| Income Taxes |
NOTE 13-Income Taxes
The following table presents the provision for income taxes for the years ended December 31, 2014, 2013 and 2012.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands)
|
|
2014
|
|
2013
|
|
2012
|
|
Current tax provision
|
|
|
|
|
|
|
|
Federal
|
$
|
4,204
|
$
|
4,042
|
$
|
2,486
|
|
State
|
|
387
|
|
312
|
|
232
|
|
Total current tax provision
|
|
4,591
|
|
4,354
|
|
2,718
|
|
|
|
|
|
|
|
|
|
Deferred tax expense (benefit)
|
|
|
|
|
|
|
|
Federal
|
|
141
|
|
(383)
|
|
419
|
|
State
|
|
(64)
|
|
(54)
|
|
(34)
|
|
Total deferred tax expense (benefit)
|
|
77
|
|
(437)
|
|
385
|
|
Total tax provision
|
$
|
4,668
|
$
|
3,917
|
$
|
3,103
|
The differences between the effective income tax rate and the Federal statutory income tax rate for the years ended December 31, 2014, 2013 and 2012 are shown below.
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
2012
|
|
|
Statutory tax rate
|
35.0
|
%
|
35.0
|
%
|
34.0
|
%
|
|
Increase (decrease) resulting from:
|
|
|
|
|
|
|
|
Low-income housing credits
|
(0.5)
|
|
(0.9)
|
|
(1.8)
|
|
|
Tax-exempt interest income
|
(5.1)
|
|
(6.3)
|
|
(7.5)
|
|
|
Bank owned life insurance income
|
(1.5)
|
|
(1.7)
|
|
(1.7)
|
|
|
State income taxes, net of federal tax benefit
|
1.3
|
|
1.2
|
|
1.1
|
|
|
Other, net
|
(0.8)
|
|
(0.3)
|
|
0.7
|
|
|
Effective income tax rate
|
28.4
|
%
|
27.0
|
%
|
24.8
|
%
|
Significant components of the Corporation’s net deferred tax asset, included in other assets as of December 31, 2014 and 2013 are shown below.
|
|
|
|
|
|
|
|
(dollars in thousands)
|
|
2014
|
|
|
2013
|
|
Deferred tax assets
|
|
|
|
|
|
|
Allowance for loan losses
|
$
|
4,145
|
|
$
|
3,579
|
|
Deferred compensation
|
|
1,578
|
|
|
1,468
|
|
Low-income housing partnerships
|
|
542
|
|
|
567
|
|
Foreclosed real estate
|
|
626
|
|
|
1,419
|
|
Other
|
|
438
|
|
|
313
|
|
Total deferred tax assets
|
$
|
7,329
|
|
$
|
7,346
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
Deferred loan fees
|
$
|
523
|
|
$
|
424
|
|
Depreciation
|
|
384
|
|
|
422
|
|
Net unrealized gains on available-for-sale securities
|
|
1,374
|
|
|
1,119
|
|
Other
|
|
299
|
|
|
300
|
|
Total deferred tax liabilities
|
$
|
2,580
|
|
$
|
2,265
|
|
Net deferred tax assets
|
$
|
4,749
|
|
$
|
5,081
|
Based on the level of historical income projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes that, as of December 31, 2014, it is more likely than not that the Corporation will realize the benefits of its deferred tax assets.
|