INCOME TAXES (Tables)

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Significant Components of Deferred Tax Assets and Liabilities

Significant components of the deferred tax assets and liabilities are as follows:

	June 30,		December 31,
	2019		2018
	(Dollars in thousands)
Deferred tax assets:
Loan loss reserves	$	4,331	$	4,293
Depreciation		314		363
Other real estate owned valuation		33		65
Unrealized loss on securities available for sale		—		1,005
Unrealized loss on securities held to maturity		—		184
Interest on nonaccrual loans		338		425
Net operating loss carryforward		—		409
Accrued bonuses		719		840
Other		4		125
Deferred tax assets		5,739		7,709
Deferred tax liabilities:
Deferred loan fees		1,645		1,512
Federal Home Loan Bank stock dividends		613		2,749
Mortgage servicing rights		1,391		1,603
Purchase accounting adjustment		199		62
Prepaid expenses		227		228
Unrealized gain on securities available for sale		513		—
Deferred tax liabilities		4,588		6,154
Net deferred tax asset	$	1,151	$	1,555

Summary of Difference in Effective Tax Rates and Statutory Federal Income Tax Rate of 21%

Effective tax rates differ from the statutory federal income tax rate of 21% for 2019 and 2018 due to the following:

	For the Three Months Ended June 30,
	2019						2018
	Dollars			Rate			Dollars			Rate
	(Dollars in thousands)
Tax at statutory rate:	$	2,686			21.00	%	$	2,469			21.00	%
Increase (decrease) due to:
Tax exempt income		(33	)		(0.26	)%		(147	)		(1.26	)%
Increase (decrease) due to:
Life insurance		(83	)		(0.65	)%		(91	)		(0.77	)%
Stock compensation		(22	)		(0.17	)%		(4	)		(0.03	)%
Reversal of disproportionate tax effect		(145	)		(1.13	)%		—			—	%
Other		(100	)		(0.78	)%		(13	)		(0.11	)%
Income tax provision	$	2,303			18.01	%	$	2,214			18.83	%

	For the Six Months Ended June 30,
	2019						2018
	Dollars			Rate			Dollars			Rate
	(Dollars in thousands)
Tax at statutory rate:	$	4,896			21.00	%	$	4,641			21.00	%
Increase (decrease) due to:
Tax exempt income		(93	)		(0.40	)%		(181	)		(0.82	)%
Increase (decrease) due to:
Life insurance		(164	)		(0.70	)%		(182	)		(0.82	)%
Stock compensation		(80	)		(0.34	)%		(132	)		(0.60	)%
Reversal of disproportionate tax effect		(145	)		(0.62	)%		—			—	%
Other		(243	)		(1.05	)%		(143	)		(0.65	)%
Income tax provision	$	4,171			17.89	%	$	4,003			18.11	%