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Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes

Income Taxes

Note 11: Income Taxes

​

Income tax expense (benefit) for the years ending December 31, were as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​
​		2021			2020			2019
Current federal	​	$	750	​	$	6,269	​	$	4,815
Current state	​	​	594	​	​	3,960	​	​	1,151
Deferred federal	​	​	4,445	​	​	(135)	​	​	3,177
Deferred state	​	​	2,034	​	​	(511)	​	​	3,259
Total income tax expenses	​	$	7,823	​	$	9,583	​	$	12,402
​	​	​	​	​	​	​	​	​	​

​

The following were the components of the deferred tax assets and liabilities as of December 31:

​

​	​	​	​	​	​	​
​		2021			2020
Allowance for credit losses	​	$	15,601	​	$	11,058
Deferred compensation	​	​	1,378	​	​	1,093
Goodwill amortization/impairment	​	​	980	​	​	2,212
Stock based compensation	​	​	971	​	​	1,356
Business combination adjustments	​	​	940	​	​	255
OREO write-downs	​	​	573	​	​	614
Federal recognized built-in loss ("RBIL") carryforward	​	​	493	​	​	142
State net operating loss and RBIL carryforward	​	​	-	​	​	60
Other assets	​	​	2,129	​	​	2,182
Total deferred tax assets	​	​	23,065	​	​	18,972
​	​	​	​	​	​	​
Accumulated depreciation on premises and equipment	​	​	(1,701)	​	​	(1,237)
Mortgage servicing rights	​	​	(2,113)	​	​	(1,261)
Amortization of core deposit intangible	​	​	(4,550)	​	​	(171)
State tax benefits	​	​	(641)	​	​	(930)
Securities	​	​	(2,620)	​	​	-
Other liabilities	​	​	(1,931)	​	​	(1,481)
Total deferred tax liabilities	​	​	(13,556)	​	​	(5,080)
Net deferred tax asset before adjustments related to other comprehensive income	​	​	9,509	​	​	13,892
Tax effect of adjustments related to other comprehensive income	​	​	(3,410)	​	​	(5,771)
Net deferred tax asset	​	$	6,099	​	$	8,121
​	​	​	​	​	​	​

​

At December 31, 2021, the Company had $2,348,000 of federal net operating loss carryforward, which may be carried forward indefinitely, and no state net operating loss carryforward.

​

The components of the provision for deferred income tax expense (benefit) for the years ending December 31, were as follows:

​

​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​
​	2021			2020			2019
Provision for credit losses	$	(78)	​	$	(4,976)	​	$	(279)
Deferred compensation	​	1,388	​	​	(186)	​	​	(242)
Amortization of core deposit intangible	​	(18)	​	​	27	​	​	14
Stock based compensation	​	385	​	​	266	​	​	(245)
Business combination adjustments	​	80	​	​	1,292	​	​	985
OREO write-downs	​	1,543	​	​	1,317	​	​	406
Federal net operating loss and RBIL carryforward	​	(351)	​	​	198	​	​	1,859
State net operating loss and RBIL carryforward	​	60	​	​	266	​	​	3,708
Depreciation	​	(1,737)	​	​	491	​	​	303
Mortgage servicing rights	​	852	​	​	(518)	​	​	(431)
Goodwill amortization/impairment	​	1,232	​	​	1,244	​	​	1,242
State tax benefits	​	(491)	​	​	3	​	​	(912)
Securities	​	4,188	​	​	-	​	​	-
Other, net	​	(574)	​	​	(70)	​	​	28
Total deferred tax (benefit) expense	$	6,479	​	$	(646)	​	$	6,436
​	​	​	​	​	​	​	​	​

​

Effective tax rates differ from federal statutory rates applied to financial statement income for the years ended December 31, due to the following:

​

​	​	​	​	​	​	​	​	​	​
​		2021			2020			2019
Tax at statutory federal income tax rate	​	$	5,852	​	$	7,856	​	$	10,890
Nontaxable interest income, net of disallowed interest deduction	​	​	(1,069)	​	​	(1,067)	​	​	(1,409)
BOLI income	​	​	(292)	​	​	(271)	​	​	(480)
State income taxes, net of federal benefit	​	​	2,054	​	​	2,570	​	​	3,496
Stock based compensation	​	​	54	​	​	297	​	​	(207)
Transaction costs	​	​	396	​	​	-	​	​	-
Other, net	​	​	828	​	​	198	​	​	112
Total tax at effective tax rate	​	$	7,823	​	$	9,583	​	$	12,402
​	​	​	​	​	​	​	​	​	​

​

The Company evaluated positive and negative evidence in order to determine if it was more likely than not that the deferred tax asset would be recovered through future income.  Significant positive evidence evaluated included recent and projected earnings, significantly improved asset quality and an improved capital position.  No significant negative evidence was noted.

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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.

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