Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Components of federal and state income tax expense (benefit)

The components of federal and state income tax expense for the years ended December 31, 2017, 2016 and 2015 were as follows (in thousands):



	2017		2016			2015
Current
Federal	$	9,825	$	11,375		$	7,357
State	2,719		2,953			1,841
Total Current	12,544		14,328			9,198
Deferred
Federal	2,047		(1,940		)	(84		)
State	451		(448		)	104
Total Deferred	2,498		(2,388		)	20
Total	$	15,042	$	11,940		$	9,218

Effective income tax rate reconciliation

The principal reasons for the difference are as follows (in thousands):



	2017			2016			2015
Expected income taxes	$	14,604		$	11,823		$	9,006
Effects of:
Tax-exempt income from bank owned life insurance	(573		)	(235		)	—
Other tax exempt income	(2,223		)	(1,577		)	(1,103		)
Nondeductible interest expense	28			21			11
State taxes, net of federal taxes	2,062			1,628			1,264
Other items	(266		)	280			41
Adjustment of deferred tax assets and liabilities for enacted change in tax laws	1,410			—			—
Effect of marginal tax rate	—			—			(1		)
Total	$	15,042		$	11,940		$	9,218

Deferred tax assets and deferred tax liabilities

The tax effects of the temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are presented below (in thousands):



	2017		2016
Deferred tax assets:
Allowance for loan losses	$	5,694	$	6,599
Available-for-sale investment securities	941		3,680
Deferred compensation	749		1,030
Supplemental retirement	170		259
Core deposit premium and other intangible assets	664		691
Pass thru activities	126		—
Other-than-temporary impairment on securities	317		438
Stock Compensation Expense	—		194
Deferred Revenue	—		101
Purchase Accounting	475		1,791
Acquisition Costs	210		319
Other	596		966
Total gross deferred tax assets	9,942		16,068
Deferred tax liabilities:
Deferred loan costs	26		178
Intangibles amortization	3,685		4,467
Prepaid expenses	232		383
FHLB stock dividend	158		380
Depreciation	1,207		740
Deferred Revenue	58		—
Accumulated accretion	112		72
Mortgage servicing rights	240		387
Total gross deferred tax liabilities	5,718		6,607
Net deferred tax assets	$	4,224	$	9,461