Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Schedule of deferred tax assets and liabilities

Significant components of the Corporation’s deferred tax assets and liabilities are as follows:



December 31 (In thousands)	2015			2014
Deferred tax assets:
Allowance for loan losses	$	19,773		$	19,023
Accumulated other comprehensive loss – Pension Plan	8,266			8,005
Accumulated other comprehensive loss – Unrealized losses on securities	157			—
Deferred compensation	3,908			3,820
OREO valuation adjustments	2,418			3,984
Net deferred loan fees	1,204			933
Deferred contract bonus	1,031			—
Other	4,171			4,338
Total deferred tax assets	$	40,928		$	40,103
Deferred tax liabilities:
Accumulated other comprehensive income – Unrealized gains on securities	—			677
Deferred investment income	10,199			10,199
Pension plan	26,205			25,949
Mortgage servicing rights	3,153			3,015
Partnership adjustments	560			865
Other	872			804
Total deferred tax liabilities	$	40,989		$	41,509
Net deferred tax asset (liability)	$	(61	)	$	(1,406	)

Federal and state income taxes

The components of the provision for federal income taxes are shown below:



December 31, (In thousands)	2015			2014		2013
Currently payable
Federal	$	32,817		$	33,931	$	34,435

Deferred
Federal	(250		)	2,528		(1,932		)

Total	$	32,567		$	36,459	$	32,503

Schedule of income tax rate reconciliation

The following is a reconciliation of income tax expense to the amount computed at the statutory rate of 35% for the years ended December 31, 2015, 2014 and 2013.



	2015		2014		2013
Statutory federal corporate tax rate	35.0	%	35.0	%	35.0	%
Changes in rates resulting from:
Tax exempt interest income, net of disallowed interest	(0.5	)%	(0.5	)%	(0.8	)%
Bank owned life insurance	(1.8	)%	(1.4	)%	(1.6	)%
Investments in qualified affordable housing projects, net of tax benefits	(1.9	)%	(1.6	)%	(1.7	)%
Other tax credits	(0.9	)%	—	%	—	%
KSOP dividend deduction	(1.0	)%	(1.0	)%	(1.1	)%
Other	(0.2	)%	(0.2	)%	(0.1	)%
Effective tax rate	28.7	%	30.3	%	29.7	%

Reconciliation of unrecognized tax benefits

The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits.



(In thousands)	2015			2014			2013
January 1 Balance	$	532		$	518		$	517
Additions based on tax positions related to the current year	80			76			74
Additions for tax positions of prior years	16			14			4
Reductions for tax positions of prior years	—			—			—
Reductions due to statute of limitations	(70		)	(76		)	(77		)
December 31 Balance	$	558		$	532		$	518