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NOTE 13 – NET DEFERRED TAX ASSET AND INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
components of the income tax provision

Salisbury provides deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. The components of the income tax provision were as follows:

Years ended December 31, (in thousands) 2020 2019 2018
Federal $3,487 $2,406 $1,986
State 566 344 217
Current provision 4,053 2,750 2,203
Federal (1,335) (317) (455)
State (265) (74) (39)
Deferred (benefit) expense (1,600) (391) (494)
Income tax provision $2,453 $2,359 $1,709
reconciliation of the expected federal statutory tax to the income tax provision

The following is a reconciliation of the expected federal statutory tax to the income tax provision:

Years ended December 31, 2020 2019 2018
Income tax at statutory federal tax rate 21.00% 21.00% 21.00%
State tax, net of federal tax benefit 1.97 1.58 1.37
Tax exempt income and dividends received deduction (3.69) (3.82) (3.84)
BOLI interest and gain (1.60) (0.61) (1.35)
Other (0.64) (0.67) (0.95)
Effective income tax rates 17.04% 17.48% 16.23%
components of Salisbury's net deferred tax assets

The components of Salisbury's net deferred tax assets are as follows:

December 31, (in thousands) 2020 2019
Allowance for loan losses $3,355 $2,174
Interest on non-performing loans 214 244
Accrued deferred compensation 517 493
Post-retirement benefits 11 11
Other real estate owned write-downs - 30
Restricted stock awards 196 220
Deferred loan fees, net 90 -
Loss on equity securities - 2
Other 98 139
Gross deferred tax assets 4,481 3,313
Deferred loan costs, net - (329)
Mark-to-market purchase accounting adjustments (8) (44)
Goodwill and core deposit intangible asset (590) (570)
Accelerated depreciation (522) (703)
Gain on equity securities (2) -
Mortgage servicing rights (150) (58)
Net unrealized holding gains on available-for-sale securities (797) (360)
Gross deferred tax liabilities (2,069) (2,064)
Net deferred tax asset $2,412 $1,249