Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Components of income tax expense

The provision for income taxes for the years ended December 31, 2023, 2022, and 2021 consisted of the following (in thousands):

	Federal		State		Total
2023
Current	$	4,692	$	3,502	$	8,194
Deferred	176		(66)		110
Provision for income taxes	$	4,868	$	3,436	$	8,304
2022
Current	$	4,827	$	3,445	$	8,272
Deferred	80		144		224
Provision for income taxes	$	4,907	$	3,589	$	8,496
2021
Current	$	4,687	$	3,464	$	8,151
Deferred	1,002		463		1,465
Provision for income taxes	$	5,689	$	3,927	$	9,616

Components of deferred tax assets and liabilities

Deferred tax assets (liabilities) consisted of the following (in thousands):

	December 31,
	2023		2022
Deferred tax assets:
Allowance for credit losses	$	4,643	$	3,207
Deferred compensation	4,152		4,204
Unrealized loss on available-for-sale investment securities	27,716		34,093
Net operating loss carryovers	1,754		1,907
Mark-to-market adjustment	301		497
Other deferred tax assets	302		84
Other-than-temporary impairment	30		30
Loan and investment impairment	280		376
Operating lease liabilities	2,696		3,385
Partnership income	74		52
State taxes	718		777
Bank premises and equipment	229		(385)
Total deferred tax assets	42,895		48,227
Deferred tax liabilities:
Operating lease right-of-use assets	(2,457)		(3,142)
Finance leases	(625)		(668)
Unrealized gain on available-for-sale investment securities	—		—
Core deposit intangible	—		(20)
FHLB stock	(191)		(191)
Loan origination costs	(1,166)		(829)
Total deferred tax liabilities	(4,439)		(4,850)
Net deferred tax assets	$	38,456	$	43,377

Reconciliation of effective tax rate

The significant items comprising these differences for the years ended December 31, 2023, 2022, and 2021 consisted of the following:

	2023		2022		2021
Federal income tax, at statutory rate	21.0	%	21.0	%	21.0	%
State taxes, net of Federal tax benefit	8.0	%	8.1	%	8.2	%
Tax exempt investment security income, net	(3.5)	%	(3.7)	%	(3.1)	%
Bank owned life insurance, net	(0.6)	%	(0.8)	%	(0.5)	%
Compensation - stock compensation	—	%	(0.2)	%	(0.2)	%
Low income housing tax credits	(0.6)	%	(0.3)	%	(0.3)	%
Other	0.2	%	0.1	%	0.2	%
Effective tax rate	24.5	%	24.2	%	25.3	%