The provision for income taxes for the years ended is comprised of the following components:

 

(In thousands)		2017				2016				2015
Income taxes currently payable		$	38,732			$	36,792			$	19,301
Deferred income taxes			23,251				9,832				13,599
Provision for income taxes		$	61,983			$	46,624			$	32,900

 

The tax effects of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to deferred income tax assets and liabilities, and their approximate tax effects, are as follows as of and

 

(In thousands)		2017				2016
Deferred tax assets:
Loans acquired		$	19,885			$	7,986
Allowance for loan losses			10,773				14,754
Valuation of foreclosed assets			2,852				3,958
Tax NOLs from acquisition			7,821				13,077
Deferred compensation payable			2,433				2,785
Accrued equity and other compensation			5,302				8,107
Acquired securities			578				1,098
Unrealized loss on available-for-sale securities			6,107				9,559
Other			8,813				7,101
Gross deferred tax assets			64,564				68,425
Deferred tax liabilities:
Goodwill and other intangible amortization			(32,572	)			(29,601	)
Accumulated depreciation			(8,945	)			(5,370	)
Other			(4,413	)			(5,877	)
Gross deferred tax liabilities			(45,930	)			(40,848	)
Net deferred tax asset, included in other assets		$	18,634			$	27,577

 

A reconciliation of income tax expense at the statutory rate to the Company's actual income tax expense is shown below for the years ended

 

(In thousands)		2017				2016				2015
Computed at the statutory rate (35%)		$	54,223			$	50,203			$	37,543
Increase (decrease) in taxes resulting from:
State income taxes, net of federal tax benefit			1,582				2,121				2,097
Discrete items related to ASU 2016-09			(1,480	)			--				--
Tax exempt interest income			(5,135	)			(5,112	)			(5,432	)
Impact of DTA remeasurement			11,471				--				--
Section 382 adjustment			--				--				(2,293	)
Other differences, net			1,322				(588	)			985
Actual tax provision		$	61,983			$	46,624			$	32,900

 

The Company follows ASC Topic , which prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  Benefits from tax positions should be recognized in the financial statements only when it is more likely than that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information.  A tax position that meets the more-likely-than- recognition threshold is measured at the largest amount of benefit that is greater than percent likely of being realized upon ultimate settlement.  Tax positions that previously failed to meet the more-likely-than- recognition threshold should be recognized in the subsequent financial reporting period in which that threshold is met.  Previously recognized tax positions that longer meet the more-likely-than- recognition threshold should be derecognized in the subsequent financial reporting period in which that threshold is longer met.  ASC Topic also provides guidance on the accounting for and disclosure of unrecognized tax benefits, interest and penalties. The Company has history of expiring net operating loss carryforwards and is projecting significant pre-tax and financial taxable income in and in future years. The Company expects to fully realize its deferred tax assets in the future.

 

On the President signed tax reform legislation (the Act”) which includes a broad range of tax reform proposals affecting businesses, including corporate tax rates, business deductions, and international tax provisions. The Act reduces the corporate tax rate from to for tax years beginning after Under US GAAP, deferred tax assets and liabilities are required to be measured at the enacted tax rate expected to apply when temporary differences are to be realized or settled and the effect of a change in tax law is recorded discretely as a component of the income tax provision related to continuing operations in the period of enactment. As a result, we were required to remeasure our deferred taxes as of based upon the new tax rate and the change was recorded in the income tax provision. The result of the tax reform resulted in a -time non-cash adjustment to income of million.

 

On the SEC issued Staff Accounting Bulletin (“SAB ), which provides guidance on accounting for the tax effects of the Act.  SAB provides a measurement period that should extend beyond year from the Act enactment date for companies to complete the accounting under ASC Income Taxes. As such, the company’s financial results reflect the income tax effects for the Act for which the accounting under ASC is complete and provisional amounts for those specific income tax effects of the Act for which the accounting under ASC is incomplete but a reasonable estimate could be determined.  The company did identify items for which the income tax effects of the Act have been completed and a reasonable estimate could be determined as of The tax expense recorded in is a reasonable estimate based on published guidance available at this time and is considered provisional. The ultimate impact of the Act differ from these estimates due to changes in interpretations and assumptions made by the Company, as well as additional regulatory guidance. Any adjustments will be reflected in the Company’s financial statements in future periods.

 

In the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) - (“ASU -), that allows a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from the Act. Current US GAAP requires the remeasurement of deferred tax assets and liabilities as a result of a change in tax laws or rates to be presented in net income from continuing operations. Consequently, the original deferred tax amount recorded through AOCI at the old rate will remain in AOCI despite the fact that its related deferred tax asset/liability will be reduced through continuing operations to reflect the new rate, resulting in “stranded” tax effects in AOCI. ASU - requires a reclassification from AOCI to retained earnings for those stranded tax effects resulting from the newly enacted federal corporate income tax rate. As permitted, the Company elected to early adopt the provisions of ASU - during the quarter which resulted in a reclassification from AOCI to retained earnings in the amount of million.

 

The amount of unrecognized tax benefits increase or decrease in the future for various reasons including adding amounts for current tax year positions, expiration of open income tax returns due to the statutes of limitation, changes in management’s judgment about the level of uncertainty, status of examinations, litigation and legislative activity and the addition or elimination of uncertain tax positions.

 

Section of the Internal Revenue Code imposes an annual limit on the ability of a corporation that undergoes an “ownership change” to use its U.S. net operating losses to reduce its tax liability. The Company closed a stock acquisition in that invoked the Section annual limitation. Approximately million of federal net operating losses subject to the IRC Sec annual limitation are expected to be utilized by the company. The net operating loss carryforwards expire between and

 

The Company files income tax returns in the U.S. federal jurisdiction.  The Company’s U.S. federal income tax returns are open and subject to examinations from the tax year and forward.  The Company’s various state income tax returns are generally open from the and later tax return years based on individual state statute of limitations.