Annual report pursuant to Section 13 and 15(d)

FEDERAL INCOME TAXES (Tables)

v3.6.0.2
FEDERAL INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2016
FEDERAL INCOME TAXES [Abstract]  
Income Tax Expense
Income tax expense was as follows (dollars in thousands):
 
   
2016
    
2015
    
2014
  
Current
  
$
5,289
    
$
2,335
    
$
1,724
  
Deferred
    
942
      
3,291
      
2,849
  
   
$
6,231
    
$
5,626
    
$
4,573
  
Difference between Financial Statement Tax Expense (Benefit) and Amount Computed by Applying Statutory Federal Tax Rate to Pretax Income
The difference between the financial statement tax expense and amount computed by applying the statutory federal tax rate to pretax income was reconciled as follows (dollars in thousands):
 
   
2016
    
2015
    
2014
  
Statutory rate
    
35
%
    
35
%
    
35
%
Statutory rate applied to income before taxes
  
$
7,764
    
$
6,447
    
$
5,266
  
Deduct
                        
Tax-exempt interest income
    
(620
)
    
(529
)
    
(391
)
Bank-owned life insurance
    
(342
)
    
(232
)
    
(237
)
Tax return credits and other adjustments
    
(513
)
    
---
      
---
  
Other, net
    
(58
)
    
(60
)
    
(65
)
   
$
6,231
    
$
5,626
    
$
4,573
  
Deferred Tax Assets and Liabilities
The net deferred tax asset recorded included the following amounts of deferred tax assets and liabilities (dollars in thousands):

   
2016
    
2015
  
Deferred tax assets
            
Allowance for loan losses
  
$
5,937
    
$
5,978
  
Nonaccrual loan interest
    
718
      
850
  
Valuation allowance on other real estate owned
    
3,714
      
3,782
  
Unrealized loss on securities available for sale
    
799
      
---
  
Other
    
176
      
647
  
Gross deferred tax assets
    
11,344
      
11,257
  
Valuation allowance
    
---
      
---
  
Total net deferred tax assets
    
11,344
      
11,257
  
                 
Deferred tax liabilities
                
Depreciation
    
(1,705
)
    
(1,739
)
Prepaid expenses
    
(399
)
    
(191
)
Unrealized gain on securities available for sale
    
---
      
(187
)
Other
    
(377
)
    
(321
)
Gross deferred tax liabilities
    
(2,481
)
    
(2,438
)
Net deferred tax asset
  
$
8,863
    
$
8,819