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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Taxes [Abstract]  
Income Taxes
Note K - Income Taxes
The provision for income taxes consists of the following components:

   
2021
    
2020
  
Current tax expense
  
$
2,414
    
$
2,036
  
Deferred tax (benefit) expense
    
(130
)
    
12
  
Total income taxes
  
$
2,284
    
$
2,048
  

The source of deferred tax assets and deferred tax liabilities at December 31:

   
2021
    
2020
  
Items giving rise to deferred tax assets:
            
Allowance for loan losses
  
$
1,410
    
$
1,557
  
Deferred compensation
    
2,007
      
1,822
  
Deferred loan fees/costs
    
148
      
136
  
Other real estate owned
    
—
      
1
  
Accrued bonus
    
286
      
212
  
Purchase accounting adjustments
    
2
      
18
  
Net operating loss
    
82
      
99
  
Lease liability
    
324
      
235
  
Nonaccrual interest income
     174       —  
Other
    
275
      
339
  
Items giving rise to deferred tax liabilities:
                
Mortgage servicing rights
    
(104
)
    
(100
)
FHLB stock dividends
    
(676
)
    
(676
)
Unrealized gain on securities available for sale
    
(188
)
    
(647
)
Prepaid expenses
    
(205
)
    
(202
)
Depreciation and amortization
    
(783
)
    
(894
)
Right-of-use asset
    
(324
)
    
(235
)
Net deferred tax asset
  
$
2,428
    
$
1,665
  


The Company determined that it was not required to establish a valuation allowance for deferred tax assets since management believes that the deferred tax assets are likely to be realized through the future reversals of existing taxable temporary differences, deductions against forecasted income and tax planning strategies.


At December 31, 2021, the Company’s deferred tax asset related to Section 382 net operating loss carryforwards was $391, which will expire in 2026.

The difference between the financial statement tax provision and amounts computed by applying the statutory federal income tax rate of 21% to income before taxes is as follows:

   
2021
   
2020
 
Statutory tax (21%)
 
$
2,943
    
$
2,584
  
Effect of nontaxable interest
    
(378
)
    
(348
)
Effect of nontaxable insurance premiums
    
(220
)
    
(210
)
Income from bank owned insurance, net
    
(168
)
    
(161
)
Effect of postretirement benefits
    
26
      
124
  
Effect of nontaxable life insurance death proceeds     (10 )     —  
Effect of state income tax
    
150
      
125
  
Tax credits
    
(72
)
    
(102
)
Other items
    
13
      
36
  
Total income taxes(1)
  
$
2,284
    
$
2,048
  

(1) Effective income tax rates were 16.3% for 2021 and 16.6% for 2020


At December 31, 2021 and December 31, 2020, the Company had no unrecognized tax benefits. The Company does not expect the amount of unrecognized tax benefits to significantly change within the next twelve months.  The Company did not recognize any interest and/or penalties related to income tax matters for the periods presented.


The Company is subject to U.S. federal income tax as well as West Virginia state income tax.  The Company is no longer subject to federal or state examination for years prior to 2018.  The tax years 2018-2020 remain open to federal and state examinations.