INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Provision for Federal Income Taxes

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

	2014		2013	2012
Income taxes currently payable	$	3,194	2,750	2,764
Deferred income tax provision (benefit)	192		192	31
Provision for income taxes	$	3,386	2,942	2,795

Reconciliation Between Statutory Income Tax and Effective Tax Rate

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

	2014		2013		2012
Statutory tax rate	34.0	%	34.0	%	34.0	%
Increase (decrease) resulting from -
Tax exempt interest	(6.8	)%	(7.2	)%	(7.2	)%
Tax exempt income on bank owned life insurance	(1.7	)%	(2.0	)%	(1.8	)%
Other – net	—	%	0.3	%	0.3	%
Effective tax rate	25.5	%	25.1	%	25.3	%

Schedule of Deferred Tax Assets and Liabilities

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

	2014			2013
Deferred tax assets:
Allowance for loan losses	$	1,061		1,148
Net unrealized losses on investment securities available-for-sale	470			846
Fair value adjustment on loans acquired from merger with First Capital	847			1,184
Write-down of other real estate owned	196			196
Pension and deferred compensation	849			1,304
Other	274			107
	3,697			4,785
Deferred tax liabilities:
Depreciation of premises and equipment	(1,280		)	(1,408		)
Amortization of intangibles	(840		)	(950		)
Deferred loan fees	(3		)	—
FHLB stock dividends	(349		)	(345		)
Fair value adjustment on securities acquired from merger with First Capital	(70		)	(143		)
	(2,542		)	(2,846		)
Net deferred tax assets (liabilities)	$	1,155		$	1,939