Note 8 - Income Taxes

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 8: INCOME TAXES

The provision for income taxes is comprised of the following components:

(In thousands)	June 30, 2014			June 30,  2013
Income taxes currently payable	$	8,539		$	7,302
Deferred income taxes		(3,143	)		(1,756	)
Provision for income taxes	$	5,396		$	5,546

The tax effects of temporary differences related to deferred taxes shown on the balance sheets were:

(In thousands)	June 30, 2014			December 31, 2013
Deferred tax assets
Loans acquired	$	16,155		$	21,853
FDIC true-up liability		2,606			2,369
Allowance for loan losses		10,880			10,660
Valuation of foreclosed assets		7,496			7,468
Tax NOLS from acquisition		11,819			11,819
Deferred compensation payable		1,863			1,808
FHLB advances		230			283
Vacation compensation		1,233			1,148
Accumulated depreciation		5,447			4,916
Loan interest		767			767
Unrealized loss on available-for-sale securities		909			1,938
Other		8,681			5,885
Total deferred tax assets		68,086			70,914
Deferred tax liabilities
Deferred loan fee income and expenses, net		(4,183	)		(2,697	)
FHLB stock dividends		(1,115	)		(1,110	)
Goodwill and other intangible amortization		(17,354	)		(16,506	)
FDIC indemnification asset		(11,967	)		(19,138	)
Other		(1,121	)		(1,231	)
Total deferred tax liabilities		(35,740	)		(40,682	)
Net deferred tax assets included in other assets on balance sheets	$	32,346		$	30,232

A reconciliation of income tax expense at the statutory rate to the Company's actual income tax expense is shown below:

(In thousands)	June 30, 2014			June 30,  2013
Computed at the statutory rate (35%)	$	6,880		$	6,321
Increase (decrease) in taxes resulting from:
State income taxes, net of federal tax benefit		460			508
Tax exempt interest income		(1,868	)		(1,200	)
Tax exempt earnings on BOLI		(247	)		(225	)
Other differences, net		171			142
Actual tax provision	$	5,396		$	5,546

The Company follows ASC Topic 740, Income Taxes, which prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information.  A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.  Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met.  Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met.  ASC Topic 740 also provides guidance on the accounting for and disclosure of unrecognized tax benefits, interest and penalties.

The amount of unrecognized tax benefits may increase or decrease in the future for various reasons including adding amounts for current tax year positions, expiration of open income tax returns due to the statutes of limitation, changes in management’s judgment about the level of uncertainty, status of examinations, litigation and legislative activity and the addition or elimination of uncertain tax positions.

The Company files income tax returns in the U.S. federal jurisdiction.  The Company’s U.S. federal income tax returns are open and subject to examinations from the 2010 tax year and forward.  The Company’s various state income tax returns are generally open from the 2007 and later tax return years based on individual state statute of limitations.