Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 15 – Income Taxes

The components of income tax expense were as follows:

	For the years ended December 31,
(dollars in thousands)	2023			2022			2021
Current income taxes:
Federal	$	3,769			8,482			10,414
State		460			1,273			2,088
Total current tax expense		4,229			9,755			12,502
Deferred income tax expense (benefit)		(228	)		(757	)		1,590
Income tax expense	$	4,001			8,998			14,092

The following is a summary of the items that caused recorded income taxes to differ from taxes computed using the statutory tax rate:

	For the years ended December 31,
(dollars in thousands)	2023			2022			2021
Tax expense at statutory rate	$	3,660			8,004			12,768
Effect of state income taxes, net of federal benefit		364			1,006			1,649
Exempt income		7			(27	)		(43	)
Effect of stock-based compensation		133			42			(115	)
Other		(163	)		(27	)		(167	)
Income tax expense	$	4,001			8,998			14,092

The components of the deferred tax assets and liabilities are as follows:

	December 31,
(dollars in thousands)	2023		2022
Deferred tax assets:
Allowance for credit losses	$	8,543		8,114
Reserve for unfunded commitments		384		584
Unrealized loss on securities available for sale		3,015		3,565
Net deferred loan fees		1,475		1,537
Deferred compensation		1,458		1,762
Lease liabilities		5,175		5,424
Other		479		393
		20,529		21,379
Deferred tax liabilities:
Property and equipment		3,334		3,561
Hedging transactions		74		27
Prepaid expenses		255		316
ROU assets		4,656		4,953
Other		10		-
		8,329		8,857
Net deferred tax asset	$	12,200		12,522

The Company has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions.