INCOME TAXES (Dollars In Thousands)

The provision for income taxes is summarized below:



Current Tax Expense:	2014			2013		2012
Federal	$	9,270		$	7,933	$	8,763
State	1,203			852		1,251
Total Current Tax Expense	10,473			8,785		10,014
Deferred Tax Expense (Benefit):
Federal	(315		)	172		(290		)
State	16			122		(63		)
Total Deferred Tax Expense (Benefit)	(299		)	294		(353		)
Total Provision for Income Taxes	$	10,174		$	9,079	$	9,661

The provisions for income taxes differed from the amounts computed by applying the U.S. Federal Income Tax Rate of 35% for 2014, 2013 and 2012 to pre-tax income as a result of the following:



	2014			2013			2012
Computed Tax Expense at Statutory Rate	$	11,737		$	10,806		$	11,144
Increase (Decrease) in Income Taxes Resulting From:
Tax-Exempt Income	(2,215		)	(2,238		)	(2,132		)
Nondeductible Interest Expense	51			80			95
State Taxes, Net of Federal Income Tax Benefit	791			633			814
Other Items, Net	(190		)	(202		)	(260		)
Total Provision for Income Taxes	$	10,174		$	9,079		$	9,661

The tax effects of temporary differences that give 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	$	6,113	$	5,794
Pension and Deferred Compensation Plans	3,885		3,999
Pension Liability Included in Accumulated Other Comprehensive Income	6,263		4,426
Other	614		566
Total Gross Deferred Tax Assets	16,875		14,785
Valuation Allowance for Deferred Tax Assets	—		—
Total Gross Deferred Tax Assets, Net of Valuation Allowance	$	16,875	$	14,785
Deferred Tax Liabilities:
Pension Plans	$	7,604	$	7,724
Depreciation	1,222		1,561
Deferred Income	3,927		3,526
Net Unrealized Gains on Securities Available-for-Sale Included in Accumulated Other Comprehensive Income	1,638		1,557
Goodwill	5,242		5,230
Total Gross Deferred Tax Liabilities	$	19,633	$	19,598

Management believes that the realization of the recognized net deferred tax assets at December 31, 2014 and 2013 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 2011 through 2014 are subject to Federal examination. Tax years 2013 and 2014 are subject to New York State examination. Tax years 2010 to 2012 are currently under New York State examination. We do not expect any material changes to our provisions for state taxes for those years as a result of the examination.