Income Taxes (Tables)
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12 Months Ended |
Dec. 31, 2022 |
Income Tax Disclosure [Abstract] |
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Schedule of Components of Income Tax Expense (Benefit) |
The provision for income taxes follows (dollars in thousands): | | | | | | | | | | | | Year Ended December 31, | | | 2022 | | 2021 | | 2020 | Federal: | | | | | | | | | | Current | | $ | 6,071 | | $ | 8,186 | | $ | 7,979 | Deferred | | | 233 | | | 135 | | | (1,697) | Total federal | | | 6,304 | | | 8,321 | | | 6,282 | State: | | | | | | | | | | Current | | | 4,874 | | | 5,916 | | | 5,711 | Deferred | | | 78 | | | (50) | | | (914) | Total state | | | 4,952 | | | 5,866 | | | 4,797 | Total tax provision | | $ | 11,256 | | $ | 14,187 | | $ | 11,079 |
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Schedule of Deferred Tax Assets and Liabilities |
The components of the net deferred tax asset, included in other assets, are as follows (dollars in thousands): | | | | | | | | | December 31, | | | 2022 | | 2021 | Deferred tax assets: | | | | | | | Allowance for credit losses on loans and leases | | $ | 6,817 | | $ | 4,215 | Foreclosed assets | | | — | | | 126 | Deferred compensation | | | 4,158 | | | 4,511 | Accrued reserves | | | 1,022 | | | 555 | Non-accrual loans | | | 241 | | | 363 | Lease liability | | | 2,147 | | | 1,752 | Loan fair value adjustment | | | 245 | | | 420 | Net operating losses | | | 1,370 | | | 1,592 | State income tax deduction | | | 1,005 | | | 1,179 | Other | | | 1,211 | | | 992 | Unrealized losses on securities available-for-sale | | | 23,746 | | | — | Total deferred tax assets | | | 41,962 | | | 15,705 | Deferred tax liabilities: | | | | | | | Deferred loan costs | | | (1,070) | | | (1,288) | Right-of-use asset | | | (2,034) | | | (1,618) | TRUPS accretion | | | (788) | | | (840) | FMV equity securities | | | (706) | | | (804) | Prepaids | | | (639) | | | (615) | Other | | | (517) | | | (565) | Intangibles | | | (337) | | | (579) | Premises and equipment | | | (887) | | | (917) | Net unrealized gain on securities available-for-sale | | | — | | | (4,687) | Total deferred tax liabilities | | | (6,978) | | | (11,913) | Net deferred tax assets | | $ | 34,984 | | $ | 3,792 |
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Schedule of Effective Income Tax Rate Reconciliation |
The expense for income taxes differs from amounts computed by applying the statutory Federal income tax rates to income before income taxes. The significant items comprising these differences consisted of the following (dollars in thousands): | | | | | | | | | | | | Year Ended December 31, | | | 2022 | | 2021 | | 2020 | Income tax expense at federal statutory rate | | $ | 9,432 | | $ | 12,012 | | $ | 9,770 | Increase (decrease) resulting from: | | | | | | | | | | State franchise tax expense, net of federal tax effect | | | 3,912 | | | 4,634 | | | 3,790 | Tax exempt municipal income | | | (1,849) | | | (1,306) | | | (1,199) | Affordable housing tax credits | | | (530) | | | (524) | | | (518) | Excess tax benefit of stock-based compensation | | | (50) | | | (109) | | | (90) | Cash surrender value - life insurance | | | 209 | | | (556) | | | — | Other | | | 132 | | | 36 | | | (674) | Total | | $ | 11,256 | | $ | 14,187 | | $ | 11,079 | Effective tax rate | | | 25.06% | | | 24.80% | | | 23.81% |
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