Net Deferred Tax Asset and Income Taxes

12 Months Ended

Dec. 31, 2011

Income Tax Expense (Benefit) [Abstract]

Net Deferred Tax Asset and Income Taxes

Net Deferred Tax Asset and Income Taxes

The components of income tax expense were as follows:

(Dollars in thousands)
Years ended December 31,	2011			2010			2009
Current tax expense (benefit):
Federal		$13,227			$10,576			$7,595
State	558			414			251
Total current tax expense	13,785			10,990			7,846
Deferred tax benefit:
Federal	(789		)	(628		)	(1,510		)
State	(74		)	(60		)	10
Total deferred tax benefit	(863		)	(688		)	(1,500		)
Total income tax expense		$12,922			$10,302			$6,346

Total income tax expense varied from the amount determined by applying the Federal income tax rate to income before income taxes.  The reasons for the differences were as follows:

(Dollars in thousands)
Years ended December 31,	2011			2010			2009
Tax expense at Federal statutory rate		$14,926			$12,024			$7,855
(Decrease) increase in taxes resulting from:
Tax-exempt income	(1,220		)	(1,145		)	(1,110		)
Dividends received deduction	(32		)	(48		)	(60		)
BOLI	(678		)	(660		)	(628		)
Federal tax credits	(364		)	(231		)	—
State income tax expense, net of federal income tax benefit	315			229			163
Other	(25		)	133			126
Total income tax expense		$12,922			$10,302			$6,346

The approximate tax effects of temporary differences that give rise to gross deferred tax assets and gross deferred tax liabilities at December 31, 2011 and 2010 are as follows:

(Dollars in thousands)
December 31,	2011			2010
Gross deferred tax assets:
Allowance for loan losses		$10,642			$10,187
Defined benefit pension obligations	10,969			7,288
Losses on write-downs of securities to fair value	1,695			1,668
Deferred compensation	1,900			1,950
Deferred loan origination fees	1,203			978
Stock based compensation	868			616
Other	2,530			1,616
Gross deferred tax assets	29,807			24,303
Gross deferred tax liabilities:
Net unrealized gains on securities available for sale	(6,136		)	(5,417		)
Amortization of intangibles	(2,459		)	(2,762		)
Deferred loan origination costs	(2,885		)	(2,499		)
Other	(1,899		)	(1,336		)
Gross deferred tax liabilities	(13,379		)	(12,014		)
Net deferred tax asset		$16,428			$12,289

The Corporation has determined that a valuation allowance is not required for any of the deferred tax assets since it is more likely than not that these assets will be realized primarily through future reversals of existing taxable temporary differences or carryback to taxable income in prior years.

The Corporation did not have unrecognized tax benefits as of December 31, 2011 and 2010.

The Corporation files income tax returns in the U.S. federal jurisdiction and various state jurisdictions.  The Corporation is no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2008.  In 2010, a state income tax examination commenced for the tax years 2007 through 2008 and was settled.  As a result, previously unrecognized tax benefits of $127 thousand were recognized in 2010.