INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

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):

	2018		2017
Current tax expense	$	1,352	$	585
Adjustment of deferred taxes due to change in enacted tax rate		—		2,025
Deferred tax expense		874		2,929
Provision for income taxes	$	2,226	$	5,539

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):

	2018		2017
Tax expense at statutory rate	$	2,225	$	3,746
Increase (decrease) in taxes resulting from:
Tax-exempt interest		(97)		(133)
Adjustment of deferred taxes due to change in enacted tax rate		—		2,025
Nondeductible transaction expenses		138		17
Other		(40)		(116)
Provision for  income taxes, as reported	$	2,226	$	5,539

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):

	2018		2017
Deferred tax assets:
NOL carryforward	$	2,634	$	1,580
Allowance for loan losses		1,078		948
Alternative Minimum Tax Credit		—		1,463
OREO		168		119
Tax credit carryovers		140		235
Deferred compensation		307		242
Pension liability		221		240
Stock compensation		92		79
Unrealized loss on securities		99		19
Purchase accounting adjustments		2,206		785
Other		808		63
Total deferred tax assets		7,753		5,773
Deferred tax liabilities:
Core deposit premium		(1,256)		(404)
FHLB stock dividend		(73)		(56)
Depreciation		(101)		(79)
Mortgage servicing rights		61		(240)
Other		(621)		(24)
Total deferred tax liabilities		(1,990)		(803)
Net deferred tax asset	$	5,763	$	4,970