Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Taxes [Abstract]

Components of Income Tax Expense

The components of income tax (benefit) expense for the two years ended December 31 were:

(Dollars in thousands)	Years Ended December 31,
	2021		2020
Current tax expense	$	235	$	105
Deferred tax expense (benefit)		49		(155)
Total tax provision (benefit)	$	284	$	(50)

Effective Income Tax Rate Reconciliation

A reconciliation of the statutory income tax (benefit) expense computed at 21% to the income tax expense included in the consolidated statements of income follows:

(Dollars in thousands)	Years Ended December 31,
	2021			2020
Income before income taxes	$	6,888		$	5,552
Statutory tax rate		21	%		21	%
Federal tax at statutory rate		1,447			1,166
Tax-exempt interest		(208)			(205)
Net earnings on BOLI		(36)			(45)
Stock-based compensation		(2)			(4)
Federal tax credits		(902)			(902)
CARES Act Loss Carryback		—			(57)
Other permanent differences		(15)			(3)
Total tax provision (benefit)	$	284		$	(50)
Effective tax rate		4.1	%		(0.9)	%

Schedule of Deferred Tax Assets and Liabilities

Deductible temporary differences and taxable temporary differences gave rise to a net deferred tax asset for the Company as of December 31, 2021 and a net deferred tax liability as of December 31, 2020. The components are detailed below:

(Dollars in thousands)	Years Ended December 31,
	2021		2020
Deferred Tax Assets:
Allowance for loan losses	$	741	$	887
Deferred directors’ compensation		329		333
Employee and director benefits		264		279
Stock-based compensation		59		50
Investment in low income housing project		397		299
Fair value adjustments to acquired assets and liabilities		172		220
Tax credit carryforward		235		173
Lease liability		63		82
Unrealized loss on debt securities available for sale		1,008		—
Unrealized loss on derivatives		—		12
Total deferred tax assets		3,268		2,335
Deferred Tax Liabilities:
Depreciation		(165)		(227)
Right of use asset		(62)		(80)
Loan origination fees and costs		(505)		(463)
Prepaid expenses		(20)		(20)
Unrealized gains on debt securities available for sale		—		(947)
Unrealized gain from securities impairment		(58)		(44)
Unrealized gain on derivatives		(114)		—
Annuity earnings		(68)		(64)
Fair value of mortgage servicing rights		(25)		(33)
Intangible assets		(37)		(47)
Goodwill		(429)		(411)
Other		(42)		(53)
Total deferred tax liabilities		(1,525)		(2,389)
Net deferred tax (liability) asset included in (other liabilities) other assets	$	1,743	$	(54)