Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Components of Income Tax Expense (Benefit)

The following table provides information on components of income tax expense for the years ended December 31, 2023 and December 31, 2022.


(Dollars in thousands)	December 31, 2023		December 31, 2022
Current tax expense:
Federal	$	172	$	8,814
State	63		3,332
	235		12,146
Deferred income tax (benefit) expense:
Federal	1,692		(911)
State	1,029		(271)
	2,721		(1,182)

Total income tax expense	$	2,956	$	10,964

Schedule of Effective Income Tax Rate Reconciliation

The following table provides a reconciliation of tax computed at the statutory federal tax rate to the actual tax expense for the years ended December 31, 2023 and December 31, 2022.


	December 31, 2023		December 31, 2022
Tax at federal statutory rate	21.0	%	21.0	%
Tax effect of:
Tax-exempt income	(3.6)		(1.0)
State income taxes, net of federal benefit	6.1		5.7
Bargain purchase gain	(13.1)		—
Nondeductible compensation costs	3.9		—
Nondeductible merger related expenses	2.6		—
Other	3.9		0.3
Actual income tax expense rate	20.8	%	26.0	%

Schedule of Deferred Tax Assets and Liabilities

The following table provides information on significant components of the Company’s deferred tax assets and liabilities for the years ended December 31, 2023 and December 31, 2022.


(Dollars in thousands)	December 31, 2023		December 31, 2022
Deferred tax assets:
Allowance for credit losses	$	14,534	$	4,460
Write-downs of OREO	33		21
Nonaccrual loan interest	344		345
Lease liabilities	3,326		2,635
Deferred compensation	4,160		1,522
Federal net operating loss	6,528		—
State net operating loss	2,448		722
Deferred loan costs	1,775		1,183
Acquisition fair value adjustments	30,452		2,580
Unrealized losses on available-for-sale securities	2,825		3,399
Other	1,398		883
Total deferred tax assets	67,823		17,750
Less valuation allowance	(1,015)		(791)
Deferred tax assets, net of valuation allowance	66,808		16,959
Deferred tax liabilities:
Depreciation	4,320		2,491
Right-of-use assets	3,229		2,560
Mortgage servicing rights	1,541		1,405
Acquisition fair value adjustments	2,401		466
Deferred capital gain on branch sale	207		220

Intangibles	13,611		2,290
Other	792		170
Total deferred tax liabilities	26,101		9,602
Net deferred tax assets	$	40,707	$	7,357