(13) INCOME TAXES

Total income taxes for the years ended December 31, 2015, 2014 and 2013 were allocated as follows:


	2015	2014	2013
	(In thousands)
Income tax expense	$ 59,248	$ 50,652	$ 37,551
Shareholders' equity for other comprehensive income (loss)	1,145	(8,481)	(13,249)
Shareholders' equity for stock option plans	(1,079)	(1,856)	(139)
Total	$ 59,314	$ 40,315	$ 24,163

The components of income tax expense attributable to operations were as follows for the years ended December 31, 2015, 2014 and 2013:


	2015	2014	2013
Current:	(In thousands)
Federal	$ 62,369	$ 51,014	$ 32,729
State	8,235	7,201	1,570
Deferred:
Federal	(10,391)	(6,870)	1,774
State	(965)	(693)	1,478
Total	$ 59,248	$ 50,652	$ 37,551

During 2015 and 2014, the Company recognized certain tax benefits related to stock options in the amount of $1.1 million and $1.9 million, respectively. Such benefits were recorded as a reduction of income taxes payable and an increase in capital surplus.

During 2015 and 2014, the Company reversed the deferred tax asset associated with stock options expiring during the current period in the amount of $1.6 million and approximately $785,000, respectively. The reversal was recorded as a reduction of deferred tax assets and a reduction in capital surplus.

Income tax expense differed from the amount computed by applying the U.S. federal income tax rate of 35% to income before income taxes resulting from the following:


	2015	2014	2013
	(In thousands)
Tax expense at statutory rates	$ 65,359	$ 58,591	$ 46,083
Increase (decrease) in taxes resulting from:
State income taxes, net of federal tax benefit	4,709	4,230	1,926
Tax-exempt interest revenue	(6,881)	(7,371)	(7,423)
Tax-exempt earnings on life insurance	(2,589)	(3,076)	(2,889)
Deductible dividends paid on 401(k) plan	(617)	(458)	(187)
Tax credits	(1,871)	(1,771)	(578)
Meals and entertainment	481	486	489
Other, net	657	21	130
Total	$ 59,248	$ 50,652	$ 37,551

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2015 and 2014 were as follows:


	2015	2014
Deferred tax assets:	(In thousands)
Loans, principally due to allowance for credit losses	$ 47,825	$ 53,922
Other real estate owned	3,069	4,605
Mark to market - securities	4,160	4,164
Accrued liabilities, principally due to
compensation arrangements and vacation accruals	24,153	17,877
Other	106	129
Unrecognized pension expense	34,654	39,428
Total gross deferred tax assets	113,967	120,125
Less: valuation allowance	-	-
Deferred tax assets	$ 113,967	$ 120,125
Deferred tax liabilities:
Lease transactions	$ 18,868	$ 25,033
Employment benefits	736	7,435
Premises and equipment, principally due
to differences in depreciation	19,294	21,845
Mortgage servicing rights	21,652	19,409
Intangible assets	11,310	11,024
Investments, principally due to interest income recognition	2,387	592
Deferred loan points	4,785	3,851
Other assets, principally due to expense recognition	9	959
Unrealized net gains on available-for-sale securities	8,764	12,393
Total gross deferred tax liabilities	87,805	102,541
Net deferred tax assets	$ 26,162	$ 17,584

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences existing at December 31, 2015.

The following table presents the activity in unrecognized tax benefits for 2015, 2014 and 2013:


	2015	2014	2013
	(In thousands)
Unrecognized tax benefit, January 1	$ -	$ -	$ 1,571
Gross increases - tax positions in prior period	-	-	-
Gross decreases - tax positions in prior period	-	-	(1,571)
Gross increases - tax positions in current period	-	-	-
Settlements	-	-	-
Lapse of statute of limitations	-	-	-
Unrecognized tax benefit, December 31	$ -	$ -	$ -

The Company recognizes accrued interest related to unrecognized tax benefits and penalties as a component of other noninterest expense. The Company accrued no interest for 2015, 2014, 2013 and had no accrued interest liability recognized at December 31, 2015 and 2014.

During 2013, a $1.6 million tax benefit was recorded as a result of the resolution of an uncertain tax position with the remainder of the settlement pertaining to accrued interest and penalties. The uncertain tax position related to the review of the tax treatment of items during the tax years 2007 through 2009. The review was resolved in our favor in 2013, resulting in the reversal of the uncertain tax position reserve for the matter.

Management does not expect that unrecognized tax benefits will significantly increase or decrease within the next 12 months.

The Company is subject to taxation in the United States and various states and local jurisdictions. The Company files a consolidated United States federal return. Based on the laws of the applicable state where the Company conducts business operations, the Company and its applicable subsidiaries either file a consolidated, combined or separate return. The tax years that remain open for examination for the Company’s major jurisdictions of the United States - Mississippi, Arkansas, Tennessee, Alabama, Louisiana and Missouri - are 2012, 2013 and 2014.