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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company files federal income tax returns on a calendar year basis. Income tax expense for the years indicated is summarized as follows:
(dollars in thousands) |  | 2023 |  | 2022 |  | 2021
Current |  | $ | 10,722 |  |  | $ | 9,792 |  |  | $ | 9,754 |
Deferred |  | (33) |  |  | (882) |  |  | 2,544 |
HTC |  | (303) |  |  | — |  |  | — |
NMTC |  | (480) |  |  | (480) |  |  | (480) |
Total income tax expense |  | $ | 9,906 |  |  | $ | 8,430 |  |  | $ | 11,818 |
The components of the Company’s net deferred tax asset, which is included in accrued interest receivable and other assets in the accompanying Statement of Financial Condition at December 31 of the years indicated are as follows:
(dollars in thousands) |  | 2023 |  | 2022
Deferred tax assets: |  |  |  |
Provision for loan losses |  | $ | 7,168 |  |  | $ | 6,581 |
Discount on purchased loans |  | 822 |  |  | 1,277 |
Salary continuation plan |  | 657 |  |  | 676 |
Mortgage servicing rights |  | 30 |  |  | 47 |
Deferred compensation |  | 5 |  |  | 5 |
Stock-based compensation |  | 260 |  |  | 262 |
Unrealized loss on securities available for sale |  | 9,121 |  |  | 11,501 |
Net operating loss acquired |  | 334 |  |  | 499 |
HTC |  | 41 |  |  | — |
(dollars in thousands) |  | 2023 |  | 2022
Other |  | 219 |  |  | 382 |
Deferred tax assets |  | $ | 18,657 |  |  | $ | 21,230 |
Deferred tax liabilities: |  |  |  |
FHLB stock dividends |  | $ | (169) |  |  | $ | (78) |
Accumulated depreciation |  | (3,280) |  |  | (3,362) |
Intangible assets |  | (842) |  |  | (1,123) |
Derivatives |  | (778) |  |  | (1,053) |
NMTC |  | (159) |  |  | (130) |
Other |  | (46) |  |  | (46) |
Deferred tax liabilities |  | (5,274) |  |  | (5,792) |
Net deferred tax asset |  | $ | 13,383 |  |  | $ | 15,438 |
For the years ended December 31, 2023, 2022 and 2021, the Company’s provision for federal income taxes differed from the amount computed by applying the federal income tax statutory rate of 21% on income from operations as indicated in the following analysis:
(dollars in thousands) |  | 2023 |  | 2022 |  | 2021
Federal tax based on statutory rate |  | $ | 10,658 |  |  | $ | 8,994 |  |  | $ | 12,773 |
State tax based on statutory rate |  | 175 |  |  | 151 |  |  | 97 |
(Decrease) increase resulting from: |  |  |  |  |  |
HTC |  | (303) |  |  | — |  |  | — |
NMTC |  | (480) |  |  | (480) |  |  | (480) |
Effect of tax-exempt income |  | (155) |  |  | (276) |  |  | (196) |
Changes in the cash surrender value of bank owned life insurance |  | (219) |  |  | (192) |  |  | (547) |
Nondeductible merger-related expenses |  | — |  |  | 41 |  |  | 30 |
Nondeductible share based compensation expense |  | 161 |  |  | 188 |  |  | 180 |
Exercise of stock options |  | (50) |  |  | (37) |  |  | (23) |
Other |  | 119 |  |  | 41 |  |  | (16) |
Income tax expense |  | $ | 9,906 |  |  | $ | 8,430 |  |  | $ | 11,818 |
Effective tax rate |  | 19.8 | % |  | 19.8 | % |  | 19.6 | %
Retained earnings as of December 31, 2023 and 2022, included $5,837,000 for which no deferred federal income tax liability has been recognized. This amount represents an allocation of income to bad debt deductions for tax purposes only. Reductions of amounts so allocated for purposes other than bad debt losses would create income for tax purposes only, which would be subject to the then-current federal statutory income tax rate. The unrecorded deferred income tax liability on the above amount was $1,985,000 as of December 31, 2023 and 2022. Current accounting standards do not require the accrual of this deferred tax amount to be recorded unless it is probable that the reserve (for tax purposes) will be significantly depleted by loan losses deductible for tax purposes in the future. Based on current estimates of losses within the Company’s loan portfolio, accrual of the deferred tax liability associated with this reserve was not required as of December 31, 2023 and 2022.

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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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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