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Note 11 - Income Taxes | 12 Months Ended
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Dec. 31, 2016
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
11. | INCOME TAXES
The consolidated provisions for income taxes for the years ended December 31, 2016 and 2015 were as follows:
|  | 2016 |  |  | 2015 |
|  | (Dollars in Thousands) |
Federal |  |  |  |  |  |  |  |
Current |  | $ | 30 |  |  | $ | 10 |
Deferred |  |  | 103 |  |  |  | 835 |
|  |  | 133 |  |  |  | 845 |
State |  |  |  |  |  |  |  |
Current |  |  | 19 |  |  |  | 15 |
Deferred |  |  | 17 |  |  |  | 91 |
|  |  | 36 |  |  |  | 106 |
Total |  | $ | 169 |  |  | $ | 951 |
The consolidated tax expense (benefit) differed from the amount computed by applying the federal statutory income tax rate of 34.0%, as described in the following table:
|  | 2016 |  |  | 2015 |
|  | (Dollars in Thousands) |
Income tax expense at federal statutory rate |  | $ | 475 |  |  | $ | 1,206 |
Increase (decrease) resulting from: |  |  |  |  |  |  |  |
Tax-exempt interest |  |  | (217 | ) |  |  | (240 | )
Bank-owned life insurance |  |  | (106 | ) |  |  | (108 | )
State income tax expense, net of federal income taxes |  |  | 29 |  |  |  | 100 |
Other |  |  | (12 | ) |  |  | (7 | )
Total |  | $ | 169 |  |  | $ | 951 |
The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2016 and 2015 are presented below:
|  | 2016 |  |  | 2015 |
|  | (Dollars in Thousands) |
Deferred tax assets: |  |  |  |  |  |  |  |
Allowance for loan losses |  | $ | 1,792 |  |  | $ | 1,395 |
Deferred compensation |  |  | 1,603 |  |  |  | 1,617 |
Deferred commissions and fees |  |  | 268 |  |  |  | 165 |
Impairment of other real estate owned |  |  | 742 |  |  |  | 924 |
Federal net operating loss carryforwards |  |  | 3,121 |  |  |  | 3,591 |
State net operating loss carryforwards |  |  | 184 |  |  |  | 231 |
Federal alternative minimum tax and general business credits carryforwards |  |  | 279 |  |  |  | 254 |
Unrealized loss on securities available-for-sale |  |  | 872 |  |  |  | — |
Other |  |  | 500 |  |  |  | 467 |
Total gross deferred tax assets |  |  | 9,361 |  |  |  | 8,644 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Premises and equipment |  |  | 327 |  |  |  | 411 |
Limited partnerships |  |  | 132 |  |  |  | 106 |
Unrealized gain on securities available-for-sale |  |  | — |  |  |  | 312 |
Cash flow hedges |  |  | 127 |  |  |  | — |
Other |  |  | 41 |  |  |  | 17 |
Total gross deferred tax liabilities |  |  | 627 |  |  |  | 846 |
Net deferred tax asset, included in other assets |  | $ | 8,734 |  |  | $ | 7,798 |
As of December 31, 2016 and 2015, the Company had $3.6 million and $4.1 million related to federal and state net operating loss and tax credit carryforwards that can be used to offset income in future periods and reduce income taxes payable in those future periods. The majority of these carryforwards will not begin to expire until 2032. The remaining net deferred tax assets, which totaled $5.2 million and $3.7 million as of December 31, 2016 and 2015, respectively, do not have an expiration date. The Company ’s determination of the realization of net deferred tax assets at December 31, 2016 and 2015 was based on management’s assessment of all available positive and negative evidence. As of both December 31, 2016 and December 31, 2015, the Company was not in a three -year cumulative loss position. In addition, the Company has positive evidence supporting the realization of its net deferred tax assets as of December 31, 2016, including the reversal of taxable temporary differences, a strong history of earnings, and tax planning strategies, including the conversion of tax-exempt investments to taxable investments to generate future taxable income to prevent tax attributes, such as net operating losses, from expiring unutilized. Accordingly, a valuation allowance was not established as of December 31, 2016 or December 31, 2015. The Company files a consolidated income tax return with the federal government and the State of Alabama. ALC files a Mississippi state income tax return related to operations from its Mississippi offices. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service and the states in which it files for the years ended December 31, 2013 through 2016. As of December 31, 2016, the Company had no unrecognized tax benefits related to federal or state income tax matters and does not anticipate any material increase or decrease in unrecognized tax benefits relative to any tax positions taken prior to December 31, 2016. As of December 31, 2016, the Company had accrued no interest and no penalties related to uncertain tax positions.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: 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=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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