INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

INCOME TAXES [Abstract]

Provision for income taxes (benefit)

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

	Year Ended December 31,
	2014	2013	2012
Currently payable	$          3,081	$          3,082	$          4,389
Deferred tax liability (asset)	478	670	(58)
Provision for income taxes	$          3,559	$          3,752	$          4,331

Deferred tax assets

The following temporary differences gave rise to the net deferred tax liabilities at December 31, 2014 and 2013 (in thousands):

	2014	2013
Deferred tax assets:
Allowance for loan losses	$          2,317	$          2,413
Deferred compensation	503	528
Merger & acquisition costs	24	29
Allowance for losses on available-for-sale securities	420	523
Pension and other retirement obligation	658	90
Interest on non-accrual loans	825	793
Incentive plan accruals	352	330
Other real estate owned expenses	24	72
Unrealized losses on available-for-sale securities	-	55
Low income housing tax credits	33	1
Other	78	94
Total	$          5,234	$          4,928
Deferred tax liabilities:
Premises and equipment	$            (306)	$            (348)
Investment securities accretion	(302)	(310)
Loan fees and costs	(166)	(184)
Goodwill and core deposit intangibles	(2,734)	(2,431)
Mortgage servicing rights	(161)	(180)
Unrealized gains on available-for-sale securities	(1,594)	-
Total	(5,263)	(3,453)
Deferred tax (liability) asset, net	$              (29)	$          1,475

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,
	2014	2013	2012
Provision at statutory rates on
pre-tax income	$          5,761	$          5,823	$          6,306
Effect of tax-exempt income	(1,865)	(1,752)	(1,853)
Low income housing tax credits	(198)	(198)	(57)
Bank owned life insurance	(172)	(171)	(172)
Nondeductible interest	60	70	87
Valuation allowance	-	-	-
Other items	(27)	(20)	20
Provision for income taxes	$          3,559	$          3,752	$          4,331
Statutory tax rates	34%	34%	34%
Effective tax rates	21.0%	21.9%	23.4%