INCOME TAXES

6 Months Ended

Jun. 30, 2024

INCOME TAXES

INCOME TAXES

NOTE 12: INCOME TAXES

For the six-month period ended June 30, 2024, the Company recorded an income tax benefit of $1.3 million and had an effective tax rate of -52.3%.  For the six-month period ended June 30, 2023, the Company recorded income tax expense of $1.9 million and had an effective tax rate of -0.94%.  The changes in the effective tax rate were predominately due to the changes in pretax income, as well as the impact of tax-exempt interest income and tax benefits associated with low-income housing tax credit investments.  The effective tax rates differ from the combined federal and state statutory rates for the Company of 28.2% due primarily to various permanent tax differences, including tax-exempt income, tax credits from low-income housing tax credit investments, and other items that impact our effective tax rate.

The Company accounts for income taxes by recognizing deferred tax assets and liabilities based upon future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is established if it is “more likely than not” that all or a portion of the deferred tax assets will not be realized.  Management has evaluated the realization of deferred tax assets and has determined that it is more likely than not that all of the deferred tax assets would be realized, therefore no valuation allowance was provided against the deferred tax assets.

Deferred tax assets totaled $36.5 million and $29.1 million at June 30, 2024 and December 31, 2023, respectively.