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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income tax expense were as follows:
For the Years Ended December 31,
(in thousands)20212020
Current:
Federal$12,990 $9,489 
State2,835 2,995 
Total current expense15,825 12,484 
Deferred tax benefit(1,927)(3,170)
Total income tax expense$13,898 $9,314 
The components of the net deferred tax asset at December 31, 2021 and 2020 were:
(in thousands)20212020
Deferred tax assets:
Allowance for loan and credit losses$6,674 $6,666 
Reserve for recourse on mortgage loans sold364 308 
Deferred loan fees - PPP1,076 — 
Stock-based compensation320 276 
Long-term incentive program507 302 
Unrealized loss on investment securities available for sale428 — 
Net operating loss carryforward67 123 
Other532 144 
9,968 7,819 
Deferred tax liabilities:
Unrealized gains on investment securities available for sale— 620 
Accumulated depreciation107 190 
Other1 68 
108 878 
Net deferred tax asset before valuation allowance9,860 6,941 
Less: Valuation allowance67 123 
Net deferred tax asset$9,793 $6,818 
Note 13 - Income Taxes (continued)
The differences between the federal income tax rate and the effective tax rate for the Company are reconciled as follows:
20212020
Statutory federal income tax rate21.00 %21.00 %
Increase (decrease) resulting from:
State income taxes, net of federal income tax benefit3.97 5.40 
Nondeductible expenses0.44 0.49 
Tax exempt income(0.20)(0.01)
Other0.59 (0.37)
Effective Tax Rate25.80 %26.51 %
Deferred tax assets represent the future tax benefit of deductible differences and, if it is more likely than not that a tax asset will not be realized, a valuation allowance is required to reduce the net deferred tax assets to net realizable value. As of December 31, 2021, management has determined that it is more likely than not that the majority of the deferred tax asset from continuing operations will be realized. At December 31, 2021 and 2020, a valuation allowance of $67 thousand and $123 thousand was recognized, respectively, for a State of Maryland net operating loss carryforward that may not be realizable.
The Company does not have material uncertain tax positions and did not recognize any adjustments for unrecognized tax benefits. The Company remains subject to examination of income tax returns for the years ending after December 31, 2017.