INCOME TAXES

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

INCOME TAXES

Note 15 – Income Taxes

The following table provides the components of income tax expense for the years ended December 31:

(In thousands)			2014		2013		2012
Current income taxes:
Federal			$	13,671	$	15,391	$	11,199
State				3,103		3,824		2,913
	Total current			16,774		19,215		14,112
Deferred income taxes:
Federal				554		2,743		3,116
State				254		605		817
	Total deferred			808		3,348		3,933
		Total income tax expense	$	17,582	$	22,563	$	18,045

The Company does not have uncertain tax positions that are deemed material, and did not recognize any adjustments for unrecognized tax benefits.

Temporary differences between the amounts reported in the financial statements and the tax bases of assets and liabilities result in deferred taxes. Deferred tax assets and liabilities, shown as the sum of the appropriate tax effect for each significant type of temporary difference, are presented in the following table at December 31 for the years indicated:

(In thousands)				2014		2013
Deferred Tax Assets:
	Allowance for loan and lease losses			$	15,022	$	15,479
	Employee benefits				1,779		1,606
	Pension plan OCI				5,873		2,211
	Deferred loan fees and costs				212		281
	Non-qualified stock option expense				503		446
	Losses on other real estate owned				98		123
	Other than temporary impairment				322		323
	Loan and deposit premium/discount				476		882
	Reserve for recourse loans				199		200
	Loss carryforward				273		132
	Other				6		79
		Gross deferred tax assets			24,763		21,762
	Valuation allowance				(287)		(132)
		Net deferred tax assets			24,476		21,630
Deferred Tax Liabilities:
	Unrealized gains on investments available-for-sale				(5,327)		(237)
	Pension plan costs				(2,124)		(2,086)
	Depreciation				(55)		(547)
	Intangible assets				(1,276)		(785)
	Bond accretion				(174)		(105)
	Other				(16)		(16)
		Gross deferred tax liabilities			(8,972)		(3,776)
			Net deferred tax asset	$	15,504	$	17,854

The reconcilements between the statutory federal income tax rate and the effective rate for the years ended December 31 are presented in the following table:

(Dollars in thousands)			2014				2013				2012
					Percentage of				Percentage of				Percentage of
					Pre-Tax				Pre-Tax				Pre-Tax
			Amount		Income		Amount		Income		Amount		Income
Income tax expense at federal statutory rate			$	19,523	35.0	%	$	23,445	35.0	%	$	19,110	35.0	%
Increase (decrease) resulting from:
	Tax exempt income, net			(3,468)	(6.2)			(3,185)	(4.7)			(2,927)	(5.4)
	Bank-owned life insurance			(855)	(1.5)			(875)	(1.3)			(916)	(1.7)
	State income taxes, net of federal income tax benefits			2,182	3.9			2,879	4.3			2,424	4.4
	Other, net			200	0.4			299	0.4			354	0.7
		Total income tax expense and rate	$	17,582	31.6	%	$	22,563	33.7	%	$	18,045	33.0	%

The variability in the effective tax rate over the three year period was due primarily to the proportion of tax exempt income compared to income before taxes for each year.