Taxes on Income (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Components of Income Tax Expense (Benefit)

Taxes on income comprise the following:



	June 30, 2018
	Federal			State		Total
Current	$	27,099		$	12,900	$	39,999
Deferred	50,000			3,000		53,000
	$	77,099		$	15,900	$	92,999

	June 30, 2017
	Federal			State		Total
Current	$	5,182		$	2,050	$	7,232
Deferred	(50,632		)	1,000		(49,632		)
	$	(45,450	)	$	3,050	$	(42,400	)

Schedule of Effective Income Tax Rate Reconciliation

Taxes on income for the six months ending June 30, 2018, and 2017, differ from the amounts computed by applying the federal income tax rate of 21% and 34% respectively to earnings before taxes on income for the following reasons, expressed in dollars:



	June 30, 2018			June 30, 2017
Federal tax at statutory rate	$	84,836		$	21,761
Items affecting federal income tax rate:
State taxes on income, net of federal benefit	12,561			2,013
Tax-exempt income	(22,263		)	(43,749		)
Bank-owned life insurance	231			(22,809		)
Valuation allowance	4,000			13,000
Other	13,634			(12,616		)
	$	92,999		$	(42,400	)

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at June 30, 2018 and December 31, 2017 are presented below:



	June 30, 2018			December 31, 2017
Deferred tax assets:
Deferred directors’ fees	$	197,000		$	195,000
Allowance for loan losses	133,000			134,000
Net operating loss carryforward	135,000			165,000
AMT credit	34,720			34,720
Charitable contribution	59,000			59,000
Professional fees	48,000			49,000
Securities available-for-sale	351,523			121,082
Fixed assets	(8,000		)	—
Other	12,280			23,278
Gross deferred tax assets	962,523			781,080
Valuation allowance	(100,000		)	(96,000		)
Net deferred tax assets	862,523			685,080
Deferred tax liabilities:
Prepaid expenses	(14,000		)	(14,000		)
FHLB stock dividends	(25,000		)	(25,000		)
Intangible assets	(15,000		)	(15,000		)
Gross deferred tax liabilities	(54,000		)	(54,000		)
Net deferred tax assets	$	808,523		$	631,080