Note 10: Income Taxes

The provision for income taxes includes the following components at December 31, 2015 and 2014:

	2015		2014
	(In thousands)
Taxes currently payable	$	270	$	902
Deferred income taxes		143		(65)
Income tax expense	$	413	$	837

A reconciliation of income tax expense at the statutory rate to the Company's actual income tax expense is shown below:

	2015		2014
	(In thousands)
Computed at the statutory rate (34%)	$	668	$	1,179
Increase (decrease) resulting from
Tax-exempt interest		(223)		(277)
Earnings on bank-owned life insurance		(100)		(82)
Other		68		17
Actual tax expense	$	413	$	837

The tax effects of temporary differences related to deferred taxes shown on the consolidated balance sheets were as follows:

	2015		2014
	(In thousands)
Deferred tax assets
Deferred loan origination fees	$	260	$	232
Allowance for loan losses		965		941
Real estate owned valuation		2		—
Pension adjustment		368		405
Reserve for uncollected interest		182		175
Benefit plan expenses		97		178
AMT credit carryover and low income housing credit		12		—
Total deferred tax assets		1,886		1,931

Deferred tax liabilities
Prepaid pension		(221)		(190)
Federal Home Loan Bank stock dividends		(1,023)		(1,023)
Book/tax depreciation differences		(560)		(517)
Financed loan fees		(129)		(117)
Unrealized gains on securities available-for-sale		(264)		(644)
Mortgage servicing rights		(125)		(113)
Total deferred tax liabilities		(2,322)		(2,604)
Net deferred tax liability	$	(436)	$	(673)

Prior to fiscal 1997, the Company was allowed a special bad debt deduction based on a percentage of earnings, generally limited to 8% of otherwise taxable income and subject to certain limitations based on aggregate loans and deposit account balances at the end of the year. This cumulative percentage of earnings bad debt deduction totaled approximately $2.7 million as of December 31, 2015. If the amounts that qualified as deductions for federal income taxes are later used for purposes other than bad debt losses, including distributions in liquidation, such distributions will be subject to federal income taxes at the then current corporate income tax rate. The amount of unrecognized deferred tax liability relating to the cumulative bad debt deduction was approximately $918,000 at December 31, 2015.