Income Taxes

12 Months Ended

Dec. 31, 2024

Income Taxes [Abstract]

Income Taxes

Note 12. Income Taxes

The components of income tax expense for the current and prior years ended are as follows:

(dollars in thousands)	2024			2023
Current income tax expense	$	2,042		$	1,422
Deferred income tax benefit		(145	)		(88	)
Reported income tax expense	$	1,897		$	1,334

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)	2024			2023
Federal statutory rate times financial statement income	$	2,395		$	1,903
Low-income housing tax credits		(46	)		(309	)
Tax-exempt interest income, net		(32	)		(70	)
Bank-owned life insurance		(230	)		(218	)
Deferred tax write-off		(287	)		-
Other, net		97			28
Reported income tax expense	$	1,897		$	1,334

The effective tax rates for 2024 and 2023 were 16.6% and 14.7%, respectively.

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

(dollars in thousands)	2024		2023
Deferred tax assets:
Allowance for credit losses	$	2,404	$	2,563
Nonaccrual loans		11		56
Net operating losses		506		540
Investments in pass-through entities		-		355
Unrealized losses on securities available-for-sale		4,554		4,660
Stock awards		157		140
Other accrued compensation		470		272
Deferred loan fees and costs		182		258
Lease liability		176		262
Other		38		49
	$	8,498	$	9,155
Deferred tax liabilities:
Premises and equipment	$	292	$	606
Acquisition accounting		30		39
Right of use asset		167		241
Other		49		-
		538		886
Net deferred tax assets	$	7,960	$	8,269

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 2021.