XML 35 R20.htm IDEA: XBRL DOCUMENT

Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Tax Disclosure

Note 12 - Income Taxes

The current and deferred amounts of income tax expense for 2017, 2016 and 2015 are as follows:

		2017				2016				2015
Current:		(dollars in thousands)
Federal		$	21,090			$	10,173			$	22,512
State			505				(366)				907
Subtotal			21,595				9,807				23,419
Deferred:
Federal			3,876				2,682				(3,835)
State			(177)				(713)				342
Subtotal			3,699				1,969				(3,493)
Income tax expense		$	25,294			$	11,776			$	19,926

The Tax Reform Act was signed into law on December 22, 2017. Pursuant to the Securities and Exchange Commission Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), given the amount and complexity of the changes in tax law resulting from the Tax Reform Act, the Company has not finalized the accounting for the income tax effects of the Tax Reform Act. This includes the re-measurement of deferred taxes. The impact of the Tax Reform Act may differ from this estimate, during the one-year measurement period due to, among other things, further refinement of the Company’s calculations, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take as a result of the Tax Reform Act. As a result of the Tax Reform Act, the Company recorded a tax charge of approximately $5.6 million primarily due to a re-measurement of deferred tax assets and liabilities.

Actual income tax expense differs from the tax computed based on pre-tax income and the applicable statutory federal tax rate for the following reasons:

		2017				2016				2015
		(dollars in thousands)
Income before income tax expense		$	68,514			$	42,858			$	61,237
Federal statutory rate			35	%			35	%			35%
Computed “expected” Federal income tax expense			23,980				15,000				21,433
State tax, net of federal tax benefit			213				(701)				812
Impact of Tax Reform Act			5,623				-				-
Bank owned life insurance			(1,113)				(896)				(624)
Tax-exempt interest and dividends			(2,123)				(1,714)				(1,584)
Tax benefits from stock based compensation			(348)				-				-
Other, net			(938)				87				(111)
Income tax expense		$	25,294			$	11,776				$19,926

The tax effects of temporary differences that give rise to significant portions of the deferred tax asset and deferred tax liability at December 31, 2017 and 2016 are presented in the following table:

		2017				2016
Deferred tax assets:		(dollars in thousands)
Allowance for loan losses			8,848				10,374
Purchase accounting			2,310				4,881
Pension actuarial losses			1,647				2,439
New Jersey net operating loss			1,310				1,004
Deferred compensation			1,184				2,277
Unrealized losses on securities and swaps			483				-
Deferred loan costs, net of fees			474				613
Accrued rent			459				617
Capital lease			211				139
Nonaccrual interest			158				470
Other			7				14
Total deferred tax assets		$	17,091			$	22,828
Deferred tax liabilities:
Employee benefit plans		$	(1,501)			$	(2,275)
Depreciation			(434)				(1,039)
Prepaid expenses			(174)				(345)
Market discount accretion			(60)				(235)
Unrealized gains on securities and swaps			(224)				(449)
Other			(28)				(33)
Total deferred tax liabilities			(2,421)				(4,376)
Net deferred tax assets		$	14,670			$	18,452

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets for state purposes is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible, while for Federal purposes the deferred tax assets can also be realized through tax carrybacks. Management considers the scheduled reversal of deferred tax liabilities, the projected future taxable income, and tax planning strategies in making this assessment. During 2017 and 2016, based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, the Company believes the net deferred tax assets are more likely than not to be realized. 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.

The Company’s federal income tax returns are open and subject to examination from the 2014 tax return year and forward. The Company’s state income tax returns are generally open from the 2013 and later tax return years based on individual state statutes of limitations.