Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Tax Disclosure [Text Block]

Income Taxes

The reported income tax expense and effective tax rate in the Consolidated Statements of Income differs from the amounts computed by applying the statutory corporate tax rate as follows for the years ended December 31:

	2012					2011					2010
(Dollars in thousands)	Amount			Rate		Amount			Rate		Amount			Rate
Income tax computed at statutory federal tax rate	$	10,469		35.0	%	$	5,890		34.3	%	$	1,956		34.0	%
Differences in rate resulting from:
Tax-exempt interest income	(565		)	(1.9	)%	(574		)	(3.4	)%	(808		)	(14.1	)%
Investments in tax credit funds	(387		)	(1.3	)%	(497		)	(2.9	)%	(715		)	(12.4	)%
Bank owned life insurance	(14		)	(0.1	)%	(44		)	(0.3	)%	(207		)	(3.6	)%
Other, net	22			0.1	%	(179		)	(0.9	)%	(54		)	(0.9	)%
Total income tax expense	$	9,525		31.8	%	$	4,596		26.8	%	$	172		3.0	%

Peoples' reported income tax expense consisted of the following for the years ended December 31:

(Dollars in thousands)	2012		2011		2010
Current income tax	$	5,004	$	4,134	$	1,986
Deferred income tax (benefit)	4,521		462		(1,814		)
Total income tax expense	$	9,525	$	4,596	$	172

The significant components of Peoples' deferred tax assets and liabilities consisted of the following at December 31:

(Dollars in thousands)	2012		2011
Deferred tax assets:
Allowance for loan losses	$	7,526	$	8,833
Tax credit carryforward	4,607		6,412
Investments	3,632		3,628
Accrued employee benefits	3,421		3,026
Other	516		1,203
Total deferred tax assets	$	19,702	$	23,102
Deferred tax liabilities:
Purchase accounting adjustments	5,460		4,733
Available-for-sale securities	3,711		4,005
Bank premises and equipment	1,536		1,478
Deferred loan income	1,442		1,398
Other	1,830		1,584
Total deferred tax liabilities	$	13,979	$	13,198
Net deferred tax asset	$	5,723	$	9,904

The tax credit carryforward at December 31, 2012 and 2011 may be carried over for a period of 20 years and will expire over the period of 2029 and 2032. No valuation allowance for deferred tax assets was required at December 31, 2012, as it is more likely than not that all of the deferred tax assets will be realized in future periods. The related federal income tax expense on securities transactions approximated $1,241,000 in 2012, $166,000 in 2011 and $2,398,000 in 2010.

Peoples' income tax returns are subject to review and examination by federal and state taxing authorities. Peoples is currently open to audit under the applicable statutes of limitations by the Internal Revenue Service for the years ended December 31, 2009 through 2011. The years open to examination by state taxing authorities vary by jurisdiction.