Note 13 - Income Taxes -

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 13 – Income Taxes –

The consolidated provision (credit) for income taxes consists of the following at December 31, 2022, 2021 and 2020:

	2022		2021			2020
	(Dollars in thousands)
Provision for Current Taxes - Federal	$	12,969	$	13,008		$	6,730
Provision (Credit) for Deferred Taxes		1,368		(586	)		58
Total Provision for Income Taxes	$	14,337	$	12,422		$	6,788

The provision (credit) for federal income taxes differs from the amount computed by applying federal statutory rates to income from operations as indicated in the following analysis at December 31, 2022, 2021 and 2020:

	2022			2021			2020
	(Dollars in thousands)
Federal Statutory Income Tax	$	14,404		$	13,557		$	7,720
Tax Exempt Income		(690	)		(815	)		(608	)
Stock Based Compensation		16			(220	)		(730	)
Goodwill Write-off for Branch Sale		-			35			-
Other - Net		607			(135	)		406
Total Provision for Income Taxes	$	14,337		$	12,422		$	6,788

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The components of the deferred tax assets and liabilities are as follows:

	2022			2021
	(Dollars in thousands)
State NOL	$	2,285		$	1,642
State NOL Valuation Allowance		(2,285	)		(1,642	)
Net Operating Loss Carryforward		1,700			18
Unrealized Loss on Securities		20,040			290
Acquired Loans Fair Market Value Adjustment		5,705			5,790
Allowance for Loan Losses		8,067			6,114
Lease Liability		3,731			3,004
Deferred Compensation		1,589			1,346
Stock Awards		1,135			791
Other		940			817
Deferred Tax Assets		42,907			18,170
Right of Use Asset		3,693			3,004
Core Deposit Intangible		2,967			2,562
Depreciation		2,512			1,802
Acquired Securities Difference in Basis		1,477			1,716
Other		1,064			264
Deferred Tax Liabilities		11,713			9,348
Net Deferred Tax Asset	$	31,194		$	8,822

The Company acquired certain deferred tax attributes and liabilities as a result of a merger during 2015, including a net operating loss (“NOL”) carryforward of $287,000 and alternative minimum tax (“AMT”) credit carryforwards of $984,000. The Company is limited in the amount it may deduct against current taxable income each year. As of December 31, 2022 the NOL carryforward was $57,475 and expires in 2033. The AMT credit carryforward was exhausted in 2019. Additionally, the Company acquired certain deferred tax attributes and liabilities as a result of the 2022 TCBI acquisition, including a federal NOL carryforward of $8.8 million and a federal charitable contribution carryforward of $229,000. The amount of the NOL carryforward the Company is allowed to deduct against current taxable income each year is limited, and the Company may not offset more than 80% of taxable income in any year. As of December 31, 2022, the NOL and charitable contribution carryforward was $8.3 million to be carried forward indefinitely until utilized.