INCOME TAXES: (Tables)

12 Months Ended

Dec. 31, 2019

Income tax expense is summarized as follows:



(Dollar amounts in thousands)	2019		2018		2017
Federal:
Currently payable	$	7,118	$	7,018	$	8,303
Deferred	2,435		1,793		3,756
Expense due to enactment of federal tax reform	—		—		6,282
	9,553		8,811		18,341
State:
Currently payable	2,168		1,699		1,818
Deferred	406		635		463
	2,574		2,334		2,281
TOTAL	$	12,127	$	11,145	$	20,622

Reconciliation of Income Tax Expense

The reconciliation of income tax expense with the amount computed by applying the statutory federal income tax rate of 21% for 2019 and 2018 (35% for 2017) to income before income taxes is summarized as follows:



(Dollar amounts in thousands)	2019			2018			2017
Federal income taxes computed at the statutory rate	$	12,810		$	12,122		$	17,414
Add (deduct) tax effect of:
Tax exempt income	(2,551		)	(2,495		)	(4,102		)
Non-deductible insurance brokerage goodwill	—			—			—
ESOP dividend deduction	(115		)	(103		)	(102		)
State tax, net of federal benefit	2,034			1,846			1,483
Affordable housing credits	(148		)	(148		)	(148		)
Expense due to enactment of federal tax reform	—			—			6,282
Other, net	97			(77		)	(205		)
TOTAL	$	12,127		$	11,145		$	20,622

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2019 and 2018, are as follows:



(Dollar amounts in thousands)	2019			2018
Deferred tax assets:
Other than temporary impairment	$	754		$	761
Net unrealized losses on retirement plans	7,465			5,783
Net unrealized losses on securities available for sale	—			2,063
Loan loss provisions	5,288			5,463
Deferred compensation	2,615			2,883
Compensated absences	611			576
Post-retirement benefits	1,309			1,338
Lease liability	1,503			—
Purchase accounting	1,600			—
Deferred loss on acquisition	482			577
Other	2,161			2,140
GROSS DEFERRED ASSETS	23,788			21,584
Deferred tax liabilities:
Net unrealized gains on securities available-for-sale	(4,248		)	—
Depreciation	(2,376		)	(2,004		)
Mortgage servicing rights	(332		)	(319		)
Pensions	(475		)	(335		)
Right-of-use asset	(1,501		)	—
Intangibles	(3,285		)	(2,852		)
Other	(2,827		)	(2,614		)
GROSS DEFERRED LIABILITIES	(15,044		)	(8,124		)
NET DEFERRED TAX ASSETS	$	8,744		$	13,460

Reconciliation of Unrecognized Tax Benefits

Unrecognized Tax Benefits — A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



(Dollar amounts in thousands)	2019			2018			2017
Balance at January 1	$	922		$	825		$	698
Additions based on tax positions related to the current year	298			174			257
Additions based on tax positions related to prior years	—			—			—
Reductions due to the statute of limitations	(395		)	(77		)	(130		)
Balance at December 31	$	825		$	922		$	825