Note 15 - Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 15. Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction and the Commonwealth of Virginia. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2011. 

The current and deferred components of income tax expense for the periods ended December 31, 2014 and 2013 are as follows:

(Dollars In Thousands)	2014		2013
Current	$	731	$	68
Deferred		856		1,272
Income tax expense	$	1,587	$	1,340

Rate Reconciliation

Total income tax expense differed from the “expected” amount computed by applying the U.S. Federal income tax rate of 34 percent to income before income taxes as a result of the following.

(Dollars In Thousands)	2014			2013
Tax at statutory federal rate	$	1,701		$	1,384
Tax-exempt interest income		(136	)		(96	)
Cash surrender value of life insurance		(35	)		26
Qualified restricted stock awards		19			26
Other		38			–
Income tax expense	$	1,587		$	1,340

Deferred Income Tax Analysis

The significant components of net deferred taxes at December 31, 2014 and 2013 are summarized as follows:

(Dollars In Thousands)	2014			2013
Deferred tax assets
Net operating losses	$	—		$	302
Alternative minimum tax		—			98
Pre-opening expenses		94			110
Allowance for loan losses		513			675
Stock-based compensation		236			236
Deferred compensation		44			8
Other real estate expenses		175			290
Unrealized loss on securities available for sale		—			308
Nonaccrual loan interest		14			17
Deferred tax asset		1,076			2,044
Deferred tax liabilities
Depreciation		360			297
Unrealized gain on securities available for sale		235			—
Accretion of bond discount		—			1
Deferred loan fees		721			587
Deferred tax liability		1,316			885
Net deferred tax (liability) asset	$	(240	)	$	1,159