INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

INCOME TAXES

Schedule of income tax expense

	2019		2018
Current Expense
Federal	$	1,443	$	1,489
Deferred Expense
Federal		240		165
State		(606)		—
	$	1,077	$	1,654

Schedule of year-end deferred tax assets and liabilities

	2019		2018
Deferred tax assets
Allowance for loan losses	$	2,129	$	1,722
Other real estate owned		35		32
Nonaccrual loan interest		19		14
Accrued expenses		197		162
Acquisition market value adjustments		9		118
Unrealized loss on securities		—		925
Low income housing investments		212		189
Unearned income		105		135
Net operating loss		407		380
Operating lease liability		2,083		—
Other		76		80
Deferred tax liabilities
Bank premises and equipment		(619)		(716)
FHLB stock		(960)		(808)
Prepaid expenses		(495)		(213)
Mortgage servicing rights		(383)		(323)
Core deposit intangibles		(31)		(50)
Unrealized gain on securities		(265)		—
Operating lease right of use asset		(2,083)		—
Valuation Allowance		(5)		(380)
Other		(10)		(57)
Net deferred tax asset (liability)	$	421	$	1,210

Schedule of reconciliation of effective tax rates and federal statutory rates applied to financial statement income

	2019		2018
U. S. federal income tax rate	21.0	%	21.0	%
Changes from the statutory rate
State deferred tax benefit	(4.3)		—
Tax-exempt interest income	(3.3)		(4.4)
Tax-exempt BOLI income	(0.7)		(0.4)
Historic and low income tax credits	(3.9)		(4.0)
Insurance captive	(1.1)		(1.0)
Non-deductible interest expense related to carrying tax-exempt investments	0.2		0.2
Other	(0.3)		0.4
	7.6	%	11.7	%