Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Taxes [Abstract]

Income Tax (Benefit) Expense

Income tax (benefit) expense was as follows:

	2021			2020
	(In thousands)
Current
Federal	$	4		$	(59	)
State		(38	)		144
Deferred
Federal		(909	)		7
State		(363	)		(499	)
Change in Valuation Allowance		369			-
Total	$	(937	)	$	(407	)

Effective Income Tax Rate Reconciliation

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

	2021			2020
	(In thousands)
Federal statutory rate times financial statement net loss	$	(1,026	)	$	(220	)
Effect of:
State taxes, net of federal benefit		(292	)		(7	)
Earnings from bank owned life insurance		(9	)		(10	)
Merger-related expense		195			200
Low income housing credits		(58	)		(117	)
Change in valuation allowance		369			-
Tax effect of stock-based compensation		(129	)		-
Tax benefit from tax positions taken in prior years		-			(273	)
Other, net		13			20
Total	$	(937	)	$	(407	)

Deferred Tax Assets and Liabilities

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

	2021			2020
	(In thousands)
Deferred tax assets:
Allowance for loan losses	$	677		$	909
Accrued liabilities		954			139
State income taxes		1			58
Stock compensation		154			310
Net operating loss carryforward		3,946			3,437
Non‑accrual loan interest		51			1
Partnership investment		155			188
General business credit		2,006			1,969
Alternative minimum tax credit		5			34
Net unrealized loss on securities available-for-sale		464			-
Right of use liability		319			-
Fair value adjustment on acquired loans		521			-
Other		363			40
Total deferred tax assets		9,616			7,085
Less: valuation allowance		(369	)		-
Total deferred tax assets, net of valuation allowance		9,247			7,085
Deferred tax liabilities:
Section 481 Adjustments to bad debts		(6	)		(334	)
Deferred loan fees/costs		(750	)		(651	)
Basis difference on fixed assets		(702	)		(18	)
Net unrealized appreciation on available‑for‑sale securities		-			(138	)
FHLB stock dividends		(98	)		(266	)
Mortgage servicing rights		-			(1	)
Prepaid expenses		(220	)		(44	)
Right of use assets		(317	)		-
Core deposit intangibles		(1,053	)		-
Total deferred tax liabilities		(3,146	)		(1,452	)
Net deferred tax assets	$	6,101		$	5,633