Annual report pursuant to Section 13 and 15(d)

FEDERAL INCOME TAXES (Tables)

v3.22.4
FEDERAL INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2022
FEDERAL INCOME TAXES [Abstract]  
Income Tax Expense
Income tax expense was as follows (dollars in thousands):

   
2022
    
2021
  
Current
  
$
7,567
    
$
5,615
  
Deferred
    
766
      
1,095
   
$
8,333
    
$
6,710
  
Reconciliation of Difference between Financial Statement Tax Expense and Amount Computed by Applying Statutory Federal Tax Rate to Pretax Income
The difference between the financial statement tax expense and amount computed by applying the statutory federal tax rate to pretax income was reconciled as follows (dollars in thousands):

   
2022
    
2021
  
Statutory rate
    
21
%
    
21
%
Statutory rate applied to income before taxes
  
$
9,044
    
$
7,502
  
Adjust for:
                
Tax-exempt interest income
    
(589
)
    
(642
)
Bank-owned life insurance
    
(184
)
    
(217
)
Other, net
    
62
      
67
   
$
8,333
    
$
6,710
  
Deferred Tax Assets and Liabilities
The net deferred tax asset recorded included the following amounts of deferred tax assets and liabilities (dollars in thousands):

   
2022
    
2021
  
Deferred tax assets
            
Allowance for loan losses
  
$
3,210
    
$
3,337
  
Net deferred loan fees
    
—
      
275
  
Nonaccrual loan interest
    
12
      
57
  
Valuation allowance on other real estate owned and property held for sale
    
—
      
6
  
Unrealized loss on securities available for sale
    
8,394
      
79
  
Other
    
257
      
311
  
Gross deferred tax assets
    
11,873
      
4,065
  
Valuation allowance
    
—
      
—
  
Total net deferred tax assets
    
11,873
      
4,065
  
                 
Deferred tax liabilities
                
Depreciation
  
$
(1,098
)
  
$
(1,199
)
Prepaid expenses
    
(309
)
    
(288
)
Net deferred loan costs
    
(21
)
    
—
  
Other
    
(733
)
    
(415
)
Gross deferred tax liabilities
    
(2,161
)
    
(1,902
)
Net deferred tax asset
  
$
9,712
    
$
2,163