Income Taxes
The provision for income taxes consists of the following:
|
| | | | | | | | | | | | |
| | December 31, |
| | 2017 | | 2016 | | 2015 |
Current | | $ | 10,998 |
| | $ | 2,367 |
| | $ | 4,293 |
|
Deferred | | (5,142 | ) | | 3,544 |
| | 443 |
|
Net deferred tax asset revaluation | | 1,846 |
| | — |
| | — |
|
Total | | $ | 7,702 |
| | $ | 5,911 |
| | $ | 4,736 |
|
The Tax Cuts and Jobs Act of 2017 ("Tax Act") was enacted on December 22, 2017. Among other changes, the Tax Act reduces the federal corporate tax rate from 35% to 21%. At December 31, 2017, the Company has substantially completed its accounting for the tax effects of enactment of the Tax Act. For deferred tax assets and liabilities, amounts were revalued based on the rates expected to reverse in the future, which is now 21%. The Company continues to analyze certain aspects of the Tax Act and further refinements are possible, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts, although we do not expect these adjustments to materially impact our financial statements.
Income tax provision is reconciled to the statutory rate applied to pre-tax income. The statutory rate was 35%, 34% and 34% at December 31, 2017, 2016 and 2015, respectively.
|
| | | | | | | | | | | | |
| | December 31, |
| | 2017 | | 2016 | | 2015 |
Statutory rate times pre-tax income | | $ | 8,025 |
| | $ | 6,115 |
| | $ | 4,646 |
|
Add (subtract) the tax effect of: | | | | | | |
|
Income from tax-exempt securities and loans | | (2,512 | ) | | (635 | ) | | (132 | ) |
State income tax, net of federal tax effect | | 693 |
| | 567 |
| | 154 |
|
Bank-owned life insurance | | (318 | ) | | (159 | ) | | (137 | ) |
Net deferred tax asset revaluation | | 1,846 |
| | — |
| | — |
|
Other differences | | (32 | ) | | 23 |
| | 205 |
|
Total income taxes | | $ | 7,702 |
| | $ | 5,911 |
| | $ | 4,736 |
|
The net deferred tax asset at December 31 consists of the following:
|
| | | | | | | | |
| | December 31, |
| | 2017 | | 2016 |
Deferred tax assets (liabilities) | | |
| | |
|
Allowance for loan losses | | $ | 3,873 |
| | $ | 4,269 |
|
Unrealized loss on available-for-sale securities | | 1,939 |
| | 5,112 |
|
Fair value adjustments | | (2,213 | ) | | (5,994 | ) |
Depreciation | | (263 | ) | | (525 | ) |
Deferred compensation and accrued payroll | | 1,051 |
| | 1,234 |
|
Loan origination costs | | (783 | ) | | (955 | ) |
Prepaid assets | | (288 | ) | | (276 | ) |
Other | | 69 |
| | 397 |
|
Total deferred tax assets, net | | $ | 3,385 |
| | $ | 3,262 |
|