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Income Taxes
6 Months Ended
Jun. 30, 2023
Income Taxes [Abstract]  
Income Taxes
4.
 
INCOME TAXES
 
The Company’s provision for income taxes is
 
presented in the following table for the dates indicated
 
(in thousands):
The actual income tax
 
expense for the six
 
months ended June 30, 2023 and
 
2022 differs from the statutory
 
tax expense
for the
 
period (computed
 
by applying
 
the U.S.
 
federal corporate
 
tax rate
 
of
21
% for
 
2023 and
 
2022 to
 
income before provision
for income taxes) as follows (in thousands):
The Company’s deferred tax assets and deferred
 
tax liabilities as of the dates indicated were (in thousands):
June 30, 2023
December 31, 2022
Deferred tax assets:
Net operating loss
$
18,951
$
21,720
Allowance for credit losses
4,834
4,432
Lease liability
3,272
3,648
Unrealized losses on available for sale securities
15,990
15,193
Depreciable property
181
158
Equity compensation
481
373
Accruals
290
723
Deferred tax assets:
43,999
46,247
Deferred tax liability:
Deferred loan cost
(205)
(28)
Lease right of use asset
(3,272)
(3,648)
Deferred expenses
(222)
(175)
Cash flow hedge
(265)
-
Other, net
(21)
(36)
Deferred tax liability
(3,985)
(3,887)
Net deferred tax assets
$
40,014
$
42,360
The
 
Company has
 
approximately
 
$
70.9
 
million
 
of
 
federal and
 
$
93.6
 
million
 
of
 
state net
 
operating
 
loss
 
carryforwards
expiring in various amounts between
 
2031 and 2036 and which are
 
limited to offset, to the
 
extent permitted, future taxable
earnings of the Company.
In assessing the realizability of deferred tax assets, management considers
 
whether it is more likely than not that some
portion or
 
all of
 
the deferred
 
tax assets
 
will not
 
be realized.
 
The ultimate
 
realization of
 
deferred tax
 
assets is
 
dependent
upon the generation of
 
future taxable income
 
during the periods in
 
which those temporary differences
 
become deductible.
Management considers the scheduled reversal
 
of deferred tax liabilities, projected future taxable
 
income, and tax planning
strategies in making this assessment.
The major tax
 
jurisdictions where the
 
Company files income
 
tax returns are
 
the U.S. federal
 
jurisdiction and
 
the State
of Florida. With few exceptions, the Company is no longer subject to U.S. federal and state income tax examinations by tax
authorities for years before 2019.
For the three and six months ended June
 
30, 2023 and 2022, the Company did
no
t have any unrecognized tax benefits
as a result of
 
tax positions taken during a prior
 
period or during the current period. Additionally,
no
 
interest or penalties were
recorded as a result of tax uncertainties.
Six Months Ended June 30,
2023
2022
Current:
Federal
$
-
$
-
State
-
-
Total
 
current
-
-
Deferred:
Federal
2,513
2,778
State
701
788
Total
 
deferred
3,214
3,566
Total
 
tax expense
$
3,214
$
3,566
Six Months Ended June 30,
2023
2022
Federal taxes at statutory rate
$
2,776
$
2,880
State income taxes, net of federal tax benefit
574
596
Bank owned life insurance
(136)
(134)
Other, net
-
224
Total
 
tax expense
$
3,214
$
3,566