Income Taxes (Notes)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

At December 31, 2013 and 2012, the Company had $1.5 million and $1.4 million in total taxes receivable, respectively.  The Company realized $955,000, $896,000, and $879,000 in tax credits related to its investments in low income housing tax credit partnerships for 2013, 2012, and 2011 respectively.  Additionally, in 2012, the Company purchased and utilized $398,000, respectively, in Alaska film tax credits from the State of Alaska.  

Components of the provision for income taxes are as follows: 

(In Thousands)	Current Tax Expense (Benefit)		Deferred (Benefit)			Total Expense
2013:
Federal		$3,227		$1,034			$4,261
State	835		181			1,016
Total		$4,062		$1,215			$5,277
2012:
Federal		$4,169		$750			$4,919
State	1,106		131			1,237
Total		$5,275		$881			$6,156
2011:
Federal		$4,941		($816	)		$4,125
State	891		(143		)	748
Total		$5,832		($959	)		$4,873

The actual expense for 2013, 2012, and 2011, differs from the “expected” tax expense (computed by applying the U.S. Federal Statutory Tax Rate of 35% for the year ended December 31, 2013, 2012, and 2011) as follows: 

(In  Thousands)	2013			2012			2011
Computed “expected” income tax expense		$6,192			$6,864			$5,695
State income taxes, net	660			803			486
Low income housing credits	(955		)	(896		)	(879		)
Other	(620		)	(615		)	(429		)
Total		$5,277			$6,156			$4,873

The components of the net deferred tax asset are as follows:

(In  Thousands)	2013			2012			2011
Deferred Tax Asset:
Allowance for loan losses		$6,543			$6,650			$6,750
Loan fees, net of costs	1,653			1,411			1,247
Depreciation and amortization	446			537			636
Other real estate owned	174			1,381			1,159
Deferred Compensation	1,665			1,973			2,059
Other	1,629			1,531			1,597
Total Deferred Tax Asset		$12,110			$13,483			$13,448
Deferred Tax Liability:
Unrealized gain on available-for-sale investment securities		($451	)		($955	)		($197	)
Intangible amortization	(1,949		)	(1,807		)	(1,675		)
Other	(934		)	(730		)	(704		)
Total Deferred Tax Liability		($3,334	)		($3,492	)		($2,576	)
Net Deferred Tax Asset		$8,776			$9,991			$10,872

A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized.  The primary source of recovery of the deferred tax asset will be future taxable income.  Management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax asset.  The deferred tax asset is included in other assets.

As of December 31, 2013, the Company had no unrecognized tax benefits. Our policy is to recognize interest and penalties on unrecognized tax benefits in “Provision for income taxes” in the Consolidated Statements of Income.  There were no amounts related to interest and penalties recognized for the years ended December 31, 2013, 2012, and 2011.  The tax years subject to examination by federal and state taxing authorities are the years ending December 31, 2013, 2012, 2011, and 2010.