Entity information:
Note
13.
  Income Taxe
s
 
The components of income tax
expense for the years ended
December 31, 2017,
2016
and
2015
are as follows
(in thousands)
:
 
   
201
7
    
201
6
    
201
5
  
Federal
:
                        
Curren
t
   $
5,708
     $
5,370
     $
3,119
  
Deferre
d
    
(305
 )    
(43
 )    
1,753
  
Deferred due to enacted changes in tax rate
s
    
1,190
      
-
      
-
  
     
6,593
      
5,327
      
4,872
  
State
:
                        
Curren
t
    
1,018
      
1,261
      
749
  
Deferre
d
    
(26
 )    
217
      
186
  
     
992
      
1,478
      
935
  
                         
Income tax expens
e
   $
7,585
     $
6,805
     $
5,807
  
 
Total income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of
35%
to income before income taxes for the years ended
December 31, 2017,
2016
and
2015
as a result of the following
(in thousands)
:
 
   
201
7
    
201
6
    
201
5
  
                         
Income taxes at 35% federal tax rat
e
   $
7,449
     $
7,889
     $
7,287
  
Increase (decrease) resulting from
:
                        
Tax-exempt interest and dividend
s
    
(1,737
 )    
(1,943
 )    
(2,046
 )
State taxes, net of federal tax benefi
t
    
717
      
729
      
506
  
Effect of change in deferred tax asset related to enacte
d
changes in tax rate
s
    
1,190
      
-
      
-
  
Othe
r
    
(34
 )    
130
      
60
  
Total
income tax expense
   $
7,585
     $
6,805
     $
5,807
  
 
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred liabi
lities at
December 31, 2017
and
2016
are as follows
(in thousands)
:
 
   
201
7
    
201
6
  
                 
Deferred tax assets
:
                
Allowance for loan losse
s
   $
2,776
     $
3,823
  
Net unrealized losses on securities available-for-sal
e
    
171
      
338
  
Other real estate owne
d
    
68
      
116
  
Accrued vacatio
n
    
168
      
251
  
State
alternative minimum tax carryforward
    
226
      
226
  
Other intangible asset
s
    
155
      
232
  
Off balance sheet reserv
e
    
126
      
191
  
Other deferred tax asset
s
    
342
      
228
  
     
4,032
      
5,405
  
Deferred tax liabilities
:
                
Bank premises and equipmen
t
    
(643
 )    
(937
 )
Goodwil
l
    
(604
 )    
(736
 )
Other deferred tax liabilitie
s
    
(16
 )    
(20
 )
     
(1,263
 )    
(1,693
 )
                 
Valuation allowanc
e
    
(226
 )    
(226
 )
                 
Net deferred tax asse
t
   $
2,543
     $
3,486
  
 
Income taxes currently payable of approximately
$322,000
and
$482,000
is included in other liabilities as of
December 31, 2017
and
2016,
respectively
.
 
 
The Company has approximately
$
226,000
of state alternative minimum tax (“
AMT”) credit carryforwards available to offset future state alternative minimum taxable income as of
December 31, 2017
and
2016.
  The Company has recorded a valuation allowance against the tax effect of the AMT credit carryforwards, as management believes it is more likely than
not
that such carryforwards will
not
be utilized
.
 
The Company and its subsidiaries file
one
income tax return in the U.S. federal jurisdiction and separate tax returns for the state of Iowa. The Company is
no
longer
subject to U.S. federal income and state tax examinations for years before
2014
.
 
The Company follows the accounting requirements for uncertain tax positions. Management has determined that the Company has
no
material uncertain tax positions and
no
materia
l accrued interest or penalties as of or for the years ended
December 31, 2017
and
2016
that would require recognition. The Company had
no
significant unrecognized tax benefits as of
December 31, 2017,
that if recognized, would affect the effective tax rate. The Company had
no
positions for which it deemed that it is reasonably possible that the total amounts of the unrecognized tax benefit will significantly increase or decrease within the
12
months as of
December 31, 2017
and
2016
.