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Income Taxes (Tables)
12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Net Deferred Tax Asset

Significant components of the Corporation’s net deferred tax asset at December 31, 2021 and 2020 are shown below.

 

(Dollars in thousands)

 

2021

 

 

2020

 

Deferred tax assets:

 

 

 

 

 

 

 

 

Allowance for loan and lease losses

 

$

3,065

 

 

$

2,810

 

Loan fees

 

 

1,409

 

 

 

1,908

 

Deferred compensation

 

 

2,661

 

 

 

722

 

Benefit plans

 

 

98

 

 

 

68

 

Unrealized loss on securities

 

 

63

 

 

 

—

 

Lease adjustments

 

 

485

 

 

 

219

 

Business combination adjustments

 

 

4,067

 

 

 

148

 

Acquired NOL, Section 1231, and charitable contribution carryforwards

 

 

745

 

 

 

91

 

Acquired AMT carryforward

 

 

777

 

 

 

—

 

Other

 

 

1,038

 

 

 

101

 

 

 

 

14,408

 

 

 

6,067

 

 

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Depreciation

 

 

(843

)

 

 

(394

)

Bond accretion

 

 

(39

)

 

 

(30

)

Goodwill and intangibles

 

 

(364

)

 

 

(359

)

Prepaid expenses

 

 

(706

)

 

 

(474

)

Business combination adjustments

 

 

(547

)

 

 

(641

)

Benefit plans

 

 

(1,130

)

 

 

(549

)

Unrealized gain on securities

 

 

—

 

 

 

(1

)

 

 

 

(3,629

)

 

 

(2,448

)

Deferred tax asset, net

 

$

10,779

 

 

$

3,619

 

Provision for Income Taxes

The provision for income taxes consists of the following:

 

(Dollars in thousands)

 

2021

 

 

2020

 

 

2019

 

Current tax provision

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

6,178

 

 

$

6,340

 

 

$

2,875

 

State

 

 

70

 

 

 

157

 

 

 

185

 

Total current tax provision

 

 

6,248

 

 

 

6,497

 

 

 

3,060

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred tax expense (benefit)

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

484

 

 

 

(1,367

)

 

$

665

 

State

 

 

—

 

 

 

—

 

 

 

—

 

Total deferred tax expense

 

$

484

 

 

 

(1,367

)

 

 

665

 

Total provision for income taxes

 

$

6,732

 

 

$

5,130

 

 

$

3,725

 

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the federal income tax provision at the statutory rate of 21% for 2021, 2020 and 2019 to Mid Penn's actual federal income tax provision at its effective rate is as follows:

 

(Dollars in thousands)

 

2021

 

 

2020

 

 

2019

 

Provision at the expected statutory rate

 

$

7,571

 

 

$

6,581

 

 

$

4,499

 

Effect of tax-exempt income

 

 

(477

)

 

 

(499

)

 

 

(683

)

Effect of investment in life insurance

 

 

(75

)

 

 

(63

)

 

 

(66

)

State income taxes, net of federal tax benefit

 

 

55

 

 

 

124

 

 

 

146.0

 

Nondeductible interest

 

 

14

 

 

 

26

 

 

 

59

 

Low income housing partnership tax credits

 

 

(853

)

 

 

(861

)

 

 

(83

)

Nondeductible merger and acquisition expense

 

 

364

 

 

 

—

 

 

 

—

 

Other items

 

 

133

 

 

 

(178

)

 

 

(147

)

Provision for income taxes

 

$

6,732

 

 

$

5,130

 

 

$

3,725