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Income Taxes
 12 Months Ended
Dec. 31, 2012
Income Taxes
Note 10. Income Taxes

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

 

(Amounts in thousands)    2012     2011      2010  

Current tax expense (benefit)

        

Federal

    $ 13,733      $ 7,101       $ (5,268 ) 

State

      1,291        110         78   
  

 

 

    

 

 

     

 

 

  
     15,024        7,211         (5,190 ) 

Deferred tax (benefit) expense

        

Federal

      (1,501 )      1,650         12,397   

State

      605        712         611   
  

 

 

    

 

 

     

 

 

  
     (896 )      2,362         13,008   
  

 

 

    

 

 

     

 

 

  

Total income tax expense

    $ 14,128      $ 9,573       $ 7,818   
  

 

 

    

 

 

     

 

 

  

 

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, 2012 and 2011:

 

     2012     2011  
(Amounts in thousands)             

Deferred tax assets:

     

Allowance for loan losses

    $ 9,857      $ 10,023   

Unrealized losses on available-for-sale securities

      169        3,444   

Impairment losses on securities

      8,023        7,349   

Deferred compensation assets

      4,235        3,692   

Alternative minimum tax credit

      1,849        2,038   

Other deferred tax assets

      2,763        3,293   
  

 

 

    

 

 

  

Total deferred tax assets

    $ 26,896      $ 29,839   

Deferred tax liabilities:

     

Intangible assets

    $ (2,138 )    $ 5,953   

Odd days interest deferral

      2,028        1,734   

Fixed assets

      2,158        2,398   

Other

      1,054        873   
  

 

 

    

 

 

  

Total deferred tax liabilities

      3,102        10,958   
  

 

 

    

 

 

  

Net deferred tax assets

    $ 23,794      $ 18,881   
  

 

 

    

 

 

  

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, 2012, are as follows:

 

     2012     2011     2010  

Tax at statutory rate

      35.00 %      35.00 %      35.00 % 

(Reduction) increase resulting from:

       

Tax-exempt interest income

      (4.16 )      (6.40 )      (6.79 ) 

State income taxes, net of federal benefit

      2.35        2.78        2.32   

Other, net

      (0.11 )      0.96        (4.18 ) 
  

 

 

    

 

 

    

 

 

  

Effective tax rate

      33.08 %      32.34 %      26.35 %