Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

The provision for income tax expense consists of the following for the years ended December 31:

	2014		2013		2012
Current:
Federal	$	1,254	$	1,145	$	666
State		561		44		2

		1,815		1,189		668
Deferred:
Federal		674		1,243		472
State		301		422		583

		975		1,665		1,055

	$	2,790	$	2,854	$	1,723

Deferred tax assets and liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2014 and 2013 consist of:

	2014		2013
Deferred tax assets:
Allowance for loan losses	$	3,858	$	4,176
Deferred compensation		243		316
Retirement compensation		1,525		1,423
Stock option compensation		264		252
Post retirement benefits		425		290
Current state franchise taxes		186		15
Non-accrual interest		230		141
Net operating loss		—		63
Tax credit carryovers		937		1,720
Investment securities unrealized loss		—		426
Other		32		19

Deferred tax assets		7,700		8,841

Deferred tax liabilities:
Fixed assets depreciation		1,364		1,291
FHLB dividends		260		260
Tax credit – loss on pass-through		155		223
Deferred loan costs		1,038		918
Investment securities unrealized gain		469		—

Total deferred tax liabilities		3,286		2,692

Net deferred tax assets (see Note 7)	$	4,414	$	6,149

Reconciliation of income taxes computed at federal statutory rates

A reconciliation of income taxes computed at the federal statutory rate of 34% and the provision for income taxes is as follows:

	2014			2013			2012

Income tax expense at statutory rates	$	2,944		$	2,801		$	2,166
Reduction for tax exempt interest		(165	)		(191	)		(166	)
State franchise tax, net of federal benefit		569			457			408
Cash surrender value of life insurance		(154	)		(154	)		(155	)
Solar credit amortization		(179	)		(201	)		(359	)
Other		(225	)		142			(171	)

	$	2,790		$	2,854		$	1,723