Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes [Abstract]

Income Taxes

NOTE 14, Income Taxes

The components of income tax expense for the current and prior year-ends are as follows:

(dollars in thousands)	2021		2020
Current income tax expense	$	1,021	$	1,155
Deferred income tax expense (benefit)		275		(634	)
Reported income tax expense	$	1,296	$	521

A reconciliation of the expected federal income tax expense on income before income taxes with the reported income tax expense for the same periods follows:

	Years Ended December 31,
(dollars in thousands)	2021			2020
Expected tax expense	$	2,045		$	1,241
Interest expense on tax-exempt assets		3			5
Low-income housing tax credit		(361	)		(413	)
Tax-exempt interest, net		(195	)		(147	)
Bank-owned life insurance		(213	)		(176	)
Other, net		17			11
Reported tax expense	$	1,296		$	521

The effective tax rates for 2021 and 2020 were 13.3% and 8.8%, respectively.

The components of the net deferred tax asset, included in other assets, are as follows:

(dollars in thousands)	2021		2020
Deferred tax assets:
Allowance for loan losses	$	2,072	$	2,017
Nonaccrual loans		10		9
Acquisition accounting		5		14
Net operating losses		609		643
Investments in pass-through entities		267		224
Bank owned life insurance benefit		72		68
Securities available-for-sale		-		-
Stock awards		116		97
Deferred compensation		314		397
Deferred loan fees and costs		270		443
Other		66		55
	$	3,801	$	3,967
Deferred tax liabilities:
Premises and equipment	$	481	$	363
Acquisition accounting		58		67
Deferred loan fees and costs		-		-
Securities available-for-sale		445		1,081
		984		1,511
Net deferred tax assets	$	2,817	$	2,456

The Company files income tax returns in the U.S. federal jurisdiction and the Commonwealth of Virginia. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2018.