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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax expense consists of the following:
 For the Year Ended December 31,
 20212020
 (In Thousands)
Current:
Federal$6,965 $1,948 
State3,087 1,386 
Current tax expense10,052 3,334 
Deferred:
Federal1,333 (1,678)
State(110)(329)
Deferred tax expense (benefit)1,223 (2,007)
Total income tax expense$11,275 $1,327 
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, 2021December 31, 2020
 (In Thousands)
Deferred tax assets:
Allowance for loan and lease losses$6,312 $7,276 
SBA recourse reserve215 302 
Deferred compensation2,016 1,457 
State net operating loss carryforwards436 482 
Write-down of foreclosed properties5 — 
Tax credit carryforwards— 1,831 
Non-accrual loan interest176 820 
Capital loss carryforwards21 21 
Unrealized losses on securities501 319 
Other619 356 
Total deferred tax assets10,301 12,864 
Deferred tax liabilities:
Leasing and fixed asset activities3,014 4,363 
Loan servicing asset420 358 
Other692 926 
Total deferred tax liabilities4,126 5,647 
Net deferred tax asset$6,175 $7,217 
The tax effects of unrealized gains and losses on securities are components of other comprehensive income. A reconciliation of the change in net deferred tax assets to deferred tax expense is as follows:
 December 31, 2021December 31, 2020
 (In Thousands)
Change in net deferred tax assets$(1,042)$1,864 
Deferred taxes allocated to other comprehensive income(181)143 
Deferred income tax (expense) benefit$(1,223)$2,007 
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 $7.0 million and $7.7 million at December 31, 2021 and 2020, respectively, which can be used to offset future state taxable income. The Corporation believes it will be able to fully utilize its established deferred tax assets and Wisconsin state net operating losses and therefore no valuation allowance has been established as of December 31, 2021and 2020.
The provision for income taxes differs from that computed at the federal statutory corporate tax rate as follows: 
 Year Ended December 31,
 20212020
 (Dollars in Thousands)
Income before income tax expense$47,030 $18,305 
Tax expense at statutory federal rate of 21% applied to income before income tax expense
$9,876 $3,844 
State income tax, net of federal effect2,351 837 
Tax-exempt security and loan income, net of TEFRA adjustments(710)(648)
Bank-owned life insurance(297)(294)
Tax credits, net— (2,535)
Other55 123 
Total income tax expense$11,275 $1,327 
Effective tax rate23.97 %7.25 %
There were no uncertain tax positions outstanding as of December 31, 2021 and 2020. As of December 31, 2021, tax years remaining open for the State of Wisconsin tax were 2017 through 2020. Federal tax years that remained open were 2018 through 2020. As of December 31, 2021, there were also no unrecognized tax benefits that are expected to significantly increase or decrease within the next twelve months.