Note 10 - Income Taxes

12 Months Ended

Dec. 31, 2015

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 2012.

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

	Years ended December 31,
	2015		2014		2013
Current	$	4,730	$	5,105	$	5,253
Deferred expense		10		73		64
Total income tax expense	$	4,740	$	5,178	$	5,317

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,
	2015			2014			2013
Computed “expected” income tax expense	$	7,201		$	7,732		$	8,087
Tax-exempt interest income		(2,381	)		(2,422	)		(2,592	)
Nondeductible interest expense		101			102			118
Other, net		(181	)		(234	)		(296	)
Reported income tax expense	$	4,740		$	5,178		$	5,317

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

	December 31,
	2015			2014
Deferred tax assets:
Allowance for loan losses and unearned fee income	$	3,229		$	3,098
Valuation allowance on other real estate owned		188			37
Deferred compensation and other liabilities		2,829			1,897
Discount accretion of securities		19			28
Net unrealized loss on securities available for sale		1,436			852
Total deferred tax assets	$	7,701		$	5,912
Deferred tax liabilities:
Fixed assets	$	(620	)	$	(160	)
Deposit intangibles		(1,432	)		(1,312	)
Total deferred tax liabilities		(2,052	)		(1,472	)
Net deferred tax assets	$	5,649		$	4,440

The Company has determined that a valuation allowance for the gross deferred tax assets is not necessary at December 31, 2015 and 2014 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.