Annual report pursuant to Section 13 and 15(d)

FEDERAL INCOME TAXES (Tables)

v3.20.4
FEDERAL INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2020
FEDERAL INCOME TAXES [Abstract]  
Income Tax Expense
Income tax expense was as follows (dollars in thousands):

   
2020
   
2019
 
Current
 
$
7,318
   
$
7,172
 
Deferred
   
(603
)
   
290
 
Change in valuation allowance
   
(92
)
   
 
   
$
6,623
   
$
7,462
 
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):

   
2020
   
2019
 
Statutory rate
   
21
%
   
21
%
Statutory rate applied to income before taxes
 
$
7,726
   
$
8,283
 
Adjust for:
               
Tax-exempt interest income
   
(700
)
   
(703
)
Bank-owned life insurance
   
(184
)
   
(204
)
Change in valuation allowance
   
(92
)
   
 
Other, net
   
(127
)
   
86
 
   
$
6,623
   
$
7,462
 
Deferred Tax Assets and Liabilities
The net deferred tax asset recorded included the following amounts of deferred tax assets and liabilities (dollars in thousands):

   
2020
   
2019
 
Deferred tax assets
           
Allowance for loan losses
 
$
3,656
   
$
3,612
 
Net deferred loan fees
 
$
822
     
 
Nonaccrual loan interest
   
120
     
182
 
Valuation allowance on other real estate owned and property held for sale
   
41
     
76
 
Unrealized loss on securities available for sale
   
     
 
Other
   
499
     
248
 
Gross deferred tax assets
   
5,138
     
4,118
 
Valuation allowance
   
     
(92
)
Total net deferred tax assets
   
5,138
     
4,026
 
                 
Deferred tax liabilities
               
Depreciation
 
$
(1,285
)
 
$
(1,053
)
Prepaid expenses
   
(170
)
   
(172
)
Unrealized gain on securities available for sale
   
(1,120
)
   
(406
)
Net deferred loan costs
   
     
(67
)
Other
   
(504
)
   
(250
)
Gross deferred tax liabilities
   
(3,079
)
   
(1,948
)
Net deferred tax asset
 
$
2,059
   
$
2,078