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Income Taxes | 12 Months Ended
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Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax expense applicable to income for the years ended December 31, 2013 and 2012 consists of the following:
|  | Year Ended December 31,
|  | 2013 |  | 2012
|  | (In Thousands)
Current: |  |  |  |
Federal |  | $ | 3,605 |  |  | $ | 5,473 |
State |  | 1,356 |  |  | 1,183 |
Current tax expense |  | 4,961 |  |  | 6,656 |
Deferred: |  |  |  |
Federal |  | 2,257 |  |  | (1,756 | )
State |  | 171 |  |  | (150 | )
Deferred tax expense (benefit) |  | 2,428 |  |  | (1,906 | )
Total income tax expense |  | $ | 7,389 |  |  | $ | 4,750 |
Deferred income tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax basis. Net deferred tax assets are included in other assets in the consolidated balance sheets. The significant components of the Corporation’s deferred tax assets and liabilities are as follows:
|  | At December 31,
|  | 2013 |  | 2012
|  | (In Thousands)
Deferred tax assets: |  |  |  |
Allowance for loan and lease losses |  | $ | 5,372 |  |  | $ | 5,890 |
Deferred compensation |  | 1,144 |  |  | 1,139 |
State net operating loss carryforwards |  | 730 |  |  | 712 |
Write-down of foreclosed properties |  | — |  |  | 188 |
Non-accrual loan interest |  | 733 |  |  | 863 |
Capital loss carryforwards |  | 35 |  |  | 35 |
Unrealized loss on securities |  | 215 |  |  | — |
Other |  | 486 |  |  | 505 |
Total deferred tax assets before valuation allowance |  | 8,715 |  |  | 9,332 |
Valuation allowance |  | (67 | ) |  | (8 | )
Total deferred tax assets |  | 8,648 |  |  | 9,324 |
Deferred tax liabilities: |  |  |  |
Leasing and fixed asset activities |  | 4,803 |  |  | 3,266 |
Unrealized gain on securities |  | — |  |  | 1,352 |
Other |  | 123 |  |  | 123 |
Total deferred tax liabilities |  | 4,926 |  |  | 4,741 |
Net deferred tax asset |  | $ | 3,722 |  |  | $ | 4,583 |
The tax effects of unrealized gains and losses on derivative instruments and unrealized gains and losses on securities are components of other comprehensive income. A reconciliation of the change in net deferred tax assets to deferred tax expense follows:
|  | At December 31,
|  | 2013 |  | 2012
|  | (In Thousands)
Change in net deferred tax assets |  | $ | (861 | ) |  | $ | 2,101 |
Deferred taxes allocated to other comprehensive income |  | (1,567 | ) |  | (195 | )
Deferred income tax (expense) benefit |  | $ | (2,428 | ) |  | $ | 1,906 |
The Corporation had state net operating loss carryforwards of approximately $14.1 million and $13.6 million at December 31, 2013 and 2012, respectively, which can be used to offset future state taxable income. The carryforwards expire between 2023 and 2032. A valuation allowance has been established for the future benefits attributable to certain of the state net operating losses. The valuation allowance associated with these deferred tax assets was $67,000 and $8,000 as of December 31, 2013 and 2012, respectively. On June 26, 2011, the State of Wisconsin 2011-2013 Budget Bill, Assembly Bill 40, was signed into law. The bill provides that, starting with the first taxable year beginning after December 31, 2011, and thereafter for the next 19 years, a combined group member that has pre-2009 net business loss carryforwards can, after first using such net business loss carryforwards to offset its own income for the taxable year and after using shared losses, use up to five percent of the pre-2009 net business loss carryforwards to offset the Wisconsin income of their group members on a proportionate basis. These net business loss carryforwards can be used to the extent the income is attributable to the group’s unitary business. If the five percent cannot fully be used, the remainder can be added to the portion that may offset the Wisconsin income of all other combined group members in a subsequent year, until it is completely used or expired. The Corporation believes it will be able to fully utilize its Wisconsin state net operating losses under this law and therefore no valuation allowance has been established on its Wisconsin state net operating losses. Realization of the deferred tax asset over time is dependent upon the Corporation generating sufficient taxable earnings in future periods. In determining that realizing the deferred tax was more likely than not, the Corporation gave consideration to a number of factors including its recent earnings history, its expected earnings in the future, appropriate tax planning strategies and expiration dates associated with operating loss carry forwards. The provision for income taxes differs from that computed at the federal statutory corporate tax rate as follows:
|  | Year Ended December 31,
|  | 2013 |  | 2012
|  | (Dollars In Thousands)
Income before income tax expense |  | $ | 21,135 |  |  | $ | 13,676 |
Tax expense at statutory federal rate of 34.43% and 34% applied to income before income tax expense, respectively |  | $ | 7,275 |  |  | $ | 4,650 |
State income tax, net of federal effect |  | 906 |  |  | 647 |
Tax-exempt security and loan income, net of TEFRA adjustments |  | (682 | ) |  | (431 | )
Change in valuation allowance |  | 59 |  |  | (3 | )
Bank-owned life insurance |  | (291 | ) |  | (239 | )
Other |  | 122 |  |  | 126 |
Total income tax expense |  | $ | 7,389 |  |  | $ | 4,750 |
Effective tax rate |  | 34.96 | % |  | 34.73 | %
As of both December 31, 2013 and 2012, the summary of all of the Corporation’s uncertain tax positions totaled $16,000. There were no significant additions to or reductions from these uncertain tax positions for the year ended December 31, 2013. In addition, there were no settlements of uncertain tax positions. As of December 31, 2013, tax years remaining open for the State of Wisconsin tax were 2010 through 2012. Federal tax years that remained open were 2010 through 2012. As of December 31, 2013, there were no unrecognized tax benefits that are expected to significantly increase or decrease within the next twelve months.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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