Income Taxes

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The income tax expense included in the accompanying consolidated statements of income consists of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Current income tax expense	$	4,690	$	2,939	$	9,427	$	5,800
Deferred income tax expense (benefit)	(122)		358		(316)		643
Income tax expense	$	4,568	$	3,297	$	9,111	$	6,443

The net deferred tax asset totaled $29.2 million at June 30, 2023 as compared to $34.7 million at December 31, 2022. The decrease in the net deferred tax asset is primarily the result of a decrease in unrealized losses in the AFS securities portfolio.  No valuation allowance was recorded at June 30, 2023 or December 31, 2022, as management believes it is more likely than not that all of the deferred tax asset items will be realized in future years. Unrecognized tax benefits were not material at June 30, 2023 or December 31, 2022.

We recognized income tax expense of $4.6 million and $9.1 million for an ETR of 15.5% and 15.2% for the three and six months ended June 30, 2023, respectively, compared to income tax expense of $3.3 million and $6.4 million, for an ETR of 11.5% and 11.3%, respectively, for the three and six months ended June 30, 2022. The higher ETR for the three and six months ended June 30, 2023 was primarily due to a decrease in net tax-exempt income as a percentage of pre-tax income as compared to the same period in 2022. The ETR differs from the statutory rate of 21% for the three and six months ended June 30, 2023 and 2022 primarily due to the effect of tax-exempt income from municipal loans and securities, as well as BOLI. We file income tax returns in the U.S. federal jurisdictions and in certain states. We are no longer subject to U.S. federal income tax examinations by tax authorities for years before 2019 or Texas state tax examinations by tax authorities for years before 2018.