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INCOME TAXES: | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES: Income tax expense is summarized as follows:
(Dollar amounts in thousands) |  | 2019 |  | 2018 |  | 2017
Federal: |  |  |  |  |  |  |  |  |
Currently payable |  | $ | 7,118 |  |  | $ | 7,018 |  |  | $ | 8,303 |
Deferred |  | 2,435 |  |  | 1,793 |  |  | 3,756 |
Expense due to enactment of federal tax reform |  | — |  |  | — |  |  | 6,282 |
|  | 9,553 |  |  | 8,811 |  |  | 18,341 |
State: |  |  |  |  |  |  |  |  |
Currently payable |  | 2,168 |  |  | 1,699 |  |  | 1,818 |
Deferred |  | 406 |  |  | 635 |  |  | 463 |
|  | 2,574 |  |  | 2,334 |  |  | 2,281 |
TOTAL |  | $ | 12,127 |  |  | $ | 11,145 |  |  | $ | 20,622 |
The reconciliation of income tax expense with the amount computed by applying the statutory federal income tax rate of 21% for 2019 and 2018 (35% for 2017) to income before income taxes is summarized as follows:
(Dollar amounts in thousands) |  | 2019 |  | 2018 |  | 2017
Federal income taxes computed at the statutory rate |  | $ | 12,810 |  |  | $ | 12,122 |  |  | $ | 17,414 |
Add (deduct) tax effect of: |  |  |  |  |  |  |  |  |
Tax exempt income |  | (2,551 | ) |  | (2,495 | ) |  | (4,102 | )
Non-deductible insurance brokerage goodwill |  | — |  |  | — |  |  | — |
ESOP dividend deduction |  | (115 | ) |  | (103 | ) |  | (102 | )
State tax, net of federal benefit |  | 2,034 |  |  | 1,846 |  |  | 1,483 |
Affordable housing credits |  | (148 | ) |  | (148 | ) |  | (148 | )
Expense due to enactment of federal tax reform |  | — |  |  | — |  |  | 6,282 |
Other, net |  | 97 |  |  | (77 | ) |  | (205 | )
TOTAL |  | $ | 12,127 |  |  | $ | 11,145 |  |  | $ | 20,622 |
On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. The primary change for the Corporation was to lower the corporate income tax rate from 35% to 21%, effective January 1, 2018. The Corporation's deferred tax assets and liabilities were re-measured based on the income tax rates at which they are expected to reverse in the future, which is generally 21%. The amount recorded related to the re-measurement of the Corporation's deferred tax balance was $6.3 million, an increase to income tax expense for the year ended December 31, 2017. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31, 2019 and 2018, are as follows:
(Dollar amounts in thousands) |  | 2019 |  | 2018
Deferred tax assets: |  |  |  |  |  |
Other than temporary impairment |  | $ | 754 |  |  | $ | 761 |
Net unrealized losses on retirement plans |  | 7,465 |  |  | 5,783 |
Net unrealized losses on securities available for sale |  | — |  |  | 2,063 |
Loan loss provisions |  | 5,288 |  |  | 5,463 |
Deferred compensation |  | 2,615 |  |  | 2,883 |
Compensated absences |  | 611 |  |  | 576 |
Post-retirement benefits |  | 1,309 |  |  | 1,338 |
Lease liability |  | 1,503 |  |  | — |
Purchase accounting |  | 1,600 |  |  | — |
Deferred loss on acquisition |  | 482 |  |  | 577 |
Other |  | 2,161 |  |  | 2,140 |
GROSS DEFERRED ASSETS |  | 23,788 |  |  | 21,584 |
Deferred tax liabilities: |  |  |  |  |
Net unrealized gains on securities available-for-sale |  | (4,248 | ) |  | — |
Depreciation |  | (2,376 | ) |  | (2,004 | )
Mortgage servicing rights |  | (332 | ) |  | (319 | )
Pensions |  | (475 | ) |  | (335 | )
Right-of-use asset |  | (1,501 | ) |  | — |
Intangibles |  | (3,285 | ) |  | (2,852 | )
Other |  | (2,827 | ) |  | (2,614 | )
GROSS DEFERRED LIABILITIES |  | (15,044 | ) |  | (8,124 | )
NET DEFERRED TAX ASSETS |  | $ | 8,744 |  |  | $ | 13,460 |
Unrecognized Tax Benefits — A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(Dollar amounts in thousands) |  | 2019 |  | 2018 |  | 2017
Balance at January 1 |  | $ | 922 |  |  | $ | 825 |  |  | $ | 698 |
Additions based on tax positions related to the current year |  | 298 |  |  | 174 |  |  | 257 |
Additions based on tax positions related to prior years |  | — |  |  | — |  |  | — |
Reductions due to the statute of limitations |  | (395 | ) |  | (77 | ) |  | (130 | )
Balance at December 31 |  | $ | 825 |  |  | $ | 922 |  |  | $ | 825 |
Of this total, $825 thousand represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods. The Corporation does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next 12 months. The total amount of interest and penalties recorded in the income statement for the years ended December 31, 2019, 2018 and 2017 was an expense decrease of $9 thousand, an increase of $23 thousand, and an increase of $4 thousand, respectively. The amount accrued for interest and penalties at December 31, 2019, 2018 and 2017 was $53 thousand, $52 thousand and $40 thousand, respectively. The Corporation and its subsidiaries are subject to U.S. federal income tax as well as income tax of the states of Indiana and Illinois. The Corporation is no longer subject to examination by taxing authorities for years before 2016.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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