Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes [Abstract]

Income Taxes

Note 12. Income Taxes

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

(dollars in thousands)	2023			2022
Current income tax expense	$	1,422		$	1,525
Deferred income tax benefit		(88	)		(51	)
Reported income tax expense	$	1,334		$	1,474

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)	2023			2022
Federal statutory rate times financial statement income	$	1,903		$	2,222
Low-income housing tax credits		(309	)		(349	)
Tax-exempt interest income, net		(70	)		(220	)
Bank-owned life insurance		(218	)		(191	)
Other, net		28			12
Reported income tax expense	$	1,334		$	1,474

The effective tax rates for 2023 and 2022 were 14.7% and 13.9%, respectively.

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

(dollars in thousands)	2023		2022
Deferred tax assets:
Allowance for credit losses	$	2,563	$	2,211
Nonaccrual loans		56		9
Net operating losses		540		574
Investments in pass-through entities		355		320
Unrealized losses on securities available-for-sale		4,660		5,520
Stock awards		140		117
Other accrued compensation		272		498
Deferred loan fees and costs		258		217
Lease liability		262		343
Other		49		11
	$	9,155	$	9,820
Deferred tax liabilities:
Premises and equipment	$	606	$	606
Acquisition accounting		39		49
Right of use asset		241		332
		886		987
Net deferred tax assets	$	8,269	$	8,833

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 2020.