INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

The income tax expense (benefit) consists of the following components:

	Year ended December 31,
	2014			2013			2012
	(Dollars in thousands)
Current	$	89		$	200		$	—
Deferred		2,978			2,958			(7,522	)
Change in valuation allowance		(42,802	)		(2,958	)		6,634
Total	$	(39,735	)	$	200		$	(888	)

Effective tax rates differ from the statutory federal income tax rate of 35% due to the following:

	Year ended December 31,
	2014						2013						2012
	Dollars			Rate			Dollars			Rate			Dollars			Rate
	(Dollars in thousands)
Tax (benefit) at statutory rate	$	3,665			35.0	%	$	3,580			35.0	%	$	(7,464	)		35.0	%
Increase (decrease) due to:
Tax exempt income		—			—	%		—			—			—			—
Life insurance		(500	)		-4.8	%		(382	)		-3.7			(575	)		2.7
Other		(98	)		-0.9	%		(40	)		-0.4			517			-2.4
Valuation allowance		(42,802	)		-408.8	%		(2,958	)		-28.9			6,634			-31.1
Income tax provision (benefit)	$	(39,735	)		-379.5	%	$	200			2.0	%	$	(888	)		4.2	%

Significant components of the deferred tax assets and liabilities are as follows:

	December 31,
	2014		2013
		(Dollars in thousands)
Deferred tax assets:
Loan loss reserves	$	6,190	$	7,391
Postretirement benefits		1,066		1,162
Depreciation		625		224
Other real estate owned valuation		498		1,421
Tax credits carryforward		513		339
Securities impairment charges		—		153
Unrealized loss on securities available for sale		2,324		14,138
Interest on nonaccrual loans		943		758
Net operating loss carryforward		24,027		26,708
Purchase accounting adjustment		82		70
Accrued bonuses		459		456
Other		279		71
Less: Valuation allowance		—		(42,802	)
Deferred tax assets		37,006		10,089
Deferred tax liabilities:
Deferred loan fees		321		405
Federal Home Loan Bank stock dividends		4,585		6,715
Mortgage servicing rights		1,917		2,079
FHLB prepayment penalty		1,332		—
Postretirement benefits accrual		493		640
Prepaid expenses		201		250
Deferred tax liabilities		8,849		10,089
Net deferred tax asset	$	28,157	$	—