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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2020
INCOME TAXES [Abstract] |
Provision for Income Taxes | The provision for income taxes consists of the following (in thousands):
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Currently payable |  | $ | 4,896 |  |  | $ | 3,503 |  |  | $ | 3,838 |
Deferred tax liability (asset) |  |  | 367 |  |  |  | 317 |  |  |  | (435 | )
Provision for income taxes |  | $ | 5,263 |  |  | $ | 3,820 |  |  | $ | 3,403 |
Deferred Tax Assets and Liabilities | The following temporary differences gave rise to the net deferred tax asset and liabilities at December 31, 2020 and 2019, respectively (in thousands):
|  | 2020 |  |  | 2019 |
Deferred tax assets: |  |  |  |  |  |
Allowance for loan losses |  | $ | 5,135 |  |  | $ | 3,470 |
Deferred compensation |  |  | 520 |  |  |  | 500 |
Merger & acquisition costs |  |  | 2 |  |  |  | - |
Allowance for losses on available-for-sale securities |  |  | 15 |  |  |  | - |
Pension and other retirement obligation |  |  | 599 |  |  |  | 368 |
Unrealized loss on interest rate swap |  |  | 2 |  |  |  | - |
Interest on non-accrual loans |  |  | 778 |  |  |  | 726 |
Incentive plan accruals |  |  | 489 |  |  |  | 418 |
Other real estate owned |  |  | 16 |  |  |  | - |
Low income housing tax credits |  |  | 131 |  |  |  | 135 |
NOL carry forward |  |  | 1,321 |  |  |  | 83 |
Lease liability |  |  | 482 |  |  |  | - |
Accrued vacation |  |  | 187 |  |  |  | - |
Other |  |  | 224 |  |  |  | 146 |
Total |  | $ | 9,901 |  |  | $ | 5,846 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Premises and equipment |  | $ | (612 | ) |  | $ | (662 | )
Investment securities accretion |  |  | (68 | ) |  |  | (70 | )
Loan fees and costs |  |  | (333 | ) |  |  | (238 | )
Goodwill and core deposit intangibles |  |  | (2,293 | ) |  |  | (2,248 | )
Mortgage servicing rights |  |  | (215 | ) |  |  | (134 | )
Unrealized gains on available-for-sale securities |  |  | (1,612 | ) |  |  | (630 | )
Right of use asset |  |  | (480 | ) |  |  | - |
Other |  |  | (245 | ) |  |  | (1 | )
Total |  |  | (5,858 | ) |  |  | (3,983 | )
Deferred tax asset, net |  | $ | 4,043 |  |  | $ | 1,863 |
Reconciliation of Statutory Tax Rates to Effective Tax Rates | The total provision for income taxes is different from that computed at the statutory rates due to the following items (dollars in thousands):
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Provision at statutory rates on pre-tax income |  | $ | 6,377 |  |  | $ | 4,895 |  |  | $ | 4,502 |
Effect of tax-exempt income |  |  | (936 | ) |  |  | (920 | ) |  |  | (955 | )
Low income housing tax credits |  |  | (141 | ) |  |  | (141 | ) |  |  | (141 | )
Bank owned life insurance |  |  | (146 | ) |  |  | (131 | ) |  |  | (131 | )
Nondeductible interest |  |  | 44 |  |  |  | 52 |  |  |  | 41 |
Nondeductible merger and acquisition expenses |  |  | 32 |  |  |  | 38 |  |  |  | - |
Other items |  |  | 33 |  |  |  | 27 |  |  |  | 87 |
Provision for income taxes |  | $ | 5,263 |  |  | $ | 3,820 |  |  | $ | 3,403 |
Statutory tax rates |  |  | 21 | % |  |  | 21 | % |  |  | 21 | %
Effective tax rates |  |  | 17.3 | % |  |  | 16.4 | % |  |  | 15.9 | %

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