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Income Tax
 12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Income Tax
Note 19 – Income Tax 
                         
 
December 31
 
  
December 31
 
  
December 31
 
 
2019
 
  
2018
 
  
2017
 
Income tax expense
 
 
 
  
 
 
  
 
 
Currently payable
   
     
     
 
Federal
  $
11,143
     $
9,166
    $
12,079
 
State
 
 
140
 
 
 
—
 
 
 
—
 
Deferred
   
     
     
 
Federal
   
1,787
      
1,277
     
331
 
State
 
 
233
 
 
 
—
 
 
 
—
 
Revaluation of deferred tax assets
   
—
      
—
      
2,426
  
                         
Total income tax expense
  $
13,303
     $
10,443
    $
14,836
 
                         
Reconciliation of federal statutory to actual tax expense
 
 
 
  
 
 
  
 
 
Federal statutory income tax at 21% in 201
9
and
2
018
35% in 2017
   $
16,767
     $
13,348
    $
16,783
 
Tax exempt interest
   
(2,977
)
    
(1,982
 )    
(2,699
 )
Tax exempt income
   
(587
)
    
(448
 )    
(638
 )
Stock compensation
   
(324
)
    
(384
 )    
(546
 )
Revaluation of deferred tax assets
   
—
      
—
      
2,426
  
Other tax exempt income
   
(313
)
 		    
(260
 )    
(456
 )
State tax
 
 
295
 
 
 
 
—
 
 
 
 
—
 
Nondeductible and other
   
442
      
169
     
(34
 )
                         
Actual tax expense
  $
13,303
     $
10,443
    $
14,836
 
                         
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                 
 
December 31
 
  
December 31
 
 
2019
 
  
2018
 
Assets
 
 
 
  
 
 
Allowance for loan losses
  $
4,120
     $
3,831
 
Net operating loss and tax credits (from acquisitions)
   
54
      
1,038
 
Director and employee benefits
   
1,890
      
2,392
 
Unrealized loss on AFS securities and fair value hedge
   
—
      
2,165
 
Accrued pension
   
775
      
801
 
Fair value adjustment on acquisitions
   
—
      
—
  
Other
   
2,145
      
670
 
                 
Total assets
   
8,984
      
10,897
 
                 
Liabilities
 
 
 
  
 
 
Depreciation
   
(4,456
)
    
(1,850
 )
State tax
   
(10
)
    
(137
 )
Federal Home Loan Bank stock dividends
   
(368
)
    
(330
 )
Difference in basis of intangible assets
   
(3,427
)
    
(2,919
 )
Fair value adjustment on acquisitions
   
(2,488
)
    
(62
 )
Unrealized gain on AFS securities and fair value hedge
 
 
(1,710
)
 
 
—
 
Other
   
(63
)
    
(119
 )
                 
Total liabilities
   
(12,522
)
    
(5,417
 )
Valuation allowance
   
—
      
(1,038
 )
                 
Net deferred tax asset/(liability)
   $
(3,538
)
   $
4,442
 
                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2019, the Company had approximately $900,000 of state tax loss available to offset future franchise taxable income. The state loss carryforward begins to expire in 2031. 
Due to the
s
e losses being incurred by acquired institutions, prior to the acquisitions by Horizon, the annual losses which can be used are subject to an annual limitation. Management believes that the Company will be able to fully utilize the state loss carryforwards within the allotted time periods, and has reversed the valuation allowance previously recorded for the possible inability to use a portion of the carryforwards.
Retained earnings of the Bank include approximately $12.8 million for which no deferred income tax liability has been recognized. This amount represents an allocation of previously acquired institutions income to bad debt deductions as of December 31, 1987 for tax purposes only. Reductions of amounts so allocated for purposes other than tax bad debt losses including redemption of bank stock or excess dividends, or loss of “bank” status would create income for tax purposes only, which would be subject to the then-current corporate income tax rate. The unrecorded deferred income tax liability on the above amount for the Company was approximately $2.7 million at December 31, 2019.
The Company files income tax returns in the U.S. federal jurisdiction. With a few exceptions, the Company is no longer subject to U.S. federal, state and local or
non-U.S.
income tax examinations by tax authorities for years before 2016.