INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of income tax expense (benefit)

Income tax expense for the years ended December 31, 2023 and 2022, consists of the following:


	Current		Deferred		Total
	(In thousands)
December 31, 2023
Federal	$	—	$	—	$	—
State	—		—		—
	$	—	$	—	$	—

December 31, 2022
Federal	$	299	$	—	$	299
State	39		—		39
	$	338	$	—	$	338

Schedule of effective income tax rate reconciliation

A reconciliation between the actual income tax expense and the expected federal income tax expense (computed by multiplying income before income tax expense times the applicable statutory federal income tax rate) for the years ended December 31, 2023 and 2022, is as follows:


	2023			2022
	(In thousands)
Income (loss) before income tax expense (benefit)	$	(7,397)		$	2,734
Applicable statutory federal income tax rate	21.00		%	21.00		%
Computed “expected” federal income tax expense (benefit)	$	(1,553)		$	574
Increase (decrease) in federal income tax expense resulting from:
State income taxes, net of federal benefit	(487)			244
Valuation allowance	2,016			(414)
Tax-exempt income	(90)			(96)
Bank owned life insurance	(98)			(103)
Non-deductible compensation	54			27
ESOP fair market value adjustment	(4)			50
Stock compensation	150			54


Other items, net	12			2
Total	$	—		$	338

Schedule of deferred tax assets and liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2023 and 2022, are as follows:


	December 31, 2023		December 31, 2022
Deferred tax assets:	(In thousands)
Allowance for credit losses on loans and REO	$	4,064	$	4,242

Allowance for losses held-to-maturity securities	38		—
Net unrealized losses on securities available-for-sale	8,087		9,529

Accrued postretirement benefits	1,173		1,195
Accrued interest receivable	144		187
Accrued bonus	244		730
Stock compensation	602		150

Premises and equipment	184		109
Finance lease liability	7,527		7,681
Charitable contribution carryover	2,533		2,729

Federal net operating loss carryforward	6,935		5,417
State net operating loss carryforward	2,345		1,879
Other	61		—
Total gross deferred tax assets	33,937		33,848
Valuation allowance	(24,105)		(22,570)
Gross deferred tax assets after valuation allowance	9,832		11,278
Deferred tax liabilities:

Net unrealized gains on derivatives	2,131		3,118
Deferred loan fees, net	559		772
Unrealized actuarial gains on post retirement benefits	66		105

Finance lease right-of-use asset	7,076		7,282
Other	—		1
Total gross deferred tax liabilities	9,832		11,278
Net deferred tax asset	$	—	$	—