Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

A summary of income tax expense/(benefit) included in the Consolidated Statements of Income follows:

(dollars in thousands)	For the year ended December 31,
	2013			2012		2011
Current tax expense:
Federal	$	22,612			19,122		19,614
State		2,531			1,879		2,020
Total current tax expense		25,143			21,001		21,634
Deferred tax expense (benefit)		(1,426	)		1,440		(2,336	)
Total income tax expense	$	23,717			22,441		19,298

Tax effects of temporary differences

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2013 and 2012, are as follows:

	December 31,
(dollars in thousands)	2013			2012
	Deductible			Deductible
	temporary			temporary
	differences			differences

Benefits and deferred remuneration	$	(4,256	)		(4,736	)
Difference in reporting the allowance for loan losses, net		22,774			22,710
Other income or expense not yet reported for tax purposes		3,008			2,582
Depreciable assets		(1,309	)		(1,413	)
Other items		1,153			801

Net deferred tax asset at end of year		21,370			19,944

Net deferred tax asset at beginning of year		19,944			21,384

Deferred tax expense (benefit)	$	(1,426	)		1,440

Effective income tax rate

The effective tax rates differ from the statutory federal income tax rate. The reasons for these differences are as follows:

	For the years ended
	December 31,
	2013			2012			2011
Statutory federal income tax rate		35.0	%		35.0			35.0

Increase/(decrease) in taxes resulting from:
Tax exempt income		(0.3	)		(0.7	)		(1.6	)
State income tax (including alternative minimum tax), net of federal tax benefit		2.3			2.3			2.0
Other items		0.3			0.8			1.4
Effective income tax rate		37.3	%		37.4			36.8

Reconciliation of unrecognized tax benefits

For the years ended December 31, 2013 and 2012 the unrecognized tax benefits and change in those unrecognized tax benefits from the beginning of the year are as follows:

(dollars in thousands)


Balance January 1, 2012	$	905

Decrease in prior unrecognized tax benefits		(342	)
Lapse of statute of limitations		(350	)
Balance December 31, 2012	$	213

Change in unrecognized tax reserve		-

Balance December 31, 2013	$	213