INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Provision for Federal Income Taxes

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

	2015			2014	2013
Income taxes currently payable	$	4,280		3,194	2,750
Deferred income tax provision (benefit)	(58		)	192	192
Provision for income taxes	$	4,222		3,386	2,942

Reconciliation Between Statutory Income Tax and Effective Tax Rate

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

	2015		2014		2013
Statutory tax rate	34.0	%	34.0	%	34.0	%
Increase (decrease) resulting from -
Tax exempt interest	(6.0	)%	(6.8	)%	(7.2	)%
Tax exempt income on bank owned life insurance	(1.4	)%	(1.7	)%	(2.0	)%
Other – net	0.3	%	—	%	0.3	%
Effective tax rate	26.9	%	25.5	%	25.1	%

Schedule of Deferred Tax Assets and Liabilities

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

	2015			2014
Deferred tax assets:
Allowance for loan losses	$	1,064		1,061
Net unrealized losses on investment securities available-for-sale	246			470
Fair value adjustment on loans acquired from merger with First Capital	847			1,184
Write-down of other real estate owned	338			196
Pension and deferred compensation	971			849
Other	440			274
	3,906			4,034
Deferred tax liabilities:
Depreciation of premises and equipment	(1,332		)	(1,280	)
Amortization of intangibles	(840		)	(950	)
Deferred loan fees	(2		)	(3	)
FHLB stock dividends	(349		)	(349	)
Fair value adjustment on securities acquired from merger with First Capital	(70		)	(143	)
	(2,593		)	(2,725	)
Net deferred tax assets (liabilities)	$	1,313		1,309