INCOME TAXES

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

INCOME TAXES

10. Income Taxes

Total income taxes for the years ended December 31, 2015, 2014 and 2013 are as follows:

	YEARS ENDED DECEMBER 31,
	2015			2014		2013
Income tax expense	$	2,287,248		$	1,997,866	$	1,829,807
Unrealized gains (losses) on securities available for sale presented in accumulated other   comprehensive income (loss)		(147,104	)		168,627		(730,715	)
Total	$	2,140,144		$	2,166,493	$	1,099,092

Income tax expense was as follows:

	YEAR ENDED DECEMBER 31,
	2015			2014		2013
Current income taxes
Federal		2,102,154			1,703,444		1,584,131
State		224,083			200,361		185,847
Total current tax expense		2,326,238			1,903,805		1,769,978
Deferred income tax benefit		(38,989	)		94,061		59,829
Income tax expense		2,287,248			1,997,866		1,829,807

The differences between actual income tax expense and the amounts computed by applying the U.S. federal income tax rate of 34% to pretax income from continuing operations for the periods indicated are reconciled as follows:

	YEARS ENDED DECEMBER 31,
	2015			2014			2013
Computed “expected” tax expense	$	2,438,322		$	2,174,873		$	2,008,289
Increase (reduction) in income taxes resulting from:
Tax exempt interest income		(341,970	)		(357,834	)		(343,189	)
State income tax, net of federal benefit		147,895			132,238			122,659
Other, net		43,001			48,589			42,048
	$	2,287,248		$	1,997,866		$	1,829,807

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2015 and 2014 are presented below:

	DECEMBER 31,
	2015			2014
Deferred tax assets:
State net operating loss carryforward	$	45,987		$	34,924
Allowance for loan losses		1,064,916			997,054
Other		23,749			20,997
Total gross deferred tax assets		1,134,652			1,052,975
Less valuation allowance		(45,987	)		(34,924	)
Deferred tax liabilities:
Prepaid expenses		(1,363	)		(7,018	)
Unrealized gain on securities available for sale		(582,926	)		(730,029	)
Deferred loan fees		(40,184	)		(30,410	)
Fixed assets, principally due to differences in depreciation		(24,611	)		(14,810	)
Other bond accretion		(65,735	)		(48,030	)
Total gross deferred tax liabilities		(714,819	)		(830,297	)
Net deferred tax asset	$	373,846		$	187,754

There was a $45,987 valuation allowance for deferred tax assets at December 31, 2015 and $34,924 at December 31, 2014 associated with the Company’s state net operating loss. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible and prior to their expiration governed by the income tax code. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods during which the deferred income tax assets are expected to be deductible, management believes it is more likely than not the Company will realize the benefits of these deductible differences, net of the existing valuation allowance at December 31, 2015. The amount of the deferred income tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.

The Company has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions in accordance with applicable regulations.

Tax returns for 2012 and subsequent years are subject to examination by taxing authorities.