INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

Schedule of Components of Income Tax Expense (Benefit)

The following table presents the components of the provision for income tax (benefit) expense included in the Consolidated Statement of Operations for the years ended December 31, 2014, 2013 and 2012 (in thousands):



	Years Ended December 31
	2014		2013		2012
Current	$	24,855	$	12,121	$	10,759
Deferred	1,365		10,407		841
Increase (decrease) in valuation allowance	—		—		(36,385		)
Provision for (benefit from) income taxes	$	26,220	$	22,528	$	(24,785	)

Schedule of Effective Income Tax Rate Reconciliation

The following tables present the reconciliation of the provision for income taxes computed at the federal statutory rate to the actual effective rate for the years ended December 31, 2014, 2013 and 2012 (dollars in thousands):



	Years Ended December 31
	2014			2013			2012
Provision for (benefit from) income taxes computed at federal statutory rate	$	28,134		$	24,179		$	14,034
Increase (decrease) in taxes due to:
Tax-exempt interest	(2,084		)	(1,633		)	(1,710		)
Investment in life insurance	(626		)	(707		)	(894		)
State income taxes (benefit), net of federal tax offset	916			824			539
Tax credits	(661		)	(636		)	(788		)
Valuation allowance	—			—			(36,385		)
Other	541			501			419
Provision for (benefit from) income taxes	$	26,220		$	22,528		$	(24,785	)



	Years Ended December 31
	2014		2013		2012
Federal income tax statutory rate	35.0	%	35.0	%	35.0	%
Increase (decrease) in tax rate due to:
Tax-exempt interest	(2.6	)	(2.4	)	(4.3	)
Investment in life insurance	(0.8	)	(1.0	)	(2.2	)
State income taxes (benefit), net of federal tax offset	1.1		1.2		1.3
Tax credits	(0.8	)	(0.9	)	(2.0	)
Valuation allowance	—		—		(90.7	)
Other	0.7		0.7		1.1
Effective income tax rate	32.6	%	32.6	%	(61.8	)%

Schedule of Net Deferred Tax Asset

The following table reflects the effect of temporary differences that gave rise to the components of the net deferred tax asset as of December 31, 2014 and 2013 (in thousands):



	December 31
	2014			2013
Deferred tax assets:
REO and loan loss reserves	$	26,536		$	17,326
Deferred compensation	9,223			7,305
Net operating loss carryforward	17,577			27,639
Low income housing tax credits	3,676			3,676
State net operating losses	1,009			957
Other	1,344			1,235
Total deferred tax assets	59,365			58,138
Deferred tax liabilities:
FHLB stock dividends	(4,805		)	(5,875		)
Depreciation	(4,479		)	(4,074		)
Deferred loan fees, servicing rights and loan origination costs	(7,843		)	(6,444		)
Intangibles	(975		)	(833		)
Financial instruments accounted for under fair value accounting	(15,611		)	(15,118		)
Loan discount	(1,190		)	—
Total deferred tax liabilities	(34,903		)	(32,344		)
Deferred income tax asset	24,462			25,794
Unrealized loss on securities—available-for-sale	145			1,685
Deferred tax asset, net	$	24,607		$	27,479