Note 10 - Income Taxes

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(

10

)

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 remeasured our deferred tax assets and liabilities based upon the new U.S. statutory federal income tax rate of

21

percent, which is the tax rate at which these assets and liabilities are expected to reverse in the future. 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 8		2017		2016
Current Federal Expense	$	2,727,094	$	3,943,495	$	3,629,213
Deferred Federal Expense		273,176		793,012		222,120
Deferred Tax Expense from Tax Rate Changes		-		2,040,946		-
Federal Income Tax Expense		3,000,270		6,777,453		3,851,333
Current State Income Tax Expense		-		-		-
Federal and State Income Tax Expense	$	3,000,270	$	6,777,453	$	3,851,333

The federal income tax expense of

$3,000,270

in

2018,

$6,777,453

in

2017

and

$3,851,333

in

2016

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 8			2017			2016
Statutory Federal Income Taxes	$	3,132,711		$	4,954,199		$	4,283,394
Tax-Exempt Interest		(57,271	)		(102,345	)		(109,759	)
Income from Cash Value Life Insurance, net of premiums		(96,733	)		(198,730	)		(182,532	)
Meal and Entertainment Disallowance		9,578			14,354			16,813
Other		11,985			69,029			(156,583	)
Tax Expense from Tax Rate Changes		-			2,040,946			-
Actual Federal Income Taxes	$	3,000,270		$	6,777,453		$	3,851,333

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

December 31

include the following:

	20 1 8			2017
Deferred Tax Assets
Allowance for Loan Losses	$	1,528,129		$	1,576,577
Other Real Estate		183,997			304,813
Deferred Compensation		148,402			161,000
Core Deposit Intangible		1,307			-
Investments		210,000			210,000
Goodwill		48,086			76,058
Restricted Stock		2,917			-
Other		201,574			237,591
	$	2,324,412		$	2,566,039
Deferred Tax Liabilities
Premises and Equipment		(1,023,090	)		(995,190	)
Other		(6,234	)		(2,585	)
		(1,029,324	)		(997,775	)
Deferred Tax Assets (Liabilities) on Unrealized Securities Gains (Losses)		2,177,113			1,725,708
Net Deferred Tax Assets	$	3,472,201		$	3,293,972