INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

INCOME TAXES

Schedule of components of the federal income tax provision (credit)

The components of the federal income tax provision (credit) for the years ended December 31 are as follows (dollars in thousands):

	2017		2016		2015
Current tax expense	$	585	$	485	$	—
Change in valuation allowance		—		—		(760)
Adjustment of deferred taxes due to change in enacted tax rate		2,025		—		—
Deferred tax expense		2,929		1,798		3,093
Provision for income taxes	$	5,539	$	2,283	$	2,333

Summary of the source of differences between income taxes at the federal statutory rate and the provision (credit) for income taxes

A summary of the source of differences between income taxes at the federal statutory rate and the provision (credit) for income taxes for the years ended December 31 is as follows (dollars in thousands):

	2017		2016		2015
Tax expense at statutory rate	$	3,746	$	2,301	$	2,695
Increase (decrease) in taxes resulting from:
Tax-exempt interest		(133)		(96)		(60)
Change in valuation allowance		—		—		(760)
Adjustment of deferred taxes due to change in enacted tax rate		2,025		—		—
Expiration of deferred tax assets		—		—		429
Nondeductible transaction expenses		17		95		—
Other		(116)		(17)		29
Provision for  income taxes, as reported	$	5,539	$	2,283	$	2,333

Schedule of major components of net deferred tax assets

The major components of net deferred tax assets at December 31 are as follows (dollars in thousands):

	2017		2016
Deferred tax assets:
NOL carryforward	$	1,580	$	3,080
Allowance for loan losses		948		1,413
Alternative Minimum Tax Credit		1,463		1,944
OREO		119		142
Tax credit carryovers		235		235
Deferred compensation		242		443
Pension liability		240		387
Stock compensation		79		116
Unrealized loss on securities		19		52
Purchase accounting adjustments		785		1,791
Other		63		805
Total deferred tax assets		5,773		10,408
Deferred tax liabilities:
Core deposit premium		(404)		(739)
FHLB stock dividend		(56)		(91)
Depreciation		(79)		(208)
Mortgage servicing rights		(240)		(583)
Other		(24)		(27)
Total deferred tax liabilities		(803)		(1,648)
Net deferred tax asset	$	4,970	$	8,760