XML 35 R18.htm IDEA: XBRL DOCUMENT
v3.20.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes
The provision for income taxes consists of the following: |  | 2020 |  | 2019 |  | 2018
Current Federal |  | $ | 14,186 |  |  | $ | 8,263 |  |  | $ | 6,699 |
Current State |  | 2,265 |  |  | 1,004 |  |  | 412 |
Deferred Federal |  | (2,765) |  |  | 3,545 |  |  | 2,226 |
Deferred State |  | (852) |  |  | (795) |  |  | 191 |
Total |  | $ | 12,834 |  |  | $ | 12,017 |  |  | $ | 9,528 |
Effective tax rates differ from the federal statutory rate of 21% for 2020, 2019 and 2018 applied to income before income taxes due to the following:
|  | 2020 |  | 2019 |  | 2018
Statutory Rate Times Pre-tax Income |  | $ | 15,759 |  |  | $ | 14,960 |  |  | $ | 11,772 |
Add (Subtract) the Tax Effect of: |  |  |  |  |  |
Income from Tax-exempt Loans and Investments |  | (2,681) |  |  | (2,246) |  |  | (2,129) |
State Income Tax, Net of Federal Tax Effect |  | 1,116 |  |  | 165 |  |  | 476 |
General Business Tax Credits |  | (1,085) |  |  | (1,039) |  |  | (914) |
Company Owned Life Insurance |  | (484) |  |  | (421) |  |  | (260) |
Other Differences |  | 209 |  |  | 598 |  |  | 583 |
Total Income Taxes |  | $ | 12,834 |  |  | $ | 12,017 |  |  | $ | 9,528 |
The net deferred tax liability at December 31 consists of the following:
|  | 2020 |  | 2019
Deferred Tax Assets: |  |  |  |
Allowance for Credit Losses |  | $ | 10,568 |  |  | $ | 3,466 |
Lease Liability (Operating Leases) |  | 2,055 |  |  | 2,198 |
Unrealized Loss on Securities |  | — |  |  | — |
Deferred Compensation and Employee Benefits |  | 823 |  |  | 787 |
Other-than-temporary Impairment |  | 246 |  |  | 240 |
Accrued Expenses |  | 1,200 |  |  | 1,209 |
Business Combination Fair Value Adjustments |  | 777 |  |  | 3,475 |
Pension and Postretirement Plans |  | 200 |  |  | 200 |
Other Real Estate Owned |  | 25 |  |  | 48 |
Non-Accrual Loan Interest Income |  | 678 |  |  | 554 |
Net Operating Loss Carryforward |  | 1,010 |  |  | 786 |
Other |  | 1,000 |  |  | 1,044 |
Total Deferred Tax Assets |  | 18,582 |  |  | 14,007 |
Deferred Tax Liabilities: |  |  |  |
Depreciation |  | (2,331) |  |  | (2,498) |
Leasing Activities, Net |  | (10,638) |  |  | (10,816) |
Unrealized Gain on Securities |  | (9,734) |  |  | (4,302) |
FHLB Stock Dividends |  | (206) |  |  | (245) |
Prepaid Expenses |  | (641) |  |  | (629) |
Intangibles |  | (1,670) |  |  | (2,032) |
Deferred Loan Fees |  | (730) |  |  | (589) |
Mortgage Servicing Rights |  | (9) |  |  | (75) |
Right of Use Asset (Operating Leases) |  | (2,028) |  |  | (2,180) |
Other |  | (230) |  |  | (685) |
Total Deferred Tax Liabilities |  | (28,217) |  |  | (24,051) |
Valuation Allowance |  | — |  |  | — |
Net Deferred Tax Liability |  | $ | (9,635) |  |  | $ | (10,044) |
Under the Internal Revenue Code, through 1996 three acquired banking companies, which are now a part of the Company’s single banking subsidiary, were allowed a special bad debt deduction related to additions to tax bad debt reserves established for the purpose of absorbing losses. The acquired banks were formerly known as River Valley Financial Bank (acquired in March 2016), Peoples Community Bank (acquired in October 2005) and First American Bank (acquired in January 1999). Subject to certain limitations, these Banks were permitted to deduct from taxable income an allowance for bad debts based on a percentage of taxable income before such deductions or actual loss experience. The Banks generally computed its annual addition to its bad debt reserves using the percentage of taxable income method; however, due to certain limitations in 1996, the Banks were only allowed a deduction based on actual loss experience. Retained earnings at December 31, 2020, include approximately $5,095 for which no provision for federal income taxes has been made. This amount represents allocations of income for allowable bad debt deductions. Reduction of amounts so allocated for purposes other than tax bad debt losses will create taxable income, which will be subject to the then current corporate income tax rate. It is not contemplated that amounts allocated to bad debt deductions will be used in any manner to create taxable income. The unrecorded deferred income tax liability on the above amount at December 31, 2020 was approximately $1,070. As of December 31, 2020, the Company had net operating loss carryforwards of $20,207, which expire in years ranging from 2021 through 2039. These net operating loss carryforwards were primarily derived from the acquisition of First Security and Citizens First. Unrecognized Tax Benefits The Company had no unrecognized tax benefits as of December 31, 2020, 2019, and 2018, and did not recognize any increase in unrecognized benefits during 2020 relative to any tax positions taken in 2020. Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, it is the Company’s policy to record such accruals in its income tax expense accounts; no such accruals existed as of December 31, 2020, 2019, and 2018. The Company and its corporate subsidiaries file a consolidated U.S. Federal income tax return, which is subject to examination for all years after 2015. The Company and its corporate subsidiaries doing business in Indiana file a combined Indiana unitary return, which is subject to examination for all years after 2015.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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=84230637&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=116825942&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=84230637&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=116825942&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=84230637&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 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration