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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The income tax expense (benefit) attributable to income from operations is summarized as follows:
(in thousands) | Current |  | Deferred |  | Total
2018 |  |  |  |  |
Federal | $ | 16,391 |  |  | $ | 2,281 |  |  | $ | 18,672 |
State | 3,060 |  |  | 73 |  |  | 3,133 |
Total | $ | 19,451 |  |  | $ | 2,354 |  |  | $ | 21,805 |
2017 |  |  |  |  |
Federal | $ | 26,860 |  |  | $ | 14,749 |  |  | $ | 41,609 |
State | 1,162 |  |  | (151 | ) |  | 1,011 |
Total | $ | 28,022 |  |  | $ | 14,598 |  |  | $ | 42,620 |
2016 |  |  |  |  |
Federal | $ | 22,943 |  |  | $ | 1,551 |  |  | $ | 24,494 |
State | 2,243 |  |  | 308 |  |  | 2,551 |
Total | $ | 25,186 |  |  | $ | 1,859 |  |  | $ | 27,045 |
The primary reasons for the differences between income tax expense and the amount computed by applying the statutory federal income tax rate to earnings are as follows:
| 2018 |  | 2017 |  | 2016
Statutory federal income tax rate | 21.0 | % |  | 35.0 | % |  | 35.0 | %
State income taxes, net of federal benefit | 2.4 |  |  | 0.7 |  |  | 1.9 |
Tax exempt income | (1.5 | ) |  | (2.6 | ) |  | (2.7 | )
Excess benefits from equity-based compensation | (0.6 | ) |  | (1.6 | ) |  | (1.4 | )
Bank-owned life insurance income | (0.4 | ) |  | (0.8 | ) |  | (0.8 | )
Federal tax credit | (0.6 | ) |  | (2.0 | ) |  | (0.4 | )
Enactment of Federal tax reform | 0.0 |  |  | 15.7 |  |  | 0.0 |
All other | 0.6 |  |  | 0.4 |  |  | (0.3 | )
Total | 20.9 | % |  | 44.8 | % |  | 31.3 | %
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount 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 were as follows:
(in thousands) | 2018 |  | 2017 |  | 2016
Deferred tax assets: |  |  |  |  |
Allowance for loan and lease losses | $ | 10,676 |  |  | $ | 9,577 |  |  | $ | 13,737 |
Interest income on nonperforming loans | 384 |  |  | 417 |  |  | 214 |
Compensation and benefits | 10,885 |  |  | 10,406 |  |  | 14,504 |
Purchase accounting adjustments | 0 |  |  | 0 |  |  | 527 |
Liabilities held at fair value | 12 |  |  | 3 |  |  | 1 |
Other | 2,333 |  |  | 2,515 |  |  | 3,088 |
Total | $ | 24,290 |  |  | $ | 22,918 |  |  | $ | 32,071 |
Deferred tax liabilities: |  |  |  |  |
Prepaid pension | 8,700 |  |  | 8,140 |  |  | 11,439 |
Depreciation | 4,193 |  |  | 2,686 |  |  | 3,006 |
Intangibles | 971 |  |  | 776 |  |  | 882 |
Purchase accounting adjustments | 328 |  |  | 194 |  |  | 0 |
Leases | 1,790 |  |  | 1,145 |  |  | 1,687 |
Other | 1,459 |  |  | 774 |  |  | 1,214 |
Total deferred tax liabilities | $ | 17,441 |  |  | $ | 13,715 |  |  | $ | 18,228 |
Net deferred tax asset at year-end | $ | 6,849 |  |  | $ | 9,203 |  |  | $ | 13,843 |
Net deferred tax asset at beginning of year | $ | 9,203 |  |  | $ | 13,843 |  |  | $ | 16,185 |
Decrease in net deferred tax asset | (2,354 | ) |  | (4,640 | ) |  | (2,342 | )
Purchase accounting adjustments, net | 0 |  |  | 0 |  |  | (483 | )
Federal tax reform remeasurement of AOCI deferred tax asset | $ | 0 |  |  | $ | 9,958 |  |  | $ | 0 |
Deferred tax expense | $ | 2,354 |  |  | $ | 14,598 |  |  | $ | 1,859 |
The above analysis does not include recorded deferred tax assets (liabilities) of $7.5 million and $4.3 million as of December 31, 2018 and 2017, respectively, related to net unrealized holdings losses/(gains) in the available-for-sale securities portfolio. In addition, the analysis excludes the recorded deferred tax assets of $12.9 million and $12.6 million, as of December 31, 2018 and 2017, respectively, related to employee benefit plans. However, the $10.0 million included above in the line 'Federal tax reform remeasurement of AOCI deferred tax asset' reflects the remeasurement of the net deferred taxes related to unrealized holding losses/(gains) in the available-for-sale portfolio and employee benefit plans as of December 31, 2017. Realization of deferred tax assets is dependent upon the generation of future taxable income or the existence of sufficient taxable income. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, management considers the scheduled reversal of the deferred tax liabilities, the level of historical taxable income, and the projected future taxable income over the periods in which the temporary differences comprising the deferred tax assets will be deductible. Based on its assessment, management determined that no valuation allowance is necessary at December 31, 2018 and 2017. At December 31, 2018 and December 31, 2017, the Company had no ASC 740-10 unrecognized tax benefits. The Company does not expect the total amount of unrecognized tax benefits to significantly increase within the next twelve months. The Company recognizes interest and penalties on unrecognized tax benefits in income tax expense in its Consolidated Statements of Income. The Company is subject to U.S. federal income tax and income tax in New York and various state jurisdictions. All tax years ending after December 31, 2014 are open to examination by the taxing authorities. On December 22, 2017, H.R.1, commonly known as the Tax Cuts and Jobs Act (the "Tax Act") was signed into law. The Tax Act includes many provisions that affect the Company's income tax expense, including reducing our corporate federal tax rate from 35% to 21% effective January 1, 2018. As a result of the rate reduction, the Company was required to re-measure, through income tax expense, our deferred tax assets and liabilities using the enacted rate at which the Company expects them to be recovered or settled. The re-measurement of the Company's net deferred tax asset resulted in additional 2017 income tax expense of $14.9 million. Also, on December 22, 2017, the U.S. Securities and Exchange Commission ("SEC") released Staff Accounting Bulletin No. 118 ("SAB 118") to address any uncertainty or diversity of views in practice in accounting for the income tax effects of the Tax Act in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete this accounting in the reporting period that includes the enactment date. SAB 118 allows for a measurement period not to extend beyond one year from the Tax Act's enactment date to complete the necessary accounting. In 2017, the Company recorded provisional amounts of deferred income taxes using reasonable estimates in areas where information necessary to complete the accounting was not available, prepared, or analyzed. One area was the Company's deferred tax liability for temporary differences between the tax and financial reporting bases of fixed assets principally due to the accelerated depreciation under the Tax Act which allows for full expensing of qualified property purchased and placed in service after September 27, 2017. The Company completed the calculations for the fixed assets with the completion of its 2017 tax returns and completed our analysis of the Internal Revenue Code Section 162(m), which, generally, limits the annual deduction for certain compensation paid to certain employees to $1.0 million, after further guidance was issued. The impact of the completed calculations to the re-measurement of the deferred taxes resulted in an immaterial change and the analysis of the Section 162(m) rules resulted in no adjustment.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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