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Federal Income Taxes | 12 Months Ended
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Dec. 31, 2021
Federal Income Taxes [Abstract] |
Federal Income Taxes | Note 14. Federal Income Taxes The temporary differences which give rise to significant portions of deferred tax assets and liabilities at December 31 are as follows: (Dollars in thousands) Deferred Tax Assets 2021 2020Allowance for loan losses $ 3,197 $ 3,561Deferred compensation 908 761Purchase accounting 18 17Other than temporary impairment of investments 58 58Accumulated other comprehensive loss 145 —Lease liabilities 1,030 1,131Other 354 581 5,710 6,109Valuation allowance (58) (58)Total gross deferred tax assets 5,652 6,051 Deferred Tax Liabilities Depreciation 102 464Right-of-use asset 1,010 1,118Joint ventures and partnerships 51 55Pension 901 1,163Accumulated other comprehensive gain — 848Deferred loan fees and costs, net 274 2Total gross deferred tax liabilities 2,338 3,650Net deferred tax asset $ 3,314 $ 2,401 In assessing the realizability of deferred tax assets, Management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, Management believes it is more likely than not that the Bank will realize the benefits of these deferred tax assets other than those for which a valuation allowance has been recorded. The components of the provision for Federal income taxes attributable to income from operations were as follows: For the Years Ended December 31 (Dollars in thousands) 2021 2020 Current tax expense (benefit) $ 3,308 $ 2,210 Tax benefit NOL carryback — (1,113) Deferred tax (benefit) expense 90 (839) Income tax provision $ 3,398 $ 258 For the years ended December 31, 2021 and 2020, the income tax provisions are different from the tax expense which would be computed by applying the Federal statutory rate to pretax operating earnings. The Federal statutory rate was 21% for 2021 and 2020. A reconciliation between the tax provision at the statutory rate and the tax provision at the effective tax rate is as follows: For the Years Ended December 31 (Dollars in thousands) 2021 2020 Tax provision at statutory rate $ 4,833 $ 2,747 Income on tax-exempt loans and securities (1,190) (1,144) Tax benefit NOL carryback — (1,113) Investment in solar tax credit (162) — Nondeductible interest expense relating to carrying tax-exempt obligations 26 43 Income from bank owned life insurance (146) (269) Stock option compensation 5 — Other, net 32 (6) Income tax provision $ 3,398 $ 258 Effective income tax rate 14.8% 2.0% The Corporation recognizes interest accrued related to unrecognized tax benefits and penalties in income tax expense for all periods presented. No penalties or interest were recognized in 2021 or 2020. The Corporation recorded a reversal of $1.1 million to its income tax expense in the second quarter of 2020 due to a benefit from the passage of the CARES Act in March 2020. The CARES Act allowed for NOLs incurred in 2018, 2019 and 2020 to be carried back to offset taxable income earned during the five-year period prior to the year in which the NOL was incurred. The Corporation incurred an NOL in 2018 that was carried back to prior periods when the statutory rate for the Corporation was 34% as compared to the current rate of 21%. The Corporation had no uncertain tax positions at December 31, 2021. The Corporation is no longer subject to U.S. Federal examinations by tax authorities for the years before 2017.

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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=121826272&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=122134291&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=121826272&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=122134291&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=121826272&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 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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