Note 9 — Income Taxes

The following table presents the (benefit) provision for income taxes in the consolidated statements of income which is comprised of the following: (in thousands)


		2011			2010 Restated			2009
Current:	Federal	$	751		$	5,043		$	9,023
	State		345			848			1,098

			1,096			5,891			10,121
Deferred:	Federal		(4,339	)		(5,691	)		(143	)
	State		(980	)		(1,505	)		(148	)

			(5,319	)		(7,196	)		(291	)

Total		$	(4,223	)	$	(1,305	)	$	9,830

The total tax (benefit) expense was different from the amounts computed by applying the federal income tax rate because of the following:


	2011			2010 Restated			2009
Federal income tax (benefit) expense at statutory rates		(35	)%		35	%		35	%
Tax-exempt interest		(56	)		(55	)		(8	)
State income taxes net of federal benefit		(10	)		(8	)		2
Other		3			2			1

Total		(98	)%		(26	)%		30	%

The effects of temporary differences between tax and financial accounting that create significant deferred-tax assets and liabilities at December 31, 2011 and 2010, and the recognition of income and expense for purposes of tax and financial reporting, are presented below: (in thousands)


	2011			2010 Restated			2009
Deferred tax assets:
Provision for possible loan losses	$	15,835		$	11,520		$	5,008
Post-retirement benefits		551			519			498
Deferred compensation		1,941			2,001			2,012
Securities available for sale		427			—			—
Unfunded pension obligation		7,396			2,299			2,414
Other		2,003			1,839			1,105

Total deferred tax assets before valuation allowance		28,153			18,178			11,037

Valuation allowance		—			—			—
Total deferred tax assets net of valuation allowance		28,153			18,178			11,037

Deferred tax liabilities:
Securities available for sale		(8,119	)		(4,975	)		3,676
Other		(1,569	)		(1,076	)		1,132

Total deferred tax liabilities		(9,688	)		(6,051	)		4,808

Net deferred tax asset	$	18,465		$	12,127		$	6,229

The deferred tax assets and liabilities are netted and presented in a single amount which is included in Other Assets in the accompanying Consolidated Statements of Condition. Suffolk had unrecognized tax benefits including interest of approximately $38,000 as of December 31, 2011 and approximately $41,000 as of December 31, 2010. Changes in unrecognized tax benefits consist of the following: (in thousands)


	Total			Federal			State
Balance December 31, 2010 (Restated)	$	41		$	32		$	9
Additions from current year tax positions		—			—			—
Additions from prior year tax positions		—			—			—
Reductions for prior year tax positions		(3	)		(2	)		(1	)
Settlements		—

Balance December 31, 2011	$	38		$	30		$	8

Suffolk recognizes interest and penalties accrued relating to unrecognized tax benefits in income tax expense. There is no accrued interest relating to uncertain tax positions as of December 31, 2011. Suffolk files income tax returns in the U.S. federal jurisdiction and in New York State. Federal and New York State returns are subject to audits by tax authorities beginning with the 2008 tax year. Suffolk Greenway, Inc., a subsidiary of Suffolk Bancorp, is currently under audit with New York State for the years 2008, 2009, and 2010. There is no anticipated change as a result of this audit. It is not anticipated that the unrecognized tax benefits will significantly change over the next 12 months.