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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2022
Income Taxes [Abstract] |
Income Tax Expense (Benefit) | Income tax expense (benefit) was as follows:
|  | 2022 |  |  | 2021 |
|  | (In thousands) |
Current |  |  |  |  |  |
Federal |  | $ | 700 |  |  | $ | 4 |
State |  |  | 218 |  |  |  | (38 | )
Deferred |  |  |  |  |  |  |  |
Federal |  |  | 944 |  |  |  | (909 | )
State |  |  | 551 |  |  |  | (363 | )
Change in Valuation Allowance |  |  | – |  |  |  | 369 |
Total |  | $ | 2,413 |  |  | $ | (937 | )
Effective Income Tax Rate Reconciliation | Effective tax rates differ from the federal statutory rate of 21% applied to income before income taxes due to the following:
|  | 2022 |  |  | 2021 |
|  | (In thousands) |
Federal statutory rate times financial statement net gain (loss) |  | $ | 1,705 |  |  | $ | (1,026 | )
Effect of: |  |  |  |  |  |  |  |
State taxes, net of federal benefit |  |  | 623 |  |  |  | (292 | )
Earnings from bank owned life insurance |  |  | (9 | ) |  |  | (9 | )
Merger-related expense |  |  | – |  |  |  | 195 |
Low-income housing credits |  |  | (6 | ) |  |  | (58 | )
Change in valuation allowance |  |  | – |  |  |  | 369 |
Tax effect of stock-based compensation |  |  | 25 |  |  |  | (129 | )
Other, net |  |  | 75 |  |  |  | 13 |
Total |  | $ | 2,413 |  |  | $ | (937 | )
Deferred Tax Assets and Liabilities | Year‑end deferred tax assets and liabilities were due to the following:
|  | 2022 |  |  | 2021 |
|  | (In thousands) |
Deferred tax assets: |  |  |  |  |  |
Allowance for loan losses |  | $ | 1,063 |  |  | $ | 677 |
Accrued liabilities |  |  | 555 |  |  |  | 954 |
State income taxes |  |  | 45 |  |  |  | 1 |
Stock compensation |  |  | 226 |  |  |  | 154 |
Net operating loss carryforward |  |  | 2,616 |  |  |  | 3,946 |
Non‑accrual loan interest |  |  | – |  |  |  | 51 |
Partnership investment |  |  | 257 |  |  |  | 155 |
General business credit |  |  | 1,962 |  |  |  | 2,006 |
Alternative minimum tax credit |  |  | 5 |  |  |  | 5 |
Net unrealized loss on securities available-for-sale |  |  | 7,388 |  |  |  | 464 |
Right of use liability |  |  | 266 |  |  |  | 319 |
Fair value adjustment on acquired loans |  |  | 291 |  |  |  | 521 |
Other |  |  | 332 |  |  |  | 363 |
Total deferred tax assets |  |  | 15,006 |  |  |  | 9,616 |
Less: valuation allowance |  |  | (369 | ) |  |  | (369 | )
Total deferred tax assets, net of valuation allowance |  |  | 14,637 |  |  |  | 9,247 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Section 481 adjustments to bad debts |  |  | (7 | ) |  |  | (6 | )
Deferred loan fees/costs |  |  | (776 | ) |  |  | (750 | )
Basis difference on fixed assets |  |  | (723 | ) |  |  | (702 | )
FHLB stock dividends |  |  | (90 | ) |  |  | (98 | )
Nonaccrual loan interest |  |  | (8 | ) |  |  | – |
Prepaid expenses |  |  | (186 | ) |  |  | (220 | )
Right of use assets |  |  | (256 | ) |  |  | (317 | )
Core deposit intangibles |  |  | (719 | ) |  |  | (1,053 | )
Total deferred tax liabilities |  |  | (2,765 | ) |  |  | (3,146 | )
Net deferred tax assets |  | $ | 11,872 |  |  | $ | 6,101 |

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