Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Taxes [Abstract]

Components of Income Tax Expense

The components of income tax (benefit) expense for the two years ended December 31 were:

(Dollars in thousands)	Years Ended December 31,
	2019		2018
Current tax expense (benefit)	$	768	$	(563)
Deferred tax expense (benefit)		(782)		(96)
Total tax expense (benefit)	$	(14)	$	(659)

Effective Income Tax Rate Reconciliation

A reconciliation of the statutory income tax (benefit) expense computed at 21% to the income tax expense included in the consolidated statements of income follows:

(Dollars in thousands)	Years Ended December 31,
	2019			2018
Income before income taxes	$	5,821		$	5,245
Statutory tax rate		21	%		21	%
Federal tax at statutory rate		1,222			1,101
Tax-exempt interest		(261)			(271)
Net earnings on BOLI		(49)			(50)
Dividend from unconsolidated subsidiary		—			(10)
Stock-based compensation		(12)			19
Federal tax credits		(902)			(901)
Merger and acquisition expenses		—			33
Defined benefit prior year contribution, net of other PTR adjustments		—			(198)
Basis difference related to Liverpool investment prior to acquisition		—			(406)
Other permanent differences		(12)			24
Total tax expense (benefit)	$	(14)		$	(659)
Effective tax rate		(0.2)	%		(12.6)	%

Schedule of Deferred Tax Assets and Liabilities

The components giving rise to the net deferred tax asset are detailed below:

(Dollars in thousands)	Years Ended December 31,
	2019		2018
Deferred Tax Assets:
Allowance for loan losses	$	634	$	494
Deferred directors’ compensation		337		345
Employee and director benefits		288		309
Qualified pension liability		—		78
Unrealized losses on debt securities available for sale		—		655
Unrealized loss from securities impairment		—		34
Stock-based compensation		40		—
Investment in low income housing project		211		142
Fair value adjustments to acquired assets and liabilities		251		293
Tax credit carryforward		191		225
Net operating loss carryforward		29		—
Lease liability		98		—
Other		—		2
Total deferred tax assets		2,079		2,577
Deferred Tax Liabilities:
Depreciation		(197)		(445)
Right of use asset		(97)		—
Loan origination fees and costs		(418)		(384)
Prepaid expenses		(52)		(229)
Unrealized gains on debt securities available for sale		(136)		—
Unrealized gain from securities impairment		(54)		—
Annuity earnings		(60)		(56)
Fair value of mortgage servicing rights		(38)		(42)
Intangible assets		(56)		(68)
Goodwill		(382)		(353)
Total deferred tax liabilities		(1,490)		(1,577)
Net deferred tax asset included in other assets	$	589	$	1,000