13. INCOME TAX EXPENSE

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

NOTE 13. INCOME TAX EXPENSE

The components of income tax expense were as follows:

	2016			2015			2014
Current expense
Federa	$	3,108,055		$	3,227,013		$	1,777,598
Deferred (benefit) expense
Federal		(8,751	)		(340,941	)		505,684
State		-			-			9,854
Total Deferred (benefit) expense		(8,751	)		(340,941	)		515,538
Total Income Tax Expense	$	3,099,305		$	2,886,072		$	2,293,136

The components of deferred taxes as of December 31, were as follows:

	2016		2015
Deferred Tax Assets:
Allowance for loan losses	$	2,353,979	$	2,564,214
Split Dollar Life Insurance		4,440		4,440
Nonqualified deferred compensation		855,635		702,440
Low income housing partnerships losses		93,561		210,107
Core deposit amortization		165,124		176,605
Other real estate owned		280,248		269,610
Unfunded pension benefit obligation		1,633,388		1,382,268
Total Assets	$	5,386,375	$	5,309,684

	2016		2015
Deferred Tax Liabilities:
Unearned low income housing credits	$	307,042	$	418,416
Depreciation		437,253		359,406
Prepaid pension		1,839,781		1,988,736
Goodwill tax amortization		900,641		901,340
Net unrealized gain on securities available for sale		2,989		1,757
Total Liabilities		3,487,706		3,669,655
Net Deferred Tax Asset (included in Other Assets on Balance Sheet)	$	1,898,668	$	1,640,029

The following table summarizes the differences between the actual income tax expense and the amounts computed using the federal statutory tax rates:

	2016			2015			2014
Tax expense at federal statutory rates	$	4,306,709		$	3,843,048		$	2,959,056
Increases (decreases) in taxes resulting from:
State income taxes, net of federal benefit		5,882			8,087			8,659
Partially tax-exempt income		(41,135	)		(46,348	)		(54,529	)
Tax-exempt income		(216,999	)		(222,672	)		(190,192	)
LIH and historic credits		(896,063	)		(700,882	)		(506,742	)
Deferred Tax Asset Valuation Allowance – reversal		-			-			396,440
Other		(59,088	)		4,840			(112,714	)
Total Income Tax Expense	$	3,099,305		$	2,886,072		$	2,293,136

The Company has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions in accordance with accounting guidance related to income taxes.

The Company and its subsidiaries file federal income tax returns and state income tax returns. With few exceptions, the Company is no longer subject to federal or state income tax examinations by tax authorities for years before 2013.