Note 8 - Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 8: INCOME TAXES

The provision (benefit) for income taxes for the years ended December 31 is comprised of the following components:

(In thousands)	2014			2013			2012
Income taxes currently payable	$	23,631		$	13,923		$	11,846
Deferred income taxes		(9,029	)		(4,618	)		485
Provision for income taxes	$	14,602		$	9,305		$	12,331

The tax effects of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to deferred income tax assets and liabilities, and their approximate tax effects, are as follows as of December 31, 2014 and 2013:

(In thousands)	2014			2013
Deferred tax assets:
Loans acquired	$	16,925		$	14,456
FDIC true-up liability		2,792			2,918
Allowance for loan losses		11,749			11,307
Valuation of foreclosed assets		14,167			14,053
Tax NOLs from acquisition		11,819			11,819
Deferred compensation payable		1,536			1,263
Vacation compensation		1,456			1,148
Accumulated depreciation		1,937			4,939
Loan interest		1,693			767
Accrued pension and profit sharing		1,793			1,682
Accrued equity and other compensation		3,356			579
Acquired securities		2,568			2,643
Accrued merger related costs		2,464			1,032
Unrealized loss on available-for-sale securities		862			1,938
Other		2,283			15
Gross deferred tax assets		77,400			70,559
Deferred tax liabilities:
Goodwill and other intangible amortization		(16,953	)		(6,803	)
FDIC acquired assets		(4,377	)		(14,524	)
Deferred loan fee income and expenses, net		(1,515	)		(2,697	)
FHLB stock dividends		(1,160	)		(1,115	)
Limitations under IRC Sec 382		(11,169	)		(13,812	)
Other		(1,478	)		(1,376	)
Gross deferred tax liabilities		(36,652	)		(40,327	)
Net deferred tax asset, included in other assets	$	40,748		$	30,232

A reconciliation of income tax expense at the statutory rate to the Company's actual income tax expense is shown below for the years ended December 31:

(In thousands)	2014			2013			2012
Computed at the statutory rate (35%)	$	17,601		$	11,387		$	14,012
Increase (decrease) in taxes resulting from:
State income taxes, net of federal tax benefit		41			825			1,142
Tax exempt income		(3,774	)		(2,739	)		(2,615	)
Tax exempt earnings on BOLI		(499	)		(461	)		(512	)
Other differences, net		1,233			293			304
Actual tax provision	$	14,602		$	9,305		$	12,331

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.

As discussed in Note 2, Metropolitan National Bank had approximately $72.8 million in net operating loss carryforward of which approximately $34.0 million is expected to be utilized by the Company under Internal Revenue Code Section 382 limitation calculations.  The net operating loss carryforwards expire between 2028 and 2032.

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 2011 tax year and forward.  The Company’s various state income tax returns are generally open from the 2008 and later tax return years based on individual state statute of limitations.