INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2015

The components of the provision (benefit) for income taxes are as follows:

	2015		2014		2013
Current	$	6,282	$	3,775	$	5,509
Deferred		621		3,395		1,895
Change in valuation allowance		-		-		-
Provision for income taxes	$	6,903	$	7,170	$	7,404

The Company’s deferred tax assets and liabilities at December 31 are shown below.

	2015			2014
Deferred tax assets
Allowance for loan losses	$	3,468		$	3,706
Purchase accounting adjustments		973			1,289
Net operating loss carryforward		545			648
Write-downs of other real estate owned		1,010			881
Taxable income on non-accrual loans		1,255			1,233
Capital loss carryforward		-			150
Accrued expenses		141			136
Other		29			19
Total deferred tax assets		7,421			8,062

Deferred tax liabilities
Amortization of intangibles	$	(4,685	)	$	(4,651	)
Depreciation		(1,000	)		(1,078	)
Federal Home Loan Bank dividends		(349	)		(349	)
Deferred loan fees		(664	)		(619	)
Unrealized gain on investment securities		(166	)		(770	)
Other		(51	)		(72	)
Total deferred tax liabilities		(6,915	)		(7,539	)

Valuation allowance on deferred tax assets		(160	)		(160	)
Net deferred taxes	$	346		$	363

An analysis of the differences between the effective tax rates and the statutory U.S. federal income tax rate is as follows:

	2015					2014					2013
U.S. federal income tax rate	$	6,579		34.0	%	$	6,909		34.0	%	$	7,015		34.0	%
Changes from the statutory rate
Impact of graduated federal tax rate		169		0.9			19		0.1			72		0.4
State income taxes, net		308		1.6			335		1.6			439		2.1
Tax-exempt interest income		(182	)	(0.9	)		(175	)	(0.9	)		(149	)	(0.7	)
Non-deductible interest expense related to carrying tax-exempt interest earning assets		11		0.1			12		0.1			9		0.0
Non-deductible stock compensation expense		34		0.1			55		0.3			57		0.3
Tax credits, net		(44	)	(0.2	)		(49	)	(0.2	)		(49	)	(0.2	)
Other		28		0.1			64		0.3			10		0.0
	$	6,903		35.7	%	$	7,170		35.3	%	$	7,404		35.9	%