Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of deferred tax assets and liabilities

Significant components of the Corporation’s deferred tax assets and liabilities are as follows:



December 31 (In thousands)	2013		2012
Deferred tax assets:
Allowance for loan losses	$	20,814	$	19,438
Accumulated other comprehensive loss – Pension Plan	3,015		14,611
Accumulated other comprehensive loss – Unrealized losses on securities	16,057		—
Intangible assets	673		697
Deferred compensation	3,611		3,750
OREO devaluations	5,287		4,855
Partnership adjustments	3,793		3,329
Other	3,705		2,973
Total deferred tax assets	$	56,955	$	49,653
Deferred tax liabilities:
Accumulated other comprehensive income – Unrealized gains on securities	—		5,178
Deferred investment income	10,199		10,199
Pension Plan	25,261		25,517
Mortgage servicing rights	3,154		2,717
Other	850		646
Total deferred tax liabilities	$	39,464	$	44,257
Net deferred tax assets	$	17,491	$	5,396

Federal and state income taxes

The components of the provision for federal and state income taxes are shown below:



December 31, (In thousands)	2013			2012		2011
Currently payable
Federal	$	27,587		$	12,984	$	5,949
State	—			—		—

Deferred
Federal	(2,456		)	12,717		22,378
State	—			—		8,382

Valuation allowance
Federal	—			—		—
State	—			—		(2,294		)
Total	$	25,131		$	25,701	$	34,415

Schedule of income tax rate reconciliation

The following is a reconciliation of income tax expense to the amount computed at the statutory rate of 35% for the years ended December 31, 2013, 2012 and 2011.



December 31	2013		2012		2011

Statutory federal corporate tax rate	35.0	%	35.0	%	35.0	%
Changes in rates resulting from:
Tax exempt interest income, net of disallowed interest	(0.8	)%	(0.9	)%	(1.0	)%
Bank owned life insurance	(1.7	)%	(1.6	)%	(1.5	)%
Tax credits (low income housing)	(6.6	)%	(6.1	)%	(5.2	)%
State income tax expense, net of federal benefit	—	%	—	%	4.7	%
Valuation allowance, net of federal benefit	—	%	—	%	(1.3	)%
Other	(1.3	)%	(1.8	)%	(1.2	)%
Effective tax rate	24.6	%	24.6	%	29.5	%

Reconciliation of unrecognized tax benefits

The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits.



(In thousands)	2013			2012			2011
January 1 Balance	$	517		$	485		$	477
Additions based on tax positions related to the current year	74			74			70
Additions for tax positions of prior years	4			25			1
Reductions for tax positions of prior years	—			—			(3		)
Reductions due to statute of limitations	(77		)	(67		)	(60		)
December 31 Balance	$	518		$	517		$	485