Note 9: Income Taxes

The following table summarizes the current and deferred components of income tax expense (benefit) for each of the three years ended December 31:


		2015		2014		2013
Current
Federal	$	5,607	$	5,411	$	5,060
State		218		263		242
		5,825		5,674		5,302
Deferred		142		240		(111	)
	$	5,967	$	5,914	$	5,191

The following table reconciles the expected federal income tax expense (computed by applying the federal statutory tax rate of 35%) to recorded income tax expense, for each of the three years ended December 31:


		2015			2014			2013

Computed tax expense	$	7,392		$	7,184		$	6,431
Increase (reduction) in income
taxes resulting from:
Officers' life insurance		(209	)		(88	)		(82	)
Tax exempt interest		(1,303	)		(1,325	)		(1,199	)
State taxes, net of federal benefit		142			171			157
Other		(55	)		(28	)		(115	)
	$	5,967		$	5,914		$	5,191

The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities at December 31, 2015 and 2014 are summarized below. The net deferred tax asset, which is included in other assets, amounted to $2,174 at December 31, 2015 and $666 at December 31, 2014.


		2015						2014
		Asset		Liability		Asset		Liability
Allowance for losses on loans and
other real estate owned	$	3,379	$	---	$	3,185	$	---
Deferred compensation		1,035		---		1,047		---
Unrealized gain or loss on
securities available for sale		---		3,076		---		4,255
Unrealized gains or loss on derivatives		873		---		389		---
Unfunded retirement benefits		249		---		263		---
Depreciation		---		615		---		572
Deferred loan origination costs		---		475		---		431
Other real estate owned		22		---		65		---
Non-accrual interest		211		---		158		---
Write down of impaired investments		1,113		---		1,195		---
Branch acquisition costs and goodwill		---		639		---		517
Prepaid expenses		---		151		---		199
Equity compensation		253		---		132		---
Other		198		203		209		3
	$	7,333	$	5,159	$	6,643	$	5,977

The Company has determined that a valuation allowance is not required for its net deferred tax asset since it is more likely than not that this asset is realizable principally through the ability to carry-back to taxable income in prior years, future reversals of existing taxable temporary differences, and future taxable income.