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INCOME TAXES | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | NOTE 15. INCOME TAXES The following table provides information on components of income tax expense for each of the three years ended December 31.
(Dollars in thousands) |  | 2014 |  | 2013 |  | 2012 |
Current tax expense (benefit): |  |  |  |  |  |  |  |  |  |
Federal |  | $ | - |  | $ | (459) |  | $ | (2,007) |
State |  |  | 225 |  |  | 90 |  |  | 210 |
|  |  | 225 |  |  | (369) |  |  | (1,797) |
Deferred income tax expense (benefit): |  |  |  |  |  |  |  |  |  |
Federal |  |  | 2,516 |  |  | (4,592) |  |  | (3,110) |
State |  |  | 320 |  |  | (1,540) |  |  | (1,658) |
|  |  | 2,836 |  |  | (6,132) |  |  | (4,768) |
Total income tax expense (benefit) |  | $ | 3,061 |  | $ | (6,501) |  | $ | (6,565) |
The following table provides a reconciliation of tax computed at the statutory federal tax rate of 34.0% to the actual tax expense (benefit) for each of the three years ended December 31.
(Dollars in thousands) |  | 2014 |  | 2013 |  | 2012 |
Tax at federal statutory rate |  | 34.0 | % | (34.0) | % | (34.0) | %
Tax effect of: |  |  |  |  |  |  |
Tax-exempt income |  | (0.9) |  | (0.4) |  | (0.6) |
Other non-deductible expenses |  | 0.3 |  | 0.2 |  | 0.2 |
State income taxes, net of federal benefit |  | 4.4 |  | (5.9) |  | (5.9) |
Other |  | (0.1) |  | (0.2) |  | (0.2) |
Actual income tax expense (benefit) rate |  | 37.7 | % | (40.3) | % | (40.5) | %
The following table provides information on significant components of the Company’s deferred tax assets and liabilities as of December 31.
(Dollars in thousands) |  | 2014 |  | 2013 |
Deferred tax assets: |  |  |  |  |  |  |
Allowance for credit losses |  | $ | 3,072 |  | $ | 4,298 |
Reserve for off-balance sheet commitments |  |  | 121 |  |  | 180 |
Net operating loss carry forward |  |  | 13,265 |  |  | 14,430 |
Write-downs of other real estate owned |  |  | 355 |  |  | 400 |
Deferred income |  |  | 1,132 |  |  | 1,108 |
Accrued expenses |  |  | 918 |  |  | 936 |
Unrealized losses on available-for-sale securities |  |  | - |  |  | 296 |
Other |  |  | 80 |  |  | 83 |
Total deferred tax assets |  |  | 18,943 |  |  | 21,731 |
Deferred tax liabilities: |  |  |  |  |  |  |
Depreciation |  |  | 372 |  |  | 463 |
Purchase accounting adjustments |  |  | 1,751 |  |  | 1,305 |
Deferred capital gain on branch sale |  |  | 425 |  |  | 438 |
Unrealized gains on available-for-sale securities |  |  | 214 |  |  | - |
Other |  |  | 437 |  |  | 435 |
Total deferred tax liabilities |  |  | 3,199 |  |  | 2,641 |
Net deferred tax assets |  | $ | 15,744 |  | $ | 19,090 |
The Company’s deferred tax assets primarily consist of net operating loss carryovers that will be used to offset taxable income in future periods through their statutory period of 20 years for federal tax purposes. No valuation allowance on these deferred tax assets was recorded at December 31, 2014 and December 31, 2013 as management believes it is more likely than not that all deferred tax assets will be realized based on the following positive material assumptions: 1) The Company was profitable for three of the four quarters in 2013 on a GAAP basis. The loss experienced in the third quarter of 2013 was solely attributable to the Asset Sale which is considered non-recurring. 2) The Company had pre-tax income of $8.1 million for the year ended December 31, 2014, providing further evidence that the Asset Sale was producing positive results and confirming the expectation of utilizing the deferred tax assets. 3) As a contingent opportunity, the Company has had discussions with certain investors about entering into a sales leaseback transaction for some of its branch locations which would generate a material taxable gain. The decision to act on this has been deferred; however, it would become a very viable option as a tax planning strategy if there was a risk that the net operating loss carryovers would expire before they were fully utilized. Alternatively, the Company has reviewed negative factors which would influence the conclusion of realizing the deferred tax assets which include the following: The Company could be subject to Section 382 of the Internal Revenue Code (“IRC”), which could further limit the realization of the net operating loss-related deferred tax asset (“NOL-DTA”). Although the local economy of the market in which the Company operates has been showing continued signs of improvement over the past two years, if this trend flattens or reverses, there is a potential that this negative evidence could outweigh the prevailing positive factors. Based on the aforementioned considerations, the preponderance of positive factors, mitigation of negative factors, and no intensions of planned material non-routine transactions, the Company concluded that the predominance of observable positive evidence outweighs the future potential of negative evidence and therefore it is more likely than not that the Company will be able to realize in the future all of the net deferred income taxes.

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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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