Entity information:
Note
1
2
– Income Taxes –
 
The consolidated provision
(credit) for income taxes consists of the following at
December 31, 2017,
2016
and
2015:
 
   
2017
    
2016
    
2015
  
   
(Dollars in thousands)
  
Provision (Credit) for Current Taxes - Federal
   $
977
     $
660
     $
1,599
  
Provision (Credit) for Deferred Taxes
    
1,458
      
953
      
(74
 )
Adjustment to Deferred Taxes for Enactment of 21%
                        
Federal Statutory Rate on December 22, 2017
    
1,668
      
-
      
-
  
Total Provision for Income Taxes
   $
4,103
     $
1,613
     $
1,525
  
 
The provision (credit) for federal income taxes differs from the amount computed by applying federal statutory rates to income from operations as indicated
in the following analysis at
December 31, 2017,
2016
and
2015:
 
   
2017
    
2016
    
2015
  
   
(Dollars in thousands)
  
Federal Statutory Income Tax at 34%
   $
3,043
     $
2,286
     $
1,911
  
Tax Exempt Income
    
(701
 )    
(708
 )    
(559
 )
Adjustment to Deferred Taxes for Enactment of 21%
                        
Federal Statutory Rate on December 22, 2017
    
1,668
      
-
      
-
  
Other - Net
    
93
      
35
      
173
  
Total Provision for Income Taxes
   $
4,103
     $
1,613
     $
1,525
  
 
D
eferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
 
The net deferred tax asset at
December 31,
201
7
and
2016
is included in other assets. The components of the deferred tax assets (liabilities) are as follows:
 
   
201
7
    
201
6
  
   
(Dollars in thousands
)
  
Allowance for Loan Losse
s
   $
1,841
     $
2,775
  
Acquried Loans Fair Market Value Adjustmen
t
    
470
      
2,168
  
Acquired Securities Difference in Basi
s
    
(450
 )    
(744
 )
Amortization of Start-Up Cost
s
    
26
      
55
  
Stock Warrants and Option
s
    
693
      
1,217
  
Depreciatio
n
    
(476
 )    
(799
 )
Interest on Acquired Nonaccrual Loan
s
    
25
      
42
  
Unrealized Loss on Securitie
s
    
437
      
1,201
  
Other Real Estat
e
    
35
      
110
  
Core Deposit Intangibl
e
    
(421
 )    
(775
 )
Acquired FHLB Debt Fair Market Value Adjustmen
t
    
-
      
228
  
Deferred Compensatio
n
    
473
      
723
  
Alternative Minimum Tax Credi
t
    
310
      
345
  
Net Operating Loss Carryforwar
d
    
42
      
78
  
Net Deferred Tax Asse
t
   $
3,005
     $
6,624
  
 
The
Company acquired certain deferred tax attributes and liabilities as a result of its merger with AGFC, including a net operating loss (“NOL”) carryforward of
$287,000
and alternative minimum tax (“AMT”) credit carryforwards of
$984,000.
The Company is limited in the amount it
may
deduct against current taxable income each year. As of
December 31, 2017
the NOL carryforward was
$201,000
and expires in
2033.
The AMT credit carryforward was
$310,000
as of
December 31, 2017
and can be carried forward as a credit against the Company’s regular tax liability. The Tax Cuts and Jobs Act enacted
December 22, 2017
permits existing AMT credit carryforwards to be used to reduce the regular tax obligation in
2018,
2019,
and
2020.
Any AMT credit carryforwards that do
not
reduce regular taxes are eligible for a
50%
refund in
2018,
2019,
and
2020,
and a
100%
refund in
2021.