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Income Taxes | 12 Months Ended
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Dec. 31, 2010
Income Taxes [Abstract] |
Income Taxes | 14. INCOME TAXES Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Corporation's deferred tax assets and liabilities are as follows:
December 31 (in thousands) |  | 2010 (Restated) |  |  | 2009 |
Deferred tax assets: |  |  |  |  |  |
Allowance for loan losses |  | $ | 52,418 |  |  | $ | 42,236 |
Accumulated other comprehensive loss – interest rate swap |  |  | 572 |  |  |  | 519 |
Accumulated other comprehensive loss – pension plan |  |  | 8,576 |  |  |  | 7,269 |
Intangible assets |  |  | 2,156 |  |  |  | 2,756 |
Deferred compensation |  |  | 4,123 |  |  |  | 4,348 |
OREO devaluations |  |  | 7,171 |  |  |  | 2,380 |
State net operating loss carryforwards |  |  | 2,812 |  |  |  | 1,725 |
Other |  |  | 4,988 |  |  |  | 5,273 |
Valuation allowance |  |  | (1,492 | ) |  |  | — |
Total deferred tax assets |  | $ | 81,325 |  |  | $ | 66,506 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Accumulated other comprehensive income – unrealized gains on securities |  | $ | 8,142 |  |  | $ | 16,221 |
Deferred investment income |  |  | 10,199 |  |  |  | 10,201 |
Pension plan |  |  | 16,835 |  |  |  | 12,664 |
Mortgage servicing rights |  |  | 3,671 |  |  |  | 3,773 |
Purchase accounting adjustments |  |  | 2,150 |  |  |  | 3,228 |
Other |  |  | 2,176 |  |  |  | 1,285 |
Total deferred tax liabilities |  | $ | 43,173 |  |  | $ | 47,372 |
Net deferred tax assets |  | $ | 38,152 |  |  | $ | 19,134 |
Park performs an analysis to determine if a valuation allowance against deferred tax assets is required in accordance with GAAP. Vision Bank is subject to state income tax in Alabama and Florida. A state tax benefit of $1.16 million was recorded by Vision Bank, consisting of a gross benefit of $3.45 million and a valuation allowance of $2.29 million. In the schedule of deferred taxes, the valuation allowance is shown net of the federal tax benefit of $803,000. Management has determined that the likelihood of realizing the full deferred tax asset on state net operating loss carryforwards fails to meet the more likely than not level. The net operating loss carryforward period for the state of Alabama and Florida are 8 years and 20 years, respectively. A merger of Vision Bank into Park National Bank would ensure the future utilization of the state net operating loss carryforward at Vision Bank. However, management is not certain when a merger of Vision Bank into Park National Bank can take place and as a result has decided to record a valuation allowance against new state tax benefit of losses at Vision Bank until management has a better understanding of the timing and likelihood of a merger of Vision Bank into Park National Bank. Management has determined that it is not required to establish a valuation allowance against remaining deferred tax assets in accordance with GAAP since it is more likely than not that the deferred tax assets will be fully utilized in future periods. The components of the provision for federal and state income taxes are shown below:
December 31 (in thousands) |  | 2010 (Restated) |  |  | 2009 |  |  | 2008 |
Currently payable |  |  |  |  |  |  |  |  |
Federal |  | $ | 26,130 |  |  | $ | 32,148 |  |  | $ | 23,645 |
State |  |  | 109 |  |  |  | (273 | ) |  |  | (44 | )
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (8,333 | ) |  |  | (6,745 | ) |  |  | 697 |
State |  |  | (3,564 | ) |  |  | (2,187 | ) |  |  | (2,287 | )
Valuation allowance |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | — |  |  |  | — |  |  |  | — |
State |  |  | 2,294 |  |  |  | — |  |  |  | — |
Total |  | $ | 16,636 |  |  | $ | 22,943 |  |  | $ | 22,011 |
The following is a reconciliation of income tax expense to the amount computed at the statutory rate of 35% for the years ended December 31, 2010, 2009 and 2008.
December 31 |  | 2010 (Restated) |  |  | 2009 |  |  | 2008 |
Statutory federal corporate tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
Changes in rates resulting from: |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt interest income, net of disallowed interest |  |  | (1.7 | )% |  |  | (1.3 | )% |  |  | (3.5 | )%
Bank owned life insurance |  |  | (2.3 | )% |  |  | (1.8 | )% |  |  | (5.0 | )%
Tax credits (low income housing) |  |  | (6.6 | )% |  |  | (4.8 | )% |  |  | (11.7 | )%
Goodwill impairment |  |  | — |  |  |  | — |  |  |  | 50.7 | %
State income tax expense, net of federal benefit |  |  | (3.0 | )% |  |  | (1.6 | )% |  |  | (4.2 | )%
Valuation allowance, net of federal benefit |  |  | 2.0 | % |  |  | — |  |  |  | — |
Other |  |  | (1.1 | )% |  |  | (1.9 | )% |  |  | 0.3 | %
Effective tax rate |  |  | 22.3 | % |  |  | 23.6 | % |  |  | 61.6 | %
Park and its Ohio-based subsidiaries do not pay state income tax to the state of Ohio, but pay a franchise tax based on their year-end equity. The franchise tax expense is included in the state tax expense and is shown in "state taxes" on Park's Consolidated Statements of Income. Vision Bank is subject to state income tax, in the states of Alabama and Florida. State income tax benefit for Vision Bank is included in "income taxes" on Park's Consolidated Statements of Income. Vision Bank's 2010 state income tax benefit was $1.16 million, net of the recorded valuation allowance. Unrecognized Tax Benefits The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits.
(In thousands) |  | 2010 |  |  | 2009 |  |  | 2008 |
January 1 Balance |  | $ | 595 |  |  | $ | 783 |  |  | $ | 828 |
Additions based on tax positions related to the current year |  |  | 69 |  |  |  | 64 |  |  |  | 102 |
Additions for tax positions of prior years |  |  | 7 |  |  |  | — |  |  |  | 18 |
Reductions for tax positions of prior years |  |  | (131 | ) |  |  | (189 | ) |  |  | (15 | )
Reductions due to statute of limitations |  |  | (63 | ) |  |  | (63 | ) |  |  | (150 | )
December 31 Balance |  | $ | 477 |  |  | $ | 595 |  |  | $ | 783 |
The amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in the future periods at December 31, 2010, 2009 and 2008 was $370,000, $504,000 and $704,000, respectively. Park does not expect the total amount of unrecognized tax benefits to significantly increase or decrease during the next year. The (income)/expense related to interest and penalties recorded in the Consolidated Statements of Income for the years ended December 31, 2010, 2009 and 2008 was $(10,500), $(18,000) and $16,000, respectively. The amount accrued for interest and penalties at December 31, 2010, 2009 and 2008 was $60,500, $71,000 and $89,000, respectively. Park and its subsidiaries are subject to U.S. federal income tax. Some of Park's subsidiaries are subject to state income tax in the following states: Alabama, Florida, California and Kentucky. Park is no longer subject to examination by federal or state taxing authorities for the tax year 2006 and the years prior. The 2007 and 2008 federal income tax returns of Park National Corporation are currently under examination by the Internal Revenue Service. Additionally, the 2009 State of Ohio franchise tax return is currently under examination. Park does not expect material adjustments from the examinations.

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- Definition Description containing the entire income tax disclosure. Examples 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. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 + Details
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