INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

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):

	2019		2018
Current tax expense	$	2,505	$	1,352
Deferred tax expense		1,355		874
Provision for income taxes	$	3,860	$	2,226

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):

	2019		2018
Tax expense at statutory rate	$	3,719	$	2,225
Increase (decrease) in taxes resulting from:
Tax-exempt interest		(110)		(97)
Nondeductible transaction expenses		—		138
Other		251		(40)
Provision for  income taxes, as reported	$	3,860	$	2,226

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):

	2019		2018
Deferred tax assets:
NOL carryforward	$	2,147	$	2,634
Allowance for loan losses		1,144		1,078
Alternative Minimum Tax Credit		—		—
OREO		177		168
Tax credit carryovers		—		140
Deferred compensation		253		307
Pension liability		109		221
Stock compensation		75		92
Unrealized loss on securities		—		99
Purchase accounting adjustments		1,507		2,206
Lease liability		980		—
Other		894		808
Total deferred tax assets		7,286		7,753
Deferred tax liabilities:
Core deposit premium		(1,108)		(1,256)
FHLB stock dividend		(73)		(73)
Depreciation		—		(101)
Mortgage servicing rights		—		61
Right of use asset		(980)		—
Unrealized gain on securities		(272)		—
Other		(707)		(621)
Total deferred tax liabilities		(3,140)		(1,990)
Net deferred tax asset	$	4,146	$	5,763