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Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Taxes |
Note 16. | Income Taxes
Income tax expense is comprised of current and deferred, federal and state income taxes on the Company’s pre-tax earnings. The following table presents the components of income tax expense in the periods indicated:
|  | Year Ended December 31, |
(Amounts in thousands) |  | 2013 |  |  | 2012 |  |  | 2011 |
Current tax expense: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 12,819 |  |  | $ | 13,733 |  |  | $ | 7,101 |
State |  |  | 1,743 |  |  |  | 1,291 |  |  |  | 110 |
Total current tax expense |  |  | 14,562 |  |  |  | 15,024 |  |  |  | 7,211 |
Deferred tax (benefit) expense: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (3,136 | ) |  |  | (1,501 | ) |  |  | 1,650 |
State |  |  | (518 | ) |  |  | 605 |  |  |  | 712 |
Total deferred tax (benefit) expense |  |  | (3,654 | ) |  |  | (896 | ) |  |  | 2,362 |
Total income tax expense |  | $ | 10,908 |  |  | $ | 14,128 |  |  | $ | 9,573 |
Deferred taxes derived from continuing operations reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for tax purposes. The following table presents the significant components of the net deferred tax asset as of the dates indicated:
|  | December 31, |
|  | 2013 |  |  | 2012 |
(Amounts in thousands) |  |  |  |  |  |
Deferred tax assets: |  |  |  |  |  |  |  |
Allowance for loan losses |  | $ | 9,209 |  |  | $ | 9,857 |
Unrealized losses on available-for-sale securities |  |  | 8,184 |  |  |  | 169 |
Unrealized asset losses |  |  | 8,018 |  |  |  | 8,023 |
Purchase accounting |  |  | 6,796 |  |  |  | 6,191 |
FDIC assisted transactions |  |  | 6,753 |  |  |  | 6,753 |
Intangible assets |  |  | 6,384 |  |  |  | 7,582 |
Deferred compensation assets |  |  | 4,224 |  |  |  | 4,235 |
Alternative minimum tax credit |  |  | 1,849 |  |  |  | 1,849 |
Other deferred tax assets |  |  | 2,670 |  |  |  | 2,763 |
Total deferred tax assets |  |  | 54,087 |  |  |  | 47,422 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
FDIC indemnification asset |  |  | 12,155 |  |  |  | 18,388 |
Fixed assets |  |  | 2,199 |  |  |  | 2,158 |
Odd days interest deferral |  |  | 1,958 |  |  |  | 2,028 |
Other |  |  | 1,066 |  |  |  | 1,054 |
Total deferred tax liabilities |  |  | 17,378 |  |  |  | 23,628 |
Net deferred tax asset |  | $ | 36,709 |  |  | $ | 23,794 |
The Company’s effective tax rate, defined as income tax expense divided by pre-tax income, may vary significantly from the statutory rate due to permanent differences and the use of available tax credits. The Company’s most significant permanent differences, income and expense items excluded by law in the calculation of taxable income, include income on municipal securities, which are exempt from federal income tax, income on bank-owned life insurance, and tax credits generated by investments in low income housing and rehabilitation of historic structures. The following table reconciles the federal statutory tax rate to the Company’s effective tax rate from continuing operations in the periods indicated:
|  | Year Ended December 31, |
|  | 2013 |  |  | 2012 |  |  | 2011 |
(Amounts in thousands) |  |  |  |  |  |  |  |  |
Federal statutory tax rate |  |  | 35.00 | % |  |  | 35.00 | % |  |  | 35.00 | %
(Reduction) increase resulting from: |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt interest |  |  | (5.14 | ) |  |  | (4.16 | ) |  |  | (6.40 | )
State income taxes, net of federal benefit |  |  | 2.35 |  |  |  | 2.35 |  |  |  | 2.78 |
Other, net |  |  | (0.33 | ) |  |  | (0.11 | ) |  |  | 0.96 |
Effective tax rate |  |  | 31.88 | % |  |  | 33.08 | % |  |  | 32.34 | %

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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 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: 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 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 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=6907707&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=6907707&loc=d3e32537-109319 Reference 6: 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=6907707&loc=d3e32559-109319 + Details
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