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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax expense consists of the following:
|  | For the Year Ended December 31,
|  | 2020 |  | 2019
|  | (In Thousands)
Current: |  |  |  |
Federal |  | $ | 1,948 |  |  | $ | 1,483 |
State |  | 1,386 |  |  | 1,988 |
Current tax expense |  | 3,334 |  |  | 3,471 |
Deferred: |  |  |  |
Federal |  | (1,678) |  |  | (1,979) |
State |  | (329) |  |  | (317) |
Deferred tax benefit |  | (2,007) |  |  | (2,296) |
Total income tax expense |  | $ | 1,327 |  |  | $ | 1,175 |
Deferred income tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax basis. Deferred tax assets and liabilities are measured using enacted tax rates to apply to taxable income in the period in which the temporary differences are expected to be recovered or settled. Net deferred tax assets are included in accrued interest receivable and other assets in the Consolidated Balance Sheets. The significant components of the Corporation’s deferred tax assets and liabilities were as follows:
|  | December 31, 2020 |  | December 31, 2019
|  | (In Thousands)
Deferred tax assets: |  |  |  |
Allowance for loan and lease losses |  | $ | 7,276 |  |  | $ | 5,104 |
SBA recourse reserve |  | 302 |  |  | 352 |
Deferred compensation |  | 1,457 |  |  | 1,335 |
State net operating loss carryforwards |  | 482 |  |  | 526 |
Tax credit carryforwards |  | 1,831 |  |  | 2,881 |
Non-accrual loan interest |  | 820 |  |  | 864 |
Capital loss carryforwards |  | 21 |  |  | 22 |
Unrealized losses on securities |  | 319 |  |  | 464 |
Other |  | 356 |  |  | 531 |
Total deferred tax assets before valuation allowance |  | 12,864 |  |  | 12,079 |
Valuation allowance |  | — |  |  | — |
Total deferred tax assets |  | 12,864 |  |  | 12,079 |
Deferred tax liabilities: |  |  |  |
Leasing and fixed asset activities |  | 4,363 |  |  | 5,841 |
Loan servicing asset |  | 358 |  |  | 337 |
Other |  | 926 |  |  | 548 |
Total deferred tax liabilities |  | 5,647 |  |  | 6,726 |
Net deferred tax asset |  | $ | 7,217 |  |  | $ | 5,353 |
The tax effects of unrealized gains and losses on securities are components of other comprehensive income. A reconciliation of the change in net deferred tax assets to deferred tax expense is as follows:
|  | December 31, 2020 |  | December 31, 2019
|  | (In Thousands)
Change in net deferred tax assets |  | $ | 1,864 |  |  | $ | 2,181 |
Deferred taxes allocated to other comprehensive income |  | 143 |  |  | 115 |
Deferred income tax benefit |  | $ | 2,007 |  |  | $ | 2,296 |
Realization of the deferred tax asset over time is dependent upon the Corporation generating sufficient taxable earnings in future periods. In making the determination that the realization of the deferred tax was more likely than not, the Corporation considered several factors including its recent earnings history, its expected earnings in the future, appropriate tax planning strategies, and expiration dates associated with operating loss carryforwards. The Corporation had state net operating loss carryforwards of approximately $7.7 million and $8.4 million at December 31, 2020 and 2019, respectively, which can be used to offset future state taxable income. The Corporation believes it will be able to fully utilize its Wisconsin state net operating losses under this law and therefore no valuation allowance has been established as of December 31, 2020. The provision for income taxes differs from that computed at the federal statutory corporate tax rate as follows:
|  | Year Ended December 31,
|  | 2020 |  | 2019
|  | (Dollars in Thousands)
Income before income tax expense |  | $ | 18,305 |  |  | $ | 24,499 |
Tax expense at statutory federal rate of 21% applied to income before income tax expense |  | $ | 3,844 |  |  | $ | 5,145 |
State income tax, net of federal effect |  | 837 |  |  | 1,321 |
Tax-exempt security and loan income, net of TEFRA adjustments |  | (648) |  |  | (635) |
Bank-owned life insurance |  | (294) |  |  | (252) |
Tax credits, net |  | (2,535) |  |  | (4,503) |
Other |  | 123 |  |  | 99 |
Total income tax expense |  | $ | 1,327 |  |  | $ | 1,175 |
Effective tax rate |  | 7.25 | % |  | 4.80 | %
There were no uncertain tax positions outstanding as of December 31, 2020 and 2019. As of December 31, 2020, tax years remaining open for the State of Wisconsin tax were 2016 through 2019. Federal tax years that remained open were 2017 through 2019. As of December 31, 2020, there were also no unrecognized tax benefits that are expected to significantly increase or decrease within the next twelve months.

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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 http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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