Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Taxes

Summary of components of the federal and state income tax expense

(dollars in thousands)	2019		2018
Federal:
Current	$	3,287	2,413
Deferred		(489)	(288)
		2,798	2,125
State:
Current		249	207
Deferred		(14)	(5)
		235	202
Totals	$	3,033	2,327

Schedule of reconciliation of the statutory income tax

(dollars in thousands)		2019			2018
Federal income tax at statutory rate	$	2,838	21.0	%	2,203	21.0	%
State tax expense, net of federal benefit		186	1.4		160	1.5
Tax exempt interest		(65)	(0.5)		(92)	(0.9)
Bank owned life insurance		(61)	(0.5)		(63)	(0.6)
Incentive stock options		66	0.5		52	0.5
Other		69	0.5		67	0.6
Effective income tax rate	$	3,033	22.4	%	2,327	22.1	%

Summary of net deferred tax assets

(dollars in thousands)	2019		2018
Deferred tax assets:
Allowance for loan and lease losses	$	2,111	1,802
Litigation reserve		220	—
Intangibles		58	74
Accrued incentive compensation		176	—
Accrued retirement		432	380
Unrealized loss on available for sale securities		2	118
Deferred rent		142	155
Mortgage repurchase reserve		16	15
Other		78	169
Total deferred tax asset		3,235	2,713
Deferred tax liabilities:
Property and equipment		(388)	(524)
Loan servicing rights		(183)	—
Mortgage pipeline fair-value adjustment		(77)	(80)
Hedge instrument fair-value adjustment		(41)	(16)
Prepaid expenses		(152)	(131)
Deferred loan costs		(279)	(234)
Total deferred tax liability		(1,120)	(985)
Net deferred tax asset	$	2,115	1,728