INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

INCOME TAXES [Abstract]

Components of the Provision (Benefits) for Income Taxes

The components of the provision (benefit) for income taxes are as follows:

	2013		2012		2011
Current	$	5,509	$	5,105	$	376
Deferred		1,895		568		4,099
Change in valuation allowance		-		-		(675	)
Provision for income taxes	$	7,404	$	5,673	$	3,800

Deferred Tax Assets and Liabilities

The Company’s deferred tax assets and liabilities at December 31 are shown below.

	2013			2012
Deferred tax assets
Allowance for loan losses	$	4,016		$	4,181
Purchase accounting adjustments		2,611			3,745
Net operating loss carryforward		1,048			1,569
Write-downs of other real estate owned		893			748
Taxable income on non-accrual loans		2,053			1,955
Security writedown		-			250
Capital loss carryforward		196			-
Accrued expenses		172			131
Unrealized loss on investment securities		322			-
Other		19			11
Total deferred tax assets		11,330			12,590
Deferred tax liabilities
Amortization of intangibles	$	(4,615	)	$	(4,405	)
Depreciation		(1,101	)		(1,027	)
Federal Home Loan Bank dividends		(377	)		(377	)
Deferred loan fees		(567	)		(548	)
Unrealized gain on investment securities		-			(3,388	)
Other		(71	)		(61	)
Total deferred tax liabilities		(6,731	)		(9,806	)
Valuation allowance on deferred tax assets		(160	)		(160	)
Net deferred taxes	$	4,439		$	2,624

Analysis of Differences Between the Effective Tax Rates and the Statutory U.S. Federal Income Tax Rate

An analysis of the differences between the effective tax rates and the statutory U.S. federal income tax rate is as follows:

	2013					2012					2011
U.S. federal income tax rate	$	7,015		34.0	%	$	5,439		34.0	%	$	3,729		34.0	%
Changes from the statutory rate
Impact of graduated federal tax rate		72		0.4			26		0.2			-		-
State income taxes, net		439		2.1			376		2.4			1,220		11.1
Tax-exempt interest income		(149	)	(0.7	)		(173	)	(1.1	)		(194	)	(1.8	)
Non-deductible interest expense related to carrying tax-exempt interest earning assets		9		0.0			12		0.1			8		0.1
Non-deductible stock compensation expense		57		0.3			62		0.4			36		0.3
Tax credits, net		(49	)	(0.2	)		(49	)	(0.3	)		(49	)	(0.4	)
Change in valuation allowance, net		-		-			-		-			(675	)	(6.1	)
Other		10		0.0			(20	)	(0.2	)		(275	)	(2.5	)
	$	7,404		35.9	%	$	5,673		35.5	%	$	3,800		34.7	%