Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

The following is a summary of income tax expense for the years ended December 31, 2017, 2016, and 2015:


	2017		2016			2015

Current – federal	$	8,978	$	6,181		$	7,777

Current – state		29		(33	)		139

Deferred – federal		376		1,023			376

Deferred tax adjustment related to reduction in U.S. federal statutory income tax rate		3,009		0			0


Income tax expense	$	12,392	$	7,171		$	8,292

The reconciliation of income tax attributable to pre-tax income at the federal statutory tax rates to income tax expense is as follows:


	2017			%			2016			%			2015			%
Tax at statutory rate	$	12,688			35.0		$	9,699			35.0		$	10,671			35.0
Tax exempt income, net		(1,899	)		(5.2	)		(2,054	)		(7.4	)		(1,816	)		(6.0	)
Deferred tax adjustment related to reduction in U.S. federal statutory income tax rate		3,009			8.3			0			0.00			0			0.0
Bank owned life insurance		(581	)		(1.6	)		(379	)		(1.3	)		(418	)		(1.4	)
Merger costs		0			0.0			170			0.6			30			0.1
Other		(825	)		(2.3	)		(265	)		(1.0	)		(175	)		(0.5	)


Income tax expense	$	12,392			34.2		$	7,171			25.9		$	8,292			27.2


	2017		2016

Deferred tax assets:
Allowance for loan losses	$	2,840	$	4,679
Fair value adjustments – business combination		1,135		2,530
Deferred compensation		1,903		2,891
Impaired security valuation		0		379
Net operating loss carryover		71		627
Post-retirement benefits		892		1,688
Unrealized loss on interest rate swap		34		161
Nonaccrual loan interest		390		649
Accrued expenses		699		1,282
Deferred fees and costs		598		629
Other		344		465

		8,906		15,980

Deferred tax liabilities:
Unrealized gain on securities available for sale		126		750
Premises and equipment		1,413		2,258
Unrealized gain on trading securities		156		118
Intangibles – section 197		2,593		4,735
Mortgage servicing rights		291		487
Other		78		23

		4,657		8,371


Net deferred tax asset	$	4,249	$	7,609