INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of pre-tax book income

The source of pre-tax book income is summarized as follows for the years ended December 31:

(Dollars are in thousands)		2017		2016
Pre-tax book income
Domestic	$	3,238	$	949
Total pre-tax book income	$	3,238	$	949

Schedule of Components of Income Tax Expense

Income tax expense (benefit) is summarized as follows for the years ended December 31:

(Dollars are in thousands)		2017		2016
Current income tax expense (benefit)
Federal	$	337	$	-
State	-		(7)
Total current income tax expense (benefit)		337		(7)

Deferred income tax expense (benefit)
Federal		(193)		(2)
State	-		-
Total deferred income tax expense		(193)		(2)
Income tax expense (benefit)	$	144	$	(9)

Schedule of Net Deferred Tax Assets and Liabilities

The net deferred tax assets and liabilities resulting from temporary differences as of December 31 are summarized as follows:

(Dollars are in thousands)		2017		2016
Deferred Tax Assets
Allowance for loan losses	$	1,301	$	2,064
Deferred compensation		89	147
Accrued employee benefits		-	15
Nonaccrual loan interest		504	896
Other real estate owned		264	1,911
Repossessed assets		-	12
Amortization of core deposits		51	101
Amortization of goodwill		260	514
Capitalized interest and repair expense		25	41
Net operating loss carryforward		3,444	5,648
AMT carryforward		339	320
Unrealized loss on securities available for sale		158	235
Total Assets, gross		6,435		11,904
Valuation allowance		-		(5,317)
Total Assets, net		6,435		6,587
Deferred Tax Liabilities
Accelerated depreciation		607	867
Accrued employee benefits		38	-
Prepaid expenses		20	38
Deferred loan costs		271	397
Total Liabilities, gross		936		1,302
Net Deferred Tax Asset	$	5,499	$	5,285

Schedule of Reconciliation of Income Tax Expense

The following table summarizes the differences between the actual income tax expense and the amounts computed using the federal statutory tax rate of 34%:

(Dollars are in thousands)		2017		2016
Income tax expense (benefit) at the applicable federal rate	$	1,101	$	323
Permanent differences resulting from:
Nondeductible expenses		15		7
Tax exempt interest income		(35)		(44)
State income taxes less federal tax effect		-		5
Bank owned life insurance		(39)		(57)
Remeasurement of deferred taxes under TCJA		4,046		-
Deferred tax valuation allowance change, net		(5,317)		(338)
Penalty on surrender of bank owned life insurance		318		-
Other adjustments		55		95
Income tax expense (benefit)	$	144	$	(9)