v2.4.0.6
Income Taxes (Notes)
 12 Months Ended
Dec. 31, 2012
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

The components of federal and state income tax expense (benefit) for the years ended December 31, 2012, 2011 and 2010 were as follows:
 
 
2012
 
2011
 
2010
Current
 
 
 
 
 
 
Federal
 
$
6,247

 
$
5,558

 
$
4,167

State
 
1,933

 
1,641

 
790

Total Current
 
8,180

 
7,199

 
4,957

Deferred
 
 

 
 

 
 

Federal
 
219

 
(435
)
 
(286
)
State
 
11

 
(235
)
 
(149
)
Total Deferred
 
230

 
(670
)
 
(435
)
Total
 
$
8,410

 
$
6,529

 
$
4,522




Recorded income tax expense differs from the expected tax expense (computed by applying the applicable statutory U.S. federal tax rate of 35% to income before income taxes).  During 2012, 2011 and 2010, the Company was in a graduated tax rate position.  The principal reasons for the difference are as follows:
 
 
2012
 
2011
 
2010
Expected income taxes
 
$
7,852

 
$
6,265

 
$
4,649

Effects of:
 
 

 
 

 
 

Tax-exempt income
 
(761
)
 
(618
)
 
(511
)
Nondeductible interest expense
 
14

 
16

 
20

State taxes, net of federal taxes
 
1,264

 
914

 
417

Other items
 
41

 
52

 
47

Effect of marginal tax rate
 
—

 
(100
)
 
(100
)
Total
 
$
8,410

 
$
6,529

 
$
4,522




In 2011, the State of Illinois increased the corporate income tax rate from 7.3% to 9.5%. Tax expense recorded by the Company during 2012, 2011 and 2010 did not include any interest or penalties. Tax returns filed with the Internal Revenue Service and Illinois Department of Revenue are subject to review by law under a three-year statute of limitations. The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2009.

The tax effects of the temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2012 and 2011 are presented below:

 
 
2012
 
2011
Deferred tax assets:
 
 
 
 
Allowance for loan losses
 
$
4,753

 
$
4,489

Available-for-sale investment securities
 
—

 
—

Deferred compensation
 
1,014

 
984

Supplemental retirement
 
365

 
370

Core deposit premium amortization
 
192

 
120

Interest on non-accrual loans
 
93

 
155

Other-than-temporary impairment on securities
 
1,610

 
1,662

Expense from other real estate properties held for sale
 
46

 
492

Deferred loan costs
 
96

 
—

Other
 
346

 
148

Total gross deferred tax assets
 
$
8,515

 
$
8,420

Deferred tax liabilities:
 
 

 
 

Deferred loan costs
 
$
—

 
$
82

Goodwill
 
2,534

 
2,069

Prepaid expenses
 
260

 
187

FHLB stock dividend
 
285

 
334

Depreciation
 
786

 
790

Purchase accounting
 
168

 
274

Accumulated accretion
 
87

 
59

Available-for-sale investment securities
 
2,903

 
2,012

Total gross deferred tax liabilities
 
$
7,023

 
$
5,807

Net deferred tax assets
 
$
1,492

 
$
2,613




Net deferred tax assets are recorded in other assets on the consolidated balance sheets. No valuation allowance related to deferred tax assets was recorded at December 31, 2012 and 2011 as management believes it is more likely than not that the deferred tax assets will be fully realized.