Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Components of The Provision For Income Taxes

Components of the provision for income taxes are as follows:



(In Thousands)	Current Tax Expense (Benefit)		Deferred Expense(Benefit)			Total Expense
2016:
Federal		$2,874		($281	)		$2,593
State	674		(83		)	591
Amortization of investment in low income housing tax credit partnerships	2,868		—			2,868
Total		$6,416		($364	)		$6,052
2015:
Federal		$4,752		$127			$4,879
State	1,200		21			1,221
Amortization of investment in low income housing tax credit partnerships	2,684		—			2,684
Total		$8,636		$148			$8,784
2014:
Federal		$6,589		($1,117	)		$5,472
State	1,558		(194		)	1,364
Amortization of investment in low income housing tax credit partnerships	1,337		—			1,337
Total		$9,484		($1,311	)		$8,173

Reconciliation of Actual to Expected Tax Expense

The actual expense for 2016, 2015, and 2014, differs from the “expected” tax expense (computed by applying the U.S. Federal Statutory Tax Rate of 35% for the year ended December 31, 2016, 2015, and 2014) as follows:



(In Thousands)	2016			2015			2014
Computed “expected” income tax expense		$7,365			$8,552			$8,646
State income taxes, net	384			794			886
Non-deductible merger expenses	—			—			130
Tax-exempt interest on investment securities	(566		)	(507		)	(415		)
Tax-exempt gain on purchase of mortgage affiliate	—			—			(1,050		)
Amortization of investment in low income housing tax credit partnerships	2,868			2,684			1,337
Low income housing credits	(3,540		)	(2,446		)	(1,298		)
Other	(459		)	(293		)	(63		)
Total		$6,052			$8,784			$8,173

Components of Net Deferred Tax Asset

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



(In Thousands)	2016			2015			2014
Deferred Tax Asset:
Allowance for loan losses		$7,717			$7,082			$5,900
Loan fees, net of costs	1,823			1,896			1,871
Depreciation and amortization	31			(64		)	(60		)
Other real estate owned	123			46			50
Deferred compensation	2,112			2,005			1,691
Net operating loss carryforwards	—			73			589
Equity compensation	544			578			502
Loan discount	326			476			1,003
Fair market value adjustment on certificates of deposit	247			283			321
Unrealized loss on available-for-sale investment securities	195			235			—
Other	1,455			1,380			1,636
Total Deferred Tax Asset		$14,573			$13,990			$13,503

Deferred Tax Liability:
Unrealized gain on available-for-sale investment securities		$—			$—			($173	)
Intangible amortization	(2,804		)	(2,494		)	(2,206		)
Mortgage servicing rights	(415		)	(415		)	—
FHLB stock repurchase and dividends	(686		)	(686		)	(306		)
Other	(404		)	(456		)	(731		)
Total Deferred Tax Liability		($4,309	)		($4,051	)		($3,416	)
Net Deferred Tax Asset		$10,264			$9,939			$10,087