Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Taxes

Schedule of Components of Income Tax Expense (Benefit)

The provision for income taxes includes these components for the years ended December 31, 2019 and 2018.

	2019		2018
Taxes currently payable	$	68,865	$	46,232
Deferred income taxes		18,829		145,046
Income tax expense	$	87,694	$	191,278

Schedule of Effective Income Tax Rate Reconciliation

	2019		2018
Computed at the statutory rate	$	186,095	$	523,447
Increase (decrease) resulting from:
Effect of gain on merger with Kentucky Federal		—		(460,391)
Bank-owned life insurance		(55,103)		(15,598)
Merger expenses		—		59,681
Other		(43,298)		84,139
Actual tax expense	$	87,694	$	191,278

Schedule Of Statutory Income Tax And Effective Tax Rate

A reconciliation between the statutory income tax and the Company’s effective rate follows:

	2019		2018
Computed at the statutory rate	21.00	%	21.00	%
Increase (decrease) resulting from
Effect of gain on merger with Kentucky Federal	—		(18.47)	%
Bank-owned life insurance	(2.12)	%	(0.63)	%
Acquired bank-owned life insurance	(4.10)	%	2.39	%
Other	(4.88)	%	3.38	%
Effective tax rate	9.90	%	7.67	%

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences related to deferred taxes shown on the balance sheets at December 31, 2019 and 2018 were:

	2019		2018
Deferred tax assets
Allowance for loan losses	$	282,653	$	277,403
Loans held for sale		13,437		5,437
Unrealized gains on
available-for-sale securities		1,520		—
Directors’ Retirement Plan		117,452		102,287
Net operating loss		183,123		244,401
Other		24,939		19,161
		623,124		648,689
Deferred tax liabilities
Deferred loan costs		(101,363)		(105,737)
Prepaid penalties on FHLB advances		(648)		(1,620)
Dividends on FHLB stock		(332,211)		(332,211)
Mortgage servicing rights		(254,901)		(263,075)
FHLB lender risk account receivable		(359,780)		(357,688)
Depreciation		(195,450)		(183,604)
Unrealized gains on available-for-sale securities		—		(192)
Other		(116,524)		(135,971)
		(1,360,877)		(1,380,098)
Valuation allowance		(19,322)		(19,322)
Net deferred tax liability	$	(757,075)	$	(750,731)