Note 9 - Federal Income Taxes

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE 9 - FEDERAL INCOME TAXES

The consolidated income tax expense is as follows: 

(Dollars in thousands)	2023			2022			2021
Current expense	$	22,518		$	16,080		$	12,675
Deferred (benefit) expense		(2,036	)		(1,353	)		2,020
Tax expense	$	20,482		$	14,727		$	14,695

NOTE 9 - FEDERAL INCOME TAXES (Continued)

A reconciliation of the differences between the federal income tax expense recorded and the amount computed by applying the federal statutory rate to income before income taxes is as follows:

(Dollars in thousands)	2023			2022			2021
Tax at statutory rate	$	21,567		$	15,915		$	15,481
Increase (decrease) from
Tax-exempt interest		(862	)		(695	)		(658	)
Bank owned life insurance		(303	)		(334	)		(233	)
Other		80			(159	)		105
Tax expense	$	20,482		$	14,727		$	14,695

The statutory tax rate was 21% for 2023, 2022 and 2021.

Significant components of deferred tax assets and liabilities, included in other assets on our Consolidated Balance Sheets, as of December 31, 2023 and 2022 are as follows: 

(Dollars in thousands)	2023		2022
Deferred income tax assets
Allowance for credit losses	$	10,482	$	8,872
Deferred compensation		226		232
Stock compensation		1,005		1,018
Nonaccrual loan interest income		132		136
Unrealized loss on securities		13,420		17,369
Lease liability		775		810
Other		779		494
Deferred tax asset		26,819		28,931
Deferred income tax liabilities
Depreciation		337		697
Prepaid expenses		612		504
Core deposit intangible		0		120
Mortgage loan servicing rights		2,382		2,486
Deferred loan fees and costs		509		211
Right of use lease asset		775		810
Business combination adjustments		1,770		1,877
Other		447		326
Deferred tax liability		6,832		7,031
Total net deferred tax asset	$	19,987	$	21,900

A valuation allowance related to deferred tax assets is required when it is considered more likely than not that all or part of the benefits related to such assets will not be realized. We determined that no valuation allowance was required at year-end 2023 or 2022. We had no unrecognized tax benefits at any time during 2023 or 2022 and do not anticipate any significant increase in unrecognized tax benefits during 2024. Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, it is our policy to record such accruals in our income tax accounts; no such accruals existed at any time during 2023 or 2022. Our U.S. federal income tax returns are no longer subject to examination for all years before 2020.