Note 16 - Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 16. 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 2012.

The current and deferred components of income tax expense for the periods ended December 31, 2015 and 2014 are as follows:

(Dollars In Thousands)	2015		2014
Current	$	1,514	$	731
Deferred		81		856
Income tax expense	$	1,595	$	1,587

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)	2015			2014
Tax at statutory federal rate	$	1,770		$	1,701
Tax-exempt interest income		(196	)		(136	)
Cash surrender value of life insurance		(55	)		(35	)
Incentive stock options		47			19
Other		29			38
Income tax expense	$	1,595		$	1,587

Deferred Income Tax Analysis

The significant components of net deferred taxes at December 31, 2015 and 2014 are summarized as follows:

(Dollars In Thousands)	2015			2014
Deferred tax assets
Pre-opening expenses	$	78		$	94
Allowance for loan losses		518			513
Stock-based compensation		236			236
Deferred compensation		107			44
Other real estate expenses		143			175
Nonaccrual loan interest		11			14
Deferred tax asset		1,093			1,076
Deferred tax liabilities
Property and equipment		327			360
Unrealized gain on securities available for sale		204			235
Deferred loan fees		821			721
Deferred tax liability		1,352			1,316
Net deferred tax liability	$	(259	)	$	(240	)