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Note 12 - Income Taxes | 12 Months Ended
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Dec. 31, 2021
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | Note 12. Income Taxes The components of income tax expense for the years ended December 31, 2021 and 2020 are as follows (in thousands):
|  | 2021 |  |  | 2020 |
Federal: |  |  |  |  |  |  |  |
Current |  | $ | 4,518 |  |  | $ | 4,102 |
Deferred |  |  | 308 |  |  |  | (886 | )
Total federal income tax expense |  |  | 4,826 |  |  |  | 3,216 |
State: |  |  |  |  |  |  |  |
Current |  |  | 1,509 |  |  |  | 1,366 |
Deferred |  |  | 425 |  |  |  | (201 | )
Total state income tax expense |  |  | 1,934 |  |  |  | 1,165 |
Total income tax expense |  | $ | 6,760 |  |  | $ | 4,381 |
Total income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 21% to income before income taxes for the years ended December 31, 2021 and 2020 as shown in the following table (in thousands):
|  | 2021 |  |  | 2020 |
Income taxes at 21% |  | $ | 6,441 |  |  | $ | 4,879 |
Increase (decrease) resulting from: |  |  |  |  |  |  |  |
Tax-exempt interest |  |  | (661 | ) |  |  | (761 | )
State taxes, net of federal tax benefit |  |  | 1,174 |  |  |  | 1,076 |
New Markets Tax Credits |  |  | (764 | ) |  |  | (764 | )
Valuation allowance |  |  | 396 |  |  |  | - |
Other |  |  | 174 |  |  |  | (49 | )
Total income tax expense |  | $ | 6,760 |  |  | $ | 4,381 |
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 31, 2021 and 2020 are as follows (in thousands):
|  | 2021 |  |  | 2020 |
Deferred tax assets: |  |  |  |  |  |  |  |
Allowance for loan losses |  | $ | 4,146 |  |  | $ | 4,294 |
State operating and alternative minimum tax carryforward |  |  | 761 |  |  |  | 729 |
Fair value adjustments from acquisitions |  |  | 116 |  |  |  | 164 |
Accrued vacation |  |  | 280 |  |  |  | 272 |
Off balance sheet reserve |  |  | 144 |  |  |  | 149 |
Other deferred tax assets |  |  | 230 |  |  |  | 207 |
Total deferred tax assets |  |  | 5,677 |  |  |  | 5,815 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Net unrealized gains on securities available-for-sale |  |  | (955 | ) |  |  | (5,341 | )
Goodwill and other intangible assets |  |  | (1,135 | ) |  |  | (1,058 | )
Bank premises and equipment |  |  | (584 | ) |  |  | (609 | )
Deferred loan costs |  |  | (145 | ) |  |  | (62 | )
Other deferred tax liabilities |  |  | (314 | ) |  |  | (250 | )
Total deferred tax liabilities |  |  | (3,133 | ) |  |  | (7,320 | )
Valuation allowance |  |  | (622 | ) |  |  | (226 | )
Net deferred tax asset (liability) |  | $ | 1,922 |  |  | $ | (1,731 | )
The Company has approximately $396 thousand of state income taxes associated with state net operating loss (“NOL”) carryforwards as of December 31, 2021. In 2021, the Company has recorded a valuation allowance against the tax effect of the NOL in the amount of $396 thousand, as management believes it is more likely than not that such carryforwards will not be utilized. The Company has approximately $226 thousand of state alternative minimum tax (“AMT”) credit carryforwards available to offset future state alternative minimum taxable income as of December 31, 2021 and 2020. The Company has recorded a valuation allowance against the tax effect of the AMT credit carryforwards, as management believes it is more likely than not that such carryforwards will not be utilized. The Company and its subsidiaries file one income tax return in the U.S. federal jurisdiction and separate tax returns for the state of Iowa. The Company is no longer subject to U.S. federal income and state tax examinations for years before 2018. The Company follows the accounting requirements for uncertain tax positions. Management has determined that the Company has no material uncertain tax positions and no material accrued interest or penalties as of or for the years ended December 31, 2021 and 2020 that would require recognition. The Company had no significant unrecognized tax benefits as of December 31, 2021, that if recognized, would affect the effective tax rate. The Company had no positions for which it deemed that it is reasonably possible that the total amounts of the unrecognized tax benefit will significantly increase or decrease within the next 12 months as of December 31, 2021 and 2020.

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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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