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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2021
INCOME TAXES [Abstract] |
Provision for Income Taxes | The provision for income taxes consists of the following (in thousands):
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Currently payable |  | $ | 5,510 |  |  | $ | 4,896 |  |  | $ | 3,503 |
Deferred tax liability (asset) |  |  | 689 |  |  |  | 367 |  |  |  | 317 |
Provision for income taxes |  | $ | 6,199 |  |  | $ | 5,263 |  |  | $ | 3,820 |
Deferred Tax Assets and Liabilities | The following temporary differences gave rise to the net deferred tax asset and liabilities at December 31, 2021 and 2020, respectively (in thousands):
Deferred tax assets: |  | 2021 |  |  | 2020 |
Allowance for loan losses |  | $ | 4,712 |  |  | $ | 5,135 |
Deferred compensation |  |  | 491 |  |  |  | 520 |
Merger & acquisition costs |  |  | 1 |  |  |  | 2 |
Allowance for losses on available-for-sale securities |  |  | 4 |  |  |  | 15 |
Pension and other retirement obligation |  |  | 360 |  |  |  | 599 |
Unrealized loss on interest rate swap |  |  | - |  |  |  | 2 |
Interest on non-accrual loans |  |  | 795 |  |  |  | 778 |
Incentive plan accruals |  |  | 536 |  |  |  | 489 |
Other real estate owned |  |  | 16 |  |  |  | 16 |
Low income housing tax credits |  |  | 137 |  |  |  | 131 |
NOL carry forward |  |  | 1,226 |  |  |  | 1,321 |
Right of use asset |  |  | 686 |  |  |  | 482 |
Accrued vacation |  |  | 168 |  |  |  | 187 |
Other |  |  | 159 |  |  |  | 224 |
Total |  | $ | 9,291 |  |  | $ | 9,901 |
Deferred tax liabilities: |  | 2021 |  |  | 2020 |
Premises and equipment |  | $ | (559 | ) |  | $ | (612 | )
Investment securities accretion |  |  | (90 | ) |  |  | (68 | )
Loan fees and costs |  |  | (644 | ) |  |  | (333 | )
Goodwill and core deposit intangibles |  |  | (2,309 | ) |  |  | (2,293 | )
Mortgage servicing rights |  |  | (246 | ) |  |  | (215 | )
Unrealized gains on available-for-sale securities |  |  | (81 | ) |  |  | (1,612 | )
Unrealized gains on equity securities |  |  | (61 | ) |  |  | - |
Unrealized gains on interest rate swap |  |  | (401 | ) |  |  | - |
Right of use asset |  |  | (685 | ) |  |  | (480 | )
Other |  |  | (133 | ) |  |  | (245 | )
Total |  |  | (5,209 | ) |  |  | (5,858 | )
Deferred tax (liability) asset, net |  | $ | 4,082 |  |  | $ | 4,043 |
Reconciliation of Statutory Tax Rates to Effective Tax Rates | The total provision for income taxes is different from that computed at the statutory rates due to the following items (dollars in thousands):
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Provision at statutory rates on pre-tax income |  | $ | 7,413 |  |  | $ | 6,377 |  |  | $ | 4,895 |
Effect of tax-exempt income |  |  | (764 | ) |  |  | (936 | ) |  |  | (920 | )
Low income housing tax credits |  |  | (141 | ) |  |  | (141 | ) |  |  | (141 | )
Bank owned life insurance |  |  | (384 | ) |  |  | (146 | ) |  |  | (131 | )
Nondeductible interest |  |  | 44 |  |  |  | 44 |  |  |  | 52 |
Nondeductible merger and acquisition expenses |  |  | - |  |  |  | 32 |  |  |  | 38 |
Other items |  |  | 31 |  |  |  | 33 |  |  |  | 27 |
Provision for income taxes |  | $ | 6,199 |  |  | $ | 5,263 |  |  | $ | 3,820 |
Statutory tax rates |  |  | 21 | % |  |  | 21 | % |  |  | 21 | %
Effective tax rates |  |  | 17.6 | % |  |  | 17.3 | % |  |  | 16.4 | %

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