Note 10 - Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 10:     INCOME TAXES

As of December 31, 2015 and 2014, retained earnings included approximately $5,075,000 for which no deferred income tax liability has been recognized. This amount represents an allocation of income to bad debt deductions for tax purposes only. Reduction of amounts so allocated for purposes other than tax bad debt losses or adjustments arising from carryback of net operating losses would create income for tax purposes only, which would be subject to the then current corporate income tax rate. The unrecorded deferred income tax liability on the above amount was approximately $1,878,000 as of both December 31, 2015 and 2014.

The provision for income taxes consists of:

	Years Ended
	December 31,
	2015		2014		2013
Taxes currently payable	$	2,140,591	$	1,445,947	$	1,532,515
Deferred income taxes		320,738		666,561		983,526
	$	2,461,329	$	2,112,508	$	2,516,041

The tax effects of temporary differences related to deferred taxes shown on the December 31, 2015 and 2014 balance sheets are:

	December 31,			December 31,
	2015			2014
Deferred tax assets:
Allowances for loan losses	$	1,976,060		$	2,240,123
Writedowns on foreclosed assets held for sale		773,652			781,870
Deferred loan fees/costs		123,390			96,877
Unrealized depreciation on available-for-sale securities		401,688			263,358
Other		446,122			421,873
		3,720,912			3,804,101
Deferred tax liabilities:
FHLB stock dividends		(51,713	)		(52,455	)
Accumulated depreciation		(368,245	)		(268,503	)
Other		(70,849	)		(70,630	)
		(490,807	)		(391,588	)
Net deferred tax asset	$	3,230,105		$	3,412,513

A reconciliation of income tax expense at the statutory rate to income tax expense at the Company’s effective rate is shown below:

	Years ended
	December 31,
	2015			2014			2013
Computed at statutory rate		34.0	%		34.0	%		34.0	%
Increase (reduction) in taxes resulting from:
State financial institution tax and credits		(4.8%	)		(4.8%	)		(4.8%	)
Cash surrender value of life insurance		(1.5%	)		(1.6%	)		(2.0%	)
Other		2.4	%		(0.8%	)		5.2	%
Actual effective rate		30.1	%		26.8	%		32.4	%