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Federal and State Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Federal and State Income Taxes | Note 14. Federal and State Income Taxes The following is a summary of consolidated income tax expense (benefit):
| Years ended
(Dollars in thousands) | December 31, 2013 |  | December 31, 2012 |  | December 31, 2011
Current |  |  |  |  |
Federal | $ | 18,377 |  |  | 12,718 |  |  | 8,836 |
State | 7,007 |  |  | 5,522 |  |  | 4,191 |
Total current income tax expense | 25,384 |  |  | 18,240 |  |  | 13,027 |
Deferred |  |  |  |  |
Federal | 3,918 |  |  | 708 |  |  | (11,256 | )
State | 715 |  |  | 129 |  |  | (2,052 | )
Total deferred income tax expense (benefit) | 4,633 |  |  | 837 |  |  | (13,308 | )
Total income tax expense (benefit) | $ | 30,017 |  |  | 19,077 |  |  | (281 | )
Combined federal and state income tax expense differs from that computed at the federal statutory corporate tax rate as follows:
| Years ended
| December 31, 2013 |  | December 31, 2012 |  | December 31, 2011
Federal statutory rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State taxes, net of federal income tax benefit | 4.0 | % |  | 3.9 | % |  | 8.1 | %
Tax-exempt interest income | (12.2 | )% |  | (14.0 | )% |  | (65.5 | )%
Tax credits | (3.2 | )% |  | (4.2 | )% |  | (22.1 | )%
Goodwill impairment charge | — | % |  | — | % |  | 42.3 | %
Other, net | 0.3 | % |  | (0.5 | )% |  | 0.6 | %
Effective tax rate | 23.9 | % |  | 20.2 | % |  | (1.6 | )%
Note 14. Federal and State Income Taxes (continued) The tax effect of temporary differences which give rise to a significant portion of deferred tax assets and deferred tax liabilities are as follows:
(Dollars in thousands) | December 31, 2013 |  | December 31, 2012
Deferred tax assets |  |  |
Allowance for loan and lease losses | $ | 50,652 |  |  | 50,963 |
Other real estate owned | 8,041 |  |  | 7,685 |
Deferred compensation | 4,837 |  |  | 3,129 |
Employee benefits | 3,132 |  |  | 2,715 |
Federal income tax credits | 2,778 |  |  | 3,543 |
Interest rate swap agreements | — |  |  | 6,549 |
Other | 7,813 |  |  | 7,835 |
Total gross deferred tax assets | 77,253 |  |  | 82,419 |
Deferred tax liabilities |  |  |
FHLB stock dividends | (10,359 | ) |  | (10,143 | )
Deferred loan costs | (6,058 | ) |  | (5,316 | )
Available-for-sale securities | (5,402 | ) |  | (37,083 | )
Depreciation of premises and equipment | (3,939 | ) |  | (5,437 | )
Intangibles | (3,099 | ) |  | (1,117 | )
Interest rate swap agreements | (736 | ) |  | — |
Other | (4,111 | ) |  | (2,929 | )
Total gross deferred tax liabilities | (33,704 | ) |  | (62,025 | )
Net deferred tax asset | $ | 43,549 |  |  | 20,394 |
The Company’s federal income tax credit carryforwards will expire in 2033. The Company and the Bank join together in the filing of consolidated income tax returns in the following jurisdictions: federal, Montana, Idaho, Colorado and Utah. Although the Bank has operations in Wyoming and Washington, neither Wyoming nor Washington imposes a corporate-level income tax. All required income tax returns have been timely filed. The following schedule summarizes the years that remain subject to examination as of December 31, 2013:
| Years ended December 31,
Federal | 2009, 2010, 2011 and 2012
Montana | 2010, 2011 and 2012
Idaho | 2009, 2010, 2011 and 2012
Colorado | 2009, 2010, 2011 and 2012
Utah | 2010, 2011 and 2012
The Company had no unrecognized income tax benefits as of December 31, 2013, and 2012. The Company recognizes interest related to unrecognized income tax benefits in interest expense and penalties are recognized in other expense. Interest expense and penalties recognized with respect to income tax liabilities for the years ended December 31, 2013, 2012, and 2011 was not significant. The Company had no accrued liabilities for the payment of interest or penalties at December 31, 2013, and 2012. Note 14. Federal and State Income Taxes (continued) The Company has assessed the need for a valuation allowance and determined that a valuation allowance was not necessary at December 31, 2013, and 2012. The Company believes that it is more-likely-than-not that the Company’s deferred tax assets will be realizable by offsetting future taxable income from reversing taxable temporary differences and anticipated future taxable income (exclusive of reversing temporary differences). In its assessment, the Company considered its strong earnings history, no history of income tax credit carryforwards expiring unused, and no future net operating losses (for tax purposes) are expected. Retained earnings at December 31, 2013 includes $3,600,000 for which no provision for federal income tax has been made. This amount represents the base year reserve for bad debts, which is essentially an allocation of earnings to pre-1988 bad debt deductions for federal income tax purposes only. This amount is treated as a permanent difference and deferred taxes are not recognized unless it appears that this bad debt reserve will be reduced and thereby result in taxable income in the foreseeable future. The Company is not currently contemplating any changes in its business or operations which would result in a recapture of this reserve for bad debts for federal income tax purposes.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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