Rendering

Component: (Network and Table)
Network
2314301 - Disclosure - Income Taxes (Tables)
(http://www.chemicalbankmi.com/role/IncomeTaxesTables)
Table(Implied)
Slicers (applies to each fact value in each table cell)
Income Tax Disclosure [Abstract]Period [Axis]
2016-01-01 - 2016-12-31
Income Tax Disclosure [Abstract]
 
Provision for Federal Income Taxes Components
The current and deferred components of the provision for income taxes were as follows:
 
 
Years Ended December 31,
(Dollars in thousands)
 
2016
 
2015
 
2014
Current income tax expense (benefit)
 
 
 
 
 
 
Federal
 
$
19,144

 
$
31,300

 
$
29,200

State
 
(423
)
 

 

Total current income tax expense
 
18,721

 
31,300

 
29,200

Deferred expense (benefit)
 
 
 
 
 
 
Federal
 
23,649

 
5,700

 
(1,700
)
State
 
442

 

 

Total deferred income tax expense (benefit)
 
24,091

 
5,700

 
(1,700
)
Change in valuation allowance
 
(706
)
 

 

Income tax provision
 
$
42,106

 
$
37,000

 
$
27,500

 
 
Schedule of Federal Effective Income Tax Rate Reconciliation
A reconciliation of expected income tax expense at the federal statutory income tax rate and the amounts recorded in the Consolidated Financial Statements were as follows:
 
 
Years Ended December 31,
 
 
2016
 
2015
 
2014
(Dollars in thousands)
 
Amount
 
Rate
 
Amount
 
Rate
 
Amount
 
Rate
Tax at statutory rate
 
$
52,548

 
35.0
 %
 
$
43,341

 
35.0
 %
 
$
31,367

 
35.0
 %
Changes resulting from:
 
 
 
 
 
 
 
 
 
 
 
 
Tax-exempt interest income
 
(5,320
)
 
(3.5
)
 
(3,943
)
 
(3.2
)
 
(3,142
)
 
(3.5
)
State taxes, net of federal benefit
 
13

 

 

 

 

 

Change in valuation allowance
 
(706
)
 
(0.5
)
 

 

 

 

Bank-owned life insurance adjustments
 
(832
)
 
(0.6
)
 
(124
)
 
(0.1
)
 
(95
)
 
(0.1
)
Director plan change in control
 
(508
)
 
(0.3
)
 

 

 

 

Income tax credits, net
 
(2,454
)
 
(1.6
)
 
(2,557
)
 
(2.1
)
 
(1,624
)
 
(1.8
)
Nondeductible transaction expenses
 
2,100

 
1.4

 
411

 
0.3

 
403

 
0.4

Tax benefits in excess of compensation costs on share-based payments(1)
 
(2,240
)
 
(1.5
)
 

 

 

 

Other, net
 
(495
)
 
(0.4
)
 
(128
)
 

 
591

 
0.7

Income tax expense
 
$
42,106

 
28.0
 %
 
$
37,000

 
29.9
 %
 
$
27,500

 
30.7
 %

(1)The year ended December 31, 2016 reflects the impact of the early adoption of ASU 2016-09 which resulted in excess tax benefits recognized within "Income tax expense" rather than previously recognized directly into equity with "Additional paid-in-capital." Refer to Note 1, Summary of Significant Accounting Policies, for further details.    

 
 
Schedule of Deferred Tax Assets and Liabilities
The significant components of the deferred tax assets and liabilities at December 31, 2016 and 2015 were as follows:
 
 
December 31,
(Dollars in thousands)
 
2016
 
2015
Deferred tax assets:
 
 
 
 
Allowance for loan losses
 
$
45,763

 
$
24,863

Acquisition-related fair value adjustments
 
62,078

 
29,280

Accrued stock-based compensation
 
18,891

 
3,240

Loss and tax credit carry forwards
 
47,977

 
7,235

Acquisition built in loss carry forward
 
28,469

 

Depreciation
 
3,896

 
4,333

Nonaccrual loan interest
 
9,465

 
4,994

Accrued expense
 
20,858

 
13,296

Other
 
7,401

 
5,951

Total deferred tax assets
 
244,798

 
93,192

Deferred tax liabilities:
 
 
 
 
Loan servicing rights
 
20,450

 
3,893

Core deposit intangible assets
 
11,844

 
7,379

Goodwill
 
6,373

 
5,808

Other
 
(715
)
 
4,742

Total deferred tax liabilities
 
37,952

 
21,822

Net deferred tax asset before valuation allowance
 
206,846

 
71,370

Valuation allowance
 
(2,239
)
 
(1,180
)
Net deferred tax asset
 
$
204,607

 
$
70,190

 
 
Summary of the loss attributes, Section 382 limitations, and tax expiration periods
The following table is a summary of the loss attributes, Section 382 limitations, and tax expiration periods as of December 31, 2016.
 
From the Acquisition of:
 
 
 
 
 
 
 
 
 
Talmer's Prior Ownership Changes
 
 
 
 
(Dollars in thousands)
Talmer
 
Monarch
 
First Place Holdings/First Place Bank
 
Talmer West Bank
 
First of Huron Corp./Signature Bank
 
From 2009 Ownership change
 
Not Limited by Section 382
 
Total
Tax Loss and Credit Carryforwards as of 12/31/16:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Years Expiring (except AMT Credits)
2032-2034
 
2026-2034
 
2026-2031
 
2030-2035
 
2031-2033
 
2027-2029
 
2033-2035
 
 
Annual Section 382 limitation-base(1)
$
34,668

 
$
673

 
$
6,650

 
$
3,028

 
$
365

 
$
145

 
$

 
N/A

Gross Federal Net Operating Losses
17,723

 
17,744

 
1,222

 
50,086

 
1,014

 
1,885

 

 
89,674

Gross Capital Losses
797

 

 

 

 

 

 

 
797

Realized Built-in Losses

 

 
71,805

 
8,936

 

 

 

 
80,741

Business Tax Credits
170

 
1,651

 
781

 

 

 

 
592

 
3,194

Less amounts not recorded due to Sec 382 Limitation

 
(1,738
)
 

 
(2,992
)
 

 
(145
)
 

 
(4,875
)
Alternative Minimum Tax Credits - no expiration
12,473

 
106

 
2,115

 

 
303

 

 
730

 
15,727

Valuation Allowance

 

 
(66
)
 
(1,287
)
 

 

 

 
(1,353
)
(1)In respect to the Monarch and Talmer acquisitions, in addition to the statutory "base" Section 382 limitation, recognized built in gain increases the Section 382 limitation during the five year period beginning on the acquisition date. The Corporation estimates that the recognized built in gain will total $5.6 million and $322.3 million for the Monarch and Talmer acquisitions, respectively.