INCOME TAXES

12 Months Ended

Dec. 31, 2012

INCOME TAXES

INCOME TAXES

9. INCOME TAXES

The components of income tax expense are as follows:

Years Ended December 31,	2012			2011			2010
(In thousands)
Current:
Federal	$	5,660		$	3,700		$	3,340
State	582			603			530
	6,242			4,303			3,870
Deferred:
Federal	(229		)	469			347
State	67			(109		)	(170		)
	(162		)	360			177
Income tax expense	$	6,080		$	4,663		$	4,047

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

Years Ended December 31,	2012					2011					2010
(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	$	6,479		34	%	$	5,134		34	%	$	4,492		34	%
Tax exempt interest	(878		)	(5	)	(896		)	(6	)	(817		)	(6	)
State taxes, net of federal income tax benefit	445			2		341			2		262			2
Other	34			1		84			1		110			1
Income tax expense	$	6,080		32	%	$	4,663		31	%	$	4,047		31	%

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

December 31,	2012			2011
(In thousands)
Deferred tax assets:
Allowance for loan losses	$	6,144		$	4,592
Restricted stock awards	777			710
Purchase accounting fair value adjustments	777			1,168
Net operating loss carryforward	516			617
Other	276			456
Total	8,490			7,543
Deferred tax liabilities:
Pension and SERP expense	(2,765		)	(2,124		)
Depreciation	(1,386		)	(1,411		)
REIT undistributed net income	(657		)	(627		)
Net deferred loan costs and fees	(602		)	(440		)
Other	(281		)	(304		)
Total	(5,691		)	(4,906		)
Total before other comprehensive income	2,799			2,637
Deferred tax liabilities:
Net unrealized gains on securities	(1,803		)	(3,774		)
Deferred tax assets:
Net change in pension liability	2,036			2,205
Net change in cash flow hedge	70			—
Net deferred tax asset	$	3,102		$	1,068

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 2009. The Company does not expect the total amount of unrecognized income tax benefits to significantly increase in the next twelve months.