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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Taxes  
Income Taxes

(9) Income Taxes

 

The provision for income taxes is summarized as follows:

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

2024

 

 

2023

 

 

2022

 

Current expense

 

 

 

 

 

 

 

 

 

Federal

 

$3,081

 

 

 

4,289

 

 

 

4,153

 

State

 

 

464

 

 

 

541

 

 

 

560

 

 

 

 

3,545

 

 

 

4,830

 

 

 

4,713

 

Deferred income tax expense (benefit)

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

693

 

 

 

(404

) 

 

 

(482

) 

State

 

 

338

 

 

 

(49

) 

 

 

(59

) 

 

 

 

1,031

 

 

 

(453

) 

 

 

(541

) 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total income tax

 

$4,576

 

 

 

4,377

 

 

 

4,172

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

2024

 

 

2023

 

 

2022

 

Tax expense at statutory rate

 

$4,398

 

 

 

4,184

 

 

 

4,262

 

State income tax, net of federal income tax effect

 

 

635

 

 

 

395

 

 

 

395

 

Interest received related to tax positions

 

 

(260)

 

 

-

 

 

 

-

 

Tax-exempt interest income

 

 

(114)

 

 

(182)

 

 

(445)

Increase in cash surrender value of life insurance

 

 

(164)

 

 

(91)

 

 

(71)

Tax credits

 

 

(10)

 

 

(10)

 

 

(11)

Nondeductible interest and other expense

 

 

24

 

 

 

30

 

 

 

24

 

Other

 

 

67

 

 

 

51

 

 

 

18

 

Total

 

$4,576

 

 

 

4,377

 

 

 

4,172

 

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, 2024 and 2023.

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

2024

 

 

2023

 

Deferred tax assets:

 

 

 

 

 

 

Allowance for credit losses

 

$2,485

 

 

 

2,944

 

Accrued retirement expense

 

 

1,215

 

 

 

1,210

 

Restricted stock

 

 

238

 

 

 

249

 

Interest income on nonaccrual loans

 

 

4

 

 

 

5

 

Lease liability

 

 

926

 

 

 

1,110

 

Unrealized loss on available for sale securities

 

 

11,412

 

 

 

11,741

 

Total gross deferred tax assets

 

 

16,280

 

 

 

17,259

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Deferred loan fees

 

 

160

 

 

 

186

 

Accumulated depreciation

 

 

375

 

 

 

375

 

Prepaid expenses

 

 

296

 

 

 

3

 

ROU Asset

 

 

899

 

 

 

1,087

 

Partnership income

 

 

250

 

 

 

112

 

Other

 

 

9

 

 

 

12

 

Total gross deferred tax liabilities

 

 

1,989

 

 

 

1,775

 

 

 

 

 

 

 

 

 

 

Net deferred tax asset

 

$14,291

 

 

 

15,484

 

 

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, 2024, the Company’s Federal income tax filings for years 2021 through 2023 are open to examination by the Internal Revenue Service. The Company’s North Carolina income tax returns for years 2021 through 2023 are open to examination by the North Carolina Department of Revenue.