INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of income tax expense (benefit)

The following table presents the components of the Company’s income tax expense as of December 31 (dollars in thousands):

	2023		2022
Current:
Federal	$	60	$	5,637
State and local	(281)		936
Total current tax (benefit)/expense	(221)		6,573
Deferred:
Federal	1,844		536
State and local	213		(55)
Valuation allowance	—		76
Total deferred tax expense	2,057		557
Income tax expense	$	1,836	$	7,130

Schedule of reconciliation of income tax (expense) benefit

The following is a reconciliation of income taxes reflected on the Consolidated Statements of Income for the years ended December 31, 2023 and 2022, with income tax expense computed by applying the United States federal income tax rate of 21% to income before income taxes (dollars in thousands):

	2023		2022
Income tax expense computed at 21% statutory rate	$	1,483	$	6,054
Differences:
Permanent differences	(106)		101
State taxes, net of federal expense	224		1,005
LIHTC investment tax credit	(441)		(404)
LIHTC investment proportional amortization	484		378
Valuation allowance	—		76
Other, net	192		(80)
Income tax expense	$	1,836	$	7,130

Schedule of principal components of deferred tax assets (liabilities)

The following table presents the principal components of the Company’s deferred tax items as of December 31 (dollars in thousands):

	2023		2022
Deferred tax assets:
Net operating loss carryforwards	$	472	$	472
Allowance for credit losses(1)	6,194		4,165
Acquired loans fair market value adjustments	607		826
Loans accounted for under the fair value option	216		146
Deferred Rent - Liability	2,579		2,706
Stock-based compensation	1,423		1,705
Other intangible assets	186		254
Unrealized losses on securities	383		495
Accrued bonuses	376		—
Loan fees	74		459
Accrued expenses	77		—
Other	184		1,574
Total deferred tax assets	12,771		12,802
Deferred tax liabilities:
Goodwill	(1,263)		(1,087)
Depreciation	(2,311)		(1,864)
Deferred Rent - Asset	(2,113)		(2,085)
Acquired loans fair market value adjustments	(196)		(215)
FHLB Redemption	(33)		(189)
Total deferred tax liabilities	(5,916)		(5,440)
Net operating loss valuation allowance	(448)		(448)
Net deferred tax asset	$	6,407	$	6,914

(1) Provision for credit loss amounts for periods prior to the ASC 326 adoption date of January 1, 2023 are reported in accordance with previously applicable GAAP.