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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Components of Income Tax Expense Attributable to Income from Operations | For the years ended December 31, 2017, 2016 and 2015, income tax expense attributable to income from operations consisted of the following (in thousands):
|  | 2017 |  | 2016 |  | 2015
Current expense: |  |  |  |  |  |
Federal |  | $ | 2,594 |  |  | $ | 6,330 |  |  | $ | 3,668 |
State |  | 417 |  |  | 638 |  |  | 216 |
Total current |  | 3,011 |  |  | 6,968 |  |  | 3,884 |
Deferred expense/(benefit): |  |  |  |  |  |
Federal |  | 942 |  |  | (2,177 | ) |  | 595 |
State |  | 382 |  |  | (387 | ) |  | 179 |
Remeasurement of deferred tax assets |  | 2,927 |  |  | — |  |  | — |
Total deferred |  | 4,251 |  |  | (2,564 | ) |  | 774 |
Income tax expense |  | $ | 7,262 |  |  | $ | 4,404 |  |  | $ | 4,658 |
Reconciliation of Income Tax Expense | Income tax expense differed from the amounts computed by applying the U.S. Federal statutory income tax rate to income before income tax expense as follows (in thousands):
|  | 2017 |  | 2016 |  | 2015
Statutory federal tax rate |  | 34 | % |  | 34 | % |  | 34 | %
Tax computed at statutory rate |  | $ | 5,006 |  |  | $ | 4,907 |  |  | $ | 4,791 |
Increase (reduction) resulting from: |  |  |  |  |  |
Tax-exempt income |  | (663 | ) |  | (511 | ) |  | (441 | )
831(b) premium adjustment |  | (269 | ) |  | (368 | ) |  | — |
Dividend exclusion |  | (8 | ) |  | (5 | ) |  | (41 | )
State taxes, net of Federal impact |  | 201 |  |  | 165 |  |  | 238 |
Nondeductible interest expense |  | 8 |  |  | 9 |  |  | 8 |
Remeasurement of deferred tax assets |  | 2,927 |  |  | — |  |  | — |
Other items, net |  | 60 |  |  | 207 |  |  | 103 |
Income tax expense |  | $ | 7,262 |  |  | $ | 4,404 |  |  | $ | 4,658 |
Effective tax rate |  | 49.4 | % |  | 30.5 | % |  | 33.1 | %
Deferred Tax Assets and Deferred Tax Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016, are presented below (in thousands):
|  | 2017 |  | 2016
Deferred tax assets: |  |  |  |
Allowance for loan losses |  | $ | 5,396 |  |  | $ | 5,405 |
Accrual for employee benefit plans |  | 186 |  |  | 337 |
Depreciation |  | 86 |  |  | 2,119 |
Deferred compensation and directors' fees |  | 872 |  |  | 1,195 |
Purchase accounting adjustment – deposits |  | 7 |  |  | 21 |
Purchase accounting adjustment – loans |  | 35 |  |  | 44 |
Purchase accounting adjustment – fixed assets |  | 149 |  |  | 221 |
Gain on deemed sale of securities |  | 567 |  |  | 798 |
Net unrealized losses on securities available for sale |  | 1,169 |  |  | 2,643 |
Accounting for defined benefit pension and other benefit plans |  | 2,370 |  |  | 4,091 |
Nonaccrued interest |  | 544 |  |  | 944 |
Accrued expense |  | 868 |  |  | 854 |
Other items, net |  | 160 |  |  | 286 |
Total gross deferred tax assets |  | 12,409 |  |  | 18,958 |
Deferred tax liabilities: |  |  |  |
Deferred loan fees and costs |  | 676 |  |  | 940 |
Prepaid pension |  | 3,023 |  |  | 3,956 |
Discount accretion |  | 239 |  |  | 342 |
Core deposit intangible |  | 1,026 |  |  | 1,460 |
REIT dividend |  | 844 |  |  | — |
Other |  | 101 |  |  | 152 |
Total gross deferred tax liabilities |  | 5,909 |  |  | 6,850 |
Net deferred tax asset |  | $ | 6,500 |  |  | $ | 12,108 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: 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=84230637&loc=d3e32639-109319 + Details
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