XML 39 R26.htm IDEA: XBRL DOCUMENT v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

Note 17. Income Taxes

The following table presents the differences between the provision for income taxes at the federal statutory rate and the amounts computed as reported for the periods stated.

 

 

 

For the years ended December 31,

 

(Dollars in thousands)

 

2023

 

 

2022

 

 

2021

 

Income tax at federal statutory rate

 

$

(12,358

)

 

 

21.0

%

 

$

4,750

 

 

 

21.0

%

 

$

14,317

 

 

 

21.0

%

Increase (decrease) resulting from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     State income taxes, net of federal tax effect

 

 

72

 

 

 

(0.1

%)

 

 

388

 

 

 

1.7

%

 

 

1,499

 

 

 

2.2

%

     Tax-exempt interest income

 

 

(50

)

 

 

0.1

%

 

 

(121

)

 

 

(0.5

%)

 

 

(105

)

 

 

(0.2

%)

     Income from life insurance

 

 

(251

)

 

 

0.4

%

 

 

(283

)

 

 

(1.3

%)

 

 

(196

)

 

 

(0.3

%)

     Impairment of goodwill

 

 

5,348

 

 

 

(9.1

%)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

     Merger-related expenses

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

250

 

 

 

0.4

%

     Other permanent differences

 

 

168

 

 

 

(0.3

%)

 

 

554

 

 

 

2.4

%

 

 

(64

)

 

 

(0.1

%)

     (Benefit) provision for income taxes

 

$

(7,071

)

 

 

12.0

%

 

$

5,288

 

 

 

23.3

%

 

$

15,701

 

 

 

23.0

%

 

The following table presents the significant components of the provision for income taxes for the periods stated.

 

 

 

For the years ended December 31,

 

(Dollars in thousands)

 

2023

 

 

2022

 

 

2021

 

Current tax provision (benefit)

 

 

 

 

 

 

 

 

 

     Federal

 

$

165

 

 

$

4,762

 

 

$

12,832

 

     State

 

 

(181

)

 

 

546

 

 

 

946

 

          Total current tax (benefit) provision

 

 

(16

)

 

 

5,308

 

 

 

13,778

 

Deferred tax provision (benefit)

 

 

 

 

 

 

 

 

 

     Federal

 

 

(7,048

)

 

 

185

 

 

 

971

 

     State

 

 

(7

)

 

 

(205

)

 

 

952

 

          Total deferred tax (benefit) provision

 

 

(7,055

)

 

 

(20

)

 

 

1,923

 

(Benefit) provision for income taxes

 

$

(7,071

)

 

$

5,288

 

 

$

15,701

 

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents significant components of deferred tax assets and liabilities as of the dates stated.

 

 

 

December 31,

 

(Dollars in thousands)

 

2023

 

 

2022

 

Deferred tax assets relating to:

 

 

 

 

 

 

     Allowance for credit losses

 

$

7,857

 

 

$

6,869

 

     Compensation differences

 

 

1,349

 

 

 

1,340

 

     Reserve for unfunded loan commitments and sold loan buy backs

 

 

904

 

 

 

640

 

     Acquisition accounting adjustments

 

 

862

 

 

 

1,522

 

     Net operating loss

 

 

5,161

 

 

 

—

 

     Pass-through entities

 

 

624

 

 

 

114

 

     Unrealized losses on securities available for sale

 

 

12,822

 

 

 

13,149

 

     Other

 

 

5,061

 

 

 

2,017

 

          Total deferred tax assets

 

 

34,640

 

 

 

25,651

 

Deferred tax liabilities relating to:

 

 

 

 

 

 

     Premises and equipment, net

 

 

(2,102

)

 

 

(2,191

)

     Core deposit and customer-based intangible assets

 

 

(807

)

 

 

(1,179

)

     Mortgage servicing rights

 

 

(5,935

)

 

 

(6,478

)

     Unrealized gains on other investments

 

 

(2,224

)

 

 

(3,491

)

     Other

 

 

(2,016

)

 

 

(85

)

          Total deferred tax liabilities

 

 

(13,084

)

 

 

(13,424

)

Deferred tax asset, net

 

$

21,556

 

 

$

12,227

 

 

Deferred income tax assets and liabilities are measured at the enacted tax rate for the period in which they are expected to reverse; therefore, as of December 31, 2023, they have been measured using the federal income tax rate enacted of 21% and applicable state income tax rates.

The Company’s deferred tax asset was $34.6 million and $25.7 million at December 31, 2023 and 2022, respectively. As of December 31, 2023, management concluded that the Company’s deferred tax assets were fully realizable, and accordingly, no valuation allowance was recorded. The Company will continue to monitor deferred tax assets to evaluate whether it will be able to realize the full benefit of the deferred tax asset or whether there is need for a valuation allowance. Significant negative trends in asset credit quality, losses from operations, or other factors could impact the realization of the deferred tax asset in the future.

At December 31, 2023, the Company had an estimated federal net operating loss of approximately $24.4 million, which originated in the year ended December 31, 2023 and can be carried forward indefinitely. As of December 31, 2023 and 2022, the Company had no uncertain tax positions.