INCOME TAXES

12 Months Ended

Dec. 31, 2019

INCOME TAXES [Abstract]

INCOME TAXES

11.  INCOME TAXES

Income tax expense (benefit) was as follows:

	Years Ended December 31,
	2019		2018
Current expense
Federal	$	6,923	$	2,873
State		224		121
Deferred expense
Federal		334		(6,895	)
Total	$	7,481	$	(3,901	)

Effective tax rates differ from the federal statutory rate of 21% for 2019 applied to income before income taxes due to the following:

	Years Ended December 31,
	2019			2018
Federal statutory rate times financial statement income	$	7,707		$	5,332
Effect of:
Initial recognition of net deferred tax asset		—			(6,741	)
S Corp taxable income		—			(2,267	)
Tax-exempt income		(348	)		(314	)
State taxes, net of federal benefit		177			95
Earnings from bank owned life insurance		(272	)		(153	)
Non deductible expenses		190			125
Other, net		27			22
Total	$	7,481		$	(3,901	)

Year-end deferred tax assets and liabilities were due to the following:

	December 31,
	2019			2018
Deferred tax assets
Allowance for loan loss	$	5,081		$	4,857
Deferred compensation		4,669			4,560
Other real estate owned		251			320
Nonaccrual loans		180			169
Unrealized loss on available-for-sale securities		—			596
Other		162			174
Total deferred tax assets		10,343			10,676
Deferred tax liabilities
Depreciation		(2,417	)		(2,331	)
Intangibles		(924	)		—
Prepaid expenses		(419	)		(390	)
Mortgage servicing rights		(431	)		(267	)
Unrealized gain on available-for-sale securities		(255	)		—
Other		(278	)		(197	)
Total deferred tax liabilities		(4,724	)		(3,185	)
Net deferred tax asset	$	5,619		$	7,491