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Note 11 - Federal Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | NOTE 11 - FEDERAL INCOME TAXES The consolidated income tax expense is as follows:
|  | 2014 |  |  | 2013 |  |  | 2012 |
Current expense |  | $ | 3,359,000 |  |  | $ | 0 |  |  | $ | 0 |
Deferred expense |  |  | 4,506,000 |  |  |  | 8,092,000 |  |  |  | 5,636,000 |
Tax expense |  | $ | 7,865,000 |  |  | $ | 8,092,000 |  |  | $ | 5,636,000 |
A reconciliation of the differences between the federal income tax expense recorded and the amount computed by applying the federal statutory rate to income before income taxes is as follows:
|  | 2014 |  |  | 2013 |  |  | 2012 |
Tax at statutory rate (35%) |  | $ | 8,819,000 |  |  | $ | 8,794,000 |  |  | $ | 6,360,000 |
Increase (decrease) from |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt interest |  |  | (621,000 | ) |  |  | (347,000 | ) |  |  | (486,000 | )
Bank owned life insurance |  |  | (415,000 | ) |  |  | (465,000 | ) |  |  | (535,000 | )
Other |  |  | 82,000 |  |  |  | 110,000 |  |  |  | 297,000 |
Tax expense |  | $ | 7,865,000 |  |  | $ | 8,092,000 |  |  | $ | 5,636,000 |
Significant components of deferred tax assets and liabilities as of December 31, 2014 and 2013 are as follows:
|  | 2014 |  |  | 2013 |
Deferred income tax assets |  |  |  |  |  |  |  |
Allowance for loan losses |  | $ | 7,014,000 |  |  | $ | 7,987,000 |
Tax credit carryforwards |  |  | 3,395,000 |  |  |  | 1,397,000 |
Nonaccrual loan interest income |  |  | 471,000 |  |  |  | 605,000 |
Deferred compensation |  |  | 1,304,000 |  |  |  | 567,000 |
Deferred loan fees |  |  | 445,000 |  |  |  | 273,000 |
Fair value write-downs on foreclosed properties |  |  | 212,000 |  |  |  | 241,000 |
Fair value of interest rate swap |  |  | 89,000 |  |  |  | 92,000 |
Losses on capital investments |  |  | 450,000 |  |  |  | 0 |
Stock compensation |  |  | 521,000 |  |  |  | 207,000 |
Net operating loss carryforward |  |  | 0 |  |  |  | 4,050,000 |
Unrealized loss on securities |  |  | 0 |  |  |  | 2,908,000 |
Other |  |  | 725,000 |  |  |  | 136,000 |
|  |  | 14,626,000 |  |  |  | 18,463,000 |
Deferred income tax liabilities |  |  |  |  |  |  |  |
Depreciation |  |  | 1,217,000 |  |  |  | 419,000 |
Prepaid expenses |  |  | 425,000 |  |  |  | 192,000 |
Core deposit intangible |  |  | 5,386,000 |  |  |  | 0 |
Mortgage loan servicing rights |  |  | 2,349,000 |  |  |  | 0 |
Unrealized gain on securities |  |  | 112,000 |  |  |  | 0 |
Other |  |  | 476,000 |  |  |  | 98,000 |
|  |  | 9,965,000 |  |  |  | 709,000 |
Net deferred tax asset before valuation allowance |  |  | 4,661,000 |  |  |  | 17,754,000 |
Valuation allowance |  |  | (450,000 | ) |  |  | 0 |
Total net deferred tax asset |  | $ | 4,211,000 |  |  | $ | 17,754,000 |
A valuation allowance related to deferred tax assets is required when it is considered more likely than not that all or part of the benefits related to such assets will not be realized. We do not believe the deferred tax asset related to losses on certain capital investments acquired in our merger with Firstbank is more likely than not to be realized. Therefore, we established a valuation allowance of $0.5 million in connection with the acquisition accounting at the time of the merger. At December 31, 2014, we had carryforwards of the following tax attributes: general business tax credits of $0.6 million that expire in the years 2028 through 2034; and $2.8 million of federal alternative minimum tax credits with an indefinite life. We had no unrecognized tax benefits at any time during 2014 or 2013 and do not anticipate any significant increase in unrecognized tax benefits during 2015. Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, it is our policy to record such accruals in our income tax accounts; no such accruals existed at any time during 2014 or 2013. Our U.S. federal income tax returns are no longer subject to examination for all years before 2011.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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