Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

The provision for federal and state income taxes included in the accompanying consolidated statements of income consists of the following:

The provision for income taxes differs from the expected statutory provision as follows:



	For the Years Ended December 31,
(Dollars in thousands)	2016		2015		2014
Expected provision at statutory rate	35.0	%	35.0	%	35.0	%
Difference resulting from:
Tax exempt interest income	(15.6	)	(9.5	)	(11.2	)
Increase in value of bank owned life insurance assets	(4.2	)	(1.2	)	(1.9	)
Stock-based compensation	(1.7	)	0.5		0.6
Non-deductible merger-related expenses	1.2		0.4		0.8
State income taxes, net of federal benefits	(1.5	)	0.9		2.6
Changes in valuation allowance	3.1		0.4		(0.6	)
Other	0.3		(0.1	)	(0.2	)
	16.6	%	26.4	%	25.1	%

The assets and liabilities giving rise to the Corporation’s deferred tax assets and liabilities are as follows:



	At December 31,
(Dollars in thousands)	2016			2015
Deferred tax assets:
Loan and lease loss	$	5,984		$	6,012
Deferred compensation	2,541			2,483
Actuarial adjustments on retirement benefits*	7,714			8,525
State net operating losses	2,725			1,986
Other-than-temporary impairments on equity securities	331			317
Alternative minimum tax credits**	3,114			2,156
Net unrealized holding losses on securities available-for-sale and swaps*	2,762			472
Other deferred tax assets	2,676			3,209
Gross deferred tax assets	27,847			25,160
Valuation allowance	(2,341		)	(1,609		)
Total deferred tax assets, net of valuation allowance	25,506			23,551
Deferred tax liabilities:
Mortgage servicing rights	2,302			2,066
Retirement plans	6,265			6,307
Intangible assets	3,543			2,460
Depreciation	1,401			347
Other deferred tax liabilities	2,430			2,192
Total deferred tax liabilities	15,941			13,372
Net deferred tax assets	$	9,565		$	10,179

*Represents the amount of deferred taxes recorded in accumulated other comprehensive loss.

** The alternative minimum tax credits have an indefinite life.