Income Taxes

(In Thousands)

Significant components of the provision for income taxes (benefits) are as follows for the periods presented:



	Year Ended December 31,
	2015		2014		2013
Current
Federal	$	17,004	$	16,474	$	12,092
State	995		540		452
	17,999		17,014		12,544
Deferred
Federal	12,625		8,649		(169		)
State	1,126		642		(116		)
	13,751		9,291		(285		)
	$	31,750	$	26,305	$	12,259

The reconciliation of income taxes computed at the United States federal statutory tax rates to the provision for income taxes is as follows:



	Year Ended December 31,
	2015			2014			2013
Tax at U.S. statutory rate	$	34,918		$	30,061		$	16,011
Increase (decrease) in taxes resulting from:
Tax-exempt interest income	(3,377		)	(3,215		)	(2,765		)
BOLI income	(1,264		)	(1,045		)	(1,430		)
Investment tax credits	(1,390		)	(1,390		)	(1,063		)
Amortization of investment in low-income housing tax credits	1,734			1,594			998
State income tax expense, net of federal benefit	1,378			921			383
Decrease to valuation allowance	—			(152		)	(164		)
Other items, net	(249		)	(469		)	289
	$	31,750		$	26,305		$	12,259

Significant components of the Company’s deferred tax assets and liabilities are as follows for the periods presented:



	December 31,
	2015		2014
Deferred tax assets
Allowance for loan losses	$	17,430	$	16,581
Loans	26,239		19,073
Deferred compensation	17,060		9,678
Net unrealized losses on securities	6,065		4,777
Impairment of assets	3,271		4,397
Net operating loss carryforwards	3,681		1,414
Other	7,499		3,315
Gross deferred tax assets	81,245		59,235
Valuation allowance on state net operating loss carryforwards	—		—
Total deferred tax assets	81,245		59,235
Deferred tax liabilities
FDIC Indemnification Asset	1,927		4,193
Investment in partnerships	2,507		2,613
Core deposit intangible	3,386		2,257
Depreciation	673		2,801
Mortgage servicing rights	4,032		—
Subordinated debt	4,287		4,490
Other	2,364		738
Total deferred tax liabilities	19,176		17,092
Net deferred tax assets	$	62,069	$	42,143

The Company and its subsidiaries file a consolidated U.S. federal income tax return. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the years ending December 31, 2012 through 2014. The Company and its subsidiaries’ state income tax returns are open to audit under the statute of limitations for the years ended December 31, 2012 through 2014.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, related to federal and state income tax matters as of December 31 is as follows:



	2015			2014		2013
Balance at January 1	$	2,653		$	2,178	$	1,723
Additions based on positions related to current period	367			475		455
Additions based on positions related to prior period	—			—		—
Reductions based on positions related to prior period	(201		)	—		—
Settlements	(1,334		)	—		—
Reductions due to lapse of statute of limitations	—			—		—
Balance at December 31	$	1,485		$	2,653	$	2,178

If ultimately recognized, the Company does not anticipate any material increase in the effective tax rate for 2015 relative to any tax positions taken prior to January 1, 2015. The Company had accrued $125, $686 and $569 for interest and penalties related to unrecognized tax benefits as of December 31, 2015, 2014 and 2013, respectively.