INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

Income tax expense consisted of the following for the years ended December 31, 2019 and 2018 (dollars in thousands):


	Year Ended December 31,
(in thousands)	2019		2018
Current
Federal	$	9,222	$	7,990
State and local		6,570		4,762
Total current		15,792		12,752
Deferred
Federal		(845)		(896)
State and local		(1,020)		(635)
Total deferred		(1,865)		(1,531)
Total income tax expense	$	13,927	$	11,221

Schedule of deferred tax assets and liabilities

Deferred tax assets and liabilities consist of the following (dollars in thousands):


	At December 31,
	2019		2018
Deferred tax assets:
Allowance for loan losses	$	8,303	$	5,893
Interest on nonaccrual loans		24		28
Off balance sheet reserves		57		127
Restricted stock		188		167
Tangible asset		17		20
Non-qualified stock options		294		290
Net unrealized loss on securities available for sale		—		172
Other		51		—
Total gross deferred tax assets		8,934		6,697
Deferred tax liabilities:
Depreciation and amortization		781		392
Net unrealized gain on securities available for sale		604		—
Pass-through income		69		255
Prepaid assets		341		—
Total gross deferred tax liabilities		1,795		647
Net deferred tax asset, included in other assets	$	7,139	$	6,050

Schedule of reconciliation of statutory federal income tax rate

The following is a reconciliation of the Company’s statutory federal income tax rate of 21% to its effective tax rate for the years ended December 31, 2019 and 2018 (dollars in thousands):


	For the year ended December 31,
	2019				2018
	Tax expense/				Tax expense/
	(benefit)		Rate		(benefit)		Rate
Pretax income at statutory rates	$	9,253	21.00	%	$	7,723	21.00	%
State and local taxes, net of federal income tax benefit		4,385	9.95			3,260	8.87
Nondeductible expenses		430	0.97			327	0.89
Excess tax deduction on equity awards		(132)	(0.30)			(83)	(0.23)
Tax-exempt income, net		(2)	(0.00)			(6)	(0.02)
Other		(7)	(0.01)			—	—
Effective income tax expense/rate	$	13,927	31.61	%	$	11,221	30.51	%