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INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2022
INCOME TAXES [Abstract]  
Provision for Income Taxes

The provision for income taxes consists of the following (in thousands):

 
Year Ended December 31,
 
   
2022
   
2021
   
2020
 
Currently payable
 
$
6,471
   
$
5,510
   
$
4,896
 
Deferred tax liability (asset)
   
(36
)
   
689
     
367
 
Provision for income taxes
 
$
6,435
   
$
6,199
   
$
5,263
 
Deferred Tax Assets and Liabilities

The following temporary differences gave rise to the net deferred tax asset and liabilities at December 31, 2022 and 2021, respectively (in thousands):

   
2022
   
2021
 
Deferred tax assets:  

     

   
Allowance for loan losses
 
$
4,581
   
$
4,712
 
Deferred compensation
   
559
     
491
 
Merger & acquisition costs
   
1
     
1
 
Allowance for losses on available-for-sale securities
   
9
     
4
 
Pension and other retirement obligation
   
146
     
360
 
Interest on non-accrual loans
   
974
     
795
 
Incentive plan accruals
   
503
     
536
 
Other real estate owned
   
32
     
16
 
Unrealized losses on available-for-sale securities
    9,972       -  
Low income housing tax credits
   
138
     
137
 
NOL carry forward
   
1,134
     
1,226
 
Right of use asset
   
1,053
     
686
 
Accrued vacation
   
157
     
168
 
Other
   
164
     
159
 
Total
 
$
19,423
   
$
9,291
 
                 
Deferred tax liabilities:
               
Premises and equipment
 
$
(492
)
 
$
(559
)
Investment securities accretion
   
(240
)
   
(90
)
Loan fees and costs
   
(685
)
   
(644
)
Goodwill and core deposit intangibles
   
(2,332
)
   
(2,309
)
Mortgage servicing rights
   
(205
)
   
(246
)
Unrealized gains on available-for-sale securities
   
-
     
(81
)
Unrealized gains on equity securities
    (16 )     (61 )
 Unrealized gains on interest rate swap     (1,443 )     (401 )
Right of use asset
   
(1,047
)
   
(685
)
Other
   
(77
)
   
(133
)
Total
   
(6,537
)
   
(5,209
)
Deferred tax (liability) asset, net
 
$
12,886
   
$
4,082
 
Reconciliation of Statutory Tax Rates to Effective Tax Rates

The total provision for income taxes is different from that computed at the statutory rates due to the following items (dollars in thousands):

 
Year Ended December 31,
 
   
2022
   
2021
   
2020
 
Provision at statutory rates on pre-tax income
 
$
7,450
   
$
7,413
   
$
6,377
 
Effect of tax-exempt income
   
(835
)
   
(764
)
   
(936
)
Low income housing tax credits
   
(141
)
   
(141
)
   
(141
)
Bank owned life insurance
   
(179
)
   
(384
)
   
(146
)
Nondeductible interest
   
74
     
44
     
44
 
Nondeductible merger and acquisition expenses
   
61
     
-
     
32
 
Other items
   
5
     
31
     
33
 
Provision for income taxes
 
$
6,435
   
$
6,199
   
$
5,263
 
Statutory tax rates
   
21
%
   
21
%
   
21
%
Effective tax rates
   
18.1
%
   
17.6
%
   
17.3
%