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INCOME TAXES | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income tax expense (benefit) for each of the periods shown below consisted of the following:
|  | Year ended December 31, |  | Year ended December 31, |  |
|  | 2022 |  | 2021 |  |
Current tax provision |  |  |  |  |  |
Federal |  | $ | 3,565 |  |  | $ | 4,761 |  |  |
State |  | 1,749 |  |  | 2,002 |  |  |
|  | 5,314 |  |  | 6,763 |  |  |
Deferred tax provision (benefit) |  |  |  |  |  |
Federal |  | 355 |  |  | 585 |  |  |
State |  | 151 |  |  | 345 |  |  |
|  | 506 |  |  | 930 |  |  |
Total |  | $ | 5,820 |  |  | $ | 7,693 |  |  |
The provision for income taxes differs from the amount of income tax determined by applying statutory federal income tax rates to pretax income as result of the following differences:
|  | Year ended December 31, |  | Year ended December 31, |  |  |
|  | 2022 |  | 2021 |
|  | Amount |  | Rate |  | Amount |  | Rate |  |  |
Tax expense at statutory rate |  | $ | 4,952 |  |  | 21.0 | % |  | $ | 6,082 |  |  | 21.0 | % |  |  |
State income taxes, net of federal |  | 1,501 |  |  | 6.4 | % |  | 1,854 |  |  | 6.4 | % |  |  |
Tax credits |  | (514) |  |  | (2.2) | % |  | — |  |  | — | % |  |  |
Bank owned life insurance |  | (135) |  |  | (0.6) | % |  | (132) |  |  | (0.4) | % |  |  |
Tax exempt interest |  | (59) |  |  | (0.3) | % |  | (52) |  |  | (0.2) | % |  |  |
Other |  | 75 |  |  | 0.4 | % |  | (59) |  |  | (0.2) | % |  |  |
Total |  | $ | 5,820 |  |  | 24.7 | % |  | $ | 7,693 |  |  | 26.6 | % |  |  |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following is a summary of the significant components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and December 31, 2021, respectively:
|  | Year ended December 31, |  | Year ended December 31,
|  | 2022 |  | 2021
Deferred tax assets: |  |  |  |
Allowance for loan losses |  | $ | 4,934 |  |  | $ | 4,587 |
Deferred loan costs/fees |  | 591 |  |  | 558 |
Restricted stock |  | 243 |  |  | 189 |
Economic performance accruals |  | 871 |  |  | 981 |
Loan discounts |  | 375 |  |  | 854 |
Lease liability |  | 535 |  |  | 613 |
Net unrealized losses on securities available for sale |  | 6,697 |  |  | — |
Other |  | 44 |  |  | 71 |
Deferred tax assets |  | $ | 14,290 |  |  | $ | 7,853 |
Deferred tax liabilities: |  |  |  |
Office properties and equipment |  | (2,098) |  |  | (1,595) |
Federal Home Loan Bank stock |  | (129) |  |  | (129) |
Core deposit intangible |  | (1,019) |  |  | (1,298) |
Net gain on equity securities |  | (710) |  |  | (641) |
Prepaid expenses |  | (250) |  |  | (198) |
Mortgage servicing rights |  | (1,172) |  |  | (1,144) |
Leases; right of use asset |  | (467) |  |  | (594) |
Net unrealized gains on securities available for sale |  | — |  |  | (61) |
Deferred tax liabilities |  | $ | (5,845) |  |  | $ | (5,660) |
Net deferred tax assets |  | $ | 8,445 |  |  | $ | 2,193 |
The Company regularly reviews the carrying amount of its deferred tax assets to determine if the establishment of a valuation allowance is necessary, as further discussed in Note 1 “Nature of Business and Summary of Significant Accounting Policies”, above. At December 31, 2022 and December 31, 2021, respectively, management determined that no valuation allowance was necessary. The Company’s income tax returns are subject to review and examination by federal, state and local government authorities. As of December 31, 2022, years open to examination by the U.S. Internal Revenue Service include taxable years ended December 31, 2019 to present. The years open to examination by state and local government authorities varies by jurisdiction. The tax effects from uncertain tax positions can be recognized in the consolidated financial statements, provided the position is more likely than not to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized, upon ultimate settlement with the relevant tax authority. The Company applied the foregoing accounting standard to all of its tax positions for which the statute of limitations remained open as of the date of the accompanying consolidated financial statements. The Company’s policy is to recognize interest and penalties related to income tax issues as components of other noninterest expense. The Company recognized no material expense on income tax related interest or penalties during any of the periods presented.

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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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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