Annual report pursuant to Section 13 and 15(d)

FEDERAL INCOME TAXES (Tables)

v3.10.0.1
FEDERAL INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2018
FEDERAL INCOME TAXES [Abstract]  
Income Tax Expense
Income tax expense was as follows (dollars in thousands):

   
2018
   
2017
 
Current
 
$
5,377
   
$
5,759
 
Deferred
   
502
     
2,450
 
Change in valuation allowance
   
92
     
 
Effect of change in enacted federal income tax rate on deferred items
   
     
2,524
 
   
$
5,971
   
$
10,733
 
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):

   
2018
   
2017
 
Statutory rate
   
21
%
   
35
%
Statutory rate applied to income before taxes
 
$
6,794
   
$
9,459
 
Adjust for:
               
Tax-exempt interest income
   
(700
)
   
(762
)
Bank-owned life insurance
   
(198
)
   
(339
)
Amortization of low income housing investment
   
233
     
 
Low income housing credit
   
(131
)
   
(88
)
Effect of change in enacted federal income tax rate on deferred items
   
     
2,524
 
Change in valuation allowance
   
92
     
 
Other, net
   
(119
)
   
(61
)
   
$
5,971
   
$
10,733
 
Deferred Tax Assets and Liabilities
The net deferred tax asset recorded included the following amounts of deferred tax assets and liabilities (dollars in thousands):

   
2018
   
2017
 
Deferred tax assets
           
Allowance for loan losses
 
$
3,544
   
$
3,486
 
Nonaccrual loan interest
   
268
     
346
 
Valuation allowance on other real estate owned and property held for sale
   
218
     
708
 
Unrealized loss on securities available for sale
   
606
     
417
 
Other
   
302
     
229
 
Gross deferred tax assets
   
4,938
     
5,186
 
Valuation allowance
   
(92
)
   
 
Total net deferred tax assets
   
4,846
     
5,186
 
                 
Deferred tax liabilities
               
Depreciation
  $
(1,005
)
  $
(977
)
Prepaid expenses
   
(200
)
   
(183
)
Unrealized gain on securities available for sale
   
     
 
Other
   
(261
)
   
(241
)
Gross deferred tax liabilities
   
(1,466
)
   
(1,401
)
Net deferred tax asset
 
$
3,380
   
$
3,785