Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Components of The Provision For Income Taxes

Components of the provision for income taxes are as follows:



(In Thousands)	Current Tax Expense (Benefit)			Deferred Expense (Benefit)			Total Expense
2018:
Federal		($1,549	)		$2,017			$468
State	(85		)	997			912
Amortization of investment in low income housing tax credit partnerships	2,691			—			2,691
Total		$1,057			$3,014			$4,071
2017:
Federal		$2,618			$3,658			$6,276
State	1,423			346			1,769
Amortization of investment in low income housing tax credit partnerships	2,276			—			2,276
Total		$6,317			$4,004			$10,321
2016:
Federal		$2,844			($251	)		$2,593
State	665			(74		)	591
Amortization of investment in low income housing tax credit partnerships	2,868			—			2,868
Total		$6,377			($325	)		$6,052

Reconciliation of Actual to Expected Tax Expense

The actual expense for 2018, 2017, and 2016, differs from the “expected” tax expense (computed by applying the U.S. Federal Statutory Tax Rate of 21% for the year ended December 31, 2018 and 35% for the years ended December 31, 2017, and 2016) as follows:



(In Thousands)	2018			2017			2016
Computed “expected” income tax expense		$5,056			$8,330			$7,365
State income taxes, net	720			1,225			384
Tax-exempt interest on investment securities	(307		)	(597		)	(566		)
Amortization of investment in low income housing tax credit partnerships	2,691			2,276			2,868
Low income housing credits	(2,821		)	(3,468		)	(3,540		)
Revaluation of deferred tax assets	(470		)	2,678			—
Other	(798		)	(123		)	(459		)
Total		$4,071			$10,321			$6,052

Components of Net Deferred Tax Asset

The components of the net deferred tax asset are as follows:



(In Thousands)	2018			2017			2016
Deferred Tax Asset:
Allowance for loan losses		$5,313			$5,922			$7,717
Loan fees, net of costs	818			825			1,823
Other real estate owned	160			160			123
Deferred compensation	1,121			1,218			2,112
Equity compensation	435			422			544
Loan discount	79			171			326
Fair market value adjustment on certificates of deposit	123			147			247
Unrealized loss on available for sale investment securities, net	270			59			195
Other	1,069			693			1,455
Total Deferred Tax Asset		$9,388			$9,617			$14,542

Deferred Tax Liability:
Intangible amortization		($288	)		($219	)		($2,804	)
Mortgage servicing rights	(3,424		)	(2,156		)	(415		)
Depreciation and amortization	(1,873		)	(404		)	31
FHLB stock repurchase and dividends	(178		)	(179		)	(686		)
Other	(379		)	(399		)	(404		)
Total Deferred Tax Liability		($6,142	)		($3,357	)		($4,278	)
Net Deferred Tax Asset		$3,246			$6,260			$10,264