Federal Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Components of the consolidated provision for federal income taxes

Components of the consolidated provision for federal income taxes are as follows for the years ended December 31:



	2017		2016			2015
Currently payable	$	180	$	2,630		$	1,596
Deferred expense (benefit)	2,836		(282		)	1,692
Income tax expense	$	3,016	$	2,348		$	3,288

Summary of federal income tax expense

The reconciliation of the provision for federal income taxes and the amount computed at the federal statutory tax rate of 34% of income before federal income tax expense is as follows for the year ended December 31:



	2017			2016			2015
Income taxes at 34% statutory rate	$	5,526		$	5,490		$	6,262
Effect of nontaxable income
Interest income on tax exempt municipal securities	(1,889		)	(1,938		)	(2,026		)
Earnings on corporate owned life insurance policies	(247		)	(419		)	(262		)
Deferred tax adjustment resulting from the statutory rate reduction pursuant to the Tax Act	319			—			—
Other	34			(154		)	(88		)
Total effect of nontaxable income	(1,783		)	(2,511		)	(2,376		)
Effect of nondeductible expenses	149			143			157
Effect of tax credits	(876		)	(774		)	(755		)
Federal income tax expense	$	3,016		$	2,348		$	3,288

Summary of deferred tax assets and liabilities

Significant components of our deferred tax assets and liabilities, included in other assets in the accompanying consolidated balance sheets, are as follows as of December 31:



	2017		2016
Deferred tax assets
Allowance for loan losses	$	1,076	$	1,576
Deferred directors’ fees	1,758		2,758
Employee benefit plans	70		115
Core deposit premium and acquisition expenses	733		1,157
Net unrecognized actuarial losses on pension plan	857		1,531
Life insurance death benefit payable	497		804
Alternative minimum tax	1,463		717
Other	607		618
Total deferred tax assets	7,061		9,276
Deferred tax liabilities
Prepaid pension cost	455		809
Premises and equipment	1,728		115
Accretion on securities	40		58
Core deposit premium and acquisition expenses	909		1,403
Net unrealized gains on available-for-sale securities	204		418
Net unrealized gains on derivative instruments	61		84
Other	1,684		1,502
Total deferred tax liabilities	5,081		4,389
Net deferred tax assets	$	1,980	$	4,887