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INCOME TAXES | 9 Months Ended
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Sep. 30, 2019
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES For the three and nine months ended September 30, 2019 income tax (benefit) expense, on a consolidated operations basis, was $(5.6) million and $1.4 million, respectively, and the effective tax rate was 28.4% and 12.9%, respectively. For the three and nine months ended September 30, 2018 income tax expense (benefit), on a consolidated operations basis, was $3.6 million and $(102) thousand, respectively, and the effective tax rate was 24.3% and (0.3)%, respectively. During 2019, the Company had a reduction in the recognition of year-to-date tax credits from the investments in alternative energy partnerships of $412 thousand and $9.6 million for the three and nine months ended September 30, 2018, respectively, compared to $0.9 million and $2.6 million, respectively, of tax credits recognized for the three and nine months ended September 30, 2019, respectively. The Company uses the flow-through income statement method to account for the investment tax credits earned on the solar investments. Under this method, investment tax credits are recognized as a reduction to income tax expense and the initial book-tax difference in the basis of the investments are recognized as additional tax expense in the year they are earned. The Company accounts for income taxes by recognizing deferred tax assets and liabilities based upon temporary differences between the amounts for financial reporting purposes and tax basis of its assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. In assessing the realization of deferred tax assets, management will continue to evaluate both positive and negative evidence on a quarterly basis, including the reversal of its taxable temporary differences, the existence of its historical earnings, the amounts of future projected earnings as well as the tax expiration periods of its income tax credits. Based on this analysis, management determined that it was more likely than not that all of the deferred tax assets would be realized; therefore, no valuation allowance was provided against the net deferred tax assets of $46.0 million and $49.4 million at September 30, 2019 and December 31, 2018, respectively. The overall decrease in net deferred tax assets was primarily due to increases of $2.0 million in deferred tax liabilities resulting from year-to-date temporary book-tax differences and an increase of $6.1 million in deferred tax liabilities from the decrease of unrealized loss on securities available-for-sale, as well as a $4.6 million reclass of tax credit to deferred tax assets. ASC 740-10-25 relates to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740-10-25 prescribes a threshold and a measurement process for recognizing in the financial statements a tax position taken or expected to be taken in a tax return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company had unrecognized tax benefits of $1.3 million and $1.2 million at September 30, 2019 and December 31, 2018, respectively. The Company does not expect the total amount of unrecognized tax benefits to significantly change in the next twelve months. As of September 30, 2019, the total unrecognized tax benefit that, if recognized, would impact the effective tax rate was $1.1 million. At September 30, 2019 and December 31, 2018, the Company had no accrued interest or penalties. In the event the Company is assessed interest and/or penalties by federal or state tax authorities, such amounts will be classified in the consolidated financial statements as income tax expense. The Company and its subsidiaries are subject to U.S. Federal income tax as well as income tax in multiple state jurisdictions. The Company is no longer subject to the assessment of U.S. federal income tax for years before 2015. The statute of limitations for the assessment of California Franchise taxes has expired for tax years before 2014 (other state income and franchise tax statutes of limitations vary by state).

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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