(12) Income Taxes:
The provision for income tax expense for the years ended December 31, 2017, December 31, 2016 and December 31, 2015, consisted of the following:
| 2017 | 2016 | 2015 | ||||||||||
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Current |
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Federal |
$ | 468 | — | — | ||||||||
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State |
95 | 95 | 97 | |||||||||
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| 563 | 95 | 97 | ||||||||||
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Deferred |
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Federal |
1,585 | 267 | 177 | |||||||||
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State |
— | — | — | |||||||||
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| 1,585 | 267 | 177 | ||||||||||
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| $ | 2,148 | $ | 362 | 274 | ||||||||
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Total income tax expense for the years ended December 31, 2017, December 31, 2016 and December 31, 2015, differed from the amounts computed by applying the federal income tax rate of 34 percent to income before income taxes as follows:
| 2017 | 2016 | 2015 | ||||||||||
|
Expected federal income tax expense at statutory tax rate |
$ | 1,853 | 1,110 | 911 | ||||||||
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Effect of nontaxable interest income |
(345 | ) | (452 | ) | (458 | ) | ||||||
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Effect of nontaxable bank owned life insurance income |
(164 | ) | (117 | ) | (114 | ) | ||||||
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Effect of Qualified Zone Academy Bond (QZAB) |
— | (114 | ) | (109 | ) | |||||||
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State taxes on income, net of federal benefit |
59 | 59 | 59 | |||||||||
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Other tax credits |
(243 | ) | (128 | ) | (80 | ) | ||||||
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Deferred tax asset revaluation |
980 | — | — | |||||||||
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Non-deductible expenses |
8 | 4 | 65 | |||||||||
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Total income tax expense |
$ | 2,148 | 362 | 274 | ||||||||
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Income tax rate |
39.4 | % | 11.1 | % | 10.2 | % | ||||||
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The components of deferred taxes as of December 31, 2017 and December 31, 2016 are summarized as follows:
| 2017 | 2016 | |||||||
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Deferred tax assets: |
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Allowance for loan loss |
$ | 1,014 | 2,078 | |||||
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Accrued expenses |
77 | 294 | ||||||
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Net operating loss carry forward |
192 | 454 | ||||||
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Tax credit carry forward |
651 | 568 | ||||||
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Unrealized loss on securities available for sale |
57 | — | ||||||
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Intangible amortization |
192 | 548 | ||||||
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Other |
77 | 242 | ||||||
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| 2,260 | 4,184 | |||||||
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Deferred tax liabilities: |
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FHLB stock dividends |
(486 | ) | (787 | ) | ||||
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Unrealized gain on securities available for sale |
— | (240 | ) | |||||
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Depreciation and amortization |
(10 | ) | (105 | ) | ||||
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| (496 | ) | (1,132 | ) | |||||
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Net deferred tax asset |
$ | 1,764 | 3,052 | |||||
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At December 31, 2017, the Company has operating loss carry forwards of approximately $3.1 million, which begin to expire in 2034.
No valuation allowance for deferred tax assets was recorded at December 31, 2017 and December 31, 2016, as management believes it is more likely than not that all of the deferred tax assets will be realized because they were supported by recoverable taxes paid in prior years and expected future taxable income. There were no unrecognized tax benefits during any of the reported periods. The Corporation files income tax returns in the U.S. federal jurisdiction. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2013. The Company recognizes interest and penalties on income taxes, if any, as a component of income tax expense.