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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Note 11 – Income Taxes The components of income tax expense for the years ended December 31 are as follows:
|  | (In Thousands) |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 3,052 |  |  | $ | 7,430 |  |  | $ | 7,536 |
State |  |  | 287 |  |  |  | 359 |  |  |  | 271 |
Total current |  |  | 3,339 |  |  |  | 7,789 |  |  |  | 7,807 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | 2,182 |  |  |  | 227 |  |  |  | (1,746 | )
State |  |  | 46 |  |  |  | (56 | ) |  |  | (59 | )
Total deferred |  |  | 2,228 |  |  |  | 171 |  |  |  | (1,805 | )
Total Income Tax |  | $ | 5,567 |  |  | $ | 7,960 |  |  | $ | 6,002 |
The following is a reconciliation of the statutory federal income tax rate to the effective tax rate:
|  | (In Thousands) |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Federal income tax at statutory rates |  | $ | 5,954 |  |  | $ | 8,489 |  |  | $ | 6,194 |
(Decrease) increase resulting from: |  |  |  |  |  |  |  |  |
State income tax, net of federal benefit |  |  | 264 |  |  |  | 239 |  |  |  | 167 |
Tax exempt interest |  |  | (129 | ) |  |  | (133 | ) |  |  | (116 | )
Section 831 deduction |  |  | (187 | ) |  |  | (270 | ) |  |  | (294 | )
Other |  |  | (335 | ) |  |  | (365 | ) |  |  | 51 |
Total Income Tax |  | $ | 5,567 |  |  | $ | 7,960 |  |  | $ | 6,002 |
Deferred tax assets and liabilities at December 31 are comprised of the following:
|  | (In Thousands) |
|  | 2023 |  |  | 2022 |
Deferred Tax Assets: |  |  |  |  |  |
Allowance for credit losses |  | $ | 5,888 |  |  | $ | 4,623 |
Deferred compensation |  |  | 547 |  |  |  | 570 |
Net unrealized loss on available-for-sale securities |  |  | 7,712 |  |  |  | 10,163 |
Fair value adjustments |  |  | 1,179 |  |  |  | 2,152 |
Other |  |  | 307 |  |  |  | 554 |
Total deferred tax assets |  |  | 15,633 |  |  |  | 18,062 |
Deferred Tax Liabilities: |  |  |  |  |  |
Accreted discounts on bonds |  |  | 95 |  |  |  | 54 |
Depreciation |  |  | 2,409 |  |  |  | 1,083 |
FHLB stock dividends |  |  | 880 |  |  |  | 1,011 |
Intangible amortization |  |  | 2,421 |  |  |  | 2,640 |
Loan servicing rights |  |  | 1,252 |  |  |  | 787 |
Prepaids |  |  | 244 |  |  |  | 500 |
Other |  |  | 488 |  |  |  | 424 |
Total deferred tax liabilities |  |  | 7,789 |  |  |  | 6,499 |
Net Deferred Tax Asset |  | $ | 7,844 |  |  | $ | 11,563 |
The Peoples Federal Savings and Loan acquisition included a net operating loss (NOL) carryforward of $2,789,124 that had a remaining balance of $2.0 million and $2.6 million at December 31, 2023 and 2022, respectively. The Corporation has additional paid-in capital that is considered restricted resulting from the acquisition of Perpetual in 2021 of approximately $2,779,000 and from the acquisition of Peoples in 2022 of approximately $2,174,000. No deferred tax liability is required to be recorded for the Corporation’s tax bad debt reserves arising before December 31, 1987, unless it is apparent that the reserves will reverse in the near future. Unrecognized deferred taxes on these reserves would total $1,040,000. If the portion of retained earnings representing these reserves is used for any purpose other than to absorb bad debts, it will be added to future taxable income and the related tax will be recognized as expense.

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