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9. Income Taxes | 12 Months Ended
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Dec. 31, 2021
9. Income Taxes |
Income Taxes |
(9) | Income Taxes
| The provision for income taxes is summarized as follows:
(Dollars in thousands) |  |  |  |  |  |  |  |  |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Current expense |  | $ | 4,079 |  |  |  | 3,049 |  |  |  | 2,972 |
Deferred income tax expense |  |  | (283 | ) |  |  | (560 | ) |  |  | 164 |
Total income tax |  | $ | 3,796 |  |  |  | 2,489 |  |  |  | 3,136 |
| The differences between the provision for income taxes and the amount computed by applying the statutory federal income tax rate to earnings before income taxes are as follows:
(Dollars in thousands) |  |  |  |  |  |  |  |  |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Tax expense at statutory rate |  | $ | 3,975 |  |  |  | 2,908 |  |  |  | 3,613 |
State income tax, net of federal income tax effect |  |  | 339 |  |  |  | 261 |  |  |  | 351 |
Tax-exempt interest income |  |  | (497 | ) |  |  | (649 | ) |  |  | (802 | )
Increase in cash surrender value of life insurance |  |  | (83 | ) |  |  | (80 | ) |  |  | (81 | )
Tax credits |  |  | (234 | ) |  |  | (234 | ) |  |  | - |
Nondeductible interest and other expense |  |  | 30 |  |  |  | 46 |  |  |  | 40 |
Other |  |  | 266 |  |  |  | 237 |  |  |  | 15 |
Total |  | $ | 3,796 |  |  |  | 2,489 |  |  |  | 3,136 |
| The following summarizes the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities. The net deferred tax asset is included as a component of other assets at December 31, 2021 and 2020.
(Dollars in thousands) |  |  |  |  |  |
|  | 2021 |  |  | 2020 |
Deferred tax assets: |  |  |  |  |  |
Allowance for loan losses |  | $ | 2,149 |  |  |  | 2,276 |
Accrued retirement expense |  |  | 1,148 |  |  |  | 1,190 |
Restricted stock |  |  | 209 |  |  |  | 190 |
Interest income on nonaccrual loans |  |  | 2 |  |  |  | 1 |
Lease liability |  |  | 1,075 |  |  |  | 798 |
Total gross deferred tax assets |  |  | 4,583 |  |  |  | 4,455 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Deferred loan fees |  |  | 263 |  |  |  | 284 |
Accumulated depreciation |  |  | 563 |  |  |  | 873 |
Prepaid expenses |  |  | 4 |  |  |  | 5 |
ROU Asset |  |  | 1,060 |  |  |  | 787 |
Other |  |  | (55 | ) |  |  | 41 |
Unrealized gain on available for sale securities |  |  | 29 |  |  |  | 1,611 |
Total gross deferred tax liabilities |  |  | 1,864 |  |  |  | 3,601 |
Net deferred tax asset |  | $ | 2,719 |  |  |  | 854 |
| The Company has analyzed the tax positions taken or expected to be taken in its tax returns and has concluded that it has no liability related to uncertain tax positions. As of December 31, 2021, the Company’s Federal income tax filings for years 2018 through 2021 open to audit by the Internal Revenue Service. The Company’s North Carolina income tax returns are currently under
A-59
| audit for tax year 2014-2016, tax years 2018, 2019, 2020 and 2021 remain open to audit by the North Carolina Department of Revenue.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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