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Federal Income Taxes | 12 Months Ended
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Dec. 31, 2018
Federal Income Taxes [Abstract] |
Federal Income Taxes | Note 12. Federal Income Taxes ﻿ The temporary differences which give rise to significant portions of deferred tax assets and liabilities at December 31 are as follows: ﻿
﻿ |  |  |  |  |  |
﻿(Dollars in thousands) |  |
﻿Deferred Tax Assets |  | 2018 |  | 2017
﻿Allowance for loan losses |  | $ | 2,607 |  | $ | 2,476
﻿Deferred compensation |  |  | 601 |  |  | 676
﻿Purchase accounting |  |  | 16 |  |  | 16
﻿Deferred loan fees and costs, net |  |  | — |  |  | 99
﻿Capital loss carryover |  |  | 34 |  |  | 173
﻿Other than temporary impairment of investments |  |  | 124 |  |  | 124
﻿Net operating loss carryforward |  |  | 1,787 |  |  | —
﻿Accumulated other comprehensive loss |  |  | 1,696 |  |  | 1,603
﻿Other |  |  | 759 |  |  | 2,191
﻿ |  |  | 7,624 |  |  | 7,358
﻿Valuation allowance |  |  | (158) |  |  | (297)
﻿Total gross deferred tax assets |  |  | 7,466 |  |  | 7,061
﻿ |  |  |  |  |  |
﻿Deferred Tax Liabilities |  |  |  |  |  |
﻿Depreciation |  |  | 239 |  |  | 162
﻿Joint ventures and partnerships |  |  | 36 |  |  | 28
﻿Pension |  |  | 1,173 |  |  | 1,068
﻿Deferred loan fees and costs, net |  |  | 26 |  |  | —
﻿Total gross deferred tax liabilities |  |  | 1,474 |  |  | 1,258
﻿Net deferred tax asset |  | $ | 5,992 |  | $ | 5,803
﻿ In assessing the realizability of deferred tax assets, M anagement considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, M anagement believes it is more likely than not that the Bank will realize the benefits of these deferred tax assets other than those for which a valuation allowance has been recorded. ﻿ The components of the provision for Federal income taxes attributable to income from operations were as follows: ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | For the Years Ended December 31
﻿(Dollars in thousands) |  | 2018 |  | 2017 |  | 2016
﻿Current tax (benefit) expense |  | $ | (164) |  | $ | 4,396 |  | $ | 2,134
﻿Deferred tax benefit |  |  | (1) |  |  | (831) |  |  | (832)
﻿Income tax provision |  | $ | (165) |  | $ | 3,565 |  | $ | 1,302
﻿ For the years ended December 31, 2018, 2017, and 2016, the income tax provisions are different from the tax expense which would be computed by applying the Federal statutory rate to pretax operating earnings. The Federal statutory rate was 21% for 2018 and 34% for 2017 and 2016. A reconciliation between the tax provision at the statutory rate and the tax provision at the effective tax rate is as follows: ﻿
﻿ |  |  |  |  |  |  |  |  |
﻿ |  | For the Years Ended December 31
﻿(Dollars in thousands) |  | 2018 |  | 2017 |  | 2016
﻿Tax provision at statutory rate |  | $ | 1,252 |  | $ | 3,252 |  | $ | 3,192
﻿Income on tax-exempt loans and securities |  |  | (1,404) |  |  | (2,056) |  |  | (1,751)
﻿Nondeductible interest expense relating to carrying tax-exempt obligations |  |  | 33 |  |  | 32 |  |  | 24
﻿Revaluation of deferred tax assets |  |  | — |  |  | 2,291 |  |  | —
﻿Income from bank owned life insurance |  |  | (108) |  |  | (171) |  |  | (210)
﻿Stock option compensation |  |  | 39 |  |  | 55 |  |  | 30
﻿Other, net |  |  | 23 |  |  | 162 |  |  | 17
﻿Income tax provision |  | $ | (165) |  | $ | 3,565 |  | $ | 1,302
﻿ |  |  |  |  |  |  |  |  |
﻿Effective income tax rate |  |  | (2.8%) |  |  | 62.1% |  |  | 13.9%
﻿ In 2017, income tax expense and the effective tax rate increased due to the write-down of net deferred tax assets as a result of the passage of the Tax Cuts and Jobs Act of 2017 (the Act). The Act reduced the federal corporate income tax rate to 21%, effective January 1, 2018, from the Corporation’s statutory rate of 34% in prior periods. With the passage of the Act, net deferred tax assets were required to be revalued using the new rate of 21%. The Corporation recorded additional income tax expense of $2.3 million in 2017 as a result of the revaluation of net deferred tax assets. ﻿ At December 31, 2018, the Corporation had a net operating loss (NOL) carryforward of $8.5 million. The NOL can be carried forward indefinitely, but is limited to the amount that can be utilized each year. ﻿ At December 31, 2018, the Corporation had a capital loss carryover of $160 thousand, expiring in 2019. This loss carryover can only be offset with capital gains for federal income tax purposes. The tax benefit of this carryover is $34 thousand, and the Corporation has recorded a valuation allowance of $34 thousand against the capital loss carryover. ﻿ The Corporation recognizes interest accrued related to unrecognized tax benefits and penalties in income tax expense for all periods presented. No penalties or interest were recognized in 201 8, 201 7 or 201 6. The Corporation has no uncertain tax positions at December 31, 201 8. The Corporation is no longer subject to U.S. Federal examinations by tax authorities for the years before 201 5.

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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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