12.	INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities as of December 31, 2014 and 2013 are as follows (in thousands):

	2014		2013
Deferred tax assets:
Allowance for loan losses	$	5,593	$	5,359
Alternative minimum tax credit		388		-
Unrealized loss on securities		-		57
Other		1,914		2,193
Total deferred tax assets		7,895		7,609
Deferred tax liabilities:
Premises and equipment		4,336		5,153
FHLB stock dividends		65		59
Unrealized gains on securities		1,538		-
Other		2,833		3,168
Total deferred tax liabilities		8,772		8,380
Net deferred tax liability	$	877	$	771

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, the Company believes that it is more likely than not that it will realize the benefits of these deductible differences existing at December 31, 2014. Therefore, no valuation allowance is necessary at this time. The net deferred tax liability is included in other liabilities on the consolidated balance sheets.

Components of income tax expense are as follows (in thousands):

	2014			2013		2012
Current	$	8,847		$	3,323	$	2,128
Deferred (benefit) expense		(1,489	)		2,828		1,651
Total income tax expense	$	7,358		$	6,151	$	3,779

The provision for federal income taxes differs from the amount computed by applying the U.S. Federal income tax statutory rate of 35% on pre-tax income as follows (in thousands):

	December 31,
	2014			2013			2012
Taxes calculated at statutory rate	$	9,264		$	7,114		$	4,697
Increase (decrease) resulting from:
Tax-exempt interest, net		(923	)		(1,095	)		(988	)
Executive officer life insurance proceeds		(1,050	)		-			-
Other		67			132			70
	$	7,358		$	6,151		$	3,779

The Company’s federal income tax returns are open and subject to examination from the 2011 tax return year and forward. The various state income and franchise tax returns are generally open from the 2011 and later tax return years based on individual state statutes of limitation. We are not currently under examination by federal or state tax authorities for the 2011, 2012, or 2013 tax years.