7.	INCOME TAXES:

The Company files a consolidated federal income tax return. Income tax expense is comprised of the following (dollars in thousands):


	Year Ended December 31,
	2014			2013		2012
Current federal income tax	$	29,832		$	24,931	$	23,605
Current state income tax		94			15		13
Deferred federal income tax expense (benefit)		(893	)		754		1,517


Income tax expense	$	29,033		$	25,700	$	25,135

Income tax expense, as a percentage of pretax earnings, differs from the statutory federal income tax rate as follows:


	As a Percent of Pretax Earnings
	2014			2013			2012
Statutory federal income tax rate		35.0	%		35.0	%		35.0	%
Reductions in tax rate resulting from interest income exempt from federal income tax		(10.6	)		(10.5	)		(9.7	)
Effect of state income tax		0.1			—			0.1
ESOP tax credit		(0.2	)		(0.2	)		(0.3	)
Other		0.2			0.3			0.2

Effective income tax rate		24.5	%		24.6	%		25.3	%

The approximate effects of each type of difference that gave rise to the Company’s deferred tax assets and liabilities at December 31, 2014 and 2013 are as follows (dollars in thousands):


	2014			2013
Deferred tax assets:
Tax basis of loans in excess of financial statement basis	$	13,876		$	12,904
Minimum liability in defined benefit plan		1,440			2,328
Recognized for financial reporting purposes but not for tax purposes:
Deferred compensation		2,423			2,213
Write-downs and adjustments to other real estate owned and repossessed assets		78			174
Other deferred tax assets		350			322


Total deferred tax assets		18,167			17,941


Deferred tax liabilities:
Financial statement basis of fixed assets in excess of tax basis		5,311			5,567
Intangible asset amortization deductible for tax purposes, but not for financial reporting purposes		11,704			10,277
Recognized for financial reporting purposes but not for tax purposes:
Accretion on investment securities		1,679			1,678
Pension plan contributions		1,414			2,309
Net unrealized gain on investment securities available-for-sale		27,010			7,909
Other deferred tax liabilities		310			366


Total deferred tax liabilities		47,428			28,106


Net deferred tax asset (liability)	$	(29,261	)	$	(10,165	)

Current authoritative accounting guidance prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of cumulative benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. Current authoritative accounting guidance also provides guidance on the accounting for and disclosure of unrecognized tax benefits, interest and penalties. The Company concluded the tax benefits of positions taken and expected to be taken on its tax returns should be recognized in the financial statements under this guidance. The Company files income tax returns in the U.S. federal jurisdiction and several U.S. state jurisdictions. We are no longer subject to U.S. federal income tax examinations by tax authorities for years before 2011 or Texas state tax examinations by tax authorities for years before 2010.