INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

INCOME TAXES

Schedule of components of provision for income tax expense

(In thousands)	2014			2013			2012
Current:
Federal tax expense	$	294		$	5,124		$	2,298
State tax expense	305			2,171			1,278
Total current expense	599			7,295			3,576
Deferred:
Federal tax expense	8,685			9,445			9,247
State tax expense	2,509			2,115			912
Total deferred tax expense	11,194			11,560			10,159
Decrease in valuation allowance	(30		)	(1,751		)	(136		)
Total income tax expense	$	11,763		$	17,104		$	13,599

Schedule of reconciliation of the statutory federal income tax rate to effective tax rate

	2014					2013					2012
(In thousands, except rates)	Amount			Rate		Amount			Rate		Amount			Rate
Statutory tax rate	$	15,928		35.0	%	$	20,387		35.0	%	$	16,375		35.0	%
Increase (decrease) resulting from:
State taxes, net of federal tax benefit	1,810			4.0		2,760			4.7		1,715			3.7
Tax exempt income - investments, net	(2,796		)	(6.1	)	(2,211		)	(3.8	)	(2,187		)	(4.7	)
Bank-owned life insurance	(1,070		)	(2.4	)	(631		)	(1.1	)	(950		)	(2.0	)
Disallowed merger costs	206			0.5		—			—		523			1.1
Non-deductible goodwill on branch divestiture	—			—		—			—		419			0.9
Tax credits, net of basis reduction	(1,658		)	(3.6	)	(995		)	(1.7	)	(1,148		)	(2.5	)
Reduction in valuation allowance	—			—		(1,712		)	(2.9	)	(428		)	(0.9	)
Other, net	(657		)	(1.5	)	(494		)	(0.9	)	(720		)	(1.5	)
Effective tax rate	$	11,763		25.9	%	$	17,104		29.3	%	$	13,599		29.1	%

Schedule of components of deferred tax assets and liabilities

(In thousands)	2014			2013
Deferred tax assets:
Allowance for loan losses	$	14,710		$	14,391
Tax credit carryforwards	11,238			9,867
Net unrealized loss on swaps, securities available for sale, and pension in OCI	—			5,740
Employee benefit plans	6,103			5,331
Purchase accounting adjustments	7,126			18,350
Net operating loss and capital loss carryforwards	5,538			7,731
Other	2,134			2,256
Deferred tax assets, net before valuation allowances	46,849			63,666
Valuation allowance	(968		)	(998		)
Deferred tax assets, net of valuation allowances	$	45,881		$	62,668
Deferred tax liabilities:
Investments	$	(773	)	$	(896	)
Premises and equipment	(4,575		)	(2,836		)
Net unrealized gain on swaps, securities available for sale, and pension in OCI	(3,823		)	—
Intangible amortization	(7,934		)	(8,225		)
Deferred tax liabilities	$	(17,105	)	$	(11,957	)
Deferred tax assets, net	$	28,776		$	50,711

Schedule of components of the valuation allowance on deferred tax asset

(in thousands)	2014			2013
State net operating loss carry-forward, net of Federal tax benefit (of 35%)	$	(739	)	$	(762	)
State tax basis difference, net of Federal tax benefit (of 35%)	(229		)	(236		)
Valuation allowances	$	(968	)	$	(998	)

Schedule of changes in unrecognized tax benefits

(In thousands)	2014			2013			2012
Unrecognized tax benefits at January 1	$	477		$	492		$	774
Increase in gross amounts of tax positions related to prior years	55			321			173
Decrease in gross amounts of tax positions related to prior years	—			(150		)	(140		)
Decrease due to settlement with taxing authority	—			(186		)	(240		)
Increase in gross amounts of tax positions related to current year	93			—			50
Decrease due to lapse in statute of limitations	(72		)	—			(125		)
Unrecognized tax benefits at December 31	$	553		$	477		$	492