Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes [Abstract]

Income Taxes

(18) Income Taxes

The provision for income tax expense consisted of the following for the years ended December 31:

	2023			2022
Current:
Federal	$	5,349		$	4,141
State		3,147			2,328
		8,496			6,469
Deferred:
Federal		(400	)		(599	)
State		(4	)		(88	)
		(404	)		(687	)
	$	8,092		$	5,782

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2023 and 2022, consisted of:

	2023		2022
Deferred tax assets:
Allowance for credit losses	$	5,246	$	4,580
Deferred compensation		64		82
Retirement compensation		1,617		1,635
Stock option compensation		453		379
Postretirement benefits		—		107
Current state franchise taxes		657		490
Non-accrual interest		333		416
Sale-leaseback		—		2
Lease liability		1,349		1,590
Investment securities unrealized loss		14,178		19,419
Other		281		392
Deferred tax assets		24,178		29,092
Deferred tax liabilities:
Fixed assets depreciation		970		1,183
FHLB dividends		184		184
Tax credit – loss on pass-through		489		422
Deferred loan costs		940		1,024
Mortgage servicing rights		383		378
Right of Use Asset		1,204		1,450
Postretirement benefits		21		—
Other		393		276
Total deferred tax liabilities		4,584		4,917
Net deferred tax assets (see Note 7)	$	19,594	$	24,175

Based upon the level of historical taxable income and projections for future taxable income over the periods during which the deferred tax assets are deductible, management believed it is more-likely-than-not the Company will realize the benefits of these deductible differences.

At December 31, 2023, the Company had no state net operating loss carry forwards and no federal tax credit carry forwards.

A reconciliation of income taxes computed at the federal statutory rate and the provision for income taxes for the years ended December 31, is as follows:

	2023			2022
Federal statutory income tax rate		21.0	%		21.0	%
Increase (decrease) in tax rate due to:
State franchise tax, net of federal benefit		8.4	%		8.2	%
Reduction for tax exempt interest		(1.2	)%		(1.7	)%
Cash surrender value of life insurance		(0.4	)%		(1.0	)%
Other		(0.5	)%		0.2	%
Effective income tax rate		27.3	%		26.7	%

Accounting for Uncertainty in Income Taxes

The Company had no unrecognized tax benefits for the years ended December 31, 2023 and 2022.  The Company recognized no changes in unrecognized tax benefits during 2023 and 2022, due to the expiration of a statute of limitations.  The Company had no significant uncertain tax positions as of December 31, 2023 and December 31, 2022.  The Company does not currently anticipate any significant increase or decrease in unrecognized tax benefits during 2024.

The Company classifies interest and penalties as a component of the provision for income taxes. At December 31, 2023, there were no unrecognized interest and penalties. The tax years ended December 31, 2022, 2021, and 2020 remain subject to examination by the Internal Revenue Service. The tax years ended December 31, 2022, 2021, 2020, and 2019 remain subject to examination by the California Franchise Tax Board. The deductibility of these tax positions will be determined through examination by the appropriate tax authorities or the expiration of the tax statute of limitations.