Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

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
2019:
Federal		$1,078			$476		$1,554
State	977			235		1,212
Amortization of investment in low income housing tax credit partnerships	2,668			—		2,668
Total		$4,723			$711		$5,434
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

Reconciliation of Actual to Expected Tax Expense

The actual expense for 2019, 2018, and 2017, differs from the “expected” tax expense (computed by applying the U.S. Federal Statutory Tax Rate of 21% for the years ended December 31, 2019 and 2018 and 35% for the year ended December 31, 2017) as follows:



(In Thousands)	2019			2018			2017
Computed “expected” income tax expense		$5,486			$5,056			$8,330
State income taxes, net	957			720			1,225
Tax-exempt interest on investment securities and loans	(300		)	(307		)	(597		)
Amortization of investment in low income housing tax credit partnerships	2,668			2,691			2,276
Low income housing credits	(2,721		)	(2,821		)	(3,468		)
Revaluation of deferred tax assets	—			(470		)	2,678
Other	(656		)	(798		)	(123		)
Total		$5,434			$4,071			$10,321

Components of Net Deferred Tax Asset

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



(In Thousands)	2019			2018			2017
Deferred Tax Asset:
Allowance for loan losses		$5,190			$5,313			$5,922
Loan fees, net of costs	741			818			825
Other real estate owned	58			160			160
Deferred compensation	1,224			1,121			1,218
Equity compensation	429			435			422
Loan discount	98			79			171
Fair market value adjustment on certificates of deposit	100			123			147
Unrealized loss on available for sale investment securities, net	(384		)	270			59
Operating lease liability	4,045			—			—
Other	1,866			1,069			693
Total Deferred Tax Asset		$13,367			$9,388			$9,617

Deferred Tax Liability:
Intangible amortization		($587	)		($288	)		($219	)
Mortgage servicing rights	(3,767		)	(3,424		)	(2,156		)
Depreciation and amortization	(1,848		)	(1,873		)	(404		)
FHLB stock repurchase and dividends	(174		)	(178		)	(179		)
Operating lease right-of-use asset	(4,067		)	—			—
Other	(389		)	(379		)	(399		)
Total Deferred Tax Liability		($10,832	)		($6,142	)		($3,357	)
Net Deferred Tax Asset		$2,535			$3,246			$6,260