INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

INCOME TAXES [Abstract]

Components of Provision (Benefits) for Income Taxes

The components of the provision (benefit) for income taxes are as follows:

	2019			2018			2017
Current	$	6,476		$	5,782		$	7,809
Write-off of deferred tax asset related to 2017 Tax Cuts and Jobs Act.		-			-			145
Deferred		563			120			637
Change in valuation allowance		(14	)		(4	)		16
Provision for income taxes	$	7,025		$	5,898		$	8,607

Deferred Tax Assets and Liabilities

The Company’s deferred tax assets and liabilities at December 31 are shown below.

	2019			2018
Deferred tax assets
Allowance for loan losses	$	2,969		$	2,884
Purchase accounting adjustments		605			963
Net operating loss carryforward		453			333
Alternative minimum tax credit carryforward		3			125
Write-downs of other real estate owned		374			235
Taxable income on non-accrual loans		981			896
Accrued expenses		278			235
Unrealized loss on investment securities		-			1,024
Other		16			15
Total deferred tax assets		5,679			6,710
Deferred tax liabilities
Amortization of intangibles	$	(3,072	)	$	(3,063	)
Depreciation		(1,320	)		(1,106	)
Federal Home Loan Bank dividends		(267	)		(224	)
Deferred loan fees		(588	)		(499	)
Unrealized gain on investment securities		(984	)		-
Other		(101	)		(105	)
Total deferred tax liabilities		(6,332	)		(4,997	)
Valuation allowance on deferred tax assets		(158	)		(172	)
Net deferred taxes	$	(811	)	$	1,541

Analysis of Differences Between Effective Tax Rates and Statutory U.S. Federal Income Tax Rate

An analysis of the differences between the effective tax rates and the statutory U.S. federal income tax rate is as follows:

	2019					2018					2017
U.S. federal income tax rate	$	6,556		21.0	%	$	5,474		21.0	%	$	8,200		35.0	%
Changes from the statutory rate
Change in deferred taxes related to decrease in future federal tax rate		-		-			-		-			145		0.6
State income taxes, net		693		2.2			518		2.0			503		2.1
Tax-exempt interest income		(163	)	(0.5	)		(143	)	(0.5	)		(239	)	(1.0	)
Non-deductible interest expense related to carrying tax-exempt interest earning assets		15		0.0			11		0.0			13		0.1
Non-deductible stock compensation expense, net		28		0.1			12		0.0			(35	)	(0.2	)
Tax credits, net		(134	)	(0.4	)		(71	)	(0.3	)		(42	)	(0.2	)
Change in valuation allowance		14		0.0			4		0.0			16		0.1
Other		16		0.1			93		0.4			46		0.2
	$	7,025		22.5	%	$	5,898		22.6	%	$	8,607		36.7	%