Quarterly report pursuant to Section 13 or 15(d)

FEDERAL INCOME TAXES (Tables)

v3.10.0.1
FEDERAL INCOME TAXES (Tables)
9 Months Ended
Sep. 30, 2018
FEDERAL INCOME TAXES [Abstract]  
Income Tax Expense
Income tax expense was as follows (dollars in thousands):
 

 
Three Months
Ended
September 30,
2018
   
Three Months
Ended
September 30,
2017
   
Nine Months
Ended
September 30,
2018
   
Nine Months
Ended
September 30,
2017
 
Current
 
$
1,432
   
$
2,261
   
$
3,663
   
$
4,004
 
Deferred
   
138
     
(104
)
   
565
     
2,249
 
   
$
1,570
   
$
2,157
   
$
4,228
   
$
6,253
 
Difference between Financial Statement Tax Expense 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):


 
Three Months
Ended
September 30,
2018
   
Three Months
Ended
September 30,
2017
   
Nine Months
Ended
September 30,
2018
   
Nine Months
Ended
September 30,
2017
 
Statutory rate
   
21
%
   
35
%
   
21
%
   
35
%
Statutory rate applied to income before taxes
 
$
1,769
   
$
2,461
   
$
4,948
   
$
7,123
 
Deduct
                               
Tax-exempt interest income
   
(171
)
   
(195
)
   
(533
)
   
(564
)
Bank-owned life insurance
   
(50
)
   
(88
)
   
(150
)
   
(256
)
Other, net
   
22

   
(21
)
   
(37
)
   
(50
)
   
$
1,570
   
$
2,157
   
$
4,228
   
$
6,253
 
Deferred Tax Assets and Liabilities
The net deferred tax asset recorded included the following amounts of deferred tax assets and liabilities (dollars in thousands):
 


September 30,
2018
  
December 31,
2017

Deferred tax assets
           
Allowance for loan losses
 
$
3,529
   
$
3,486
 
Nonaccrual loan interest
   
277
     
346
 
Valuation allowance on other real estate owned
   
162
     
708
 
Unrealized loss on securities available for sale
   
1,193
     
417
 
Other
   
253
     
229
 
Gross deferred tax assets
   
5,414
     
5,186
 
Valuation allowance
   
---
     
---
 
Total net deferred tax assets
   
5,414
     
5,186
 
                 
Deferred tax liabilities
               
Depreciation
   
(996
)
   
(977
)
Prepaid expenses
   
(163
)
   
(183
)
Other
   
(259
)
   
(241
)
Gross deferred tax liabilities
   
(1,418
)
   
(1,401
)
Net deferred tax asset
 
$
3,996
   
$
3,785