Quarterly report pursuant to Section 13 or 15(d)

Note 9 - Federal Income Taxes

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Note 9 - Federal Income Taxes
 3 Months Ended
Mar. 31, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

NOTE 9 - FEDERAL INCOME TAXES

 

Income tax expense was as follows (dollars in thousands):

 

   

Three Months

    

Three Months

  
   

Ended

    

Ended

  
   

March 31,

    

March 31,

  
   

2024

    

2023

  

Current

   $ 2,269     $ 2,825  

Deferred

     80       150  
    $ 2,349     $ 2,975  

 

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):

 

   

Three Months

    

Three Months

  
   

Ended

    

Ended

  
   

March 31,

    

March 31,

  
   

2024

    

2023

  

Statutory rate

     21 %     21 %

Statutory rate applied to income before taxes

   $ 2,550     $ 3,146  

Deduct

                

Tax-exempt interest income

     (117 )     (147 )

Bank-owned life insurance

     (58 )     (42 )

Other, net

     (26 )     18  
    $ 2,349     $ 2,975  

 

The realization of deferred tax assets is largely dependent upon future taxable income, future reversals of existing taxable temporary differences and the ability to carryback losses to available tax years. In assessing the need for a valuation allowance, we consider positive and negative evidence, including taxable income in carry-back years, scheduled reversals of deferred tax liabilities, expected future taxable income and tax planning strategies. Management believes it is more likely than not that all of the deferred tax assets at March 31, 2024 will be realized against deferred tax liabilities and projected future taxable income.

 

 

NOTE 9 - FEDERAL INCOME TAXES (Continued)

 

The net deferred tax asset recorded included the following amounts of deferred tax assets and liabilities (dollars in thousands):

 

   

March 31,

    

December 31,

  
   

2024

    

2023

  

Deferred tax assets

                

Allowance for credit losses

   $ 3,662     $ 3,663  

Nonaccrual loan interest

     13       13  

Unrealized loss on securities available for sale

     6,358       6,095  

Other

     265       262  

Gross deferred tax assets

     10,298       10,033  

Valuation allowance

     —       —  

Total net deferred tax assets

     10,298       10,033  

Deferred tax liabilities

                

Depreciation

     (997 )     (1,003 )

Prepaid expenses

     (303 )     (303 )

Net deferred loan costs

     (52 )     (35 )

Accretion

     (1,238 )     (1,139 )

Other

     (323 )     (351 )

Gross deferred tax liabilities

     (2,913 )     (2,831 )

Deferred tax asset - net

   $ 7,385     $ 7,202  

 

There were no unrecognized tax benefits at March 31, 2024 or  December 31, 2023 and the Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. The Company is no longer subject to audit by the Internal Revenue Service for years before 2020.