(15)	Income Taxes

The significant components of income tax expense attributable to operations are:

	Years ended December 31,
	2012			2011			2010
Current
Federal	$	21,011		$	29,274		$	34,124
State		1,815			1,477			1,743
		22,826			30,751			35,867

Deferred
Federal		(13	)		(8,129	)		(12,121	)
State		3			(1,349	)		(2,834	)
		(10	)		(9,478	)		(14,955	)
Total income tax expense	$	22,816		$	21,273		$	20,912

Not included in the above table are items that were recorded to stockholders' equity of approximately ($0.1 million), ($0.5 million), and ($4.3 million) for 2012, 2011, and 2010, respectively, relating to deferred taxes on the unrealized (gain) loss on available for sale securities, tax benefits recognized with respect to stock options exercised, and deferred taxes related to pension plans.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

	December 31,
(In thousands)	2012		2011
Deferred tax assets
Allowance for loan losses	$	26,687	$	27,487
Deferred compensation		5,362		4,911
Postretirement benefit obligation		1,600		1,036
Fair value adjustments from acquisitions		3,633		2,227
Accrued liabilities		1,524		1,482
Stock-based compensation expense		5,726		4,440
Other		1,933		1,214
Total deferred tax assets		46,465		42,797
Deferred tax liabilities
Pension and executive retirement		7,676		6,916
Unrealized gains on securities available for sale		10,939		12,156
Premises and equipment, primarily due to accelerated depreciation		1,980		2,340
Equipment leasing		582		3,090
Deferred loan costs		873		767
Intangible amortization		13,146		11,081
Other		154		494
Total deferred tax liabilities		35,350		36,844
Net deferred tax asset at year-end		11,115		5,953
Net deferred tax asset (liability) at beginning of year		5,953		(4,023	)
Increase in net deferred tax asset	$	5,162	$	9,976

Realization of deferred tax assets is dependent upon the generation of future taxable income or the existence of sufficient taxable income within the available carryback period. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized. Based on available evidence, gross deferred tax assets will ultimately be realized and a valuation allowance was not deemed necessary at December 31, 2012 and 2011.

A reconciliation of the beginning and ending balance of gross unrecognized tax benefits is as follows:

(In thousands)	2012			2011			2010
Balance at January 1	$	888		$	3,081		$	2,287
Additions for tax positions of prior years		-			-			1,714
Reduction for tax positions of prior years		(888	)		(2,193	)		(920	)
Balance at December 31	$	-		$	888		$	3,081

At December 31, 2012, the Company had no ASC 740-10 unrecognized tax benefits with $.9 million and $3.1 million of unrecognized tax benefits at December 31, 2011 and 2010, respectively. The Company does not expect the total amount of unrecognized tax benefits to significantly increase within the next twelve months. During 2012 and 2011 there was a reduction of reserves for Federal tax benefits for expiration of the statute of limitations of prior years' tax filings and in 2011 the Company reached a settlement with New York State on franchise tax examinations for the years 2003 through 2007. As a result, unrecognized tax benefits were reduced $0.9 million and $2.2 million for 2012 and 2011, respectively, with a reduction of tax expense of $0.8 million in 2012 and $1.5 million in 2011.

The Company is no longer subject to U.S. Federal and New York State examination by tax authorities for years prior to 2008.

The Company recognizes interest accrued and penalties related to unrecognized tax benefits in income tax expense. The total amount of accrued interest at December 31, 2011 was approximately $0.1 million. Net interest impacting the Company's 2011 and 2010 tax expense was $0.3 million and $0.3 million, respectively.

The following is a reconciliation of the provision for income taxes to the amount computed by applying the applicable Federal statutory rate of 35% to income before taxes:

	Years ended December 31
(In thousands)	2012			2011			2010
Federal income tax at statutory rate	$	27,081		$	27,711		$	27,410
Tax exempt income		(2,536	)		(2,925	)		(3,448	)
Net increase in CSV of life insurance		(908	)		(919	)		(939	)
Low income housing tax credits		(629	)		(782	)		(296	)
State taxes, net of federal tax benefit		1,182			764			756
State audit settlements		-			(681	)		(1,465	)
Other, net		(1,374	)		(1,895	)		(1,106	)
Income tax expense	$	22,816		$	21,273		$	20,912