INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Provision for Federal Income Taxes

The provision for federal income taxes consists of (in thousands):

	2019		2018	2017
Income taxes currently payable	$	3,694	2,721	3,018
Revaluation of net deferred tax liability	—		—	(224	)
Deferred income tax provision (benefit)	419		228	1,478
Provision for income taxes	$	4,113	2,949	4,272

Reconciliation Between Statutory Income Tax and Effective Tax Rate

A reconciliation between the statutory income tax and the Company's effective tax rate follows:

	2019		2018		2017
Statutory tax rate	21.0	%	21.0	%	34.0	%
Increase (decrease) resulting from -
Tax exempt interest	(1.4	)%	(3.1	)%	(6.0	)%
Tax exempt income on bank owned life insurance	(0.9	)%	(0.9	)%	(1.7	)%
Revaluation of net deferred tax liability	—	%	—	%	(1.3	)%
Captive insurance premium income	(0.8	)%	(0.9	)%	(0.9	)%
Other – net	—	%	0.5	%	0.7	%
Effective tax rate	17.9	%	16.6	%	24.8	%

Schedule of Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities, included in the Consolidated Balance Sheets with accrued interest and other liabilities in 2019 and other assets in 2018, consist of the following at December 31 (in thousands):

	2019			2018
Deferred tax assets:
Allowance for loan losses	$	849		849
Net unrealized losses on investment securities available-for-sale	—			1,240
Fair value adjustment on loans acquired from mergers	451			723
Write-down of other real estate owned	10			—
Deferred compensation	706			706
Other	459			432
	2,475			3,950
Deferred tax liabilities:
Depreciation of premises and equipment	(1,621		)	(1,551	)
Net unrealized gains on investment securities available-for-sale	(270		)	—
Amortization of intangibles	(1,537		)	(1,499	)
Prepaid expenses	(246		)	(243	)
Deferred loan fees	—			(1	)
FHLB stock dividends	(216		)	(216	)
Fair value adjustment on securities acquired from mergers	(3		)	(6	)
	(3,893		)	(3,516	)
Net deferred tax (liabilities) assets	$	(1,418	)	434