Note 9 - Income Taxes

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(

9

)

Income

Taxes

The components of income tax expense for the years ended

December

31

are as follows:

	20 16		2015		2014
Current Federal Expense	$	3,629,213	$	3,162,367	$	1,335,337
Deferred Federal Expense		222,120		625,436		1,932,950
Federal Income Tax Expense		3,851,333		3,787,803		3,268,287
Current State Income Tax Expense		-		-		-
Federal and State Income Tax Expense	$	3,851,333	$	3,787,803	$	3,268,287

The federal income tax expense of

$3,851,333

in

2016,

$3,787,803

in

2015,

and

$3,268,287

in

2014

is different than the income taxes computed by applying the federal statutory rates to income before income taxes. The reasons for the differences are as follows:

	20 16			2015			2014
Statutory Federal Income Taxes	$	4,283,394		$	4,134,570		$	3,671,971
Tax-Exempt Interest		(109,759	)		(83,903	)		(74,138	)
Premiums on Officers’ Life Insurance		(182,532	)		(232,988	)		(186,712	)
Meal and Entertainment Disallowance		16,813			21,600			14,044
Other		(156,583	)		(51,476	)		(156,878	)
Actual Federal Income Taxes	$	3,851,333		$	3,787,803		$	3,268,287

	20 16			2015
Deferred Tax Assets
Allowance for Loan Losses	$	3,033,920		$	2,925,328
Other Real Estate		688,162			537,914
Deferred Compensation		280,704			308,128
Investments		340,000			340,000
Goodwill		167,666			212,190
Other		379,304			418,165
		4,889,756			4,741,725
Deferred Tax Liabilities
Premises and Equipment		(1,553,460	)		(1,183,309	)
Other		(4,185	)		(4,185	)
		(1,557,645	)		(1,187,494	)
Deferred Tax Assets (Liabilities) on Unrealized Securities Gains (Losses)		2,587,163			2,284,362
Net Deferred Tax Assets	$	5,919,274		$	5,838,593

The deferred tax assets are included in Other Assets in the consolidated balance sheets. As discussed in Note

1,

certain positions taken in the Company’s tax returns

may

be subject to challenge by the taxing authorities. An analysis of activity related to unrecognized taxes as of

December

31

follows.

	201 6		2015		2014
Balance, Beginning	$	-	$	-	$	42,327
Positions Taken During the Current Year		-		-		-
Reductions Resulting from Lapse of Statutes of Limitation		-		-		42,327
Balance, Ending	$	-	$	-	$	-

The net decrease of

$42,327

is included in income tax expense for the year ended

December

31,

2014.