Income Taxes

9 Months Ended

Sep. 30, 2022

Income Taxes [Abstract]

Income Taxes

4. INCOME TAXES 

The Company’s provision for income taxes is presented in the following table for the dates indicated (in thousands):

The actual income tax expense for the nine months ended September 30, 2022 and 2021 differs from the statutory tax

expense for the period (computed by applying the U.S. federal corporate tax rate of

21

% for 2022 and 2021 to income

before provision for income taxes) as follows (in thousands):

The Company’s deferred tax assets and deferred tax liabilities as of the dates indicated were (in thousands):

September 30, 2022

December 31, 2021

Deferred tax assets:

Net operating loss

$

23,580

$

28,819

Allowance for credit losses

4,208

3,816

Lease liability

3,418

3,595

Unrealized losses on available for sale securities

15,345

817

Deferred loan fees

2

400

Depreciable property

146

361

Stock option compensation

332

241

Accruals

467

600

Other, net

22

2

Deferred tax assets:

47,520

38,651

Deferred tax liability:

Lease right of use asset

(3,418)

(3,595)

Deferred expenses

(174)

(127)

Deferred tax liability

(3,592)

(3,722)

Net deferred tax assets

$

43,928

$

34,929

The Company has approximately $

89.1

 million of federal and $

111.9

 million of state net operating loss carryforwards

expiring in various amounts between 2031 and 2036 and which are limited to offset, to the extent permitted, future taxable

earnings of the Company.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some

portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent

upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning

strategies in making this assessment.

The major tax jurisdictions where the Company files income tax returns are the U.S. federal jurisdiction and the State

of Florida. With few exceptions, the Company is no longer subject to U.S. federal and state income tax examinations by tax

authorities for years before 2018.

For the three months ended September 30, 2022 and 2021, the Company did

no

t have any unrecognized tax benefits

as a result of tax positions taken during a prior period or during the current period. Additionally,

no

 interest or penalties were

recorded as a result of tax uncertainties.

Nine Months Ended September 30,

2022

2021

Current:

Federal

$

-

$

-

State

-

-

Total current

-

-

Deferred:

Federal

4,342

3,962

State

1,187

887

Total deferred

5,529

4,849

Total tax expense

$

5,529

$

4,849

Nine Months Ended September 30,

2022

2021

Federal taxes at statutory rate

$

4,460

$

4,258

State income taxes, net of federal tax benefit

923

710

Bank owned life insurance

(202)

(122)

Other, net

348

3

Total tax expense

$

5,529

$

4,849