Quarterly report pursuant to Section 13 or 15(d)

FEDERAL INCOME TAXES (Tables)

v3.4.0.3
FEDERAL INCOME TAXES (Tables)
3 Months Ended
Mar. 31, 2016
FEDERAL INCOME TAXES [Abstract]  
Income Tax Expense
Income tax expense was as follows (dollars in thousands):
 
   
Three Months
Ended
March 31,
2016
   
Three Months
Ended
March 31,
2015
 
Current
 
$
1,468
   
$
653
 
Deferred
   
(68
)
   
592
 
   
$
1,400
   
$
1,245
 
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
March 31,
2016
   
Three Months
Ended
March 31,
2015
 
Statutory rate
   
35
%
   
35
%
Statutory rate applied to income before taxes
 
$
1,713
   
$
1,430
 
Add (deduct)
               
Tax-exempt interest income
   
(148
)
   
(117
)
Bank-owned life insurance
   
(155
)
   
(57
)
Other, net
   
(10
)
   
(11
)
   
$
1,400
   
$
1,245
 
Deferred Tax Assets and Liabilities
The net deferred tax asset recorded included the following amounts of deferred tax assets and liabilities (dollars in thousands):
 
   
March 31,
2016
   
December31,
2015
 
Deferred tax assets
           
Allowance for loan losses
 
$
5,995
   
$
5,978
 
Nonaccrual loan interest
   
830
     
850
 
Valuation allowance on other real estate owned
   
3,739
     
3,782
 
Unrealized loss on securities available for sale
   
---
     
---
 
Other
   
704
     
647
 
Gross deferred tax assets
   
11,268
     
11,257
 
Valuation allowance
   
---
     
---
 
Total net deferred tax assets
   
11,268
     
11,257
 
                 
Deferred tax liabilities
               
Depreciation
   
(1,682
)
   
(1,739
)
Prepaid expenses
   
(191
)
   
(191
)
Unrealized gain on securities available for sale
   
(528
)
   
(187
)
Other
   
(321
)
   
(321
)
Gross deferred tax liabilities
   
(2,722
)
   
(2,438
)
Net deferred tax asset
 
$
8,546
   
$
8,819