Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Taxes

Schedule of allocation of federal and state income taxes between current and deferred provisions

(Dollars in thousands)	2019		2018
Current
Federal	$	3,366	$	3,752
State		1,479		1,530
		4,845		5,282
Deferred
Federal		1,147		600
State		319		229
		1,466		829
Total	$	6,311	$	6,111

Schedule of reconciliation of tax provision based on statutory corporate rate on pretax income and provision for taxes

(Dollars in thousands)	2019			2018
Income tax expense at statutory rate	$	5,944		$	5,318
Income tax effect of:
Other tax-exempt income		(263)			(182)
Share-based compensation		(69)			1
Meal and entertainment expenses		82			88
State income taxes, net of federal income tax benefits		1,301			1,246
Tax benefit from the exercise of stock options		(297)			(134)
Tax benefit from tax depreciation study (1)		(402)			—
Other		15			(226)
Total income tax expense	$	6,311		$	6,111
Effective income tax rate		22.29	%		24.13	%

(1) The Company conducted a study that reduced the asset lives used to calculate depreciation.  The Company filed an amended tax return and was able to deduct the increase in depreciation expense at the 2017 federal corporate tax rate of 35% rather than the current 21% federal corporate tax rate.

Schedule of components of income taxes payable (receivable)

	December 31,
(Dollars in thousands)	2019		2018
Current taxes payable:
Federal	$	767	$	621
State		1,538		1,786
	$	2,305	$	2,407
Deferred taxes receivable:
Federal	$	(1,651)	$	(2,836)
State		(968)		(1,300)
	$	(2,619)	$	(4,136)

Schedule of tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities

	December 31,
(Dollars in thousands)	2019		2018
Deferred tax assets:
Premises and equipment	$	547	$	1,037
Hawaii franchise tax		479		468
Unfunded pension liability		925		691
Allowance for loan losses		722		703
Impaired asset write-down		—		765
Employee benefit plans		2,692		2,601
Equity incentive plan		350		399
Unrealized losses on securities available-for-sale		—		32
Deferred compensation		413		480
Net lease liability		161		—
Other		8		159
		6,297		7,335
Deferred tax liabilities:
Deferred loan costs		3,078		2,844
FHLB stock dividends		126		126
Prepaid expense		155		169
Unrealized gain on securities available-for-sale		185		—
Premiums on loans sold		134		60
		3,678		3,199
Net deferred tax assets	$	2,619	$	4,136