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Note 13 - Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

13.

INCOME TAXES

The provision for federal income taxes consists of:

(Dollar amounts in thousands)		2015				2014				2013

Current payable		$	1,004			$	2,146			$	1,556
Deferred			558				(154	)			423

Total provision		$	1,562			$	1,992			$	1,979

The tax effects of deductible and taxable temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

(Dollar amounts in thousands)		2015				2014

Deferred tax assets:
Allowance for loan and lease losses		$	2,171			$	2,328
Supplemental retirement plan			371				282
Investment security basis adjustment			66				66
Nonaccrual interest income			415				444
Deferred origination fees, net			12				295
OREO adjustments			92				94
Accrued compensation			234				207
Other			23				14
Gross deferred tax assets			3,384				3,730

Deferred tax liabilities:
Premises and equipment			514				385
Net unrealized gain on securities			1,233				1,311
FHLB stock dividends			225				225
Intangibles			401				353
Mortgage servicing rights			68				-
Other			44				77
Gross deferred tax liabilities			2,485				2,351

Net deferred tax assets		$	899			$	1,379

No valuation allowance was established at December 31, 2015 and 2014, in view of the Company’s ability to carry back to taxes paid in previous years and certain tax strategies, coupled with the anticipated future taxable income as evidenced by the Company's earnings potential.

The reconciliation between the federal statutory rate and the Company’s effective consolidated income tax rate is as follows:

(Dollar amounts in thousands)		2015								2014								2013
		Amount				% of Pretax Income				Amount				% of Pretax Income				Amount				% of Pretax Income

Provision at statutory rate		$	2,866				34.0	% $			3,119				34.0	% $			3,062				34.0	%
Tax-free income			(1,347	)			(15.9	)			(1,187	)			(12.9	)			(1,138	)			(12.6	)
Nondeductible interest expense			34				0.4				37				0.4				45				0.5
Other			9				0.0				23				0.2				10				0.1

Actual tax expense and effective rate		$	1,562				18.5	% $			1,992				21.7	% $			1,979				22.0	%

ASC 740‐10 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more‐likely‐than‐not recognition threshold is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more‐likely‐than‐not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more‐likely‐than‐not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met.

At December 31, 2015 and December 31, 2014, the Company had no unrecognized tax benefits. The Company does not expect the total amount of unrecognized tax benefits to significantly increase within the next 12 months. The Company recognizes interest and penalties on unrecognized tax benefits as a component of income tax expense.

The Company and the Bank are subject to U.S. federal income tax as well as an income tax in the state of Ohio, and the Bank is subject to a capital‐based franchise tax in the state of Ohio. The Company and the Bank are no longer subject to examination by taxing authorities for years before December 31, 2012.