Income Taxes (Notes)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of federal and state income tax expense for the years ended December 31, 2014, 2013 and 2012 were as follows:

	2014			2013		2012
Current
Federal	$	6,956		$	5,899	$	6,247
State	2,287			1,976		1,933
Total Current	9,243			7,875		8,180
Deferred
Federal	(17		)	750		219
State	28			221		11
Total Deferred	11			971		230
Total	$	9,254		$	8,846	$	8,410

Recorded income tax expense differs from the expected tax expense (computed by applying the applicable statutory U.S. federal tax rate of 35% to income before income taxes).  During 2014, 2013 and 2012, the Company was in a graduated tax rate position.  The principal reasons for the difference are as follows:

	2014			2013			2012
Expected income taxes	$	8,650		$	8,249		$	7,852
Effects of:
Tax-exempt income	(954		)	(877		)	(761		)
Nondeductible interest expense	10			9			14
State taxes, net of federal taxes	1,505			1,429			1,264
Other items	43			36			41
Total	$	9,254		$	8,846		$	8,410

Tax expense recorded by the Company during 2014, 2013 and 2012 did not include any interest or penalties. Tax returns filed with the Internal Revenue Service and Illinois Department of Revenue are subject to review by law under a three-year statute of limitations. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2011.

The tax effects of the temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2014 and 2013 are presented below:

	2014		2013
Deferred tax assets:
Allowance for loan losses	$	5,522	$	5,348
Available-for-sale investment securities	559		5,353
Deferred compensation	1,108		1,070
Supplemental retirement	317		351
Core deposit premium and other intangible assets	341		255
Interest on non-accrual loans	35		31
Other-than-temporary impairment on securities	449		449
Other	412		407
Total gross deferred tax assets	8,743		13,264
Deferred tax liabilities:
Deferred loan costs	110		110
Goodwill	3,441		3,004
Prepaid expenses	296		258
FHLB stock dividend	285		285
Depreciation	600		731
Purchase accounting	—		66
Accumulated accretion	39		33
Total gross deferred tax liabilities	4,771		4,487
Net deferred tax assets	$	3,972	$	8,777

Net deferred tax assets are recorded in other assets on the consolidated balance sheets. No valuation allowance related to deferred tax assets was recorded at December 31, 2014 and 2013 as management believes it is more likely than not that the deferred tax assets will be fully realized.