INCOME TAXES (Dollars In Thousands)

The provision for income taxes is summarized below:



Current Tax Expense:	2013		2012			2011
Federal	$	7,933	$	8,763		$	6,726
State	852		1,251			816
Total Current Tax Expense	8,785		10,014			7,542
Deferred Tax Expense (Benefit):
Federal	172		(290		)	1,775
State	122		(63		)	397
Total Deferred Tax Expense (Benefit)	294		(353		)	2,172
Total Provision for Income Taxes	$	9,079	$	9,661		$	9,714

The provisions for income taxes differed from the amounts computed by applying the U.S. Federal Income Tax Rate of 35% for 2013, 2012 and 2011 to pre-tax income as a result of the following:



	2013			2012			2011
Computed Tax Expense at Statutory Rate	$	10,806		$	11,144		$	11,076
Increase (Decrease) in Income Taxes Resulting From:
Tax-Exempt Income	(2,238		)	(2,132		)	(2,199		)
Nondeductible Interest Expense	80			95			152
State Taxes, Net of Federal Income Tax Benefit	633			814			788
Other Items, Net	(202		)	(260		)	(103		)
Total Provision for Income Taxes	$	9,079		$	9,661		$	9,714

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2013 and 2012 are presented below:



	2013		2012
Deferred Tax Assets:
Allowance for Loan Losses	$	5,794	$	6,105
Pension and Deferred Compensation Plans	3,999		4,140
Pension Liability Included in Accumulated Other Comprehensive Income	4,426		9,241
Other	566		608
Total Gross Deferred Tax Assets	14,785		20,094
Valuation Allowance for Deferred Tax Assets	—		—
Total Gross Deferred Tax Assets, Net of Valuation Allowance	$	14,785	$	20,094
Deferred Tax Liabilities:
Pension Plans	$	7,724	$	8,178
Depreciation	1,561		1,475
Deferred Income	3,526		3,189
Net Unrealized Gains on Securities Available-for-Sale Included in Accumulated Other Comprehensive Income	1,557		3,690
Goodwill	5,230		5,225
Total Gross Deferred Tax Liabilities	$	19,598	$	21,757

Management believes that the realization of the recognized net deferred tax assets at December 31, 2013 and 2012 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 2010 through 2013 are subject to Federal and New York State examination.