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Income Taxes
 12 Months Ended
Dec. 31, 2011
Income Taxes [Abstract]  
Income Taxes
Note 9. Income Taxes

The components of income tax expense (benefit) from continuing operations consist of the following:

 

                         
(Amounts in thousands)   2011     2010     2009  

Current tax expense (benefit)

                        

Federal

   $ 7,101     $ (5,268 )    $ (9,534 ) 

State

     110       78       246  
   

 

 

    

 

 

    

 

 

  
      7,211       (5,190 )      (9,288 ) 
       

Deferred tax expense (benefit)

                        

Federal

     1,650       12,397       (17,608 ) 

State

     712       611       (1,258 ) 
   

 

 

    

 

 

    

 

 

  
      2,362       13,008       (18,866 ) 
   

 

 

    

 

 

    

 

 

  
       

Total income tax expense (benefit)

   $ 9,573     $ 7,818     $ (28,154 ) 
   

 

 

    

 

 

    

 

 

  

Deferred income taxes related to continuing operations reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting versus tax purposes. The following table details the tax effects of significant items comprising the Company’s net deferred tax assets as of December 31, 2011 and 2010:

 

                 
    2011     2010  
(Amounts in thousands)            

Deferred tax assets:

                

Allowance for loan losses

   $ 10,023     $ 9,931  

Unrealized losses on AFS securities

     3,444       6,728  

Unrealized loss on derivative security

     —         586  

Securities impairments

     7,349       5,150  

Deferred compensation

     3,692       4,570  

State net operating loss carryforward

     579       1,699  

Alternative minimum tax credit

     2,038       2,782  

Other

     2,714       3,099  
   

 

 

    

 

 

  

Total deferred tax assets

   $ 29,839     $ 34,545  
     

Deferred tax liabilities:

                

Intangible assets

   $ 5,953     $ 6,254  

Odd days interest deferral

     1,734       1,723  

Fixed assets

     2,398       2,564  

Other

     873       1,222  
   

 

 

    

 

 

  

Total deferred tax liabilities

     10,958       11,763  
   

 

 

    

 

 

  

Net deferred tax assets

   $ 18,881     $ 22,782  
   

 

 

    

 

 

  

Income taxes as a percentage of pre-tax income may vary significantly from statutory rates due to items of income and expense which are excluded, by law, from the calculation of taxable income, as well as the utilization of available tax credits. Municipal bond income represents the most significant permanent tax difference.

 

The reconciliation of the statutory federal tax rate and the effective tax rate from continuing operations for the three years ended December 31, 2011, are as follows:

 

                         
    2011     2010     2009  
       

Tax at statutory rate

     35.00 %      35.00 %      35.00 % 

Increase resulting from:

                        

Tax-exempt interest income, net of nondeductible expense

     (6.40 )      (6.79 )      2.88  

State income taxes, net of federal benefit

     2.78       2.32       0.65  

Gain on acquisition, net of acquisition related costs

     0.00       0.00       2.24  

Other, net

     0.96       (4.18 )      1.29  
   

 

 

    

 

 

    

 

 

  

Effective tax rate

     32.34 %      26.35 %      42.06 %