INCOME TAXES

12 Months Ended

Dec. 31, 2011

INCOME TAXES

INCOME TAXES

8. INCOME TAXES

The components of income tax expense are as follows:

Years Ended December 31,	2011			2010			2009
(In thousands)
Current:
Federal	$	3,700		$	3,340		$	4,467
State	603			530			530
	4,303			3,870			4,997
Deferred:
Federal	469			347			(788		)
State	(109		)	(170		)	(160		)
	360			177			(948		)
Income tax expense	$	4,663		$	4,047		$	4,049

The reconciliation of the expected Federal income tax expense at the statutory tax rate to the actual provision follows:

Years Ended December 31,	2011					2010					2009
(Dollars in thousands)	Amount			Percentage of Pre-tax Earnings		Amount			Percentage of Pre-tax Earnings		Amount			Percentage of Pre-tax Earnings
Federal income tax expense computed by applying the statutory rate to income before income taxes	$	5,134		34	%	$	4,492		34	%	$	4,362		34	%
Tax exempt interest	(896		)	(6	)	(817		)	(6	)	(682		)	(6	)
State taxes, net of federal income tax benefit	341			2		262			2		302			3
Other	84			1		110			1		67			1
Income tax expense	$	4,663		31	%	$	4,047		31	%	$	4,049		32	%

Deferred income tax assets and liabilities are comprised of the following:

December 31,	2011			2010
(In thousands)
Deferred tax assets:
Allowance for loan losses	$	4,592		$	3,613
Restricted stock awards	710			611
Purchase accounting fair value adjustments	1,168			—
Net operating loss carryforward	617			—
Other	456			206
Total	7,543			4,430
Deferred tax liabilities:
Pension and SERP expense	(2,124		)	(1,470		)
Depreciation	(1,411		)	(830		)
REIT undistributed net income	(627		)	(648		)
Net deferred loan costs and fees	(440		)	(481		)
Other	(304		)	(127		)
Total	(4,906		)	(3,556		)
Total before other comprehensive income	2,637			874
Deferred tax liabilities:
Net unrealized gains on securities	(3,774		)	(2,336		)
Deferred tax assets:
Net change in pension liability	2,205			1,202
Net deferred tax asset (liability)	$	1,068		$	(260	)

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the State of New York. The Company is no longer subject to examination by taxing authorities for years before 2008. The Company does not expect the total amount of unrecognized income tax benefits to significantly increase in the next twelve months.