Note 9 - Income Taxes

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 9: Income Taxes

The Company files United States federal income tax returns, and Virginia, West Virginia and North Carolina state income tax returns. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2018. Allocation of income tax expense between current and deferred portions is as follows:

	Years ended December 31,
	2021		2020
Current	$	4,099	$	2,795
Deferred expense		152		282
Total income tax expense	$	4,251	$	3,077

The following reconciles the “expected” income tax expense, computed by applying the U.S. federal income tax rate of 21% to income before tax expense, with the reported income tax expense:

	Years ended December 31,
	2021			2020
Computed “expected” income tax expense	$	5,173		$	4,021
Tax-exempt interest income		(763	)		(798	)
Nondeductible interest expense		25			62
Other, net		(184	)		(208	)
Reported income tax expense	$	4,251		$	3,077

The components of net deferred tax assets, included in other assets, are as follows:

	December 31,
	2021			2020
Deferred tax assets:
Allowance for loan losses and unearned fee income	$	1,774		$	1,938
Valuation allowance on other real estate owned		186			188
Defined benefit plan		1,837			2,697
Deferred compensation and other liabilities		899			866
Lease accounting		327			423
SBA fees		9			191
Total deferred tax assets	$	5,032		$	6,303
Deferred tax liabilities:
Fixed assets	$	(415	)	$	(424	)
Goodwill		(1,228	)		(1,228	)
Defined benefit plan, prepaid portion		(2,021	)		(2,186	)
Net unrealized gain on securities available for sale		(759	)		(3,500	)
Lease accounting		(321	)		(419	)
Discount accretion of securities		(27	)		(15	)
Total deferred tax liabilities		(4,771	)		(7,772	)
Net deferred tax assets (liabilities)	$	261		$	(1,469	)

The Company determined that no valuation allowance for gross deferred tax assets was necessary at December 31, 2021 and 2020.