Income Taxes

12 Months Ended

Dec. 31, 2020

Income Taxes [Abstract]

INCOME TAXES

NOTE 16. INCOME TAXES

The following table provides information on components of income tax expense for continuing operations for each of the two years ended December 31.

(Dollars in thousands)	2020		2019
Current tax expense:
Federal	$	5,477	$	3,974
State		2,025		1,395
		7,502		5,369
Deferred income tax (benefit) expense:
Federal		(1,650)		122
State		(535)		119
		(2,185)		241
Total income tax expense	$	5,317	$	5,610

The following table provides a reconciliation of tax computed at the statutory federal tax rate to the actual tax expense for continuing operations for each of the two years ended December 31.

	2020		2019
Tax at federal statutory rate	21	%	21	%
Tax effect of:
Tax-exempt income	(1.6)		(1.0)
State income taxes, net of federal benefit	5.6		5.5
Other	0.3		0.1
Actual income tax expense rate	25.3	%	25.6	%

The following table provides information on significant components of the Company’s deferred tax assets and liabilities as of December 31.

(Dollars in thousands)	2020		2019
Deferred tax assets:
Allowance for credit losses	$	3,721	$	2,850
Write-downs of other real estate owned		12		9
Nonaccrual loan interest		367		353
Unrealized losses on available-for-sale securities transferred to held to maturity		—		4
Other		2,152		735
Total deferred tax assets		6,252		3,951
Less valuation allowance		(169)		(63)
Deferred tax assets net of valuation allowance		6,083		3,888
Deferred tax liabilities:
Depreciation		177		198
Acquisition accounting adjustments		580		508
Deferred capital gain on branch sale		187		194
Unrealized gains on available-for-sale securities		567		74
Other		130		160
Total deferred tax liabilities		1,641		1,134
Net deferred tax assets	$	4,442	$	2,754