Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Schedule of Components of Income Tax Expense (Benefit)

Income tax expense is comprised of the following:



	Year Ended December 31,
(In thousands)	2014		2013		2012
Taxes currently payable
Federal	$	52,514	$	24,426	$	48,359
State	4,763		3,496		2,655
Deferred expense (benefit)	44,666		51,585		4,679
Total income tax expense	$	101,943	$	79,507	$	55,693

Schedule of Effective Income Tax Rate Reconciliation

The actual income tax rate differs from the statutory tax rate as shown in the following table:



		Year Ended December 31,
		2014		2013		2012
Statutory rate		35.00	%	35.00	%	35.00	%
Increase (decrease) in rate due to:
	Interest on tax-exempt securities and tax-free loans, net	(2.77	)	(3.16	)	(3.23	)
	Merger expenses at acquisition	—		0.54		—
	Reduction in excess tax reserves	—		0.11		—
	Bank owned life insurance	(2.10	)	(2.53	)	(3.10	)
	State income tax (net)	0.91		0.87		0.94
	Tax credits	(0.96	)	(1.06	)	(1.14	)
	ESOP Dividends	(0.13	)	(0.14	)	(0.21	)
	Nondeductible meals and entertainment	0.22		0.27		0.25
	Other	(0.18	)	0.31		0.83
Effective tax rates		29.99	%	30.21	%	29.34	%

Schedule of Deferred Tax Assets and Liabilities

Principal components of the Corporation’s net deferred tax asset are summarized as follows:



		Year Ended
		December 31,
(In thousands)		2014			2013
Deferred tax assets:
	Allowance for credit losses	$	35,760		$	37,857
	Employee benefits	51,584			33,676
	Real Estate Mortgage Investment Credit	4,831			5,645
	Acquired liabilities	6,296			14,768
	Acquired loans	51,701			62,993
	Available for sale securities	3,862			16,819
	Loan fees and expenses	—			2,777
	Federal NOL carryforwards	131,195			190,350
	Alternative minimum tax credit carryforward	83,428			41,882
	General business tax credit carryforward	1,982			5,715
	State income tax (net of federal benefit)	1,970			4,728
	Other	467			—
	Total deferred tax assets	373,076			417,210
Deferred tax liabilities:
	Leased assets and depreciation	(24,699		)	(25,818		)
	FHLB stock	(18,165		)	(24,401		)
	Loan fees and expenses	(2,537		)	—
	Goodwill	(16,580		)	(7,129		)
	Core deposit intangibles	(22,013		)	(25,302		)
	Other	—			(3,510		)
	Total deferred tax liabilities	(83,994		)	(86,160		)
Total net deferred tax asset		$	289,082		$	331,050

Change in Deferred Taxes

At December 31, 2014, the Corporation had gross federal loss carryforwards of $374.8 million that expire in 2028 through 2032, general business credits of $2.0 million that expire in 2028, and $83.4 million of federal alternative minimum tax credits with an indefinite life. In addition, future state income taxes are expected to be reduced by $2.3 million resulting from state non-operating losses at various levels in various states. This benefit is expected to be fully used during the expiration period of 2014 through 2027.

The period change in deferred taxes recorded both directly to shareholders’ equity and as a part of the income tax expense is summarized as follows:



		Year Ended December 31,
(In thousands)		2014			2013
Deferred tax changes reflected in other comprehensive income		$	(2,698	)	$	(27,285	)
Deferred tax changes reflected in Federal income tax expense		44,666			51,585
Deferred tax changes reflected in acquired net assets		—			(348,239		)
	Net decrease/(increase) in DTA	$	41,968		$	(323,939	)

Summary of Income Tax Contingencies

A reconciliation of the change in the reserve for uncertain tax positions for 2014 and 2013 is as follows:



(In thousands)	Federal and State Tax			Accrued Interest and Penalties			Gross Unrecognized Income Tax Benefits
Balance as of January 1, 2014	$	1,003		$	262		$	1,265
Additions for tax provisions related to prior year	798			14			812
Reduction for tax positions related to prior year due closed tax years	(31		)	(3		)	(34		)
Reduction for tax positions related to prior tax years	(1,465		)	(254		)	(1,719		)
Balance at December 31, 2014	$	305		$	19		$	324
Components of Reserve:
State income tax exposure	$	305		$	19		$	324
Balance at December 31, 2014	$	305		$	19		$	324

(In thousands)	Federal and State Tax			Accrued Interest and Penalties			Gross Unrecognized Income Tax Benefits
Balance as of January 1, 2013	$	953		$	854		$	1,807
Additions for tax provisions related to prior year	77			72			149
Reduction for tax positions related to prior tax years	(27		)	(664		)	(691		)
Balance at December 31, 2013	$	1,003		$	262		$	1,265
Components of Reserve:
Potential adjustment to nondeductible interest expense	$	30		$	5		$	35
State income tax exposure	973			257			1,230
Balance at December 31, 2013	$	1,003		$	262		$	1,265

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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