INCOME TAXES

The provision for federal income taxes consists of (in thousands):



	2013		2012	2011
Income taxes currently payable	$	2,750	2,764	2,441
Deferred income tax provision (benefit)	192		31	(231	)
Provision for income taxes	$	2,942	2,795	2,210

A reconciliation between the statutory income tax and the Company's effective tax rate follows:



	2013		2012		2011
Statutory tax rate	34.0	%	34.0	%	34.0	%
Increase (decrease) resulting from -
Tax exempt interest	(7.2	)%	(7.2	)%	(7.7	)%
Tax exempt income on bank owned life insurance	(2.0	)%	(1.8	)%	(1.9	)%
Other – net	0.3	%	0.3	%	(1.2	)%
Effective tax rate	25.1	%	25.3	%	23.2	%

Deferred tax assets and liabilities at December 31 consist of the following (in thousands):



	2013			2012
Deferred tax assets:
Allowance for loan losses	$	1,148		1,169
Net unrealized losses on investment securities available-for-sale	846			—
Fair value adjustment on acquired loans	1,184			—
Write-down of other real estate owned	196			185
Pension and deferred compensation	1,304			1,189
Other	107			23
	4,785			2,566
Deferred tax liabilities:
Depreciation of premises and equipment	(1,408		)	(987		)
Net unrealized gains on investment securities available-for-sale	—			(2,511		)
Amortization of intangibles	(950		)	(181		)
Deferred loan fees	—			(5		)
FHLB stock dividends	(345		)	(267		)
Fair value adjustment on acquired time deposits	(143		)	—
	(2,846		)	(3,951		)
Net deferred tax assets (liabilities)	$	1,939		$	(1,385	)

As of December 31, 2013 and 2012 there were no unrecognized tax benefits and the Company does not anticipate the total amount of unrecognized tax benefits will significantly change within the next twelve months. There were no amounts recognized for interest and penalties in the consolidated statements of income for the three-year period ended December 31, 2013.

The Company is no longer subject to examination by federal tax authorities for years before 2010.