INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Components of Income Tax Expense (Benefit)

The following table summarizes the current and deferred components of income tax expense for each of the years ended December 31, 2017, 2016 and 2015:



(in thousands)	2017		2016		2015
Current:
Federal Tax Expense	$	8,705	$	5,189	$	5,607
State Tax Expense	1,039		217		218
Total Current Expense	9,744		5,406		5,825

Deferred	2,898		470		142
Impact of federal tax reform enactment	3,988		—		—
Total Income Tax Expense	$	16,630	$	5,876	$	5,967

Schedule of Effective Income Tax Rate Reconciliation

The following table reconciles the expected federal income tax expense (computed by applying the federal statutory tax rate of 35%) to recorded income tax expense for the years ended December 31, 2017, 2016 and 2015:



	2017					2016					2015
(in thousands, except ratios)	Amount			Rate		Amount			Rate		Amount			Rate
Statutory Tax Rate	$	14,918		35.00	%	$	7,283		35.00	%	$	7,392		35.00	%
Increase (Decrease) Resulting From:
State taxes, net of federal benefit	986			2.31		141			0.68		142			0.67
Tax exempt interest	(2,074		)	-4.87		(1,388		)	-6.67		(1,303		)	-6.17
Federal tax credits	(130		)	-0.30		—			—		—			—
Officers' life insurance	(538		)	-1.26		(244		)	-1.17		(209		)	-0.99
Acquisition Costs	89			0.21		289			1.39		—			—
Stock-based compensation plans	(241		)	-0.57		—			—		—			—
Impact of federal tax reform enactment	3,988			9.36		—			—		—			—
Other	(368		)	-0.86		(205		)	-0.99		(55		)	-0.26
Effective Tax Rate	$	16,630		39.02	%	$	5,876		28.24	%	$	5,967		28.25	%

Schedule of Deferred Tax Assets and Liabilities

The significant components of deferred tax assets and liabilities at December 31, 2017 and December 31, 2016 were as follows:



	2017				2016
(in thousands)	Assets (1)		Liabilities (1)		Assets (2)		Liabilities (2)
Allowance for loan losses	$	2,729	$	—	$	3,733	$	—
Deferred compensation	3,333		—		1,018		—
Unrealized gain or loss on securities available for sale	649		—		1,144		—
Unrealized gain or loss on derivatives	853		—		968		—
Unfunded post-retirement benefits	—				219		—
Depreciation	—		1,356		—		537
Deferred loan origination costs	—		655		—		517
Other real estate owned	8		—		12		—
Non-accrual interest	273		—		215		—
Write down of impaired investments	—		—		626		—
Branch acquisition costs and goodwill	—		737		—		760
Core deposit intangible	—		1,525		82		—
Acquisition fair value adjustments	4,000		—		—		—
Prepaid expenses	—		302		—		275
Interest rate cap premium amortization	—		276		—		352
Mortgage servicing rights	—		769		—		5
Equity compensation	297		—		310		—
Prepaid pension	—		345		—		—
Contract incentives	594		—		—		—
Other	409		—		110		1
Total	$	13,145	$	5,965	$	8,437	$	2,447

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(1) 2017 balances reflect a federal statutory rate of 21%

(2) 2016 balances reflect a federal statutory rate of 35%