Note 20 - Income Taxes

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE 20 Income Taxes

The components of income tax expense (benefit) for the years ended December 31, 2024, 2023, and 2022 were as follows:

	Year ended
	December 31,
(dollars in thousands)	2024			2023			2022
Federal
Current	$	6,973		$	851		$	9,005
Deferred		(3,105	)		1,151			727
Federal income tax		3,868			2,002			9,732
State
Current		2,389			2,415			2,298
Deferred		(878	)		(259	)		147
State income tax		1,511			2,156			2,445
Total income tax expense	$	5,379		$	4,158		$	12,177

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at  December 31, 2024 and 2023 were as follows:

	December 31,		December 31,
(dollars in thousands)	2024		2023
Deferred Tax Assets
Allowance for credit losses	$	15,526	$	9,002
Employee compensation and benefit accruals		2,593		2,253
Expense accruals		561		327
Identifiable intangible amortization		—		2,176
Deferred loan fees		691		931
Fair value adjustments on available-for-sale securities		3,509		—
Acquired loan discounts		17,487		—
Nonaccrual loan interest		750		143
Unrealized loss on available‑for‑sale investment securities		24,737		24,548
Unrealized loss on derivative and hedge instruments		—		135
Unfunded commitment liability		1,856		1,913
Operating lease liabilities		4,968		1,486
Other		264		129
Total deferred tax assets from temporary differences		72,942		43,043
Deferred Tax Liabilities
Accumulated depreciation		2,272		737
Goodwill and intangible amortization		10,246		3,840
Servicing assets		2,071		530
Prepaid expenses		1,571		1,188
Unrealized gain on derivative and hedge instruments		151		—
Operating lease right-of-use assets		3,651		1,539
Other		95		614
Total deferred tax liabilities from temporary differences		20,057		8,448
Net Deferred Tax Assets	$	52,885	$	34,595

The reconciliation between applicable income taxes and the amount computed at the applicable statutory federal tax rate for the years ending December 31, 2024, 2023, and 2022 was as follows:

	Year ended December 31,
	2024						2023						2022
				Percent of						Percent of						Percent of
(dollars in thousands)	Amount			Pretax Income			Amount			Pretax Income			Amount			Pretax Income
Taxes at statutory federal income tax rate	$	4,863			21.0	%	$	3,329			21.0	%	$	10,958			21.0	%
Tax effect of:
Tax exempt income		(1,131	)		(4.9	)%		(715	)		(4.5	)%		(514	)		(1.0	)%
State income taxes, net of federal benefits		1,278			5.5	%		715			4.5	%		2,297			4.4	%
Nondeductible items and other		369			1.6	%		829			5.2	%		(564	)		(1.1	)%
Applicable income taxes	$	5,379			23.2	%	$	4,158			26.2	%	$	12,177			23.3	%

It is the opinion of management that the Company has no significant uncertain tax positions that would be subject to change upon examination.