INCOME TAXES (Table)

12 Months Ended

Dec. 31, 2017

Schedule of Components of Income Tax Expense (Benefit)

The following table provides information on components of income tax expense for each of the three years ended December 31.


(Dollars in thousands)	2017		2016		2015
Current tax expense:
Federal	$	4,047	$	525	$	247
State		-		19		287
		4,047		544		534
Deferred income tax expense:
Federal		2,903		4,486		3,369
State		1,573		1,231		505
		4,476		5,717		3,874

Total income tax expense	$	8,523	$	6,261	$	4,408

Schedule of Effective Income Tax Rate Reconciliation

The following table provides a reconciliation of tax computed at the statutory federal tax rate to the actual tax expense (benefit) for each of the three years ended December 31.


(Dollars in thousands)	2017		2016		2015
Tax at federal statutory rate	35.0	%	35.0	%	34.0	%
Tax effect of:
Tax-exempt income	(1.0)		(0.8)		(0.4)
Other non-deductible expenses	0.1		0.3		0.2
State income taxes, net of federal benefit	5.2		5.1		4.5
Tax impact from enacted change in tax rate	2.9		-		-
Other	0.9		(0.2)		(0.1)
Actual income tax expense rate	43.1	%	39.4	%	38.2	%

Schedule of Deferred Tax Assets and Liabilities

The following table provides information on significant components of the Company’s deferred tax assets and liabilities as of December 31. The Company recorded a provisional adjustment to our U.S. deferred income taxes as of December 31, 2017 to reflect the reduction in the U.S. statutory tax rate from 35% to 21% resulting from the Tax Act.


(Dollars in thousands)	2017		2016
Deferred tax assets:
Allowance for credit losses	$	2,625	$	3,486
Reserve for off-balance sheet commitments		81		122
Net operating loss carry forward		741		2,232
Write-downs of other real estate owned		212		387
Deferred income		95		1,011
Unrealized losses on available-for-sale securities		460		630
Unrealized losses on available-for-sale securities
transferred to held to maturity		20		42
AMT Credits		-		869
Other		635		1,192
Total deferred tax assets		4,869		9,971
Deferred tax liabilities:
Depreciation		408		239
Amortization on loans FMV adjustment		84		156
Purchase accounting adjustments		1,994		2,019
Deferred capital gain on branch sale		207		401
Other		241		116
Total deferred tax liabilities		2,934		2,931
Net deferred tax assets	$	1,935	$	7,040