Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

NOTE 20 Income Taxes

The components of income tax expense (benefit) for the years ended December 31, 2022, 2021, and 2020 were as follows:

	Year ended
	December 31,
(dollars in thousands)	2022		2021		2020
Federal
Current	$	9,005	$	10,731	$	14,541
Deferred		727		2,212		(3,615)
Federal income tax		9,732		12,943		10,926
State
Current		2,298		2,879		3,736
Deferred		147		574		(819)
State income tax		2,445		3,453		2,917
Total income tax expense	$	12,177	$	16,396	$	13,843

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2022 and 2021 were as follows:

	December 31,		December 31,
(dollars in thousands)	2022		2021
Deferred Tax Assets
Allowance for loan losses	$	7,818	$	7,925
Employee compensation and benefit accruals		2,455		2,762
Expense accruals		417		634
Identifiable intangible amortization		3,363		3,341
Deferred loan fees		1,665		58
Net operating loss carry forwards		3		42
Nonaccrual loan interest		74		86
Unrealized loss on available‑for‑sale investment securities		33,056		1,426
Other		884		518
Total deferred tax assets from temporary differences		49,735		16,792
Deferred Tax Liabilities
Accumulated depreciation		835		918
Goodwill and intangible amortization		5,115		2,752
Servicing assets		663		451
Prepaid expenses		552		1,014
Other		201		43
Total deferred tax liabilities from temporary differences		7,366		5,178
Net Deferred Tax Assets	$	42,369	$	11,614

The reconciliation between applicable income taxes and the amount computed at the applicable statutory Federal tax rate for years ending December 31, 2022, 2021, and 2020 was as follows:

	Year ended December 31,
	2022				2021				2020
			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	$	10,958	21.0	%	$	14,506	21.0	%	$	12,289	21.0	%
Tax effect of:
Tax exempt income		(514)	(1.0)	%		(556)	(0.8)	%		(527)	(0.9)	%
State income taxes, net of federal benefits		2,297	4.4	%		2,973	4.3			2,522	4.3	%
Nondeductible items and other		(564)	(1.1)	%		(527)	(0.8)			(441)	(0.8)	%
Applicable income taxes	$	12,177	23.3	%	$	16,396	23.7	%	$	13,843	23.6	%

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