XML 56 R17.htm IDEA: XBRL DOCUMENT v3.24.1
INCOME TAXES
12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 10 INCOME TAXES

 

The Company files a consolidated federal income tax return. The following summarizes the provision for income taxes and the related deferred tax components for the years ended December 31, 2023 and 2022.

 

Income tax expense is summarized as follows for the years ended December 31, 2023 and 2022:

 Schedule of pre-tax book income

(Dollars are in thousands) 2023   2022
Current income tax expense $ 2,139 $ 1,759
Deferred tax expense 8 540
Income tax expense $ 2,147 $ 2,299

 

The following table summarizes the differences between the actual income tax expense and the amounts computed using the federal statutory tax rate of 21% for years ended December 31, 2023 and 2022, respectively:

 Schedule of reconciliation of income tax expense

(Dollars are in thousands)  2023  2022
       
Income tax expense at the applicable federal rate  $2,152   $2,180 
Permanent differences resulting from:          
     Nondeductible expenses   12    9 
     Tax exempt interest income   (2)   (3)
     Bank owned life insurance   (9)   29 
Other adjustments   (6)   84 
Income tax expense  $2,147   $2,299 

 

 

The net deferred tax assets and liabilities resulting from temporary differences as of December 31, 2023 and 2022, are summarized as follows:

 Schedule of net deferred tax assets and liabilities

(Dollars are in thousands)  2023  2022
Deferred tax assets          
     Allowance for credit losses  $1,696   $1,498 
     Deferred compensation   75    80 
     Unrealized loss on securities available for sale   3,098    3,706 
     Other real estate owned   15    48 
     Self-insured health insurance   267    250 
     Lease Liability   866    829 
     Other   355    351 
Total assets, gross   6,372    6,762 

 

Deferred tax liabilities          
     Depreciation   565    874 
     Prepaid expenses   30    18 
     Deferred loan costs   450    418 
     Right-of-use asset   866    829 
Total liabilities, gross   1,911    2,139 
Net deferred tax asset  $4,461   $4,623 

 

In accordance with applicable accounting guidance, the Company determined that it was not required to establish a valuation allowance for deferred tax assets as it is more likely than not that the deferred tax asset will be realized through future taxable income, future reversals of existing taxable temporary differences and tax strategies. The Company’s net deferred tax asset is recorded in the consolidated financial statements separately.

 

As of December 31, 2023 and 2022, the Company had no unrecognized tax benefits. The Company does not expect the total amount of unrecognized tax benefits to increase significantly over the next twelve months. The company recognizes interest and penalties as a component of income tax expense.

 

The Company and Bank are subject to U. S. federal income tax, a capital-based franchise tax in the Commonwealth of Virginia; and income and excise taxes in West Virginia, Tennessee and North Carolina, respectively, based on earnings realized from business activities within each state. Years prior to 2020 are no longer subject to examination by taxing authorities.