ 28,946  
               

        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:

 
  Years Ended December 31,  
(Dollars in thousands)
  2012   2011   2010  

Income taxes at federal statutory rate

  $ 15,806   $ 11,675   $ 28,290  

Increase (reduction) of taxes resulting from:

                   

State income taxes, net of federal tax benefit

    983     626     1,844  

Tax-exempt interest

    (1,436 )   (821 )   (834 )

Income tax credits

    (571 )   (584 )   (584 )

Dividends received deduction

    (3 )   (3 )   (2 )

Other, net

    349     (131 )   232  
               

 

  $ 15,128   $ 10,762   $ 28,946  
               

        The components of the net deferred tax asset, included in other assets are as follows:

 
  December 31,  
(Dollars in thousands)
  2012   2011  

Allowance for loan losses

  $ 16,597   $ 18,244  

Other-than-temporary impairment on securities

    1,196     120  

Share-based compensation

    854     785  

Pension plan and post-retirement benefits

    2,067     2,557  

Deferred compensation

    2,572     664  

Purchase accounting adjustments

    42,815     216  

Other real estate owned

    8,214     2,303  

Tax deductible goodwill

    1,060      

Net operating loss carryforwards

    6,870     1,138  

Cash flow hedge

    572      

Other

    921     673  
           

Total deferred tax assets

    83,738     26,700  
           

Gain on FDIC assisted transaction deferred for tax purposes

    27,075     17,080  

Unrealized gains on investment securities available for sale

    5,294     3,579  

Depreciation

    3,556     3,265  

Intangible assets

    7,649     1,483  

Deferred loan fees

    1,740     1,935  

Prepaid expense

    295     689  

Other

    2,969     211  
           

Total deferred tax liabilities

    48,578     28,242  
           

Net deferred tax asset (liability) before valuation allowance

    35,160     (1,542 )
           

Less, valuation allowance

    (1,259 )   (1,138 )
           

Net deferred tax asset (liability)

  $ 33,901   $ (2,680 )
           

        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.