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Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 12. Income Taxes

Income tax expense in the consolidated statements of income for the years ended December 31, 2022, 2021, and 2020, includes the following (in thousands):

​	​	​	​	​	​	​	​	​	​
​		2022			2021		​	2020
Current tax expense		​			​		​	​	​
Federal	​	$	10,412	​	$	8,031	​	$	6,330
State	​		2,029	​		855	​		1,447
Deferred tax expense related to:	​			​			​
Federal	​		(407)	​		405	​		(991)
State	​		(148)	​		238	​		(228)
Total income tax expense	​	$	11,886	​	$	9,529	​	$	6,558

​

The income tax expense is different from the expected tax expense computed by multiplying income before income tax expense by the statutory income tax rate of 21%. The reasons for this difference are as follows (in thousands):

​	​	​	​	​	​	​	​	​	​
​		2022			2021		​	2020
Federal income tax expense computed at the statutory rate	​	$	11,531	​	$	9,307	​	$	6,487
State income taxes, net of federal tax benefit	​		1,486	​		863	​		923
Nondeductible acquisition expenses	​		1	​		94	​		109
Tax-exempt interest	​		(624)	​		(568)	​		(555)
Bank-owned life insurance	​	​	(389)	​	​	(393)	​	​	(149)
Tax benefit from stock options	​		(170)	​		(10)	​		(14)
Other	​		51	​		236	​		(243)
Total income tax expense	​	$	11,886	​	$	9,529	​	$	6,558

​

The components of the net deferred tax asset, which are included in Other Assets in the consolidated balance sheets, as of December 31, 2022 and 2021, were as follows (in thousands):

​	​	​	​	​	​	​
​		2022			2021
Deferred tax assets:				​	​
Allowance for loan losses		$	6,033	​	$	5,011
Fair value adjustments	​		3,366	​		4,119
Unrealized losses on investment securities	​		11,965	​		—
Unrealized losses on hedges	​	​	337	​	​	—
Other real estate owned	​		258	​		306
Deferred compensation	​		2,316	​		1,564
Lease liability	​		2,445	​		2,559
Federal net operating loss carryforward	​		4,335	​		4,645
Other	​		1,617	​		1,977
Total deferred tax assets	​		32,672	​		20,181
Deferred tax liabilities:	​			​
Accumulated depreciation	​		2,464	​		2,317
Core deposit intangible	​		2,362	​		3,047
Right of use asset	​		2,408	​		2,541
Unrealized gains on investment securities	​	​	—	​	​	240
Unrealized gains on hedges	​	​	—	​	​	262
Other	​		845	​		540
Total deferred tax liabilities	​		8,079	​		8,947
Net deferred tax asset	​	$	24,593	​	$	11,234

​

At December 31, 2022, the Company has a federal net operating loss carryforward recorded of approximately $20.6 million acquired with the acquisition of SCB.  The net operating loss is subject to Section 382 limitations. The federal net operating loss will begin to expire in 2030. The income tax returns of the Company for 2021, 2020, and 2019 are subject to examination by the federal and state taxing authorities, generally for three years after they were filed.

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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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

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-Name Accounting Standards Codification
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