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Income Tax Expense
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Tax Expense Income Tax Expense
The components of income tax expense for the years ended December 31, 2023, 2022, and 2021, were as follows:
Years Ended December 31,
(in thousands)202320222021
Current tax expense$8,395 $7,752 $7,881 
Deferred tax expense (benefit)(330)313 (773)
Income tax expense$8,065 $8,065 $7,108 
The source and tax effect of items reconciling income tax expense to the amount computed by applying the federal income tax rates in effect to income before income tax expense for the years ended December 31, 2023, 2022, and 2021, are as follows:
 December 31,
202320222021
(dollars in thousands)AmountPercentAmountPercentAmountPercent
Income before income tax expense$42,944 100.0 %$44,981 100.0 %$40,060 100.0 %
U.S. federal income tax expense9,018 21.0 %9,446 21.0 %8,413 21.0 %
Nontaxable income(1,073)(2.5 %)(1,338)(3.0 %)(1,347)(3.4 %)
Nondeductible expenses67 0.2 %50 0.1 %38 0.1 %
Other53 0.1 %(93)(0.2 %)4 — %
Income tax expense$8,065 18.8 %$8,065 17.9 %$7,108 17.7 %
The Company records deferred income taxes on the tax effect of changes in temporary differences. Deferred tax assets (liabilities) are subject to a valuation allowance unless their realization is more likely than not. The deferred tax assets (liabilities) were comprised of the following as of December 31, 2023 and 2022:
December 31,
(in thousands)20232022
Depreciation$(2,542)$(2,435)
FHLB of Dallas stock dividends(20)(22)
Gross deferred tax liability(2,562)(2,457)
Allowance for credit losses4,541 4,190 
Allowance for operational losses54 34 
Health insurance self fund221 52 
Deferred compensation708 620 
Net unrealized loss on securities16,081 18,917 
Equity security valuation35 4 
Advance payment197 325 
Accrued bonus502 448 
Other72 40 
Gross deferred tax asset22,411 24,630 
Net deferred tax asset (liability)$19,849 $22,173