Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

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

(dollars in thousands)	For the year ended December 31,
	2014		2013			2012
Current tax expense:
Federal	$	22,046		22,612			19,122
State		2,386		2,531			1,879
Total current tax expense		24,432		25,143			21,001
Deferred tax expense (benefit)		2,964		(1,426	)		1,440
Total income tax expense	$	27,396		23,717			22,441

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, 2014 and 2013, are as follows:

	December 31,
(dollars in thousands)	2014			2013
	Deductible			Deductible
	temporary			temporary
	differences			differences
Benefits and deferred remuneration	$	(3,885	)	$	(4,256	)
Difference in reporting the allowance for loan losses, net		21,006			22,774
Other income or expense not yet reported for tax purposes		2,325			3,008
Depreciable assets		(1,040	)		(1,309	)
Other items		-			1,153
Net deferred tax asset at end of year		18,406			21,370
Net deferred tax asset at beginning of year		21,370			19,944

Deferred tax expense (benefit)	$	2,964		$	(1,426	)

Effective income tax rate

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

	Years ended December 31,
	2014			2013			2012
Statutory federal income tax rate		35.0	%		35.0			35.0
Increase/(decrease) in taxes resulting from:
Tax exempt income		(0.1	)		(0.3	)		(0.7	)
State income tax (including alternative minimum tax),net of federal tax benefit		2.7			2.3			2.3
Other items		0.7			0.3			0.8
Effective income tax rate		38.3	%		37.3			37.4

Reconciliation of unrecognized tax benefits

For the years ended December 31, 2014 and 2013 the unrecognized tax benefits and change in those unrecognized tax benefits from the beginning of the year are as follows:

(dollars in thousands)

Balance as of January 1, 2013	$	213

Change in unrecognized tax reserve		-

Balance as of December 31, 2013	$	213

Change in unrecognized tax reserve		-

Balance as of December 31, 2014	$	213