Note 9 - Income Taxes

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

9. INCOME TAXES

The provision for income taxes was

$0.4

million for both of the

nine

-month periods ended

September 30, 

2017

and

2016.

The Company’s effective tax rate was

23.0%

and

23.4%,

respectively, for the same periods. The effective tax rate is impacted by recurring permanent differences, such as those associated with bank-owned life insurance and tax-exempt investments and loan income.

The Company had a net deferred tax asset of

$7.7

million and

$8.7

million as of

September 30, 

2017

and

December 31, 2016,

respectively. The reduction in the net deferred tax asset resulted primarily from the impact of changes in the fair value of securities available-for-sale, as well as the reduction of federal net operating loss carry-forwards.