NOTE 14 - INCOME TAXES

Income taxes were as follows for the years ended December 31:


	2016		2015			2014
Current	$	6,449	$	5,191		$	3,151
Deferred		170		(410	)		11

Income taxes	$	6,619	$	4,781		$	3,162

Effective tax rates differ from the statutory federal income tax rate of 35% in 2016 and 34% in 2015 and 2014 due to the following:


	2016			2015			2014
Income taxes computed at the statutory federal tax rate	$	8,343		$	5,959		$	4,315
Add (subtract) tax effect of:
Nontaxable interest income, net of nondeductible interest expense		(946	)		(900	)		(824	)
Low income housing tax credit		(435	)		(303	)		(303	)
Cash surrender value of BOLI		(197	)		(159	)		(167	)
Other		(146	)		184			141

Income tax expense	$	6,619		$	4,781		$	3,162

There were no tax benefits attributable to security losses in 2016, 2015 and 2014, respectively.

Year-end deferred tax assets and liabilities were due to the following:


	2016			2015
Deferred tax assets
Allowance for loan losses	$	4,640		$	5,005
Deferred compensation		1,762			1,617
Intangible assets		187			224
Pension costs		277			232
Other		102			99

Deferred tax asset		6,968			7,177

Deferred tax liabilities
Tax depreciation in excess of book depreciation		(97	)		(95	)
Discount accretion on securities		(58	)		(59	)
Purchase accounting adjustments		(1,091	)		(1,340	)
FHLB stock dividends		(1,705	)		(1,705	)
Unrealized gain on securities available for sale		(1,035	)		(1,831	)
Other		(256	)		(200	)

Deferred tax liability		(4,242	)		(5,230	)

Net deferred tax asset	$	2,726		$	1,947

No valuation allowance was established at December 31, 2016 and 2015, due to the Company’s ability to carryback to taxes paid in previous years and certain tax strategies, coupled with the anticipated future income as evidenced by the Company’s earning potential.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the State of Ohio for all affiliates other than Civista. Civista is subject to tax in Ohio based upon its net worth.

There is currently no liability for uncertain tax positions and no known unrecognized tax benefits. The Company’s federal tax returns for taxable years through 2012 have been closed for purposes of examination by the Internal Revenue Service.