Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

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. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):

	2024		2023
Allowance for credit losses	$	4,495	$	4,553
Deferred compensation payable	3,441		3,336
Accrued expenses	2,365		2,575
Unrealized securities losses	34,973		33,524
Other	6,910		8,602
Total Deferred Tax Assets	52,184		52,590
Goodwill and other intangible assets	3,080		4,180
Other	7,400		6,194
Total Deferred Tax Liabilities	10,480		10,374
Deferred Tax Assets, net	$	41,704	$	42,216

    No material valuation allowances for deferred tax assets were recorded at December 31, 2024 or 2023 as the Company believes it is more likely than not that all of the deferred tax assets will be realized because they were supported by recoverable taxes paid in prior years. 

Significant components of the provision for income taxes are as follows (in thousands): 

	2024		2023		2022
Current:
Federal	$	23,883	$	27,156	$	20,481
State	3,151		4,349		3,313
Total current tax expense	27,034		31,505		23,794
Total deferred tax expense	381		(2,764)		1,469
Income tax expense	$	27,415	$	28,741	$	25,263

A reconciliation of the significant differences between the federal statutory income tax rate and the Company’s effective income tax rate is as follows (in thousands):

	2024			2023			2022
Computed federal taxes at statutory rate	$	30,348		$	30,052		$	26,740
State income taxes, net of federal tax benefit	2,577			3,225			2,871
Tax effects of:
Tax-exempt interest income	(732)			(925)			(1,142)
Bank-owned life insurance	(818)			(1,268)			(1,167)
Income tax credits	(4,008)			(2,747)			(1,904)
Other items, net	48			404			(135)
Income tax expense	$	27,415		$	28,741		$	25,263
Effective tax rate	19.0		%	20.1		%	19.8		%

The entire amount of the Company’s unrecognized tax benefits, if recognized, would favorably affect the Company’s effective tax rate.   The Company anticipates that it will release $0.4 million over the next 12 months.  A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows (in thousands):

	2024		2023
Beginning balance	$	1,256	$	1,619
Additions for current year tax positions	309		230
Increases (decreases) for prior year tax positions	78		(44)
Decreases related to lapse of applicable statute of limitation	(368)		(549)
Ending balance	$	1,275	$	1,256

Interest and penalties on income tax uncertainties are included in income tax expense.  During 2024, 2023 and 2022, the provision related to interest and penalties was not material in any period. The balance of accrued interest and penalties at December 31, 2024 and 2023 was approximately $1.0 million.

    The Company is currently open to audit under the statute of limitations by the Internal Revenue Service and various state taxing authorities for the years ended December 31, 2021 and forward.