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Note 13 - Income Taxes | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
13. | INCOME TAXES
The provision for federal income taxes for the years ended December 31, consists of:
(Dollar amounts in thousands) |  | 2019 |  |  | 2018 |
Current payable |  | $ | 2,265 |  |  | $ | 2,403 |
Deferred |  |  | 327 |  |  |  | (241 | )
Total provision |  | $ | 2,592 |  |  | $ | 2,162 |
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 at December 31:
(Dollar amounts in thousands) |  | 2019 |  |  | 2018 |
Deferred tax assets: |  |  |  |  |  |  |  |
Allowance for loan and lease losses |  | $ | 1,288 |  |  | $ | 1,327 |
Supplemental retirement plan |  |  | 469 |  |  |  | 454 |
Investment security basis adjustment |  |  | 18 |  |  |  | 18 |
Nonaccrual interest income |  |  | 297 |  |  |  | 389 |
Accrued compensation |  |  | 244 |  |  |  | 222 |
Deferred origination fees, net |  |  | 30 |  |  |  | - |
Net unrealized loss on AFS securities |  |  | - |  |  |  | 41 |
Lease liability |  |  | 1,051 |  |  |  | - |
Gross deferred tax assets |  |  | 3,397 |  |  |  | 2,451 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Premises and equipment |  |  | 583 |  |  |  | 328 |
Net unrealized gain on AFS securities |  |  | 490 |  |  |  | - |
Net unrealized gain on equity securities |  |  | 62 |  |  |  | 1 |
FHLB stock dividends |  |  | 139 |  |  |  | 139 |
Intangibles |  |  | 378 |  |  |  | 342 |
Mortgage servicing rights |  |  | 82 |  |  |  | 75 |
Deferred origination fees, net |  |  | - |  |  |  | 13 |
Acquisition fair value adjustments |  |  | 253 |  |  |  | 275 |
Right of use assets |  |  | 1,032 |  |  |  | - |
Other |  |  | 4 |  |  |  | 5 |
Gross deferred tax liabilities |  |  | 3,023 |  |  |  | 1,178 |
Net deferred tax assets |  | $ | 374 |  |  | $ | 1,273 |
No valuation allowance was established at December 31, 2019 and 2018, in view of the Company’s 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 for the years ended December 31, is as follows:
(Dollar amounts in thousands) |  | 2019 |  |  | 2018 |
|  |  |  |  |  | % of |  |  |  |  |  |  | % of |
|  |  |  |  |  | Pretax |  |  |  |  |  |  | Pretax |
|  | Amount |  |  | Income |  |  | Amount |  |  | Income |
Provision at statutory rate |  | $ | 3,214 |  |  |  | 21.0 | % |  | $ | 3,065 |  |  |  | 21.0 | %
Tax-exempt income |  |  | (647 | ) |  |  | (4.2 | )% |  |  | (622 | ) |  |  | (4.3 | )%
Nondeductible interest expense |  |  | 32 |  |  |  | 0.2 | % |  |  | 27 |  |  |  | 0.2 | %
Stock-based compensation |  |  | - |  |  |  | - | % |  |  | (37 | ) |  |  | (0.3 | )%
Other |  |  | (7 | ) |  |  | (0.1 | )% |  |  | (271 | ) |  |  | (1.8 | )%
Actual tax expense and effective rate |  | $ | 2,592 |  |  |  | 16.9 | % |  | $ | 2,162 |  |  |  | 14.8 | %
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, 2019 and December 31, 2018, the Company had no ASC 740 - 10 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 states of Ohio and Florida, 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, 2016.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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