Income taxes

The approximate benefit (provision) for income taxes for the years ended December 31, 2015, 2014, and 2013 was as follows (dollars in thousands):



	2015			2014			2013
Current:
Federal	$	(582	)	$	(185	)	$	30
State	(111		)	(30		)	(27		)
	(693		)	(215		)	3
Deferred	(11,820		)	37			50,143
Benefit (provision) for income taxes	$	(12,513	)	$	(178	)	$	50,146

The benefit (provision) for income taxes results in effective tax rates which are different than the federal income tax statutory rate. A reconciliation of the differences for the years ended December 31, 2015, 2014, and 2013 is as follows (dollars in thousands):



	2015			2014			2013
Expected federal income tax provision/credit at statutory rates	$	(11,582	)	$	(1,370	)	$	(238	)
State income taxes, net of federal effect	(1,456		)	(179		)	(33		)
Effect of nontaxable income, net	643			489			547
Reversal of valuation allowance	4			—			41,632
Section 382 impairment re-evaluation	—			—			8,163
Tax affected disallowed merger costs	—			(974		)	—
Rate change for deferred taxes	(353		)	1,687			52
Other, net	231			169			23
Benefit (provision) for income taxes	$	(12,513	)	$	(178	)	$	50,146

The income tax provision in 2015 represents a 37.8% effective tax rate on the Company’s $33.1 million of pretax income. This rate differs from statutory rates due primarily to a revaluation of net deferred tax assets, mainly related to an anticipated change in our applicable state rate at the time the net DTA will be utilized, less additional tax effect of nontaxable income arising from bank-owned life insurance and municipal securities. Other differences to the effective tax rate were related to normal recurring permanent differences and tax credits.

The significant components of the net deferred tax assets and liabilities at December 31, 2015 and 2014 were as follows (dollars in thousands):



	2015			2014
Deferred tax assets:
Reserve for loan losses and unfunded loan commitments	$	8,961		$	9,920
Deferred benefit plan expenses, net	12,768			11,942
Federal and state net operating loss and other carryforwards	28,068			39,532
Tax credit carryforwards	2,427			1,397
Allowance for losses on OREO	651			928
Accrued interest on non-accrual loans	169			2,240
Purchased intangibles	5,390			6,580
Fair value of acquired assets/liabilities	1,563			2,849
Other	575			793
Deferred tax assets	60,572			76,181
Valuation allowance for deferred tax assets	(74		)	(78		)
Deferred tax assets, net of valuation allowance	60,498			76,103
Deferred tax liabilities:
Accumulated depreciation and amortization	2,070			2,552
Deferred loan fees	1,233			(466		)
FHLB stock dividends	2,242			2,289
Net unrealized gains on investment securities available-for-sale	994			1,765
Purchased intangibles	2,543			2,885
Other	743			952
Deferred tax liabilities	9,825			9,977
Net deferred tax assets (liabilities)	$	50,673		$	66,126

The Company recorded an income tax provision of $12.5 million and $0.2 million in 2015 and 2014, respectively, and an income tax benefit of $50.1 million in 2013. The significant income tax benefit in 2013 resulted primarily from reversing substantially all of the Company’s DTA valuation allowance at June 30, 2013 of $41.6 million and the reversal of certain previously written-off deferred tax benefits of $8.5 million resulting from the reassessment of the Company’s Internal Revenue Code (“IRC”) Section 382 limitations and other related analyses.

At December 31, 2015, the Company had deferred tax assets of $22.1 million and $6.0 million for federal and state net operating loss (“NOL”) carry-forwards, respectively. Also, the Company had deferred tax assets of $0, $2.3 million and $0.2 million for charitable contribution carry-forwards, federal and state tax credits, respectively. At December 31, 2014, the Company had deferred tax assets of $32.1 million and $6.6 million relating to federal and state NOL carry-forwards, respectively. Also, the Company had $0.8 million, $1.3 million and $0.1 million relating to charitable contribution carry-forwards, federal and state tax credits, respectively.

At December 31, 2015, the deferred tax assets above correspond to federal and state NOL carry forwards available of $63.0 million and $119.4 million, respectively. The NOLs are available to offset future taxable income through 2034. Also, at December 31, 2015, the Company had charitable contributions carry-forwards of $0.1 million, which will expire in 2018, and federal and state credits of $2.3 million and $0.2 million, respectively, which will expire between 2017 and 2035.

In estimating DTA, management considers whether it is more likely than not that some portion or all of the DTA will or will not be realized. The Company’s ultimate realization of the DTA is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. Management considers the nature and amount of historical and projected future taxable income, the scheduled reversal of deferred tax assets and liabilities, and available tax planning strategies in making this assessment. The amount of deferred taxes recognized could be impacted by changes to any of these variables.

The valuation allowance for deferred tax assets as of December 31, 2015 and 2014 was $0.1 million. The DTA valuation allowance relates to state attributes that will expire without benefit.

In 2009, a valuation allowance was established due to uncertainty at the time regarding the Company’s ability to generate sufficient future taxable income to fully realize the benefit of the net DTA. Due to cumulative losses incurred by the Company in years prior to 2012 and other relevant considerations, the Company was unable to conclude that it was more likely than not that it will realize its net deferred tax asset and, accordingly, maintained a valuation allowance to fully offset its deferred tax asset at December 31, 2012 and 2011.

During 2013, the Company reversed substantially all of its existing valuation allowance due to management’s determination that it was more likely than not that the Company’s deferred tax asset would be realized. The determination resulted from consideration of both the positive and negative evidence available that can be objectively verified.

Management completed its assessment of the Internal Revenue Code Section 382 limitations, resulting from the capital raise conducted by the Company in January 2011 in which it raised $177.0 million, and from the merger with Home in May 2014. As broadly defined in Section 382, both the issuance of common stock in connection with the capital raise as well as the merger resulted in an “ownership change” of the Company. The NOL carry-forwards and tax credits at December 31, 2014 are expected to be utilized over the statutory carry-forward period.

The Company files a U.S. federal income tax return, state income tax returns in Idaho, Oregon, and other state and local income tax returns in various jurisdictions. As of December 31, 2015, our federal tax returns for 2011 and earlier and our state tax returns for 2010 and earlier were no longer subject to examination by the taxing authorities. However, our tax attribute carry-forwards from closed tax years may be subject to examination to the extent utilized in an open tax year.

The Company has evaluated its income tax positions as of December 31, 2015 and 2014. Based on this evaluation, the Company has determined that it does not have any uncertain income tax positions for which an unrecognized tax liability should be recorded. The Company recognizes interest and penalties related to income tax matters as additional income taxes in the consolidated statements of income. The Company had no significant interest or penalties related to income tax matters during the years ended December 31, 2015, 2014 or 2013.