Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

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,
	2020		2019
Current tax expense	$	105	$	768
Deferred tax benefit		(155)		(782)
Total tax benefit	$	(50)	$	(14)

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,
	2020			2019
Income before income taxes	$	5,552		$	5,821
Statutory tax rate		21	%		21	%
Federal tax at statutory rate		1,166			1,222
Tax-exempt interest		(205)			(261)
Net earnings on BOLI		(45)			(49)
Stock-based compensation		(4)			(12)
Federal tax credits		(902)			(902)
CARES Act Loss Carryback		(57)			—
Other permanent differences		(3)			(12)
Total tax benefit	$	(50)		$	(14)
Effective tax rate		(0.9)	%		(0.2)	%

Schedule of Deferred Tax Assets and Liabilities

Deductible temporary differences and taxable temporary differences gave rise to a net deferred tax asset for the Company as of December 31, 2020 and 2019. The components giving rise to the net deferred tax asset are detailed below:

(Dollars in thousands)	Years Ended December 31,
	2020		2019
Deferred Tax Assets:
Allowance for loan losses	$	887	$	634
Deferred directors’ compensation		333		337
Employee and director benefits		279		288
Stock-based compensation		50		40
Investment in low income housing project		299		211
Fair value adjustments to acquired assets and liabilities		220		251
Tax credit carryforward		173		191
Net operating loss carryforward		—		29
Lease liability		82		98
Unrealized loss on derivatives		12		—
Total deferred tax assets		2,335		2,079
Deferred Tax Liabilities:
Depreciation		(227)		(197)
Right of use asset		(80)		(97)
Loan origination fees and costs		(463)		(418)
Prepaid expenses		(20)		(52)
Unrealized gains on debt securities available for sale		(947)		(136)
Unrealized gain from securities impairment		(44)		(54)
Annuity earnings		(64)		(60)
Fair value of mortgage servicing rights		(33)		(38)
Intangible assets		(47)		(56)
Goodwill		(411)		(382)
Other		(53)		—
Total deferred tax liabilities		(2,389)		(1,490)
Net deferred tax (liability) asset included in (other liabilities) other assets	$	(54)	$	589