Note 9 - Income Taxes

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(

9

)

Income

Taxes

The Tax Cuts and Jobs Act (the "

TCJ Act"), enacted on

December 22, 2017,

reduced the U.S. federal corporate tax rate to

21

percent.

As a result of the enactment of the TCJ Act we have remeasured our deferred tax assets and liabilities based upon the new U.S. statutory federal income tax rate of

21%,

which is the tax rate at which these assets and liabilities are expected to reverse in the future. Notwithstanding the foregoing, we are still analyzing certain aspects of the new law and refining our calculations, which could affect the measurement of these assets and liabilities or give rise to new deferred tax amounts. Nonetheless, we recognized additional income tax expense of

$2,040,946

in the

fourth

quarter of

2017

related to the remeasurement of our deferred tax assets and liabilities.

The

components of income tax expense for the years ended

December 31

are as follows:

	20 1 7		20 16		20 15
Current Federal Expense	$	3,943,495	$	3,629,213	$	3,162,367
Deferred Federal Expense		793,012		222,120		625,436
Deferred Tax Expense from Tax Rate Changes		2,040,946		-		-
Federal Income Tax Expense		6,777,453		3,851,333		3,787,803
Current State Income Tax Expense		-		-		-
Federal and State Income Tax Expense	$	6,777,453	$	3,851,333	$	3,787,803

The

federal income tax expense of

$6,777,453

in

2017,

$3,851,333

in

2016

and

$3,787,803

in

2015

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 1 7			20 16			20 15
Statutory Federal Income Taxes	$	4,954,199		$	4,283,394		$	4,134,570
Tax-Exempt Interest		(102,345	)		(109,759	)		(83,903	)
Income from Cash Value Life Insurance, net of premiums		(198,730	)		(182,532	)		(232,988	)
Meal and Entertainment Disallowance		14,354			16,813			21,600
Other		69,029			(156,583	)		(51,476	)
Tax Expense from Tax Rate Changes		2,040,946			-			-
Actual Federal Income Taxes	$	6,777,453		$	3,851,333		$	3,787,803

Deferred

taxes, which are included in Other Assets, in the accompanying consolidated balance sheets as of

December 31

include the following:

	20 1 7			20 16
Deferred Tax Assets
Allowance for Loan Losses	$	1,576,577		$	3,033,920
Other Real Estate		304,813			688,162
Deferred Compensation		161,000			280,704
Investments		210,000			340,000
Goodwill		76,058			167,666
Other		237,591			379,304
	$	2,566,039			4,889,756
Deferred Tax Liabilities
Premises and Equipment		(995,190	)		(1,553,460	)
Other		(2,585	)		(4,185	)
		(997,775	)		(1,557,645	)
Deferred Tax Assets (Liabilities) on Unrealized Securities Gains (Losses)		1,725,708			2,587,163
Net Deferred Tax Assets	$	3,293,972		$	5,919,274