Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The income tax expense in the consolidated statements of income for the years ended December 31, 2020 and 2019 are as follows:

(dollars in thousands)	2020		2019
Current federal expense	$	3,965	$	1,881
Deferred federal expense	(1,150)		517
Federal income tax expense	2,815		2,398
Current state income tax expense	—		—
Provision for income taxes	$	2,815	$	2,398

The Company's income tax expense differs from amounts computed by applying the federal statutory rates to income before income taxes. A reconciliation of the differences for the years ended December 31, 2020 and 2019 is as follows:

(dollars in thousands)	2020		2019
Tax at federal income tax rate	$	3,072	$	2,648
Change resulting from:
Tax-exempt interest	(253)		(130)
Income in cash value of bank owned life insurance	(156)		(113)
Nondeductible merger expenses	—		39
Other	152		(46)
Provision for income taxes	$	2,815	$	2,398

The components of deferred income taxes for the years ended December 31, 2020 and 2019 are as follows:

(dollars in thousands)	2020		2019
Deferred Tax Assets
Allowance for loan losses	$	1,958	$	1,624
Lease liability	109		—
Net operating loss carryforwards	272		—
Other real estate	48		115
Deferred compensation	147		163
Goodwill	72		33
Restricted stock	10		9
Purchase accounting adjustments	202		633
Investment in partnerships	191		—
Other	13		401
Nonaccrual interest	2		2
Gross deferred tax assets	3,024		2,980
Deferred Tax Liabilities
Premises and equipment	604		839
Right of use lease asset	107		—
Unrealized gain on securities available for sale	1,803		96
Core deposit intangible	376		533
Other	—		7
Gross deferred tax liabilities	2,890		1,475
Net deferred tax assets	$	134	$	1,505