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INCOME TAXES | 12 Months Ended
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Dec. 31, 2017
INCOME TAXES [Abstract] |
INCOME TAXES | ﻿ NOTE 1 6. 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) |  | 2017 |  | 2016 |  | 2015
﻿Current tax expense: |  |  |  |  |  |  |  |  |
﻿Federal |  | $ | 4,047 |  | $ | 525 |  | $ | 247
﻿State |  |  | - |  |  | 19 |  |  | 287
﻿ |  |  | 4,047 |  |  | 544 |  |  | 534
﻿Deferred income tax expense: |  |  |  |  |  |  |  |  |
﻿Federal |  |  | 2,903 |  |  | 4,486 |  |  | 3,369
﻿State |  |  | 1,573 |  |  | 1,231 |  |  | 505
﻿ |  |  | 4,476 |  |  | 5,717 |  |  | 3,874
﻿ |  |  |  |  |  |  |  |  |
﻿Total income tax expense |  | $ | 8,523 |  | $ | 6,261 |  | $ | 4,408
﻿ ﻿ The U.S. Tax Cuts and Jobs Act (“Tax Act”) was enacted on December 22, 2017 and introduces significant changes to U.S. income tax law. Effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21% and creates new taxes on certain foreign-sourced earnings and certain related-party payments, which are referred to as the global intangible low-taxes income tax and the base erosion tax, respectively. In addition, in 2017 the Company was subject to a one-time transition tax on accumulated foreign subsidiary earnings not previously subject to U.S. income tax. ﻿ Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, the Company has made reasonable estimates of the effects and recorded provisional amounts in its financial statements as of December 31, 2017. As the Company collects and prepares the necessary data and interprets the Tax Act and any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, it may make adjustments to the provisional amounts. Those adjustments may materially impact the Company’s provision for income taxes and effective tax rate in the period in which the adjustments are made. The accounting for the tax effects of the Tax Act will be completed in 2018. ﻿ Provisional amounts of the following income tax effects of the Tax Act have been recorded as of December 31, 2017 and are subject to change during 2018. ﻿ One-time transition tax The Tax Act requires the Company to pay U.S. income taxes on accumulated foreign subsidiary earnings not previously subject to U.S. income tax at a rate of 15.5% to the extent foreign cash and certain other net current assets and 8% on the remaining earnings. The Company recorded a provisional amount for its one-time transitional tax liability and income tax expense of $100.1 thousand. The Company recorded provisional amounts based on estimates of the effects of the Tax Act as the analysis requires significant data from its foreign subsidiary that is not regularly collected or analyzed. ﻿ Deferred tax effects The Tax Act reduces the U.S. statutory tax rate from 35% to 21% for years after 2017. Accordingly, the Company remeasured its deferred taxes as of December 31, 2017 to reflect the reduced tax rate that will apply in future periods when these deferred taxes are settled or realized. The Company recognized a deferred tax reduction of $582 thousand to reflect the reduced U.S. tax rate and other effects of the Tax Act. Although the tax rate reduction is known, the Company has not collected the necessary data to complete its analysis of the effect of the Tax Act on the underlying deferred taxes and as such, the amounts recorded as of December 31, 2017 are provisional. ﻿ The net tax expense recognized in 2017 related to the Tax Act was $582 thousand. As the Company completes its analysis of the Tax Act and incorporated additional guidance that may be issued by the U.S. Treasury Department, the IRS or other standard-setting bodies, it may identify additional effects not reflected as of December 31, 2017. ﻿ The following table provides a reconciliation of tax computed at the statutory federal tax rate to the actual tax expense (benefit) for each of the three years ended December 31. ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿(Dollars in thousands) |  | 2017 |  | 2016 |  | 2015
﻿Tax at federal statutory rate |  | 35.0 | % |  | 35.0 | % |  | 34.0 | %
﻿Tax effect of: |  |  |  |  |  |  |  |  |
﻿Tax-exempt income |  | (1.0) |  |  | (0.8) |  |  | (0.4) |
﻿Other non-deductible expenses |  | 0.1 |  |  | 0.3 |  |  | 0.2 |
﻿State income taxes, net of federal benefit |  | 5.2 |  |  | 5.1 |  |  | 4.5 |
﻿Tax impact from enacted change in tax rate |  | 2.9 |  |  | - |  |  | - |
﻿Other |  | 0.9 |  |  | (0.2) |  |  | (0.1) |
﻿Actual income tax expense rate |  | 43.1 | % |  | 39.4 | % |  | 38.2 | %
﻿ ﻿ ﻿ ﻿ ﻿ ﻿ ﻿ ﻿ The following table provides information on significant components of the Company’s deferred tax assets and liabilities as of December 31. The Company recorded a provisional adjustment to our U.S. deferred income taxes as of December 31, 2017 to reflect the reduction in the U.S. statutory tax rate from 35% to 21% resulting from the Tax Act. ﻿
﻿ |  |  |  |  |  |
﻿(Dollars in thousands) |  | 2017 |  | 2016
﻿Deferred tax assets: |  |  |  |  |  |
﻿Allowance for credit losses |  | $ | 2,625 |  | $ | 3,486
﻿Reserve for off-balance sheet commitments |  |  | 81 |  |  | 122
﻿Net operating loss carry forward |  |  | 741 |  |  | 2,232
﻿Write-downs of other real estate owned |  |  | 212 |  |  | 387
﻿Deferred income |  |  | 95 |  |  | 1,011
﻿Unrealized losses on available-for-sale securities |  |  | 460 |  |  | 630
﻿Unrealized losses on available-for-sale securities |  |  |  |  |  |
﻿ transferred to held to maturity |  |  | 20 |  |  | 42
﻿AMT Credits |  |  | - |  |  | 869
﻿Other |  |  | 635 |  |  | 1,192
﻿Total deferred tax assets |  |  | 4,869 |  |  | 9,971
﻿Deferred tax liabilities: |  |  |  |  |  |
﻿Depreciation |  |  | 408 |  |  | 239
﻿Amortization on loans FMV adjustment |  |  | 84 |  |  | 156
﻿Purchase accounting adjustments |  |  | 1,994 |  |  | 2,019
﻿Deferred capital gain on branch sale |  |  | 207 |  |  | 401
﻿Other |  |  | 241 |  |  | 116
﻿Total deferred tax liabilities |  |  | 2,934 |  |  | 2,931
﻿Net deferred tax assets |  | $ | 1,935 |  | $ | 7,040
The Company’s deferred tax assets consist of gross net operating loss carryovers for state tax purposes of $12.1 million that will be used to offset taxable income in future periods. The Company’s state net operating loss carryovers will begin to expire in the year ended December 31, 2026 with limited amounts available through December 31, 2034. ﻿ No federal NOL exists as of December 31, 2017. ﻿ No valuation allowance on these deferred tax assets was recorded at December 31, 2017 and December 31, 2016 as management believes it is more likely than not that all deferred tax assets will be realized.

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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 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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