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INCOME TAXES | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Provision for Income Taxes The components of the Company’s provision for income taxes for the years ended December 31, 2016, 2015, and 2014 were, as follows:
(In thousands) |  | 2016 |  | 2015 |  | 2014
Current: |  |  |  |  |  |  |  |  |
Federal tax expense |  | $ | 6,758 |  |  | $ | 4,696 |  |  | $ | 294 |
State tax expense |  | 1,101 |  |  | (1,631 | ) |  | 305 |
Total current expense |  | 7,859 |  |  | 3,065 |  |  | 599 |
Deferred: |  |  |  |  |  |  |  |  |
Federal tax expense |  | 9,438 |  |  | 2,023 |  |  | 8,685 |
State tax expense |  | 1,591 |  |  | (24 | ) |  | 2,509 |
Total deferred tax expense |  | 11,029 |  |  | 1,999 |  |  | 11,194 |
Change in valuation allowance |  | (104 | ) |  | — |  |  | (30 | )
Total income tax expense |  | $ | 18,784 |  |  | $ | 5,064 |  |  | $ | 11,763 |
Effective Tax Rate The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2016, 2015, and 2014:
|  | 2016 |  | 2015 |  | 2014
(In thousands, except rates) |  | Amount |  | Rate |  | Amount |  | Rate |  | Amount |  | Rate
Statutory tax rate |  | $ | 27,108 |  |  | 35.0 | % |  | $ | 19,104 |  |  | 35.0 | % |  | $ | 15,928 |  |  | 35.0 | %
Increase (decrease) resulting from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
State taxes, net of federal tax benefit |  | 1,675 |  |  | 2.2 |  |  | (974 | ) |  | (1.8 | ) |  | 1,810 |  |  | 4.0 |
Tax exempt income - investments, net |  | (3,849 | ) |  | (5.0 | ) |  | (3,463 | ) |  | (6.3 | ) |  | (2,796 | ) |  | (6.1 | )
Bank-owned life insurance |  | (1,364 | ) |  | (1.8 | ) |  | (1,284 | ) |  | (2.4 | ) |  | (1,070 | ) |  | (2.4 | )
Disallowed merger costs |  | 542 |  |  | 0.7 |  |  | 422 |  |  | 0.8 |  |  | 206 |  |  | 0.5 |
Non-deductible goodwill on disposal operations sale |  | — |  |  | — |  |  | 313 |  |  | 0.6 |  |  | — |  |  | — |
Tax credits, net of basis reduction |  | (6,225 | ) |  | (8.0 | ) |  | (8,308 | ) |  | (15.2 | ) |  | (1,658 | ) |  | (3.6 | )
Change in valuation allowance |  | 125 |  |  | 0.2 |  |  | — |  |  | — |  |  | — |  |  | — |
Other, net |  | 772 |  |  | 1.0 |  |  | (746 | ) |  | (1.4 | ) |  | (657 | ) |  | (1.5 | )
Effective tax rate |  | $ | 18,784 |  |  | 24.3 | % |  | $ | 5,064 |  |  | 9.3 | % |  | $ | 11,763 |  |  | 25.9 | %
Deferred Tax Liabilities and Assets As of December 31, 2016 and 2015, significant components of the Company’s deferred tax asset and liabilities were, as follows:
(In thousands) |  | 2016 |  | 2015
Deferred tax assets: |  |  |  |  |  |
Allowance for loan losses |  | $ | 17,747 |  |  | $ | 16,303 |
Tax credit carryforwards |  | 4,100 |  |  | 7,295 |
Unrealized capital loss on tax credit investments |  | 6,999 |  |  | 2,892 |
Net unrealized loss on swaps, securities available for sale, and pension in OCI |  | — |  |  | 2,371 |
Employee benefit plans |  | 7,813 |  |  | 8,776 |
Purchase accounting adjustments |  | 23,520 |  |  | 10,755 |
Net operating loss and capital loss carryforwards |  | 2,643 |  |  | 3,317 |
Other |  | 4,997 |  |  | 2,527 |
Deferred tax assets, net before valuation allowances |  | 67,819 |  |  | 54,236 |
Valuation allowance |  | (125 | ) |  | (229 | )
Deferred tax assets, net of valuation allowances |  | $ | 67,694 |  |  | $ | 54,007 |
Deferred tax liabilities: |  |  |  |  |  |
Net unrealized gain on swaps, securities available for sale, and pension in OCI |  | $ | (5,884 | ) |  | $ | — |
Premises and equipment |  | (2,519 | ) |  | (2,577 | )
Loan servicing rights |  | (4,546 | ) |  | — |
Intangible amortization |  | (11,543 | ) |  | (8,904 | )
Other |  | (2,074 | ) |  | — |
Deferred tax liabilities |  | $ | (26,566 | ) |  | $ | (11,481 | )
Deferred tax assets, net |  | $ | 41,128 |  |  | $ | 42,526 |
The Company’s net deferred tax asset decreased by $1.4 million during 2016, including $8.3 million deferred tax expense recognized as an decrease in shareholder's equity, and $17.8 million from the acquisition of First Choice resulting in a reduction in goodwill. Refer to Note 2 for more information about the acquisition. Deferred tax assets, net of valuation allowances, are expected to be realized through the reversal of existing taxable temporary differences and future taxable income. Valuation Allowances The components of the Company’s valuation allowance on its deferred tax asset, net as of December 31, 2016 and 2015 were, as follows:
(in thousands) |  | 2016 |  | 2015
State tax basis difference, net of Federal tax benefit (of 35%) |  | $ | (125 | ) |  | $ | (229 | )
