Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes

Income Taxes

Note 8. Income Taxes

The components of income tax expense are as follows for the years ended December 31, 2023 and 2022:

	2023		2022
(dollars in thousands)
Current income tax expense:
Federal	$	128	$	302
State		28		148
Total current tax expense		156		450
Deferred income tax expense:
Federal		(59)		(147)
State		(25)		(63)
Total deferred tax expense		(84)		(210)
Total Income tax expense	$	72	$	240

A reconciliation of income tax expense computed at the statutory rate of 21% at December 31, 2023 and December 31, 2022 to the actual income tax expense for the years ended December 31, 2023 and 2022 is as follows:

	2023		2022
(dollars in thousands)
Income tax expense at federal statutory rate	$	315	$	417
(Decrease) increase resulting from:
Tax-exempt income		(212)		(212)
Bank owned life insurance		(34)		(33)
State income taxes, net of Federal income tax benefit		3		68
Total income tax expense	$	72	$	240

Deferred tax assets and liabilities resulting from the tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes at December 31, 2023 and 2022 are as follows:

	2023		2022
(dollars in thousands)
Deferred income tax benefits:
Accrued deferred compensation	$	89	$	87
Allowance for credit losses		480		386
Accumulated depreciation		(12)		(18)
Accrued Liabilities		110		144
Reserve for unfunded commitments		130		131
Accounting standard 310-20		(151)		(145)
Right of use asset		(58)		(101)
Lease liability		58		101
Accumulated securities discount accretion		272		248
Net unrealized depreciation on investment securities available for sale		6,979		8,069
Net deferred income tax benefits	$	7,897	$	8,902

Management has determined that no valuation allowance is required as it believes it is more likely than not that all of the deferred tax assets will be fully realizable in the future. At December 31, 2023 and 2022, management believes there are no uncertain tax positions under ASC Topic 740 Income Taxes. We file income tax returns in the US federal jurisdictions.  We are no longer subject to state or US federal income tax examinations by tax authorities for years ended before 2020.

Income tax expense was $0.07 million and $0.24 million at December 2023 and 2022, respectively.