Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

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

(dollars in thousands)	For the year ended December 31,
	2015		2014		2013
Current tax expense:
Federal	$	19,864		22,046		22,612
State		1,647		2,386		2,531
Total current tax expense		21,511		24,432		25,143
Deferred tax expense (benefit)		3,011		2,964		(1,426	)
Total income tax expense	$	24,522		27,396		23,717

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, 2015 and 2014, are as follows:

	December 31,
	2015			2014
(dollars in thousands)	Deductible temporary differences			Deductible temporary differences

Benefits and deferred remuneration	$	(4,992	)	$	(3,885	)
Difference in reporting the allowance for loan losses, net		18,576			21,006
Other income or expense not yet reported for tax purposes		2,607			2,325
Depreciable assets		(796	)		(1,040	)
Net deferred tax asset at end of year		15,395			18,406
Net deferred tax asset at beginning of year		18,406			21,370

Deferred tax expense	$	3,011		$	2,964

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,
	2015			2014			2013
Statutory federal income tax rate Increase/(decrease) in taxes resulting from:		35.0	%		35.0			35.0
Tax exempt income		(0.1	)		(0.1	)		(0.3	)
State income tax (including alternative minimum tax), net of federal tax benefit		1.8			2.7			2.3
Other items		-			0.7			0.3
Effective income tax rate		36.7	%		38.3			37.3

Reconciliation of unrecognized tax benefits

For the years ended December 31, 2015 and 2014 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, 2014	$	213

Change in unrecognized tax reserve		-

Balance as of December 31, 2014	$	213

Change in unrecognized tax reserve		-

Balance as of December 31, 2015	$	213