INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

INCOME TAXES

Schedule of income tax expense (benefit)

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

	2021		2020
Current:
Federal	$	6,228	$	7,970
State and local		1,110		1,859
Total current tax expense		7,338		9,829
Deferred:
Federal		(734)		(1,392)
State and local		66		(280)
Valuation allowance		—		372
Total deferred tax benefit		(668)		(1,300)
Income tax expense	$	6,670	$	8,529

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, 2021 and 2020, with income tax expense computed by applying the United States federal income tax rate of 21% to income before income taxes (in thousands):

	2021		2020
Income tax expense computed at 21% statutory rate	$	5,729	$	6,943
Differences:
Permanent differences		169		(57)
State taxes, net of federal expense		1,018		1,150
LIHTC investment tax credit		(386)		(36)
LIHTC investment proportional amortization		539		—
Valuation allowance		—		372
Other, net		(399)		157
Income tax expense	$	6,670	$	8,529

Schedule of principal components of deferred tax assets (liabilities)

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

	2021		2020
Deferred tax assets:
Net operating loss carryforwards	$	395	$	577
Allowance for loan losses		3,385		3,054
Acquired loans fair market value adjustments		976		—
Acquisition related basis adjustment		226		—
Deferred rent		753		635
Stock-based compensation		1,800		1,613
Provision on other real estate owned		463		484
Other intangible assets		279		615
Accrued bonuses		868		898
Loan fees		—		244
Accrued expenses		821		—
Other		382		553
Total deferred tax assets		10,348		8,673
Deferred tax liabilities:
Goodwill		(1,137)		(1,013)
Depreciation		(1,636)		(904)
Unrealized gain on securities		(73)		(236)
Loan fees		(155)		—
Other		(130)		(92)
Total deferred tax liabilities		(3,131)		(2,245)
Net operating loss valuation allowance		(372)		(372)
Net deferred tax asset	$	6,845	$	6,056