Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Components of Income Tax Expense

The components of income tax expense for the three years ended December 31 were (in thousands):

		2014		2013		2012
Current tax (benefit) expense	$	331	$	(157)	$	1,042
Deferred tax expense (benefit)		194		662		(64)
Total tax expense	$	525	$	505	$	978

Effective Income Tax Rate Reconciliation

A reconciliation of the statutory income tax expense computed at 34% to the income tax expense included in the consolidated statements of income follows (dollars in thousands):

	Years Ended December 31,
		2014		2013		2012
Income before income taxes	$	4,741	$	4,506	$	4,626
Statutory tax rate		34.0%		34.0%		34.0%
Federal tax at statutory rate		1,612		1,532		1,573
Tax-exempt interest		(358)		(354)		(431)
Net earnings on BOLI		(93)		(108)		(148)
Gain from life insurance proceeds		(56)		-		-
Dividend from unconsolidated subsidiary		(13)		(13)		(12)
Stock-based compensation		16		10		2
Federal tax credits		(575)		(556)		-
Other permanent differences		(8)		(6)		(6)
Total tax expense	$	525	$	505	$	978
Effective tax rate		11.1%		11.2%		21.1%

Schedule of Deferred Tax Assets and Liabilities

The components giving rise to the net deferred tax asset are detailed below (in thousands):

		December 31,
		2014		2013
Deferred Tax Assets
Allowance for loan losses	$	675	$	639
Deferred directors' compensation		519		541
Employee and director benefits		553		574
Qualified pension liability		457		-
Unrealized losses on securities available for sale		-		387
Unrealized loss from securities impairment		239		221
Investment in low income housing project		52		-
Other		57		109
Total deferred tax assets		2,552		2,471
Deferred Tax Liabilities
Depreciation		(199)		(223)
Equity income from unconsolidated subsidiary		(526)		(462)
Qualified pension asset		-		(342)
Loan origination costs		(348)		(287)
Prepaid expense		(138)		(95)
Unrealized gains on securities available for sale		(148)		-
Annuity earnings		(68)		(63)
Fair value of mortgage servicing rights		(66)		(57)
Goodwill		(387)		(340)
Total deferred tax liabilities		(1,880)		(1,869)
Net deferred tax asset
included in other assets	$	672	$	602