FEDERAL INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Federal income taxes

Federal income taxes consisted of the following components:

		2013		2012		2011
Income tax/(benefit)
Currently payable	$	7,680	$	7,275	$	7,445
Deferred		375		(152)		(536)
	$	8,055	$	7,123	$	6,909

Effective Income Tax Rate Reconciliation

The following is a reconciliation of income tax expense and the amount computed by applying the effective federal income tax rate of 35% to income before income taxes:

		2013		2012		2011
Statutory rate applied to income before income taxes	$	9,737	$	8,844	$	8,189
Tax exempt income		(794)		(903)		(785)
Company owned life insurance income		(399)		(407)		(393)
Incentive stock options		17		34		71
Non qualified options expired		162		-		-
Low-income housing tax credit		(557)		(547)		(248)
Other		(111)		102		75
	$	8,055	$	7,123	$	6,909

Deferred Tax Assets and Liabilities

Year-end deferred tax assets and liabilities were due to the following factors:

		2013		2012
Deferred tax assets from:
Allowance for loan losses	$	5,707	$	5,799
Benefit plans		2,142		1,749
Premises and equipment		775		828
Net operating loss carryforward		2,832		3,131
Acquisition intangibles		360		430
Net unrealized loss on available for sale securities		916		-
Other		634		675
		13,366		12,612
Deferred tax liabilities for:
FHLB stock dividends		(966)		(966)
Acquisition intangibles		(3,035)		(2,776)
Net unrealized gain on available for sale securities		-		(2,023)
Other		(6)		(52)
		(4,007)		(5,817)
Net deferred tax asset	$	9,359	$	6,795