Income Taxes

The current and deferred components of income tax expense on the consolidated statements of income were as follows:



	For The Years Ended December 31,
	2014			2013			2012
Current:
Federal	$	11,435		$	11,853		$	5,107
State	505			400			457
	11,940			12,253			5,564
Deferred:
Federal	(500		)	(121		)	5,318
Income tax expense	$	11,440		$	12,132		$	10,882

The income tax expense differs from the amount computed by applying the statutory federal income tax rate as a result of the following:



	For The Years Ended December 31,
	2014			2013			2012
Computed tax expense	$	12,604		$	12,220		$	12,008
Increase (reduction) in income taxes resulting from:
Tax exempt income	(704		)	(510		)	(623		)
Income from life insurance	(503		)	(459		)	(484		)
State taxes, net of federal benefit	328			260			297
Low income housing credits	(286		)	(299		)	(328		)
Goodwill impairment	—			991			—
Other	1			(71		)	12
Income tax expense	$	11,440		$	12,132		$	10,882

Temporary differences between the financial statements carrying amounts and the tax bases of assets and liabilities gave rise to the following deferred tax assets and liabilities:



	December 31,
	2014				2013
	Asset		Liability		Asset		Liability
Allowance for possible losses on loans	$	7,397	$	—	$	7,564	$	—
Pension and other benefits	4,018		—		3,900		—
Net unrealized losses on derivative instruments	3,200		—		1,369		—
Net unrealized losses on postretirement plans	1,165		—		992		—
Deferred compensation and benefits	945		—		963		—
Purchase accounting and deposit premium	329		—		321		—
Net unrealized losses on AFS securities	172		—		4,288		—
Allowance for OREO valuation	107		—		59		—
Allowance for OTTI of investments	71		—		71		—
Depreciation	—		1,910		—		1,765
Deferred loan origination fees	—		1,581		—		1,390
Prepaid expenses	—		620		—		766
MSRs	—		172		—		254
Other	1,313		—		695		—
	$	18,717	$	4,283	$	20,222	$	4,175

Deferred income taxes have been calculated using a rate of 35%. No valuation allowance established on the Company's deferred tax assets as of December 31, 2014 or 2013.

Although not currently under review, income tax returns for the years ended December 31, 2011 through 2013 are open to audit by federal and Maine authorities. If the Company, as a result of an audit, were assessed interest and penalties, the amounts would be recorded within non-interest expense on the consolidated statements of income.