INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

INCOME TAXES

Schedule of income tax expense (benefit)

The components of the Company’s income tax expense (benefit) as of December 31 (in thousands):

	2019		2018
Current:
Federal	$	3,076	$	(118)
State and local		323		87
Total current tax expense (benefit)		3,399		(31)
Deferred:
Federal	$	(1,338)	$	1,567
State and local		122		239
Total deferred tax expense (benefit)		(1,216)		1,806
Income tax expense	$	2,183	$	1,775

Schedule of reconciliation of income tax (expense) benefit

The following is a reconciliation of income taxes reflected on the statements of income for the years ended December 31 with income tax expense computed by applying the United States federal income tax rate of 21% to income before income taxes (in thousands):

	2019			2018
Income tax expense computed at 21% statutory rate	$	2,140		$	1,558
Differences:
Permanent differences		(30)			(89)
State taxes, net of federal expense		394			258
Other, net		(321)	(1)		48
Income tax expense	$	2,183		$	1,775

Includes the impact of R&D tax credits.

Schedule of principal components of deferred tax assets (liabilities)

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

	2019		2018
Deferred tax assets:
Net operating loss carryforwards	$	545	$	995
Allowance for loan losses		1,925		1,921
Deferred rent		797		960
Stock-based compensation		1,400		1,277
Allowance for losses on other real estate owned		438		461
Other intangible assets		723		747
Unrealized losses on securities		55		530
Accrued Bonuses		474		127
Loan fees		352		245
Other		685		310
Total deferred tax assets		7,394		7,573
Deferred tax liabilities:
Goodwill	$	(1,354)	$	(1,772)
Depreciation		(961)		(980)
Other		(32)		(515)
Total deferred tax liabilities		(2,347)		(3,267)
Net deferred tax asset	$	5,047	$	4,306