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v3.20.4

Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2020
Income Taxes [Abstract] |
Components of Provision for Income Taxes | The components of the provision for income taxes, exclusive of tax effect of unrealized AFS securities gains and losses, are as follows:
(in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Current federal income tax expense |  | $ | 12,884 |  |  | $ | 8,351 |  |  | $ | 11,042 |
Current state income tax expense |  |  | 786 |  |  |  | 513 |  |  |  | 518 |
Deferred income tax expense (benefit) |  |  | (2,900 | ) |  |  | 2,030 |  |  |  | (246 | )
Effect of Kentucky tax legislation benefit |  |  | (9 | ) |  |  | (3,442 | ) |  |  | 0 |
Total income tax expense |  | $ | 10,761 |  |  | $ | 7,452 |  |  | $ | 11,314 |
Reconciliation of Income Tax Expense at Statutory Rate to Actual Income Tax Expense | A reconciliation of income tax expense at the statutory rate to our actual income tax expense is shown below:
(in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Computed at the statutory rate |  | $ | 14,755 |  |  |  | 21.00 | % |  | $ | 15,118 |  |  |  | 21.00 | % |  | $ | 14,814 |  |  |  | 21.00 | %
Adjustments resulting from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt interest |  |  | (547 | ) |  |  | (0.78 | ) |  |  | (563 | ) |  |  | (0.78 | ) |  |  | (673 | ) |  |  | (0.95 | )
Housing and new markets credits |  |  | (4,194 | ) |  |  | (5.97 | ) |  |  | (4,471 | ) |  |  | (6.21 | ) |  |  | (2,635 | ) |  |  | (3.73 | )
Dividends received deduction |  |  | 0 |  |  |  | - |  |  |  | 0 |  |  |  | - |  |  |  | (9 | ) |  |  | (0.01 | )
Bank owned life insurance |  |  | (277 | ) |  |  | (0.39 | ) |  |  | (284 | ) |  |  | (0.39 | ) |  |  | (599 | ) |  |  | (0.85 | )
ESOP dividend deduction |  |  | (221 | ) |  |  | (0.32 | ) |  |  | (203 | ) |  |  | (0.28 | ) |  |  | (188 | ) |  |  | (0.27 | )
Stock option exercises and restricted stock vesting |  |  | (10 | ) |  |  | (0.01 | ) |  |  | (10 | ) |  |  | (0.01 | ) |  |  | (39 | ) |  |  | (0.06 | )
Effect of KY tax legislation |  |  | (7 | ) |  |  | (0.01 | ) |  |  | (2,719 | ) |  |  | (3.78 | ) |  |  | 0 |  |  |  | - |
State income taxes |  |  | 621 |  |  |  | 0.88 |  |  |  | 405 |  |  |  | 0.56 |  |  |  | 409 |  |  |  | 0.58 |
Split dollar life insurance |  |  | 529 |  |  |  | 0.75 |  |  |  | 0 |  |  |  | - |  |  |  | 0 |  |  |  | - |
Other |  |  | 112 |  |  |  | 0.16 |  |  |  | 179 |  |  |  | 0.24 |  |  |  | 234 |  |  |  | 0.33 |
Total |  | $ | 10,761 |  |  |  | 15.31 | % |  | $ | 7,452 |  |  |  | 10.35 | % |  | $ | 11,314 |  |  |  | 16.04 | %
Components of Net Deferred Tax Liability | The components of the net deferred tax liability as of December 31 are as follows:
(in thousands) |  | 2020 |  |  | 2019 |
Deferred tax assets: |  |  |  |  |  |
Allowance for credit/loan and lease losses* |  | $ | 11,982 |  |  | $ | 8,757 |
Interest on nonaccrual loans |  |  | 471 |  |  |  | 485 |
Accrued expenses |  |  | 1,444 |  |  |  | 1,100 |
Allowance for other real estate owned |  |  | 593 |  |  |  | 1,437 |
State net operating loss carryforward |  |  | 3,975 |  |  |  | 3,786 |
Lease liabilities |  |  | 3,468 |  |  |  | 3,859 |
Other |  |  | 470 |  |  |  | 294 |
Total deferred tax assets |  |  | 22,403 |  |  |  | 19,718 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | (15,006 | ) |  |  | (15,048 | )
FHLB stock dividends |  |  | (1,245 | ) |  |  | (1,441 | )
Loan fee income |  |  | (238 | ) |  |  | (656 | )
Mortgage servicing rights |  |  | (1,015 | ) |  |  | (814 | )
Unrealized gains on AFS securities |  |  | (4,807 | ) |  |  | (1,534 | )
Limited partnership investments |  |  | (414 | ) |  |  | (326 | )
Right of use assets |  |  | (3,297 | ) |  |  | (3,698 | )
Other |  |  | (1,068 | ) |  |  | (1,101 | )
Total deferred tax liabilities |  |  | (27,090 | ) |  |  | (24,618 | )
Beginning balance for valuation allowance for deferred tax asset |  |  | 210 |  |  |  | 3,957 |
Change in valuation allowance |  |  | (210 | ) |  |  | (3,747 | )
Ending balance for valuation allowance for deferred tax asset |  |  | 0 |  |  |  | 210 |
Net deferred tax liability |  | $ | (4,687 | ) |  | $ | (5,110 | )
*Effective January 1, 2020, the allowance for loan and lease losses became the allowance for credit losses with the implementation of ASU 2016-13, commonly referred to as CECL.

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32639-109319 + Details
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