Note 10 - Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 10: Income Taxes

The Company files United States federal income tax returns, and Virginia, West Virginia and North Carolina state income tax returns. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2010.

Allocation of income tax expense between current and deferred portions is as follows:

	Years ended December 31,
	2014		2013		2012
Current	$	5,105	$	5,253	$	5,064
Deferred expense		73		64		181
Total income tax expense	$	5,178	$	5,317	$	5,245

The following is a reconciliation of the “expected” income tax expense, computed by applying the U.S. Federal income tax rate of 35% to income before income tax expense, with the reported income tax expense:

	Years ended December 31,
	2014			2013			2012
Computed “expected” income tax expense	$	7,732		$	8,087		$	8,047
Tax-exempt interest income		(2,422	)		(2,592	)		(2,554	)
Nondeductible interest expense		102			118			139
Other, net		(234	)		(296	)		(387	)
Reported income tax expense	$	5,178		$	5,317		$	5,245

The components of net deferred tax assets, included in other assets, are as follows:

	December 31,
	2014			2013
Deferred tax assets:
Allowance for loan losses and unearned fee income	$	3,098		$	3,169
Valuation allowance on other real estate owned		37			110
Deferred compensation and other liabilities		1,897			1,201
Discount accretion of securities		28			29
Net unrealized loss on securities available for sale		852			7,545
Total deferred tax assets	$	5,912		$	12,054
Deferred tax liabilities:
Fixed assets	$	(160	)	$	(270	)
Deposit intangibles		(1,312	)		(1,191	)
Total deferred tax liabilities		(1,472	)		(1,461	)
Net deferred tax assets	$	4,440		$	10,593

The Company has determined that a valuation allowance for the gross deferred tax assets is not necessary at December 31, 2014 and 2013 because the realization of all gross deferred tax assets can be supported by the amount of taxes paid during the carryback period available under current tax laws.