INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

INCOME TAXES [Abstract]

Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) was as follows for the periods indicated (dollars in thousands):

	Year Ended December 31,
	2023		2022		2021
Current expense
Federal	$	16,192	$	13,250	$	12,834
State		381		302		220
Deferred expense
Federal		99		1,359		1,453
Total	$	16,672	$	14,911	$	14,507

Effective Income Tax Rate Reconciliation

Effective tax rates differ from the federal statutory rate of 21% applied to income before income taxes due to the following for the periods indicated (dollars in thousands):

	Year Ended December 31,
	2023			2022			2021
Federal statutory rate times financial statement income	$	16,678		$	15,362		$	15,355
Effect of:
Tax-exempt income		(836	)		(953	)		(978	)
State taxes, net of federal benefit		301			239			174
Earnings from bank owned life insurance		(279	)		(251	)		(262	)
Non-deductible expenses		675			409			281
Other, net		133			105			(63	)
Total	$	16,672		$	14,911		$	14,507
Effective tax rate		20.99	%		20.38	%		19.84	%

Deferred Tax Assets and Liabilities

Year-end deferred tax assets and liabilities were due to the following at year-end (dollars in thousands):

	December 31,
	2023			2022
Deferred tax assets
Allowance for credit losses	$	8,895		$	8,251
Deferred compensation		5,640			6,118
Leases		200			201
Other real estate owned		30			—
Nonaccrual loans		78			71
Unrealized gain on available-for-sale securities		17,234			21,579
Other		456			286
Total deferred tax assets		32,533			36,506
Deferred tax liabilities
Depreciation		(2,800	)		(2,672	)
Intangibles		(626	)		(505	)
Prepaid expenses		(564	)		(355	)
Mortgage servicing rights		(5,580	)		(5,770	)
Other		(3,550	)		(4,386	)
Total deferred tax liabilities		(13,120	)		(13,688	)
Net deferred tax asset	$	19,413		$	22,818