INCOME TAXES (In Thousands)

The provision for income taxes is summarized below:



Current Tax Expense:	2012			2011		2010
Federal	$	8,763		$	6,726	$	8,369
State	1,251			816		1,231
Total Current Tax Expense	10,014			7,542		9,600
Deferred Tax Expense (Benefit):
Federal	(290		)	1,775		273
State	(63		)	397		(119		)
Total Deferred Tax Expense (Benefit)	(353		)	2,172		154
Total Provision for Income Taxes	$	9,661		$	9,714	$	9,754

The provisions for income taxes differed from the amounts computed by applying the U.S. Federal Income Tax Rate of 35% for 2012, 2011 and 2010 to pre-tax income as a result of the following:



	2012			2011			2010
Computed Tax Expense at Statutory Rate	$	11,144		$	11,076		$	11,076
Increase (Decrease) in Income Taxes Resulting From:
Tax-Exempt Income	(2,132		)	(2,199		)	(2,236		)
Nondeductible Interest Expense	95			152			176
State Taxes, Net of Federal Income Tax Benefit	814			788			723
Other Items, Net	(260		)	(103		)	15
Total Provision for Income Taxes	$	9,661		$	9,714		$	9,754

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2012 and 2011 are presented below:



	2012		2011
Deferred Tax Assets:
Allowance for Loan Losses	$	6,105	$	5,957
Pension and Deferred Compensation Plans	4,140		3,965
Pension Liability Included in Accumulated Other Comprehensive Income	9,241		8,859
Other	608		669
Total Gross Deferred Tax Assets	20,094		19,450
Valuation Allowance for Deferred Tax Assets	—		—
Total Gross Deferred Tax Assets, Net of Valuation Allowance	$	20,094	$	19,450
Deferred Tax Liabilities:
Pension Plans	$	8,178	$	8,758
Depreciation	1,475		1,347
Deferred Income	3,189		3,017
Net Unrealized Gains on Securities Available-for-Sale Included in Accumulated Other Comprehensive Income	3,690		4,465
Goodwill	5,225		5,036
Total Gross Deferred Tax Liabilities	$	21,757	$	22,623

The following table presents supplemental income tax information for the periods ending December 31, 2012 and 2011:



	2012		2011
Supplemental Information:
Deferred Tax Assets During the Year from the Acquisition of Subsidiaries	$	—	$	44
Deferred Tax Liabilities During the Year from the Acquisition of Subsidiaries	—		1,061
Unrecognized Tax Benefits	—		—

Management believes that the realization of the recognized net deferred tax assets at December 31, 2012 and 2011 is more likely than not, based on existing loss carryback ability, available tax planning strategies and expectations as to future taxable income.

Interest and penalties are recorded as a component of the provision for income taxes, if any. Tax years 2009 through 2012 are subject to Federal and New York State examination.