Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) included in the consolidated statements of operations were as follows:

	Years Ended December 31,
	2012			2011			2010
	(in thousands)
Current income taxes:
Federal	$	(163	)	$	(248	)	$	(102	)
State	0			(27		)	(11		)
Total current income taxes	(163		)	(275		)	(113		)
Deferred income taxes:
Federal	(269,968		)	248			102
State	(21,912		)	27			11
Total deferred income taxes	(291,880		)	275			113
Total income tax (benefit) expense	$	(292,043	)	$	0		$	0

Schedule of Deferred Tax Assets and Liabilities

The tax effects of the principal temporary differences giving rise to deferred tax assets and liabilities were as follows:

	December 31,
	2012			2011
	(in thousands)
Deferred tax assets:
NOL carryforwards - federal	$	242,318		$	250,946
NOL carryforwards - state	21,443			22,110
Tax credits - federal	7,671			7,587
Tax credits - state	2,594			4,167
Allowance for losses on loans	61,385			75,393
Deferred compensation	10,760			12,485
Bonus accrual	4,670			2,138
Intangibles	2,284			6
Purchase accounting premiums and discounts	2,087			3,877
Nonaccrual loans	1,931			2,167
Deferred rent	1,119			1,063
Other	3,394			3,044
Total deferred tax assets	361,656			384,983
Deferred tax liabilities:
Unrealized gains on available-for-sale securities	22,627			22,670
FHLB Seattle dividends	16,325			16,486
Mortgage servicing rights	11,869			8,169
Fair value - loans held for sale	8,966			3,093
Deferred loan fees	5,867			5,162
Prepaid expenses	2,151			1,945
ASC 740 (FIN 48) - temporary differences	5			9
Total deferred tax liabilities	67,810			57,534
Valuation allowance	(1,764		)	(327,449		)
Net deferred tax asset	$	292,082		$	0

Schedule of Effective Income Tax Rate Reconciliation

The following table summarizes the calculation of Sterling's effective tax rates for the periods presented:

	Years Ended December 31,
	2012		2011		2010
Income tax provision at the federal statutory rate	35.0	%	35.0	%	35.0	%
Tax effect of:
Deferred tax valuation allowance	(347.8	)%	(25.0	)%	(40.1	)%
State taxes, net of federal benefit	3.8	%	0.0	%	3.1	%
Tax-exempt interest	(2.5	)%	(6.3	)%	1.0	%
Bank owned life insurance	(3.2	)%	(5.8	)%	1.1	%
Tax credits	0.0	%	(1.6	)%	0.9	%
Other, net	3.2	%	3.7	%	(1.0	)%
Effective tax rate	(311.5	)%	0.0	%	0.0	%

Summary of Income Tax Contingencies

The following is a reconciliation of the beginning and ending amount of unrecognized tax positions for the periods presented:

	2012			2011			2010
	(in thousands)
Balance at January 1	$	525		$	1,586		$	6,330
Additions - current year tax positions	70			75			65
Additions - prior year tax positions	0			0			0
Reductions - prior year tax positions	(183		)	(1,136		)	(4,809		)
Balance at December 31	412			525			1,586
Accrued interest and penalties, net of tax effect at December 31	100			103			140
Total liability for unrecognized tax positions at December 31	$	512		$	628		$	1,726