Note 14 - Income Taxes

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

(14) Income Taxes

An analysis of the difference between statutory and effective tax rates for the nine months ended September 30, 2015 and 2014 follows:

	Nine months ended September 30
	2015			2014
U.S. federal statutory tax rate		35.0	%		35.0	%
Tax exempt interest income		(1.4	)		(1.5	)
Tax credits		(2.4	)		(1.5	)
Cash surrender value of life insurance		(0.6	)		(1.3	)
State income taxes, net of federal benefit		0.8			0.9
Other, net		0.3			(0.2	)
Effective tax rate		31.7	%		31.4	%

State income tax expense represents tax owed in Indiana. Kentucky and Ohio state bank taxes are based on capital levels, and are recorded as other non-interest expense.

US GAAP provides guidance on financial statement recognition and measurement of tax positions taken, or expected to be taken, in tax returns. As of September 30, 2015 and December 31, 2014, the gross amount of unrecognized tax benefits, including penalties and interest, was $51 thousand and $42 thousand, respectively. If recognized, tax benefits would reduce tax expense and accordingly, increase net income. The amount of unrecognized tax benefits may increase or decrease in the future for various reasons including adding amounts for current year tax positions, expiration of open income tax returns due to statutes of limitation, changes in management’s judgment about the level of uncertainty, status of examination, litigation and legislative activity and addition or elimination of uncertain tax positions. Federal and state income tax returns are subject to examination for the years after 2011.