Federal Income Taxes
 12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
Federal Income Taxes
Note 12 – Federal Income Taxes
Components of the consolidated provision for federal income taxes are as follows for the years ended December 31:

2013
 
2012
 
2011
Currently payable
$
3,404

 
$
1,747

 
$
965

Deferred (benefit) expense
(1,208
)
 
616

 
389

Income tax expense
$
2,196

 
$
2,363

 
$
1,354


The reconciliation of the provision for federal income taxes and the amount computed at the federal statutory tax rate of 34% of income before federal income tax expense is as follows for the years ended December 31:

2013
 
2012
 
2011
Income taxes at 34% statutory rate
$
5,000

 
$
4,953

 
$
3,932

Effect of nontaxable income
 
 
 
 
 
Interest income on tax exempt municipal securities
(1,746
)
 
(1,675
)
 
(1,687
)
Earnings on corporate owned life insurance policies
(249
)
 
(238
)
 
(207
)
Other
(154
)
 
(147
)
 
(65
)
Total effect of nontaxable income
(2,149
)
 
(2,060
)
 
(1,959
)
Effect of tax credits
(801
)
 
(667
)
 
(793
)
Effect of nondeductible expenses
146

 
137

 
174

Federal income tax expense
$
2,196

 
$
2,363

 
$
1,354



Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for federal income tax purposes. Significant components of our deferred tax assets and liabilities, included in other assets in the accompanying consolidated balance sheets, are as follows as of December 31:
 
2013
 
2012
Deferred tax assets
 
 
 
Allowance for loan losses
$
2,988

 
$
3,133

Deferred directors’ fees
2,313

 
2,100

Employee benefit plans
257

 
189

Core deposit premium and acquisition expenses
971

 
892

Net unrealized losses on trading securities
360

 
351

Net unrecognized actuarial losses on pension plan
1,100

 
1,891

Net unrealized losses on available-for-sale securities
1,345

 
—

Life insurance death benefit payable
804

 
804

Alternative minimum tax
729

 
729

Other
321

 
195

Total deferred tax assets
11,188

 
10,284

Deferred tax liabilities
 
 
 
Prepaid pension cost
1,023

 
1,021

Premises and equipment
449

 
724

Accretion on securities
42

 
37

Core deposit premium and acquisition expenses
1,229

 
1,203

Net unrealized gains on available-for-sale securities
—

 
4,912

Other
547

 
1,163

Total deferred tax liabilities
3,290

 
9,060

Net deferred tax assets
$
7,898

 
$
1,224


We are subject to U.S. federal income tax; however, we are no longer subject to examination by taxing authorities for years before 2010. There are no material uncertain tax positions requiring recognition in our consolidated financial statements. We do not expect the total amount of unrecognized tax benefits to significantly increase in the next twelve months.
We recognize interest and/or penalties related to income tax matters in income tax expense. We do not have any amounts accrued for interest and penalties at December 31, 2013 and 2012 and we not aware of any claims for such amounts by federal income tax authorities.