Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Income tax expense (benefit) for the years ended December 31, 2021 and 2020 was as follows:

	2021		2020
Current tax provision:
Federal	$	3,852	$	5,088
State	503		1,693
Total Current tax provision	4,355		6,781
Deferred expense (benefit):
Federal	2,727		(2,902)
State	778		(804)
Total deferred expense (benefit):	3,505		(3,706)
Total income tax expense	$	7,860	$	3,075

The effective tax rate differed from the federal statutory rate of 21% in 2021 and 2020 as follows:

	2021		2020
Federal tax based on federal corporate statutory rate	$	6,820	$	3,313
State tax, net of federal effect	1,012		702
Changes resulting from:
CARES Act tax benefit	—		(968)
Other, net	28		28
Total Income tax expense	$	7,860	$	3,075

Deferred tax assets and liabilities at December 31, 2021 and December 31, 2020 were due to the following:

	2021		2020
Deferred tax assets:
Allowance for loan losses	$	3,238	$	5,364
Deferred loan fees	274		3,358
Discount on loans sold	934		1,396
Operating lease liabilities	1,143		995
Accrued bonuses	534		454
Other	962		598
Total gross deferred tax assets	7,085		12,165
Deferred tax liabilities:
Mortgage banking fair value adjustments	(1,074)		(2,861)
SBA loan servicing rights	(1,542)		(2,068)
Deferred loan costs	(2,193)		(1,884)
Right-of-use operating lease assets	(1,094)		(947)
Depreciation	(693)		(597)
Other	(35)		—
Total gross deferred tax liabilities	(6,631)		(8,357)
Net deferred tax asset	$	454	$	3,808

At December 31, 2021 and December 31, 2020, the Company did not have any federal net operating loss carryforwards. In March 2020, the Company recognized a one-time tax benefit of $968 as a result of the CARES Act, which allowed for carryback of 2018 net operating loss to tax years with higher corporate tax rates.

The Company and its subsidiary file a consolidated U.S. Corporation federal income tax return which is subject to examination by taxing authorities for years 2018 and later.There were no unrecognized tax benefits at December 31, 2021, and the Company does not expect the total amount of unrecognized tax benefits to significantly increase in the next twelve months. The Company recognizes interest and/or penalties related to income tax matters in income tax expense when applicable. The Company did not record any interest and penalties for 2021 and 2020.