Note 9 - Income Taxes

12 Months Ended

Dec. 31, 2023

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 2020. Allocation of income tax expense between current and deferred portions for the period indicated is as follows:

	Year Ended December 31,
	2023		2022
Current	$	2,234	$	5,940
Deferred (benefit) expense		750		(109	)
Total income tax expense	$	2,984	$	5,831

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 as of the period indicated:

	Year Ended December 31,
	2023			2022
Computed “expected” income tax expense	$	3,922		$	6,670
Tax-exempt interest income		(354	)		(728	)
Nondeductible interest expense		(170	)		24
Other, net		(414	)		(135	)
Reported income tax expense	$	2,984		$	5,831

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

	December 31,
	2023			2022
Deferred tax assets:
Allowance for credit losses and unearned fee income	$	2,155		$	1,906
Valuation allowance on other real estate owned		-			248
Defined benefit pension plan		614			623
Deferred compensation and other liabilities		889			919
Net unrealized loss on securities available for sale		16,629			21,644
Lease accounting		237			303
Unvested stock-based compensation		5			-
Total deferred tax assets	$	20,529		$	25,643
Deferred tax liabilities:
Fixed assets	$	(597	)	$	(463	)
Goodwill		(1,228	)		(1,228	)
Defined benefit pension plan, prepaid portion		(2,034	)		(2,013	)
Lease accounting		(230	)		(297	)
Discount accretion of securities		(122	)		(84	)
Total deferred tax liabilities		(4,211	)		(4,085	)
Net deferred tax assets	$	16,318		$	21,558

The Company determined that no valuation allowance for gross deferred tax assets was necessary as of December 31, 2023 and 2022.