XML 40 R22.htm IDEA: XBRL DOCUMENT
v3.6.0.2

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2016
INCOME TAXES [Abstract] |
INCOME TAXES | ﻿ 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) |  | 2016 |  | 2015 |  | 2014
﻿Current tax expense (benefit): |  |  |  |  |  |  |  |  |
﻿Federal |  | $ | 525 |  | $ | 247 |  | $ | -
﻿State |  |  | 19 |  |  | 287 |  |  | 225
﻿ |  |  | 544 |  |  | 534 |  |  | 225
﻿Deferred income tax expense (benefit): |  |  |  |  |  |  |  |  |
﻿Federal |  |  | 4,486 |  |  | 3,369 |  |  | 2,516
﻿State |  |  | 1,230 |  |  | 505 |  |  | 320
﻿ |  |  | 5,716 |  |  | 3,874 |  |  | 2,836
﻿ |  |  |  |  |  |  |  |  |
﻿Total income tax expense (benefit) |  | $ | 6,261 |  | $ | 4,408 |  | $ | 3,061
The following table provides a reconciliation of tax computed at th e statutory federal tax rate to the actual tax expense (benefit) for each of the three years ended December 31. ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿(Dollars in thousands) |  | 2016 |  | 2015 |  | 2014
﻿Tax at federal statutory rate |  | 35.0 | % |  | 34.0 | % |  | 34.0 | %
﻿Tax effect of: |  |  |  |  |  |  |  |  |
﻿Tax-exempt income |  | (0.8) |  |  | (0.4) |  |  | (0.9) |
﻿Other non-deductible expenses |  | 0.3 |  |  | 0.2 |  |  | 0.3 |
﻿State income taxes, net of federal benefit |  | 5.1 |  |  | 4.5 |  |  | 4.4 |
﻿Other |  | (0.2) |  |  | (0.1) |  |  | (0.1) |
﻿ |  |  |  |  |  |  |  |  |
﻿Actual income tax expense (benefit) rate |  | 39.4 | % |  | 38.2 | % |  | 37.7 | %
﻿ The following table provides information on significant components of the Company’s deferred tax assets and liabilities as of December 31. ﻿
﻿ |  |  |  |  |  |
﻿(Dollars in thousands) |  | 2016 |  | 2015
﻿Deferred tax assets: |  |  |  |  |  |
﻿Allowance for credit losses |  | $ | 3,486 |  | $ | 3,316
﻿Reserve for off-balance sheet commitments |  |  | 122 |  |  | 121
﻿Net operating loss carry forward |  |  | 2,232 |  |  | 9,069
﻿Write-downs of other real estate owned |  |  | 387 |  |  | 308
﻿Deferred income |  |  | 1,011 |  |  | 1,155
﻿Unrealized gains on available-for-sale securities |  |  | 672 |  |  | 48
﻿Accrued expenses |  |  | - |  |  | 946
﻿AMT Credits |  |  | 869 |  |  | -
﻿Other |  |  | 1,192 |  |  | 191
﻿Total deferred tax assets |  |  | 9,971 |  |  | 15,154
﻿Deferred tax liabilities: |  |  |  |  |  |
﻿Depreciation |  |  | 239 |  |  | 271
﻿Amortization on loans FMV adjustment |  |  | 156 |  |  | 140
﻿Purchase accounting adjustments |  |  | 2,019 |  |  | 1,988
﻿Deferred capital gain on branch sale |  |  | 401 |  |  | 411
﻿Other |  |  | 116 |  |  | 212
﻿Total deferred tax liabilities |  |  | 2,931 |  |  | 3,022
﻿Net deferred tax assets |  | $ | 7,040 |  | $ | 12,132
The Company’s deferred tax assets consists of gross net operating loss carryovers for federal and state of $2.2 million and $27.3 million that will be used to offset taxable income in future periods. The Company’s federal and state net operating loss carryovers are available for use through December 31, 2033 while its state net operating losses will begin to expire in the year ended December 31, 2026 with limited amounts available through December 31, 2034. Additionally, the Company has $869 thousand of alternative minimum tax credit carryforwards as of December 31, 2016 which may be carried forward indefinitely. ﻿ No valuation allowance on these deferred tax assets was recorded at December 31, 2016 and December 31, 2015 as management believes it is more likely than not that all deferred tax assets will be realized based on the following positive material factors: 1) The Company was profitable for all four quarters of 2014, 2015 and 2016 on a GAAP basis. The net operating loss was originally created in the third quarter of 2013 and was solely attributable to the former Talbot Bank’s sale of loans and other real estate owned (the “Asset Sale”), which is considered non-recurring. 2) The Company had pre-tax income of $15.9 million and $11.5 million for the years ended December 31, 2016 and 2015, providing further evidence that the Asset Sale was producing positive results and confirming the expectation of utilizing the deferred tax assets. Alternatively, the Company has reviewed negative factors which would influence the conclusion of realizing the deferred tax assets. These factors include the following: 1) 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”). 2) Although the local economy of the market in which the Company operates has been showing continued signs of improvement over the past four years, if this trend flattens or reverses, there is a potential that this potential negative evidence could outweigh the prevailing positive factors. Based on the aforementioned considerations, the Company has 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 tax assets.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 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 2: 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=65882285&loc=d3e32559-109319 Reference 3: 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=65882285&loc=d3e32718-109319 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=65882285&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=65882285&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration