INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

INCOME TAXES

Schedule of expense (benefit) for income taxes

The components of the Company's income tax (benefit) expense as of December 31 (in thousands):

	2018		2017
Current:
Federal	$	(118)	$	140
State and local		87		173
Total current tax (benefit) expense		(31)		313
Deferred:
Federal	$	1,567	$	1,902
Net deferred tax asset remeasurement		—		1,179
State and local		239		(410)
Total deferred taxes		1,806		2,671
Income tax expense	$	1,775	$	2,984

Schedule of reconciliation of income tax (expense) benefit

The following is a reconciliation of income taxes reflected on the statements of income for the years ended December 31 with income tax expense computed by applying the United States federal income tax rate of 21% and 35%, respectively to income before income taxes (in thousands):

	2018		2017
Income tax expense computed at 21% and 35% statutory rate, respectively	$	1,558	$	1,753
Statutory rate change from 35% to 21%		—		1,179
Differences:
Permanent differences		(89)		(114)
State taxes, net of federal expense		258		166
Other, net		48		—
Income tax expense	$	1,775	$	2,984

Schedule of principal components of deferred tax assets (liabilities)

The following were the principal components of the Company's deferred tax items as of December 31 (in thousands):

	2018		2017
Deferred tax assets:
Net operating loss carryforwards	$	995	$	2,758
Allowance for loan losses		1,921		1,911
Deferred rent		960		957
Stock-based compensation		1,277		1,266
Allowance for losses on other real estate owned		461		469
Other intangible assets		747		946
Unrealized losses on securities		530		405
Other		206		-
Total deferred tax assets		7,097		8,712
Deferred tax liabilities:
Goodwill	$	(1,772)	$	(1,683)
Depreciation		(980)		(998)
Other		(39)		(44)
Total deferred tax liabilities		(2,791)		(2,725)
Net deferred tax asset	$	4,306	$	5,987