Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

The income tax expense for the years ended December 31 consisted of the following (in thousands):

	2019		2018			2017
Current tax expense (benefit):
Federal	$	8,882	$	19,351		$	(3,031	)
State		1,308		1,135			573
Total current tax expense (benefit)		10,190		20,486			(2,458	)
Deferred tax expense (benefit):
Federal		280		(10,303	)		12,297
State		89		(177	)		106
Total deferred tax expense (benefit)		369		(10,480	)		12,403
Total income tax expense	$	10,559	$	10,006		$	9,945

Income Tax Expense Differed From Statutory Federal Income Tax Rate

Income tax expense differed from the statutory federal income tax rate for the years ended December 31 as follows:

	2019			2018			2017
Statutory federal tax rate		21.0	%		21.0	%		35.0	%
Increase (decrease) resulting from:
Tax exempt interest income		(1.9	)		(2.6	)		(5.6	)
Tax credits and adjustments		(3.0	)		(0.3	)		(6.7	)
Non-taxable earnings on company owned life insurance		(0.6	)		(0.8	)		(1.4	)
State taxes, net of federal tax benefit		1.9			1.5			1.1
Nondeductible expenses		0.2			0.2			0.3
Goodwill and contingent consideration adjustments		-			1.0			0.3
Other, net		0.2			0.2			(0.1	)
Effective tax rate		17.8	%		20.2	%		22.9	%

Income Tax Expense Allocation

Total income tax expense (benefit) was as follows for the years ended December 31 (in thousands):

	2019		2018			2017
Income tax expense	$	10,559	$	10,006		$	9,945
Shareholder’s equity		3,113		(3,156	)		3,909

Net Deferred Tax Assets

The Company’s net deferred tax asset (liability) is included in other assets in the consolidated statements of financial condition. The tax effects of temporary differences that give rise to the deferred tax assets and deferred tax liabilities are as follows at December 31 (in thousands):

	2019		2018
Deferred tax assets:
Allowance for loan losses	$	7,810	$	8,550
Deferred compensation		1,095		1,771
Investment in limited partnerships		1,191		660
SERP agreements		418		417
Interest on nonaccrual loans		191		106
Share-based compensation		586		541
Net unrealized loss on securities available for sale		-		2,848
Other		224		138
Gross deferred tax assets		11,515		15,031
Deferred tax liabilities:
Prepaid expenses		498		583
Prepaid pension costs		897		1,415
Intangible assets		2,643		2,581
Depreciation and amortization		1,961		2,096
Net unrealized gain on securities available for sale		301		-
Loan servicing assets		289		258
Other		550		240
Gross deferred tax liabilities		7,139		7,173
Net deferred tax asset	$	4,376	$	7,858