Income Tax

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Tax

Income Tax

The components of income tax expense (benefit) are as follows:

	Years Ended December 31,
	2012			2011			2010
	(in thousands)
Current tax (benefit) expense	$	21,218		$	21,688		$	(13,547	)
Deferred tax expense (benefit)	(3,656		)	(3,783		)	15,838
Total	$	17,562		$	17,905		$	2,291

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

	December 31,
	2012			2011
	(in thousands)
Deferred tax assets:
Allowance for loan and lease losses	$	30,027		$	20,910
Supplemental executive retirement plan	6,967			6,564
Stock option and restricted stock	682			989
OREO costs	3,801			3,209
Nonaccrual interest	193			222
Security impairment	—			1,041
Other	557			632
Total deferred tax assets	42,227			33,567
Deferred tax liabilities:
Asset purchase tax basis difference	(19,408		)	(14,812		)
FHLB stock dividends	(1,963		)	(1,977		)
Purchase accounting	(745		)	(1,030		)
Deferred loan fees	(1,755		)	(1,517		)
Unrealized gain on investment securities	(11,150		)	(14,291		)
Depreciation	(1,870		)	(1,517		)
Total deferred tax liabilities	(36,891		)	(35,144		)
Net deferred tax asset (liability)	$	5,336		$	(1,577	)

A reconciliation of the Company’s effective income tax rate with the federal statutory tax rate is as follows:

	Years Ended December 31,
	2012					2011					2010
	Amount			Percent		Amount			Percent		Amount			Percent
	(dollars in thousands)
Income tax based on statutory rate	$	22,297		35	%	$	23,080		35	%	$	11,576		35	%
Reduction resulting from:
Tax credits	(504		)	(1	)%	(608		)	(1	)%	(808		)	(2	)%
Tax exempt instruments	(3,906		)	(6	)%	(3,824		)	(6	)%	(3,744		)	(11	)%
Life insurance proceeds	(1,001		)	(2	)%	(766		)	(1	)%	(735		)	(2	)%
Bargain purchase	—			—	%	(1,036		)	(2	)%	(5,383		)	(16	)%
Other, net	676			1	%	1,059			2	%	1,385			3	%
Income tax provision	$	17,562		27	%	$	17,905		27	%	$	2,291		7	%

As of December 31, 2012 and 2011, we had no unrecognized tax benefits. Our policy is to recognize interest and penalties on unrecognized tax benefits in “Provision for income taxes” in the Consolidated Statements of Income. There were no amounts related to interest and penalties recognized for the years ended December 31, 2012 and 2011. The tax years subject to examination by federal and state taxing authorities are the years ending December 31, 2011, 2010, and 2009.