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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of the income tax for the Company consisted of the following at December 31:
| 2022 |  | 2021
| (dollars in thousands)
Current tax expense | $ | 21,014 |  |  | $ | 10,383 |
Deferred tax benefit | (11,018) |  |  | (3,011) |
Total tax expense | $ | 9,996 |  |  | $ | 7,372 |
At December 31, 2022 the current net income tax receivable was $1.3 million and at December 31, 2021 the net income tax payable was $1.2 million. A reconciliation of the income tax expense (benefit) and the amount computed by applying the statutory federal income tax rate to the income before income taxes is as follows for the year ended December 31:
| 2022 |  | 2021
| (dollars in thousands)
| Amount |  | Rate |  | Amount |  | Rate
Federal income tax at statutory rate | $ | 10,630 |  |  | 21.0 | % |  | $ | 7,219 |  |  | 21.0 | %
State income taxes | 523 |  |  | 1.0 |  |  | 256 |  |  | 0.7 |
Effect of tax-exempt interest income | (84) |  |  | (0.2) |  |  | (100) |  |  | (0.3) |
Stock-based compensation | (987) |  |  | (1.9) |  |  | (43) |  |  | (0.1) |
Bank owned life insurance earnings | (76) |  |  | (0.2) |  |  | (36) |  |  | (0.1) |
Excess executive compensation | 128 |  |  | 0.3 |  |  | 58 |  |  | 0.1 |
Other | (138) |  |  | (0.3) |  |  | 18 |  |  | 0.1 |
| $ | 9,996 |  |  | 19.7 | % |  | $ | 7,372 |  |  | 21.4 | %
The Company did not record or accrue any interest and penalties related to income taxes for the years ended December 31, 2022 or 2021. The Company and Bank have entered into a tax allocation agreement, which provides that income taxes shall be allocated between the parties on a monthly basis. The intent of this agreement is that each member of the consolidated group will incur no greater tax liability than it would have incurred on a stand-alone basis. The net deferred tax asset consists of the following temporary differences and carryforward items at December 31:
| 2022 |  | 2021
| (dollars in thousands)
Deferred tax assets: |  |  |
Allowance for loan losses | $ | 17,076 |  |  | $ | 6,223 |
Lease liability | 1,212 |  |  | 1,374 |
Accrued expenses | 708 |  |  | 596 |
Deferred compensation | 142 |  |  | 162 |
Allowance for unfunded commitments | 225 |  |  | 277 |
Nonqualified stock options | 108 |  |  | 107 |
Interest on nonaccrual loans | — |  |  | 10 |
Restricted stock options | 522 |  |  | 196 |
Deferred income | 79 |  |  | 58 |
Net unrealized loss on available-for-sale securities | 621 |  |  | — |
Other | 218 |  |  | 37 |
Total deferred tax assets | 20,911 |  |  | 9,040 |
Deferred tax liabilities: |  |  |
Right of use asset | (1,162) |  |  | (1,327) |
Depreciation and amortization | (977) |  |  | (661) |
Net unrealized gain on equity security | (314) |  |  | (233) |
Net unrealized gain on available-for-sale securities | — |  |  | (1) |
Total deferred tax liabilities | (2,453) |  |  | (2,222) |
Net deferred tax asset | $ | 18,458 |  |  | $ | 6,818 |
The determination of the amount of deferred income tax assets which are more likely than not to be realized is primarily dependent on projections of future earnings, which are subject to uncertainty and estimates that may change given economic conditions and other factors. The realization of deferred income tax assets is regularly assessed and a valuation allowance is recorded if it is “more likely than not” that all or a portion of the deferred tax asset will not be realized. “More likely than not” is defined as greater than a 50% chance. All available evidence, both positive and negative is considered to determine whether, based on the weight of that evidence, a valuation allowance is needed. Based upon its analysis of available evidence, including recent profitability, management has determined that it is “more likely than not” that the Company’s deferred income tax assets as of December 31, 2022 will be fully realized and therefore no valuation allowance was recorded. At December 31, 2022, the Company had no federal net operating loss carryforwards or tax credit carryforwards. The Company files federal and various state income tax returns. Federal tax returns for the 2019 tax year and later are open for examination. The total amount of unrecognized tax benefits, including interest and penalties, at December 31, 2022 was not material. The amount of tax benefits that would impact the effective rate, if recognized, is not expected to be material. The Company does not anticipate any significant changes with respect to unrecognized tax benefits within the next 12 months.

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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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