ServisFirst Bancshares, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

Components of Income Tax Expense (Benefit)

The components of income tax expense are as follows:

	Year Ended December 31,
	2014		2013		2012
			(In Thousands)
Current tax expense:
Federal	$	25,929	$	21,264	$	17,993
State		693		899		1,308
Total current tax expense		26,622		22,163		19,301
Deferred tax expense (benefit):
Federal		(3,778)		(1,616)		(1,999)
State		(1,243)		(189)		(182)
Total deferred tax expense		(5,021)		(1,805)		(2,181)
Total income tax expense	$	21,601	$	20,358	$	17,120

Effective Income Tax Rate Reconciliation

The Company’s total income tax expense differs from the amounts computed by applying the Federal income tax statutory rates to income before income taxes. A reconciliation of the differences is as follows:

	Year Ended December 31, 2014
	Amount		% of Pre-tax Earnings
	(In Thousands)
Income tax at statutory federal rate	$	25,892		35.00	%
Effect on rate of:
State income tax, net of federal tax effect		(358)		(0.49)	%
Tax-exempt income, net of expenses		(1,316)		(1.78)	%
Bank owned life insurance contracts		(798)		(1.08)	%
Incentive stock option expense		(18)		(0.02)	%
Federal tax credits		(1,659)		(2.24)	%
Other		(142)		(0.19)	%
Effective income tax and rate	$	21,601		29.20	%

	Year Ended December 31, 2013
	Amount		% of Pre-tax Earnings
	(In Thousands)
Income tax at statutory federal rate	$	21,691		35.00	%
Effect on rate of:
State income tax, net of federal tax effect		462		0.75	%
Tax-exempt income, net of expenses		(1,200)		(1.94)	%
Bank owned life insurance contracts		(698)		(1.13)	%
Incentive stock option expense		66		0.11	%
Other		(37)		(0.06)	%
Effective income tax and rate	$	20,284		32.85	%

	Year Ended December 31, 2012
	Amount		% of Pre-tax Earnings
	(In Thousands)
Income tax at statutory federal rate	$	18,047		35.00	%
Effect on rate of:
State income tax, net of federal tax effect		732		1.42	%
Tax-exempt income, net of expenses		(1,007)		(1.95)	%
Bank owned life insurance contracts		(568)		(1.10)	%
Incentive stock option expense		121		0.23	%
Other		(206)		(0.40)	%
Effective income tax and rate	$	17,119		33.20	%

Deferred Tax Assets and Liabilities

The components of net deferred tax asset are as follows:

	December 31,
	2014		2013
	(In Thousands)
Deferred tax assets:
Allowance for loan losses	$	13,491	$	11,844
Other real estate owned		1,319		1,222
Nonqualified equity awards		1,594		773
Nonaccrual interest		444		374
State tax credits		987		-
Investments		667		-
Deferred loan fees		87		-
Other deferred tax assets		117		141
Total deferred tax assets		18,706		14,354

Deferred tax liabilities:
Net unrealized gain on securities available for sale		2,418		2,102
Depreciation		421		514
Prepaid expenses		151		161
Deferred loan fees		-		83
Investments		-		229
Other deferred tax liabilities		-		247
Total deferred tax liabilities		2,990		3,336
Net deferred income tax assets	$	15,716	$	11,018

Summary of the changes in the amount of unrecognized benefits

The following table presents a summary of the changes during 2014, 2013 and 2012 in the amount of unrecognized tax benefits that are included in the consolidated balance sheets.

	2014		2013		2012
			(In Thousands)
Balance, beginning of year	$	437	$	161	$	-
Increases related to prior year tax positions		367		276		-
Decreases related to prior year tax positions		-		-		-
Increases related to current year tax positions		-		-		161
Settlements		-		-		-
Lapse of statute		-		-		-
Balance, end of year	$	804	$	437	$	161

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

+ References + Details