INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

INCOME TAXES

Schedule of allocation of federal income tax between current and deferred portion

Years Ended December 31, (in thousands)	2013			2012		2011
Current expense:
Federal	$	20,668		$	51,888	$	50,326
State	2,167			1,565		996
Deferred expense:
Federal	(7,395		)	10,798		(1,287		)
State	(365		)	355		13
Total	$	15,075		$	64,606	$	50,048

Schedule of effective tax rate that differs from that computed at the federal statutory rate

Years Ended December 31,	2013		2012		2011
Federal statutory rate times financial statement income	35.00	%	35.00	%	35.00	%
Effect of:
State taxes, net of federal benefit	2.89	%	0.68	%	0.46	%
General business tax credits	-0.73	%	-0.34	%	-0.69	%
Other, net	0.06	%	-0.22	%	-0.06	%
Effective tax rate	37.22	%	35.12	%	34.71	%

Schedule of deferred tax assets and liabilities

Years Ended December 31, (in thousands)	2013			2012
Deferred tax assets:
Allowance for loan losses	$	7,622		$	7,970
Accrued expenses	3,571			5,128
Net operating loss carryforward(1)	1,587			1,349
Depreciation	519			334
Other-than-temporary impairment	749			884
Partnership losses	832			794
Other	834			333
Total deferred tax assets	15,714			16,792
Deferred tax liabilities:
Unrealized investment securities gains	(1,621		)	(3,022		)
Federal Home Loan Bank dividends	(4,309		)	(4,362		)
Deferred loan fees	(653		)	(706		)
Mortgage servicing rights	(1,958		)	(1,877		)
Bargain purchase gain	(5,460		)	(14,454		)
New market tax credits	(1,517		)	(1,368		)
Total deferred tax liabilities	(15,518		)	(25,789		)
Less: Valuation allowance	(1,684		)	(1,592		)
Net deferred tax liability	$	(1,488	)	$	(10,589	)

(1) The Company has a Kentucky net operating loss carry forward of $22 million which began to expire in 2012 and a Florida net operating loss carryforward of $5 million which begins to expire in 2030. The Company maintains a valuation allowance as it does not anticipate generating taxable income in Kentucky or Florida to utilize these carryforwards prior to expiration.

Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits

December 31, (in thousands)	2013			2012
Balance, beginning of year	$	595		$	506
Additions based on tax related to the current year	39			146
Additions for tax positions of prior years	783			—
Reductions for tax positions of prior years	—			—
Reductions due to the statute of limitations	(36		)	(57		)
Settlements	—			—
Balance, end of year	$	1,381		$	595

Schedule of amount of interest and penalties

December 31, (in thousands)	2013		2012
Interest and penalties recorded in the income statement	$	401	$	28
Interest and penalties accrued	567		166