Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

11. Income Taxes

The current and deferred components of income tax expense were as follows:

	2012		2011		2010
Current:
Federal	$	5,107	$	11,301	$	11,282
State		457		463		433
		5,564		11,764		11,715
Deferred:
Federal		5,318		17		(602	)
Income tax expense	$	10,882	$	11,781	$	11,113

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

	2012			2011			2010
Computed tax expense	$	12,008		$	13,285		$	12,558
Increase (reduction) in income taxes resulting from:
Tax exempt income		(623	)		(753	)		(888	)
State taxes, net of federal benefit		297			301			281
Income from life insurance		(484	)		(760	)		(517	)
Low income housing credits		(328	)		(393	)		(381	)
Other		12			101			60
Income tax expense	$	10,882		$	11,781		$	11,113

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

	2012				2011
	Asset		Liability		Asset		Liability
Allowance for possible losses on loans	$	8,081	$	-	$	8,061	$	-
Allowance for OTTI of investments		71		-		5,352		-
Allowance for OREO valuation		149		-		179		-
Pension and other benefits		3,715		-		3,690		-
Depreciation		-		2,073		-		1,687
Deferred loan origination fees		-		1,256		-		1,155
Deferred compensation and benefits		904				890		-
Net unrealized gains on investments available for sale and derivative instruments		-		3,090		-		2,080
Net unrealized losses on postretirement plans		1,476		-		970		-
Purchase accounting		760		-		571		-
Deposit premium		-		907		-		937
Mortgage servicing rights		-		190		-		269
Prepaid expenses		-		683		-		579
Other		706		-		480		-
	$	15,862	$	8,199	$	20,193	$	6,707

The related income taxes have been calculated using a rate of 35%. No valuation allowance is deemed necessary for the net deferred tax asset.

Although not currently under review, income tax returns for the years ended December 31, 2009 through 2011 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 through other non-interest expense.