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INCOME TAXES | 12 Months Ended
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Dec. 31, 2016
INCOME TAXES |
INCOME TAXES | 11. INCOME TAXES The following table details the components of income tax expense:
|  | Year Ended December 31, |
(In thousands) |  | 2016 |  |  | 2015 |  |  | 2014 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 14,730 |  |  | $ | 8,248 |  |  | $ | 3,926 |
State |  |  | 780 |  |  |  | 1,230 |  |  |  | 507 |
Total current |  |  | 15,510 |  |  |  | 9,478 |  |  |  | 4,433 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 2,388 |  |  |  | 1,457 |  |  |  | 2,187 |
State |  |  | 897 |  |  |  | (157 | ) |  |  | 619 |
Total deferred |  |  | 3,285 |  |  |  | 1,300 |  |  |  | 2,806 |
Total income tax expense |  | $ | 18,795 |  |  | $ | 10,778 |  |  | $ | 7,239 |
The following table is a reconciliation of the expected Federal income tax expense at the statutory tax rate to the actual provision:
|  | Year Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
(Dollars in thousands) |  | Amount |  |  | Percentage of Pre-tax Earnings |  |  | Amount |  |  | Percentage of Pre-tax Earnings |  |  | Amount |  |  | Percentage of Pre-tax Earnings |
Federal income tax expense computed by applying the statutory rate to income before income taxes |  | $ | 19,000 |  |  |  | 35 | % |  | $ | 11,161 |  |  |  | 35 | % |  | $ | 7,141 |  |  |  | 34 | %
Tax exempt interest |  |  | (986 | ) |  |  | (2 | ) |  |  | (927 | ) |  |  | (3 | ) |  |  | (665 | ) |  |  | (3 | )
State taxes, net of federal income tax benefit |  |  | 1,090 |  |  |  | 2 |  |  |  | 1,087 |  |  |  | 3 |  |  |  | 743 |  |  |  | 4 |
Other |  |  | (309 | ) |  |  | — |  |  |  | (543 | ) |  |  | (1 | ) |  |  | 20 |  |  |  | — |
Income tax expense |  | $ | 18,795 |  |  |  | 35 | % |  | $ | 10,778 |  |  |  | 34 | % |  | $ | 7,239 |  |  |  | 35 | %
The following table summarizes the composition of deferred tax assets and liabilities:
|  | December 31, |
(In thousands) |  | 2016 |  |  | 2015 |
Deferred tax assets: |  |  |  |  |  |  |  |
Allowance for loan losses and off-balance sheet credit exposure |  | $ | 11,401 |  |  | $ | 9,154 |
Net unrealized losses on securities |  |  | 6,019 |  |  |  | 3,224 |
Compensation and related benefit obligations |  |  | 2,226 |  |  |  | 1,435 |
Purchase accounting fair value adjustments |  |  | 14,376 |  |  |  | 15,942 |
Net change in pension and other post-retirement benefits plans |  |  | 3,249 |  |  |  | 2,811 |
Net operating loss carryforward |  |  | 2,470 |  |  |  | 1,955 |
Net loss on cash flow hedges |  |  | - |  |  |  | 524 |
Other |  |  | 756 |  |  |  | 672 |
Total deferred tax assets |  |  | 40,497 |  |  |  | 35,717 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Pension and SERP expense |  |  | (4,715 | ) |  |  | (4,142 | )
Depreciation |  |  | (1,537 | ) |  |  | (1,828 | )
REIT undistributed net income |  |  | (86 | ) |  |  | (482 | )
Net deferred loan costs and fees |  |  | (1,844 | ) |  |  | (1,416 | )
Net gain on cash flow hedges |  |  | (341 | ) |  |  | - |
State and local taxes |  |  | (1,862 | ) |  |  | (1,541 | )
Other |  |  | (179 | ) |  |  | - |
Total deferred tax liabilities |  |  | (10,564 | ) |  |  | (9,409 | )
Net deferred tax asset |  | $ | 29,933 |  |  | $ | 26,308 |
The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the State and City of New York and the State of New Jersey. The Company is no longer subject to examination by taxing authorities for years before 2013. There are no unrecorded tax benefits and the Company does not expect the total amount of unrecognized income tax benefits to significantly increase in the next twelve months. Tax laws were enacted in 2014 and 2015 that changed the manner in which financial institutions and their affiliates are taxed in New York State and New York City, effective January 1, 2015. The initial impact of enactment of these tax law changes on the carrying amount of the Company’s deferred tax assets and liabilities was immaterial to the consolidated financial statements. In connection with the acquisitions of HSB and FNBNY, the Company acquired net operating loss (“NOL”) carryfowards subject to Internal Revenue Code Section 382. The Company recorded a deferred tax asset that it expects to realize within the carryfoward period. At December 31, 2016, the remaining NOL carryforward was $4.0 million. In connection with the CNB acquisition, the Company acquired New York State and New York City net operating losses in the amount of $14.8 million and $6.2 million, respectively. The Company recorded a deferred tax asset that it expects to realize within the carryforward period.

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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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