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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes
NOTE 13 - INCOME TAXES
Income taxes were as follows for the years ended December 31:
 
    
2021
     
2020
     
2019
  
Current
    $ 5,111      $ 6,947      $ 4,713  
State
      587        270        307  
Deferred
      1,319        (2,277 )       663  
    
 
 
     
 
 
     
 
 
  
Income taxes
    $         7,017      $       4,940      $       5,683  
    
 
 
     
 
 
     
 
 
  
Effective tax rates differed
from the statutory federal income tax rate of 21% in 2021, 2020 and 2019 due to the following:
 
    
2021
     
2020
     
2019
  
Income taxes computed at the statutory federal tax rate
    $ 9,988      $ 7,798      $ 8,308  
Add (subtract) tax effect of:
                           
Nontaxable interest income, net of nondeductible interest expense
      (1,315 )       (1,293 )       (1,194 ) 
Low income housing tax credit
      (1,402 )       (1,186 )       (903 ) 
Cash surrender value of BOLI
      (252 )       (205 )       (211 ) 
Change in tax position BOLI
      —        —        (353 ) 
Other
      (2 )       (174 )       36  
    
 
 
     
 
 
     
 
 
  
Income tax expense
    $       7,017      $       4,940      $       5,683  
    
 
 
     
 
 
     
 
 
  
Year-end deferred tax assets and liabilities were due to the following:
 
    
2021
     
2020
  
Deferred tax assets
                  
Allowance for loan losses
    $ 5,595      $ 5,256  
Deferred compensation
      1,213        1,201  
Pension costs
      56        304  
Intangible assets
      231        312  
Net operating loss carryforward
      —        509  
Deferred loan fees
      614        1,260  
Other
      713        745  
    
 
 
     
 
 
  
Deferred tax asset
            8,422              9,587  
    
 
 
     
 
 
  
Deferred tax liabilities
                  
Tax depreciation in excess of book depreciation
      (973 )       (851 ) 
Discount accretion on securities
      (86 )       (10 ) 
FHLB stock dividends
      (969 )       (969 ) 
Unrealized gain on securities available for sale
      (3,806 )       (5,606 ) 
Prepaids
      (276 )       (325 ) 
Other
      (1,243 )       (979 ) 
    
 
 
     
 
 
  
Deferred tax liability
      (7,353 )       (8,740 ) 
    
 
 
     
 
 
  
Net deferred tax asset
    $ 1,069      $ 847  
    
 
 
     
 
 
  
No valuation allowance was established at December 31, 2021 and 2020, due to the Company’s ability to carryforward net operating losses to taxes paid in future years and certain tax strategies, coupled with the anticipated future income as evidenced by the Company’s earning potential.
The Company and its subsidiaries are subject to U.S. federal income tax. The Company is subject to tax in Ohio based upon its net worth and in Indiana based upon its net income.
There is currently no liability for uncertain tax positions and no known unrecognized tax benefits. The Company’s federal tax returns for taxable years through 201
7
have been closed for purposes of examination by the Internal Revenue Service.