INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

INCOME TAXES [Abstract]

Provision for income taxes (benefit)

The provision for income taxes consists of the following (in thousands):

	Year Ended December 31,
	2012			2011		2010
Currently payable	$	4,389		$	3,512	$	3,426
Deferred tax liability (asset)		(58	)		98		(270	)
Provision for income taxes	$	4,331		$	3,610	$	3,156

Deferred tax assets

The following temporary differences gave rise to the net deferred tax liabilities at December 31, 2012 and 2011 (in thousands):

	2012			2011
Deferred tax assets:
Allowance for loan losses	$	2,307		$	2,206
Deferred compensation		544			563
Allowance for losses on available-for-sale securities		784			789
Pension and other retirement obligation		733			586
Unrealized loss on interest rate swap		68			118
Interest on non-accrual loans		720			572
Incentive plan accruals		323			84
Other		214			140
Total	$	5,693		$	5,058
Deferred tax liabilities:
Premises and equipment	$	(358	)	$	(343	)
Investment securities accretion		(302	)		(354	)
Loan fees and costs		(110	)		(80	)
Goodwill and core deposit intangibles		(2,126	)		(1,828	)
Low income housing tax credits		(20	)		(36	)
Mortgage servicing rights		(167	)		(103	)
Unrealized gains on available-for-sale securities		(3,480	)		(3,406	)
Total		(6,563	)		(6,150	)
Deferred tax liability, net	$	(870	)	$	(1,092	)

Reconciliation of statutory tax rates to effective tax rates

The total provision for income taxes is different from that computed at the statutory rates due to the following items (in thousands):

	Year Ended December 31,
	2012			2011			2010
Provision at statutory rates on
pre-tax income	$	6,306		$	5,590		$	4,977
Effect of tax-exempt income		(1,853	)		(1,844	)		(1,607	)
Low income housing tax credits		(57	)		(96	)		(164	)
Bank owned life insurance		(172	)		(169	)		(171	)
Nondeductible interest		87			107			113
Other items		20			22			8
Provision for income taxes	$	4,331		$	3,610		$	3,156
Statutory tax rates		34	%		34	%		34	%
Effective tax rates		23.4	%		22.0	%		21.5	%