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Income Tax | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Tax | Income Tax
| December 31 2023 |  | December 31 2022 |  | December 31 2021
Income tax expense |  |  |  |  |
Currently payable |  |  |  |  |
Federal | $ | 14,980 |  |  | $ | 9,111 |  |  | $ | 11,742 |
State | (640) |  |  | 888 |  |  | 1,303 |
Deferred |  |  |  |  |
Federal | (8,594) |  |  | 2,208 |  |  | 2,056 |
State | 71 |  |  | (31) |  |  | 255 |
Revaluation of deferred tax assets | 5,201 |  |  | — |  |  | — |
Total income tax expense | $ | 11,018 |  |  | $ | 12,176 |  |  | $ | 15,356 |
Reconciliation of federal statutory to actual tax expense |  |  |  |  |
Federal statutory income tax at 21% | $ | 8,190 |  |  | $ | 22,173 |  |  | $ | 21,514 |
Tax exempt interest | (6,777) |  |  | (6,623) |  |  | (5,362) |
Tax exempt BOLI income | (779) |  |  | (746) |  |  | (604) |
Stock compensation | (88) |  |  | (232) |  |  | (250) |
Revaluation of deferred tax assets | 5,201 |  |  | — |  |  | — |
Other tax exempt income | (371) |  |  | (454) |  |  | (404) |
State tax | 142 |  |  | 676 |  |  | 1,231 |
Tax credit investments | (2,976) |  |  | (2,774) |  |  | (981) |
BOLI redemption ordinary income | 5,316 |  |  | — |  |  | — |
BOLI redemption excise | 2,532 |  |  | — |  |  | — |
Nondeductible and other | 628 |  |  | 156 |  |  | 212 |
Actual tax expense | $ | 11,018 |  |  | $ | 12,176 |  |  | $ | 15,356 |
| December 31 2023 |  | December 31 2022
Assets |  |  |
Allowance for credit losses | $ | 12,546 |  |  | $ | 12,762 |
Net operating loss and tax credits | 9,592 |  |  | 9,313 |
Director and employee benefits | 2,471 |  |  | 2,019 |
Unrealized loss on AFS securities and cash flow hedge | 17,706 |  |  | 28,230 |
Basis in partnership equity investments | 1,322 |  |  | — |
Capital loss carryover | 5,201 |  |  | — |
Other | 2,856 |  |  | 555 |
Total assets | 51,694 |  |  | 52,879 |
Liabilities |  |  |
Depreciation | (4,512) |  |  | (4,599) |
State tax | (253) |  |  | (262) |
Federal Home Loan Bank stock dividends | (365) |  |  | (368) |
Difference in basis of intangible assets | (4,545) |  |  | (4,440) |
Fair value adjustment on acquisitions | (2,142) |  |  | (2,807) |
Other | (1,131) |  |  | (68) |
Total liabilities | (12,948) |  |  | (12,544) |
Valuation allowance | (5,201) |  |  | — |
Net deferred tax asset/(liability) | $ | 33,545 |  |  | $ | 40,335 |
During 2023, the Company generated a state net operating loss of $6.2 million that may be carried forward for 15 years. The Company has federal general business tax credits of $9.6 million that can be carried forward twenty years and expire beginning in 2042. During 2023, the Company generated a capital loss of $32.1 million as a result of the sale of investment securities owned by Horizon Investments, Inc. As a result of previously generated capital gains within the last three tax years, $7.3 million of the capital loss can be offset by those capital gains. The remaining $24.8 million is allowed to be carried forward for a period of five years to offset future capital gains that are recognized. The tax effect of this capital loss carryforward is $5.2 million. Management has concluded that a valuation allowance against this deferred tax attribute was required and will be reevaluated until it is more likely than not that the capital loss carryforward can be realized. 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, 2023. 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 2020.

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