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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | (16) Income Taxes Income tax expense (benefit) attributable to income from operations consisted of the following: Schedule of Components of Income Tax Expense (Benefit)
|  | 2020 |  |  | 2019 |  |  | 2018 |
(Dollars in thousands) |  | Years ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 4,582 |  |  | $ | 1,805 |  |  | $ | 396 |
State |  |  | 708 |  |  |  | (157 | ) |  |  | (197 | )
Total current |  |  | 5,290 |  |  |  | 1,648 |  |  |  | 199 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (442 | ) |  |  | (160 | ) |  | $ | 875 |
State |  |  | (8 | ) |  |  | 22 |  |  |  | 155 |
Total deferred |  |  | (450 | ) |  |  | (138 | ) |  |  | 1,030 |
Deferred tax valuation allowance |  |  | (53 | ) |  |  | (57 | ) |  |  | (146 | )
Deferred tax remeasurement |  |  | - |  |  |  | - |  |  |  | 85 |
Income tax expense |  | $ | 4,787 |  |  | $ | 1,453 |  |  | $ | 1,168 |
The reasons for the difference between actual income tax expense (benefit) and expected income tax expense attributable to income from operations at the statutory federal income tax rate were as follows: Schedule of Effective Income Tax Rate Reconciliation
|  | 2020 |  |  | 2019 |  |  | 2018 |
(Dollars in thousands) |  | Years ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Computed “expected” tax expense |  | $ | 5,099 |  |  | $ | 2,544 |  |  | $ | 2,435 |
(Reduction) increase in income taxes resulting from: |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt interest income, net |  |  | (695 | ) |  |  | (748 | ) |  |  | (850 | )
Deferred tax remeasurement |  |  | - |  |  |  | - |  |  |  | 85 |
Excess tax benefit from stock option exercise |  |  | (26 | ) |  |  | - |  |  |  | (119 | )
Bank owned life insurance |  |  | (137 | ) |  |  | (165 | ) |  |  | (140 | )
Reversal of unrecognized tax benefits, net |  |  | (229 | ) |  |  | (558 | ) |  |  | (512 | )
State income taxes, net of federal benefit |  |  | 800 |  |  |  | 407 |  |  |  | 364 |
Investment tax credits |  |  | (28 | ) |  |  | (15 | ) |  |  | (24 | )
Other, net |  |  | 3 |  |  |  | (12 | ) |  |  | (71 | )
Income tax (benefit) expense |  | $ | 4,787 |  |  | $ | 1,453 |  |  | $ | 1,168 |
The tax effects of temporary differences that give rise to the significant portions of the deferred tax assets and liabilities at the following dates were as follows: Schedule of Deferred Tax Assets and Liabilities
|  | 2020 |  |  | 2019 |
(Dollars in thousands) |  | As of December 31, |
|  | 2020 |  |  | 2019 |
Deferred tax assets: |  |  |  |  |  |  |  |
Loans, including allowance for loan losses |  | $ | 2,040 |  |  | $ | 1,590 |
Net operating loss carry forwards |  |  | 273 |  |  |  | 326 |
State taxes |  |  | 614 |  |  |  | 414 |
Net deferred loan fees |  |  | 432 |  |  |  | 11 |
Acquisition costs |  |  | 161 |  |  |  | 182 |
Deferred compensation arrangements |  |  | 66 |  |  |  | 69 |
Investments |  |  | 54 |  |  |  | 45 |
Other, net |  |  | 158 |  |  |  | 39 |
Total deferred tax assets |  |  | 3,798 |  |  |  | 2,676 |
Less valuation allowance |  |  | (273 | ) |  |  | (326 | )
Total deferred tax assets, net of valuation allowance |  |  | 3,525 |  |  |  | 2,350 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Unrealized gain on investment securities available-for-sale |  |  | 3,065 |  |  |  | 1,700 |
Premises and equipment, net of depreciation |  |  | 500 |  |  |  | 361 |
Mortgage servicing rights |  |  | 777 |  |  |  | 492 |
Prepaid expenses |  |  | 302 |  |  |  | 157 |
Intangible assets |  |  | 278 |  |  |  | 181 |
FHLB stock dividends |  |  | 12 |  |  |  | 6 |
Total deferred tax liabilities |  |  | 4,934 |  |  |  | 2,897 |
Net deferred tax liability |  | $ | (1,409 | ) |  | $ | (547 | )
The Company has Kansas corporate net operating loss carry forwards totaling $4.7 million and $5.6 million as of December 31, 2020 and 2019, respectively, which expire between 2021 and 2027. The Company has recorded a valuation allowance against the Kansas corporate net operating loss carry forwards. A valuation allowance related to the remaining deferred tax assets has not been provided because management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets at December 31, 2020. Retained earnings at December 31, 2020 and 2019 include approximately $6.3 million for which no provision for federal income tax had been made. This amount represents allocations of income to bad debt deductions in years prior to 1988 for tax purposes only. Reduction of amounts allocated for purposes other than tax bad debt losses will create income for tax purposes only, which will be subject to the then current corporate income tax rate. The Company has unrecognized tax benefits representing tax positions for which a liability has been established. A reconciliation of the beginning and ending amount of the liability relating to unrecognized tax benefits is as follows: Schedule of Unrecognized Tax Benefits
(Dollars in thousands) |  | Years ended December 31, |
|  | 2020 |  |  | 2019 |
Unrecognized tax benefits at beginning of year |  | $ | 1,416 |  |  | $ | 1,472 |
Gross increases to current year tax positions |  |  | 1,100 |  |  |  | 554 |
Gross decreases to prior year’s tax positions |  |  | (26 | ) |  |  | (2 | )
Lapse of statute of limitations |  |  | (352 | ) |  |  | (608 | )
Unrecognized tax benefits at end of year |  | $ | 2,138 |  |  | $ | 1,416 |
Tax years that remain open and subject to audit include the years 2017 through 2020 for both federal and state tax purposes. The Company recognized $352,000 and $608,000 of previously unrecognized tax benefits during 2020 and 2019, respectively. The gross unrecognized tax benefits of $2.1 million and $1.4 million at December 31, 2020 and December 31, 2019, respectively, would favorably impact the effective tax rate by $1.7 million and $1.1 million, respectively, if recognized. During 2020, the Company recorded $71,000 of income tax expense associated with interest and penalties. During 2019 and 2018, the Company recorded an income tax benefit of $77,000 and $119,000, respectively, associated with interest and penalties. As of December 31, 2020 and 2019, the Company has accrued interest and penalties related to the unrecognized tax benefits of $325,000 and $254,000, respectively, which are not included in the table above. The Company believes that it is reasonably possible that a reduction in gross unrecognized tax benefits of up to $48,000 is possible during the next 12 months as a result of the lapse of the statute of limitations.

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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=84230637&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=116825942&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=84230637&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=116825942&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=84230637&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 + Details
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