INCOME TAXES

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The provision for federal income taxes consists of (in thousands):

	2021		2020	2019
Income taxes currently payable	$	4,317	3,951	3,694
Deferred income tax provision	294		134	419
Provision for income taxes	$	4,611	4,085	4,113

A reconciliation between the statutory income tax and the Company's effective tax rate follows:

	2021		2020		2019
Statutory tax rate	21.0	%	21.0	%	21.0	%
Increase (decrease) resulting from -
Tax exempt interest	(0.7)	%	(0.9)	%	(1.4)	%
Tax exempt income on bank owned life insurance	(0.9)	%	(1.3)	%	(0.9)	%
Captive insurance premium income	(0.8)	%	(0.8)	%	(0.8)	%
Tax benefit from certain provisions of the CARES Act	—	%	(0.8)	%	—	%
Other – net	(0.6)	%	(0.3)	%	—	%
Effective tax rate	18.0	%	16.9	%	17.9	%

Deferred tax assets and liabilities, included in the Consolidated Balance Sheets with accrued interest and other liabilities in 2021 and 2020, consist of the following at December 31 (in thousands):

	2021		2020
Deferred tax assets:
Allowance for loan losses	$	1,156	1,203
Net unrealized losses on investment securities available-for-sale	408		—
Fair value adjustment on loans acquired from mergers	103		196
Deferred compensation	630		667
Minimum pension liability	73		81
Operating lease right-of-use assets	1,359		1,338
Other	96		245
	3,825		3,730
Deferred tax liabilities:
Depreciation of premises and equipment	(1,595)		(1,673)
Net unrealized gains on investment securities available-for-sale	—		(1,156)
Amortization of intangibles	(1,518)		(1,512)
Prepaid expenses	(323)		(283)
FHLB stock dividends	(216)		(216)
Operating lease liabilities	(1,359)		(1,338)
	(5,011)		(6,178)
Net deferred tax liabilities	$	(1,186)	(2,448)

As of December 31, 2021 and 2020 there were no unrecognized tax benefits and the Company does not anticipate the total amount of unrecognized tax benefits will significantly change within the next twelve months.  There were no amounts recognized for interest and penalties in the Consolidated Statements of Income for the three-year period ended December 31, 2021.

The Company is no longer subject to examination by federal tax authorities for years before 2018.