Valuation allowances |  | $ | (125 | ) |  | $ | (229 | )
The state tax basis difference, net of Federal tax benefit was also originally recorded in 2012, due to management’s assessment that it is more likely than not that certain deferred tax assets recorded for the difference between the book basis and the state tax basis in certain tax credit limited partnership investments (LPs) will not be realized. Management anticipates that the remaining excess state tax basis will be realized as a capital loss upon disposition, and that it is unlikely that the Company will have capital gains against which to offset such capital losses. During 2016, the valuation allowance decreased by $104 thousand. A $125 thousand change was recorded as an increase to income tax expense and $229 thousand was recorded as a reduction in state tax basis upon sale of a partnership interest. The valuation allowances as of December 31, 2016 are subject to change in the future as the Company continues to periodically assess the likelihood of realizing its deferred tax assets. Tax Attributes At December 31, 2016, the Company has $7.5 million of federal net operating loss carryforwards, $6.1 million of New Jersey net operating losses, and $13.9 million of Connecticut net operating losses available that were obtained through acquisition, the utilization of which are limited under Internal Revenue Code 382. No deferred tax asset has been recorded on the Connecticut net operating loss since the state of Connecticut does not currently allow a deduction for net operating losses. These net operating losses begin to expire in 2024. The related deferred tax asset is $2.6 million. In addition, the Company has alternative minimum tax credit carryforwards of $4.1 million with no expiration date. The Company anticipates utilizing these carryforwards prior to their expirations. Unrecognized Tax Benefits On a periodic basis, the Company evaluates its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This evaluation takes into consideration the status of taxing authorities’ current examinations of the Company’s tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment in relation to uncertain tax positions. The following table presents changes in unrecognized tax benefits for the years ended December 31, 2016, 2015, and 2014:
(In thousands) |  | 2016 |  | 2015 |  | 2014
Unrecognized tax benefits at January 1 |  | $ | 307 |  |  | $ | 553 |  |  | $ | 477 |
Increase in gross amounts of tax positions related to prior years |  | 270 |  |  | — |  |  | 55 |
Increase in gross amounts of tax positions related to current year |  | — |  |  | — |  |  | 93 |
Decrease due to lapse in statute of limitations |  | (117 | ) |  | (246 | ) |  | (72 | )
Unrecognized tax benefits at December 31 |  | $ | 460 |  |  | $ | 307 |  |  | $ | 553 |
It is reasonably possible that over the next twelve months the amount of unrecognized tax benefits may change from the reevaluation of uncertain tax positions arising in examinations, in appeals, or in the courts, or from the closure of tax statutes. The Company does not expect any significant changes in unrecognized tax benefits during the next twelve months. All of the Company’s unrecognized tax benefits, if recognized, would be recorded as a component of income tax expense, therefore, affecting the effective tax rate. The Company recognizes interest and penalties, if any, related to the liability for uncertain tax positions as a component in income tax expense. The accrual for interest and penalties was not material in all or any years presented. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction as well as in various states. In the normal course of business, the Company is subject to U.S. federal, state, and local income tax examinations by tax authorities. The Company is no longer subject to examination for tax years prior to 2013 including any related income tax filings from its recent acquisitions. The Company has been selected for audit in the state of New York for tax years 2013-2014.

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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 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 2: 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=65882285&loc=d3e32559-109319 Reference 3: 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=65882285&loc=d3e32718-109319 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=65882285&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=65882285&loc=d3e32537-109319 + Details
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