Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes [Abstract]

Income Taxes

NOTE 17 – Income Taxes

The components of income tax expense were as follows:

	For the years ended December 31,
(dollars in thousands)	2022			2021		2020
Current income taxes:
Federal	$	8,482			10,414		10,244
State		1,273			2,088		841
Total current tax expense		9,755			12,502		11,085
Deferred income tax expense (benefit)		(757	)		1,590		(5,594	)
Income tax expense	$	8,998			14,092		5,491

The following is a summary of the items that caused recorded income taxes to differ from taxes computed using the statutory tax rate:

	For the years ended December 31,
(dollars in thousands)	2022			2021			2020
Tax expense at statutory rate	$	8,004			12,768			5,002
Effect of state income taxes, net of federal benefit		1,006			1,649			664
Exempt income		(27	)		(43	)		(27	)
Effect of stock-based compensation		42			(115	)		(30	)
Other		(27	)		(167	)		(118	)
Income tax expense	$	8,998			14,092			5,491

The components of the deferred tax assets and liabilities are as follows:

	December 31,
(dollars in thousands)	2022		2021
Deferred tax assets:
Allowance for credit losses	$	8,114		6,386
Reserve for unfunded commitments		584		-
Unrealized loss on securities available for sale		3,565		197
Net deferred loan fees		1,537		1,054
Deferred compensation		1,762		1,930
Lease liabilities		5,424		5,883
Other		393		260
		21,379		15,710
Deferred tax liabilities:
Property and equipment		3,561		1,419
Hedging transactions		27		151
Prepaid expenses		316		148
ROU assets		4,953		5,595
		8,857		7,313
Net deferred tax asset	$	12,522		8,397

The Company has analyzed the tax positions taken or expected to be taken in its tax returns and concluded it has no liability related to uncertain tax positions.