Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income tax (benefit) expense was as follows:

Effective tax rates differ from the federal statutory rate of 21% applied to income before income taxes due to the following:

	2020			2019
	(In thousands)
Federal statutory rate times financial statement net (loss) income	$	(220	)	$	(115	)
Effect of:
State taxes, net of federal benefit		(7	)		(45	)
Earnings from bank owned life insurance		(10	)		(11	)
Merger-related expense		200			-
Low income housing credits		(117	)		(198	)
Tax benefit from tax positions taken in prior years		(273	)		-
Other, net		20			24
Total	$	(407	)	$	(345	)

Year‑end deferred tax assets and liabilities were due to the following:

	2020			2019
	(In thousands)
Deferred tax assets:
Allowance for loan losses	$	909		$	897
Accrued liabilities		139			137
State income taxes		58			36
Stock compensation		310			202
Net operating loss carryforward		3,437			3,614
Non‑accrual loan interest		1			1
Partnership investment		188			173
General business credit		1,969			1,859
Alternative minimum tax credit		34			94
Other		40			34
Total deferred tax assets		7,085			7,047
Deferred tax liabilities:
Section 481 Adjustments to bad debts		(334	)		(660	)
Deferred loan fees/costs		(651	)		(797	)
Basis difference on fixed assets		(18	)		(15	)
Net unrealized appreciation on available‑for‑sale securities		(138	)		(59	)
FHLB stock dividends		(266	)		(266	)
Mortgage servicing rights		(1	)		(3	)
Prepaid expenses		(44	)		(27	)
Total deferred tax liabilities		(1,452	)		(1,827	)
Net deferred tax assets	$	5,633		$	5,220

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2020			2019
	(In thousands)
Balance at beginning of year	$	475		$	475
Additions for tax positions of current year		-			-
Additions for tax positions of prior year		-			-
Reductions for tax positions of prior years		(475	)	‑
Balance at end of year	$	-		$	475