XML 29 R18.htm IDEA: XBRL DOCUMENT
v3.22.4

Note 10 - Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | NOTE 10 – INCOME TAXES The income tax expense is as follows:
|  | For the years ended December 31, |
|  | 2022 |  |  | 2021 |
Current expense |  | $ | 3,578 |  |  | $ | 2,320 |
Deferred expense |  |  | (237 | ) |  |  | 28 |
Total income tax expense |  | $ | 3,341 |  |  | $ | 2,348 |
A reconciliation of the provision for income taxes computed at the statutory federal corporate tax rate of 21% for 2022 and 2021, to the income tax expense in the Consolidated Statements of Operations follows:
|  | For the years ended December 31, |
|  | 2022 |  |  | 2021 |
Expense computed at the statutory federal tax rate |  | $ | 2,905 |  |  | $ | 2,048 |
State and local taxes, net of federal income tax effect |  |  | 501 |  |  |  | 504 |
Other, net |  |  | (65 | ) |  |  | (4 | )
Valuation allowance for deferred tax assets |  |  | — |  |  |  | (200 | )
|  | $ | 3,341 |  |  | $ | 2,348 |
Effective income tax rate |  |  | 24.15 | % |  |  | 24.07 | %
Retained earnings at December 31, 2022 and 2021 include $14.9 million for which no deferred federal income tax liability has been recorded. This amount represents an allocation of income to bad debt deductions for tax purposes alone. The net deferred tax asset is as follows:
|  | December 31, |
|  | 2022 |  |  | 2021 |
Gross deferred tax assets |  |  |  |  |  |  |  |
Allowance for loan losses |  | $ | 2,114 |  |  | $ | 1,798 |
Alternative minimum tax and net operating loss carryforwards |  |  | 3,886 |  |  |  | 3,938 |
Lease liability |  |  | 964 |  |  |  | 1,306 |
Other |  |  | 1,231 |  |  |  | 854 |
Unrealized loss on securities |  |  | 2,147 |  |  |  | — |
|  |  | 10,342 |  |  |  | 7,896 |
Gross deferred tax liabilities |  |  |  |  |  |  |  |
Net deferred loan origination costs |  |  | (1,095 | ) |  |  | (808 | )
Purchase accounting adjustments |  |  | (1,421 | ) |  |  | (1,516 | )
Right of use asset |  |  | (964 | ) |  |  | (1,306 | )
Fixed assets |  |  | (1,061 | ) |  |  | (800 | )
Other |  |  | (626 | ) |  |  | (675 | )
Unrealized gain on securities |  |  | — |  |  |  | (29 | )
|  |  | (5,167 | ) |  |  | (5,134 | )
|  | $ | 5,175 |  |  | $ | 2,762 |
As of December 31, 2022 and 2021, the Company’s net deferred tax asset (“DTA”) was $5.2 million and $2.8 million, respectively. A DTA valuation allowance is required under ASC 740 when the realization of a DTA is assessed and the assessment indicates that it is “more likely than not” (i.e., more than 50% likely) that all or a portion of the DTA will not be realized. All available evidence, both positive and negative must be considered to determine whether, based on the weight of that evidence, a valuation allowance against the net DTA is required. Objectively verifiable evidence is assigned greater weight than evidence that is not objectively verifiable. The valuation allowance is analyzed quarterly for changes affecting the DTA. The Company’s ability to realize the DTA is dependent upon the generation of future taxable income during the periods in which the tax attributes underlying the DTA become deductible. The amount of the DTA that will ultimately be realized will be impacted by the Company’s future taxable income, any changes to the many variables that could impact future taxable income and the then applicable corporate tax rate. A valuation allowance of $200,000 that was attributed to the Illinois net loss deduction carryforwards, was recovered in 2021 and there was no valuation allowance at December 31, 2022 and 2021. At December 31, 2022, the Company had a federal net operating loss carryforward of $6.9 million relating to its acquisition of Downers Grove National Bank, which is subject to utilization limitations under Section 382 of the Internal Revenue Code, and will begin to expire in 2030, and $225,000 of alternative minimum tax credit carryforward that does not expire and is subject to utilization limitations under Section 382 of the Internal Revenue Code. At December 31, 2022, the Company had a state net operating loss carryforward for the State of Illinois of $44.4 million, which will begin to expire in 2031 and fully expires in 2033. Unrecognized Tax Benefits A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | December 31, |
|  | 2022 |  |  | 2021 |
Beginning of year |  | $ | 283 |  |  | $ | 277 |
Additions based on tax positions related to the current year |  |  | 67 |  |  |  | 34 |
Additions for tax positions of prior years |  |  | 6 |  |  |  | 10 |
Reductions due to the statute of limitations and reductions for tax positions of prior years |  |  | (51 | ) |  |  | (38 | )
End of year |  | $ | 305 |  |  | $ | 283 |
The Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. At December 31, 2022 and 2021, the Company had immaterial amounts accrued for potential interest and penalties. If recognized, the entire amount of unrecognized tax benefits would affect the effective tax rate. The Company and its subsidiary are subject to U.S. federal income tax as well as income tax of the various states where the Company does business. The Company is no longer subject to examination by the federal taxing authorities for years before 2019 and the Illinois taxing authorities for years before 2019.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration