INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

INCOME TAXES

Components of Income Tax Expense

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

(Dollars in thousands)	Years Ended December 31,
	(As Restated)
	2023		2022
Current tax expense	$	1,001	$	309
Deferred tax benefit		(31)		(1)
Total tax provision	$	970	$	308

Effective Income Tax Rate Reconciliation

(Dollars in thousands)	Years Ended December 31,
				(As Restated)
	2023			2022
Income before income taxes	$	7,566		$	7,372
Statutory tax rate		21	%		21	%
Federal tax at statutory rate		1,589			1,548
Tax-exempt interest		(176)			(189)
Net earnings on BOLI		(39)			(67)
Gain from life insurance proceeds		(34)			(80)
Stock-based compensation		—			3
Federal tax credits		(366)			(902)
Other permanent differences		(4)			(5)
Total tax provision	$	970		$	308
Effective tax rate		12.8	%		4.2	%

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, 2023 and December 31, 2022. The components are detailed below:

(Dollars in thousands)	Years Ended December 31,
			(As Restated)
	2023		2022
Deferred Tax Assets:
Allowance for credit losses	$	1,280	$	847
Deferred directors’ compensation		200		212
Employee and director benefits		229		252
Stock-based compensation		53		51
Investment in low income housing project		585		494
Fair value adjustments to acquired assets and liabilities		48		146
Tax credit carryforward		—		130
Lease liability		101		85
Unrealized loss on debt securities available for sale		1,716		1,638
Unrealized loss on debt securities held to maturity		8,501		9,536
Total deferred tax assets		12,713		13,391
Deferred Tax Liabilities:
Depreciation		(101)		(124)
Right of use asset		(99)		(83)
Loan origination fees and costs		(592)		(559)
Prepaid expenses		(11)		(10)
Unrealized gain from securities impairment		(18)		(16)
Unrealized gain on derivatives		—		(56)
Annuity earnings		(77)		(73)
Fair value of mortgage servicing rights		(17)		(19)
Intangible assets		—		(26)
Goodwill		(437)		(429)
Other		(42)		(28)
Total deferred tax liabilities		(1,394)		(1,423)
Net deferred tax asset	$	11,319	$	11,968