Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Note 10. Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction and the Commonwealth of Virginia.

The following table summarizes the components of the net deferred tax assets included in other assets at December 31, 2020 and 2019.

(In thousands)	2020		2019
Deferred tax assets:
Allowance for loan losses	$	1,443	$	1,098
Interest on nonaccrual loans	71		40
Accrued vacation	98		76
SERP obligation	583		479
OREO	219		219
Accumulated depreciation	139		97
Restricted stock	64		108
Other	327		254
		2,944		2,371
Deferred tax liabilities:
Securities available for sale	703		344
Other	20		11
	723		355
Net deferred tax assets	$	2,221	$	2,016

The Company has not recorded a valuation allowance for deferred tax assets as management feels it is more-likely-than-not that they will be ultimately realized.

Components of income tax expense is summarized below:

	Year Ended December 31,
(In thousands)	2020			2019		2018
Current tax expense	$	1,554		$	880	$	525
Deferred taxes		(487	)		124		221
	$	1,067		$	1,004	$	746

Income tax expense for the years ended December 31, 2020, 2019 and 2018 differed from the federal statutory rate applied to income before income taxes for the following reasons:

(In thousands)	2020			2019			2018
Computed “expected” tax expense	$	1,458		$	1,643		$	1,445
Changes in income taxes resulting from:
Tax-exempt interest income		(160	)		(146	)		(149	)
Tax credits		(479	)		(552	)		(504	)
Other		248			59			(46	)
	$	1,067		$	1,004		$	746