Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income tax expense is comprised of the following:

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



		Year Ended December 31,
		2015		2014		2013
Statutory rate		35.00	%	35.00	%	35.00	%
Increase (decrease) in rate due to:
	Interest on tax-exempt securities and tax-free loans, net	(2.75	)	(2.77	)	(3.16	)
	Merger expenses at acquisition	—		—		0.54
	Reduction in excess tax reserves	—		—		0.11
	Bank owned life insurance	(1.76	)	(2.10	)	(2.53	)
	State income tax (net)	0.59		0.91		0.87
	Tax credits	(0.82	)	(0.96	)	(1.06	)
	ESOP Dividends	(0.14	)	(0.13	)	(0.14	)
	Nondeductible meals and entertainment	0.25		0.22		0.27
	Other	(0.66	)	(0.18	)	0.31
Effective tax rates		29.71	%	29.99	%	30.21	%

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



		Year Ended
		December 31,
(In thousands)		2015			2014
Deferred tax assets:
	Allowance for credit losses	$	40,069		$	35,760
	Employee benefits	50,868			51,584
	Real Estate Mortgage Investment Credit	3,791			4,831
	Acquired liabilities	5,931			6,296
	Acquired loans	25,388			51,701
	Available for sale securities	11,475			3,862
	Loan fees and expenses	—			—
	Federal NOL carryforwards	102,194			131,195
	Alternative minimum tax credit carryforward	112,861			83,428
	General business tax credit carryforward	2,924			1,982
	State income tax (net of federal benefit)	2,441			1,970
	Other	1,789			467
	Total deferred tax assets	359,731			373,076
Deferred tax liabilities:
	Leased assets and depreciation	(41,649		)	(24,699		)
	FHLB stock	(18,641		)	(18,165		)
	Loan fees and expenses	(1,480		)	(2,537		)
	Goodwill	(26,885		)	(16,580		)
	Core deposit intangibles	(18,697		)	(22,013		)
	Other	—			—
	Total deferred tax liabilities	(107,352		)	(83,994		)
Total net deferred tax asset		$	252,379		$	289,082

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)		2015			2014
Deferred tax changes reflected in other comprehensive income		$	(10,565	)	$	(2,698	)
Deferred tax changes reflected in Federal income tax expense		47,269			44,666
	Net decrease/(increase) in DTA	$	36,704		$	41,968

A reconciliation of the change in the reserve for uncertain tax positions for 2015 and 2014 is as follows:



(In thousands)	Federal and State Tax			Accrued Interest and Penalties			Gross Unrecognized Income Tax Benefits
Balance as of January 1, 2015	$	305		$	19		$	324
Additions for tax provisions related to prior year	299			17			316
Reduction for tax positions related to prior year due closed tax years	—			—			—
Reduction for tax positions related to prior tax years	(134		)	—			(134		)
Balance at December 31, 2015	$	470		$	36		$	506
Components of Reserve:
State income tax exposure	$	470		$	36		$	506
Balance at December 31, 2015	$	470		$	36		$	506

(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