Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The income tax expense in the consolidated statements of income for the years ended December 31, 2021 and 2020 are as follows:

(dollars in thousands)	2021		2020
Current federal expense	$	5,316	$	3,965
Deferred federal expense	(661)		(1,150)
Federal income tax expense	4,655		2,815
Current state expense	663		—
Deferred state expense	(823)		—
State income tax expense	$	(160)	$	—
Provision for income taxes	$	4,495	$	2,815

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, 2021 and 2020 is as follows:

(dollars in thousands)	2021		2020
Tax at federal income tax rate	$	4,862	$	3,072
Change resulting from:
State taxes	(126)		—
Tax-exempt interest	(404)		(253)
Income in cash value of bank owned life insurance	(219)		(156)
Nondeductible merger expenses	222		—
Other	160		152
Provision for income taxes	$	4,495	$	2,815

The components of deferred income taxes for the years ended December 31, 2021 and 2020 are as follows:

(dollars in thousands)	2021		2020
Deferred Tax Assets
Allowance for loan losses	$	3,290	$	1,958
Lease liability	169		109
Net operating loss carryforwards	272		272
Other real estate	—		48
Deferred compensation	297		147
Unrealized loss on securities available for sale	2,170		—
Restricted stock	166		10
Purchase accounting adjustments	—		202
Investment in partnerships	232		191
Other	19		87
Gross deferred tax assets	6,615		3,024
Deferred Tax Liabilities
Premises and equipment	267		604
Right of use lease asset	164		107
Unrealized gain on securities available for sale	—		1,803
Purchase accounting adjustments	1,322		—
Core deposit intangible	1,218		376
Gross deferred tax liabilities	2,971		2,890
Net deferred tax assets	$	3,644	$	134