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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 12 — INCOME TAXES Income tax expense (benefit) for the years ended December 31, 2014, 2013, and 2012 consisted of the following:
|  | Years Ended December 31, |
(Dollars in thousands) |  | 2014 |  |  | 2013 |  |  | 2012 |
Income tax expense (benefit): |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 6,005 |  |  | $ | 242 |  |  | $ | 132 |
Deferred |  |  | 4,814 |  |  |  | 1,884 |  |  |  | 1,846 |
Change in valuation allowance for deferred tax asset |  |  | (441 | ) |  |  | 7 |  |  |  | (7,372 | )
Income tax expense (benefit) |  | $ | 10,378 |  |  | $ | 2,133 |  |  | $ | (5,394 | )
Effective tax rates differ from federal statutory rates applied to income before income taxes due to the following:
|  | Years Ended December 31, |
(Dollars in thousands) |  | 2014 |  |  | 2013 |  |  | 2012 |
Tax provision computed at federal statutory rate |  | $ | 10,436 |  |  | $ | 5,290 |  |  | $ | 1,931 |
Effect of: |  |  |  |  |  |  |  |  |  |  |  |
State taxes, net |  |  | 1,160 |  |  |  | 148 |  |  |  | 85 |
Change in effective tax rate |  |  | (528 | ) |  |  | — |  |  |  | — |
Bargain purchase gain |  |  | — |  |  |  | (3,065 | ) |  |  | — |
Transaction costs |  |  | — |  |  |  | 259 |  |  |  | — |
Noncontrolling interest in subsidiary |  |  | (22 | ) |  |  | (215 | ) |  |  | — |
Bank-owned life insurance |  |  | (165 | ) |  |  | (40 | ) |  |  | — |
Tax exempt interest |  |  | (189 | ) |  |  | (42 | ) |  |  | — |
Change in valuation allowance |  |  | (441 | ) |  |  | 7 |  |  |  | (7,372 | )
Other |  |  | 127 |  |  |  | (209 | ) |  |  | (38 | )
Income tax expense (benefit) |  | $ | 10,378 |  |  | $ | 2,133 |  |  | $ | (5,394 | )
Deferred income taxes reflect the net tax effects of temporary differences between the recorded amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2014 and 2013 are as follows:
|  | Years Ended December 31, |
(Dollars in thousands) |  | 2014 |  |  | 2013 |
Deferred tax assets |  |  |  |  |  |  |  |
Federal net operating loss carryforwards |  | $ | 11,570 |  |  | $ | 12,596 |
State net operating loss carryforwards |  |  | 2,296 |  |  |  | 2,811 |
Capital loss carryforwards |  |  | — |  |  |  | 379 |
Acquired loan basis |  |  | 5,422 |  |  |  | 8,876 |
Other real estate owned |  |  | 1,543 |  |  |  | 1,684 |
AMT credit carryforward |  |  | 1,634 |  |  |  | 1,768 |
Acquired deposit basis |  |  | 158 |  |  |  | 633 |
Allowance for loan losses |  |  | 3,081 |  |  |  | 564 |
Other |  |  | 587 |  |  |  | 2,595 |
Total deferred tax assets |  |  | 26,291 |  |  |  | 31,906 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Goodwill and intangible assets |  |  | 4,025 |  |  |  | 5,135 |
Fair value adjustment on junior subordinated debentures |  |  | 3,182 |  |  |  | 3,451 |
Unrealized gain on securities available for sale |  |  | 534 |  |  |  | 56 |
Other |  |  | 1,436 |  |  |  | 858 |
Total deferred tax liabilities |  |  | 9,177 |  |  |  | 9,500 |
Net deferred tax asset before valuation allowance |  |  | 17,114 |  |  |  | 22,406 |
Valuation allowance |  |  | (1,158 | ) |  |  | (1,599 | )
Net deferred tax asset |  | $ | 15,956 |  |  | $ | 20,807 |
The Company’s federal net operating loss carryforwards as of December 31, 2014 and 2013 were $33,444,000 and $37,048,000, respectively. These net operating loss carryforwards begin to expire in 2029. At December 31, 2014, the Company had state net operating loss carryforwards in Illinois, Iowa and Wisconsin of $17,477,000, $32,812,000, and $2,645,000, respectively. At December 31, 2013, the Company had state net operating loss carryforwards in Illinois, Iowa and Wisconsin of $22,141,000, $33,189,000, and $2,799,000, respectively. These net operating loss carryforwards expire beginning in 2021 through 2034. The Company has a valuation allowance on the net operating loss carryforwards for certain states and certain other investments that are not expected to be realized before expiration. An Internal Revenue Code Section 382 (Section 382) ownership change was triggered during 2013. A significant portion of the deferred tax asset relating to the Company’s net operating loss and Alternative Minimum Tax credit carry-forwards are subject to the annual limitation rules under Section 382 from the EJ Financial Corp. (EJ) and NBI acquisitions and the 2013 share exchange. The utilization of tax carryforward attributes acquired from the EJ acquisition is subject to an annual limitation of $341,000. The utilization of tax carryforward attributes acquired from the NBI acquisition is subject to an annual limitation of $2,040,000. Any remaining tax attribute carryforwards generated prior to the 382 ownership change in 2013 are subject to an annual limitation of $3,696,000. At December 31, 2014 and 2013, the Company had no amounts recorded for uncertain tax positions and does not expect any material changes in uncertain tax benefits during the next 12 months. The Company is subject to U.S. federal income tax as well as income tax in various states. The Company is not subject to examination by taxing authorities for years prior to 2011.

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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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