Income Taxes

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Income Taxes

NOTE 17           Income Taxes

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

	2014			2013			2012
Current income tax provision:
Federal	$	2,236		$	1,246		$	1,600
State		763			450			535
Total current		2,999			1,696			2,135
Deferred income tax provision (benefit):
Federal		(113	)		(132	)		330
State		20			99			70
Total deferred		(93	)		(33	)		400
Total provision for income taxes	$	2,906		$	1,663		$	2,535

A summary of the source of differences between income taxes at the federal statutory rate and the provision for income taxes for the years ended December 31 follows:

	2014						2013						2012
				Percent						Percent						Percent
				of						of						of
				Pretax						Pretax						Pretax
	Amount			Income			Amount			Income			Amount			Income
Tax expense at statutory rate	$	3,178			34.0		$	2,178			34.0		$	2,905			34.0
Increase (decrease) in taxes resulting from:
Tax-exempt interest		(605	)		(6.5	)		(703	)		(11.0	)		(778	)		(9.1	)
Bank-owned life insurance		(137	)		(1.5	)		(137	)		(2.1	)		(138	)		(1.6	)
State income tax		517			5.6			362			5.7			399			4.7
Merger-related expenses		0			0.0			0			0.0			73			1.0
Other		(47	)		(0.5	)		(37	)		(0.6	)		74			1.0
Provision for income taxes	$	2,906			31.1		$	1,663			26.0		$	2,535			30.0

Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of PSB’s assets and liabilities. The major components of the net deferred tax assets are as follows:

	2014		2013
Deferred tax assets:
Allowance for loan losses	$	2,467	$	2,579
Deferred compensation and directors’ fees		1,424		1,308
Foreclosed assets		248		352
Unrealized loss on interest rate swaps		128		171
Other		307		223
Gross deferred tax assets		4,574		4,633
Deferred tax liabilities:
Premises and equipment		705		769
Mortgage servicing rights		687		673
FHLB stock		120		120
Unrealized gain on securities available for sale		541		400
Deferred net loan origination costs		120		128
Prepaid expenses		88		139
Gross deferred tax liabilities		2,261		2,229
Net deferred tax asset	$	2,313	$	2,404

At December 31, 2014, federal tax returns remained open for Internal Revenue Service (IRS) review for tax years after 2010, while state tax returns remain open for review by state taxing authorities for tax years after 2009. There were no federal or state income tax audits being conducted at December 31, 2014.

The following table presents income tax effects on items of comprehensive income (loss) for the years ended December 31:

	2014						2013						2012
	Pretax			Income Tax			Pretax			Income Tax			Pretax			Income Tax
	Inc.(Exp.)			Exp.(Credit)			Inc.(Exp.)			Exp.(Credit)			Inc.(Exp.)			Exp.(Credit)
Unrealized gain (loss) on securities available for sale	$	693		$	273		$	(1,574	)	$	(613	)	($	310	)	$	(119	)
Reclassification adjustment for net security gain included in net income		(3	)		(1	)		(12	)		(5	)		0			0
Amortization of unrealized gain on securities available for sale transferred to securities held to maturity included in net income		(330	)		(130	)		(420			(184	)		(452	)		(178	)
Unrealized gain (loss) on interest rate swap		(73	)		(29	)		75			29			(295	)		(116	)
Reclassification adjustment of interest rate swap settlements included in earnings		188			74			186			73			172			68
Totals	$	475		$	187		$	(1,745	)	$	(700	)	$	(885	)	$	(345	)