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Note 9 - Federal Income Taxes
 12 Months Ended
Dec. 31, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

NOTE 9 - FEDERAL INCOME TAXES

 

The consolidated income tax expense was as follows: 

 

(Dollars in thousands)

 2024  2023  2022 
             

Current expense

 $19,090  $22,518  $16,080 

Deferred benefit

  (397)  (2,036)  (1,353)

Tax expense

 $18,693  $20,482  $14,727 

 

A reconciliation of the differences between the federal income tax expense recorded and the amount computed by applying the federal statutory rate to income before income taxes were as follows:

 

(Dollars in thousands)

 

2024

  

2023

  

2022

 
  

Amount

  

Percent

  

Amount

  

Percent

  

Amount

  

Percent

 
                         

Tax at statutory rate

 $20,640   21.0% $21,567   21.0% $15,915   21.0%

Increase (decrease) from

                        

Tax-exempt interest

  (1,027)  (1.0)  (862)  (0.8)  (695)  (0.9)

Bank owned life insurance

  (529)  (0.5)  (303)  (0.3)  (334)  (0.4)

Non-deductible expenses

  241   0.2   213   0.2   129   0.2 

Tax credits

  (266)  (0.3)  24   -   (262)  (0.3)

Other

  (366)  (0.4)  (157)  (0.2)  (26)  - 

Tax expense

 $18,693   19.0% $20,482   19.9% $14,727   19.6%

 

The statutory tax rate was 21% for 2024, 2023 and 2022. 

 

Significant components of deferred tax assets and liabilities, included in other assets on our Consolidated Balance Sheets, as of December 31, 2024 and 2023 were as follows: 

 

(Dollars in thousands)

 2024  2023 

Deferred income tax assets

        

Allowance for credit losses

 $11,435  $10,482 

Deferred compensation

  269   226 

Stock compensation

  1,011   1,005 

Nonaccrual loan interest income

  192   132 

Unrealized loss on securities

  13,245   13,420 

Lease liability

  928   775 

Other

  567   779 

Deferred tax asset

  27,647   26,819 
         

Deferred income tax liabilities

        

Depreciation

  259   337 

Prepaid expenses

  685   612 

Mortgage loan servicing rights

  2,620   2,382 

Deferred loan fees and costs

  471   509 

Right of use lease asset

  928   775 

Business combination adjustments

  1,626   1,770 

Other

  849   447 

Deferred tax liability

  7,438   6,832 
         

Total net deferred tax asset

 $20,209  $19,987 

 

A valuation allowance related to deferred tax assets is required when it is considered more likely than not that all or part of the benefits related to such assets will not be realized. We determined that no valuation allowance was required at year-end 2024 or 2023. We had no unrecognized tax benefits at any time during 2024 or 2023 and do not anticipate any significant increase in unrecognized tax benefits during 2025. Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, it is our policy to record such accruals in our income tax accounts; no such accruals existed at any time during 2024 or 2023. Our U.S. federal income tax returns are no longer subject to examination for all years before 2021.