Note 17 – Income Tax


	December 31			December 31			December 31
	2014			2013			2012
Income tax expense
Currently payable
Federal	$	4,710		$	3,900		$	5,582
State		(149	)		(88	)		120
Deferred		1,594			3,236			2,744

Total income tax expense	$	6,155		$	7,048		$	8,446

Reconciliation of federal statutory to actual tax expense
Federal statutory income tax at 35%	$	8,488		$	9,424		$	9,800
Tax exempt interest		(1,628	)		(1,517	)		(1,419	)
Tax exempt income		(366	)		(362	)		(359	)
Other tax exempt income		(309	)		(342	)		—
Nondeductible and other		(30	)		(176	)		(177	)
Effect of state income taxes		—			21			601

Actual tax expense	$	6,155		$	7,048		$	8,446


	December 31			December 31
	2014			2013
Assets
Allowance for loan losses	$	5,680		$	5,677
Net operating loss		3,509			2,977
Director and employee benefits		1,953			1,828
Unrealized loss on AFS securities and fair value hedge		588			931
Other		596			537

Total assets		12,326			11,950

Liabilities
Depreciation		(1,563	)		(1,424	)
Difference in expense recognition		—			(368	)
State tax		(126	)		(236	)
Federal Home Loan Bank stock dividends		(200	)		(295	)
Difference in basis of intangible assets		(2,839	)		(2,189	)
FHLB Penalty		(283	)		(508	)
Other		(1,303	)		(1,188	)

Total liabilities		(6,314	)		(6,208	)

Net deferred tax asset	$	6,012		$	5,742

As of December 31, 2014, the Company had approximately $10.9 million of state tax loss carryforward available to offset future franchise taxable income. Also, at December 31, 2014, the Company had approximately $7.6 million of federal loss carryforward available to offset future federal income tax. The state loss carryforward begins to expire in 2014. The federal loss carryforward expires in 2029. Due to these losses being incurred by Heartland and Summit prior to the acquisitions by Horizon, the annual losses which can be used are subject to an annual limitation. Management believes that the Company will be able to utilize the benefits recorded for both state and federal loss carryforwards within the allotted time periods.

The Company files income tax returns in the U.S. federal jurisdiction. With a few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2011.