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Note 11 - Income Taxes | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | Note 11 – Income Taxes Information as of December 31 and for the year follows:
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Provision for Income Taxes |  |  |  |  |  |  |  |  |  |  |  |
Current federal income tax expense |  | $ | 3,070 |  |  | $ | 984 |  |  | $ | 946 |
Deferred federal income tax expense/(benefit) |  |  | 202 |  |  |  | 310 |  |  |  | 209 |
Income tax expense |  | $ | 3,272 |  |  | $ | 1,294 |  |  | $ | 1,155 |
Reconciliation of Income Tax Provision to Statutory Rate |  |  |  |  |  |  |  |  |  |  |  |
Income tax computed at statutory federal rate of 21% |  | $ | 3,966 |  |  | $ | 1,778 |  |  | $ | 1,783 |
Tax exempt interest income |  |  | (574 | ) |  |  | (320 | ) |  |  | (309 | )
Tax exempt earnings on bank-owned life insurance |  |  | (162 | ) |  |  | (162 | ) |  |  | (81 | )
Tax credits |  |  | (240 | ) |  |  | (218 | ) |  |  | (154 | )
Nondeductible merger expenses |  |  | 182 |  |  |  | 164 |  |  |  | - |
Other items |  |  | 100 |  |  |  | 52 |  |  |  | (84 | )
Income tax expense |  | $ | 3,272 |  |  | $ | 1,294 |  |  | $ | 1,155 |
Effective income tax rate |  |  | 17 | % |  |  | 15 | % |  |  | 14 | %
(Dollars in thousands) |  |  |  |  |  |  |  |
Components of Deferred Tax Assets and Liabilities |  | 2020 |  |  | 2019 |
Deferred tax assets: |  |  |  |  |  |  |  |
Purchase accounting adjustments from mergers with County |  |  |  |  |  |  |  |
and Community Shores |  | $ | 1,953 |  |  | $ | 1,129 |
Allowance for loan losses |  |  | 1,595 |  |  |  | 585 |
Net operating loss carryforward |  |  | 851 |  |  |  | - |
Deferred loan fees |  |  | 466 |  |  |  | 301 |
Write-downs of other real estate owned |  |  | 326 |  |  |  | 169 |
Other |  |  | 380 |  |  |  | 198 |
Total deferred tax assets |  |  | 5,571 |  |  |  | 2,382 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Unrealized gains on securities available for sale |  |  | 2,931 |  |  |  | 360 |
Purchase accounting adjustments from mergers with County |  |  |  |  |  |  |  |
and Community Shores |  |  | 1,403 |  |  |  | 1,285 |
Loan servicing rights |  |  | 833 |  |  |  | 447 |
Depreciation |  |  | 653 |  |  |  | 778 |
Interest rate lock commitments |  |  | 177 |  |  |  | 14 |
Other |  |  | 230 |  |  |  | 221 |
Total deferred tax liabilities |  |  | 6,227 |  |  |  | 3,105 |
Net deferred tax liability |  | $ | (656 | ) |  | $ | (723 | )
As of December 31, 2020, deferred tax assets included federal net operating loss carryforwards of approximately $4.1 million which was acquired through the merger with Community Shores. The loss carryforwards expire at various dates from 2032 to 2036. Deferred tax assets are recognized for net operating losses because the benefit is more likely than not to be realized. Under Internal Revenue Service limitations, ChoiceOne is limited to applying approximately $185,000 of net operating losses per year.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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