NOTE

INCOME TAXES

The provision (benefit) for income taxes for the years ended

December

is comprised of the following components:

(In thousands)	2016		2015		2014

Income taxes currently payable	$	36,792	$	19,301	$	23,631
Deferred income taxes		9,832		13,599		(9,029	)

Provision for income taxes	$	46,624	$	32,900	$	14,602

The tax effects of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to deferred income tax assets and liabilities, and their approximate tax effects, are as follows as of

December

31,

2016

and

2015:

(In thousands)	2016			2015

Deferred tax assets:
Loans acquired	$	7,986		$	14,716
Allowance for loan losses		14,754			12,700
Valuation of foreclosed assets		3,958			11,212
Tax NOLs from acquisition		13,077			14,593
Deferred compensation payable		2,785			2,767
Vacation compensation		1,740			2,250
Accrued equity and other compensation		6,367			5,197
Acquired securities		1,098			1,770
Other accrued liabilities		1,834			1,943
Unrealized loss on available-for-sale securities		9,559			1,655
Other		5,267			3,006
Gross deferred tax assets		68,425			71,809

Deferred tax liabilities:
Goodwill and other intangible amortization		(29,601	)		(30,550	)
Limitations under IRC Sec 382		--			(3,478	)
Accumulated depreciation		(5,370	)		(3,914	)
Other		(5,877	)		(4,187	)
Gross deferred tax liabilities		(40,848	)		(42,129	)

Net deferred tax asset, included in other assets	$	27,577		$	29,680

104

A reconciliation of income tax expense at the statutory rate to the Company's actual income tax expense is shown below for the years ended

December

31:

(In thousands)	2016			2015			2014

Computed at the statutory rate (35%)	$	50,203		$	37,543		$	17,601
Increase (decrease) in taxes resulting from:
State income taxes, net of federal tax benefit		2,121			2,097			41
Tax exempt interest income		(4,207	)		(4,708	)		(3,774	)
Tax exempt earnings on BOLI		(905	)		(724	)		(499	)
Section 382 adjustment		--			(2,293	)		--
Other differences, net		(588	)		985			1,233

Actual tax provision	$	46,624		$	32,900		$	14,602

The Company follows ASC Topic

740,

Income Taxes

, which prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than

fifty

percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the

first

subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the

first

subsequent financial reporting period in which that threshold is no longer met. ASC Topic

740

also provides guidance on the accounting for and disclosure of unrecognized tax benefits, interest and penalties.

The amount of unrecognized tax benefits

may

increase or decrease in the future for various reasons including adding amounts for current tax year positions, expiration of open income tax returns due to the statutes of limitation, changes in management’s judgment about the level of uncertainty, status of examinations, litigation and legislative activity and the addition or elimination of uncertain tax positions.

Section

382

of the Internal Revenue Code imposes an annual limit on the ability of a corporation that undergoes an “ownership change” to use its U.S. net operating losses to reduce its tax liability. The Company closed a stock acquisition in a prior year that invoked the Section

382

annual limitation. Approximately

$37.5

million of federal net operating losses subject to the IRC Sec

382

annual limitation are expected to be utilized by the company. The net operating loss carryforwards expire between

2028

and

2035.

The Company files income tax returns in the U.S. federal jurisdiction. The Company’s U.S. federal income tax returns are open and subject to examinations from the

2013

tax year and forward. The Company’s various state income tax returns are generally open from the

2013

and later tax return years based on individual state statute of limitations.