INCOME TAXES (Tables)

9 Months Ended

Sep. 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:

	September 30,		December 31,
	2019		2018
	(Dollars in thousands)
Deferred tax assets:
Loan loss reserves	$	4,455	$	4,293
Depreciation		541		363
Other real estate owned valuation		36		65
Unrealized loss on securities available for sale		—		1,005
Unrealized loss on securities held to maturity		—		184
Interest on nonaccrual loans		375		425
Net operating loss carryforward		—		409
Accrued bonuses		822		840
Other		76		125
Deferred tax assets		6,305		7,709
Deferred tax liabilities:
Deferred loan fees		1,702		1,512
Federal Home Loan Bank stock dividends		437		2,749
Mortgage servicing rights		1,412		1,603
Purchase accounting adjustment		219		62
Prepaid expenses		246		228
Unrealized gain on securities available for sale		1,174		—
Deferred tax liabilities		5,190		6,154
Net deferred tax asset	$	1,115	$	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 September 30,
	2019						2018
	Dollars			Rate			Dollars			Rate
	(Dollars in thousands)
Tax at statutory rate:	$	2,706			21.00	%	$	2,467			21.00	%
Increase (decrease) due to:
Tax exempt income		(40	)		(0.31	)%		(85	)		(0.73	)%
Increase (decrease) due to:
Life insurance		(84	)		(0.65	)%		(92	)		(0.78	)%
Stock compensation		(31	)		(0.24	)%		(12	)		(0.10	)%
Reversal of disproportionate tax effect		—			—	%		—			—	%
Other		(168	)		(1.30	)%		(61	)		(0.52	)%
Income tax provision	$	2,383			18.50	%	$	2,217			18.87	%

	For the Nine Months Ended September 30,
	2019						2018
	Dollars			Rate			Dollars			Rate
	(Dollars in thousands)
Tax at statutory rate:	$	7,602			21.00	%	$	7,108			21.00	%
Increase (decrease) due to:
Tax exempt income		(133	)		(0.37	)%		(266	)		(0.79	)%
Increase (decrease) due to:
Life insurance		(248	)		(0.69	)%		(273	)		(0.81	)%
Stock compensation		(111	)		(0.31	)%		(144	)		(0.42	)%
Reversal of disproportionate tax effect		(145	)		(0.40	)%		—			—	%
Other		(412	)		(1.14	)%		(205	)		(0.60	)%
Income tax provision	$	6,553			18.09	%	$	6,220			18.38	%