Net Deferred Tax Asset and Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [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,	2013			2012		2011
Current tax expense:
Federal		$13,518			$13,937		$13,227
State	742			533		558
Total current tax expense	14,260			14,470		13,785
Deferred tax expense (benefit):
Federal	2,300			1,310		(789		)
State	(33		)	18		(74		)
Total deferred tax expense (benefit)	2,267			1,328		(863		)
Total income tax expense		$16,527			$15,798		$12,922

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,	2013			2012			2011
Tax expense at Federal statutory rate		$18,438			$17,805			$14,926
(Decrease) increase in taxes resulting from:
Tax-exempt income	(1,408		)	(1,220		)	(1,220		)
Dividends received deduction	—			(12		)	(32		)
BOLI	(648		)	(857		)	(678		)
Federal tax credits	(364		)	(364		)	(364		)
State income tax expense, net of federal income tax benefit	461			358			315
Other	48			88			(25		)
Total income tax expense		$16,527			$15,798			$12,922

The approximate tax effects of temporary differences that give rise to gross deferred tax assets and gross deferred tax liabilities are as follows:

(Dollars in thousands)
December 31,	2013			2012
Gross deferred tax assets:
Allowance for loan losses		$10,033			$11,037
Defined benefit pension obligations	3,544			11,462
Losses on write-downs of securities to fair value	941			1,500
Deferred compensation	2,545			2,174
Deferred loan origination fees	1,593			1,432
Stock based compensation	1,686			1,555
Other	2,650			2,680
Gross deferred tax assets	22,992			31,840
Gross deferred tax liabilities:
Net unrealized gains on securities available for sale	(1,791		)	(4,318		)
Amortization of intangibles	(1,977		)	(2,207		)
Deferred loan origination costs	(3,697		)	(3,176		)
Other	(2,776		)	(2,255		)
Gross deferred tax liabilities	(10,241		)	(11,956		)
Net deferred tax asset		$12,751			$19,884

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, carryback to taxable income in prior years or by offsetting projected future taxable income.

The Corporation had no unrecognized tax benefits as of December 31, 2013 and 2012.

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 2010.