INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

Components of Income Tax Expense (Benefit)

Income tax expense for the years ended December 31, 2016, 2015 and 2014 consisted of the following:

(dollars in thousands)	2016		2015		2014
Current federal	$	23,749	$	19,992	$	18,877
Deferred federal		268		1,378		1,118
Current state		1,086		1,257		1,650
Deferred state		30		206		740
Total income tax expense	$	25,133	$	22,833	$	22,385

Differences In Taxes From Continuing Operations

The differences between financial statement tax expense and amounts computed by applying the statutory federal income tax rate of 35% for 2016, 2015 and 2014 to income before income taxes were as follows:

(dollars in thousands)	2016		2015		2014
Income taxes at statutory federal rate of 35%	$	27,026	$	24,220	$	23,167
Increase (decrease) in taxes resulting from:
Tax exempt income		(1,498)		(1,323)		(1,301)
Nondeductible expense		190		206		196
State income tax, net of federal tax effect		726		951		1,656
Captive insurance premium income		(361)		(363)		(378)
Tax credits		(311)		(241)		(233)
Bank owned life insurance		(554)		(605)		(631)
Reserve for unrecognized tax benefits		0		0		(64)
Other		(85)		(12)		(27)
Total income tax expense	$	25,133	$	22,833	$	22,385

Deferred Tax Assets and Liabilities

The net deferred tax asset recorded in the consolidated balance sheets at December 31, 2016 and 2015 consisted of the following:

(dollars in thousands)	2016		2015
Deferred tax assets:
Bad debts	$	17,187	$	17,187
Pension and deferred compensation liability		1,310		1,370
Non-qualified stock options		38		309
Nonaccrual loan interest		2,061		2,618
Long-term incentive plan		2,348		987
Other		450		337
		23,394		22,808
Deferred tax liabilities:
Accretion		121		156
Depreciation		4,952		4,222
Loan servicing rights		1,174		1,070
State taxes		620		632
Deferred loan fees		78		65
Intangible assets		1,925		1,891
REIT spillover dividend		1,479		1,413
Prepaid expenses		959		907
Other		418		422
		11,726		10,778
Valuation allowance		0		0
Net deferred tax asset	$	11,668	$	12,030