Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Taxes [Abstract]

Components of Provision for Income Taxes

The components of the provision for income taxes, exclusive of tax effect of unrealized AFS securities gains and losses, are as follows:

(in thousands)	2020			2019			2018
Current federal income tax expense	$	12,884		$	8,351		$	11,042
Current state income tax expense		786			513			518
Deferred income tax expense (benefit)		(2,900	)		2,030			(246	)
Effect of Kentucky tax legislation benefit		(9	)		(3,442	)		0
Total income tax expense	$	10,761		$	7,452		$	11,314

Reconciliation of Income Tax Expense at Statutory Rate to Actual Income Tax Expense

A reconciliation of income tax expense at the statutory rate to our actual income tax expense is shown below:

(in thousands)	2020					2019					2018
Computed at the statutory rate	$	14,755		21.00	%	$	15,118		21.00	%	$	14,814		21.00	%
Adjustments resulting from:
Tax-exempt interest		(547	)	(0.78	)		(563	)	(0.78	)		(673	)	(0.95	)
Housing and new markets credits		(4,194	)	(5.97	)		(4,471	)	(6.21	)		(2,635	)	(3.73	)
Dividends received deduction		0		-			0		-			(9	)	(0.01	)
Bank owned life insurance		(277	)	(0.39	)		(284	)	(0.39	)		(599	)	(0.85	)
ESOP dividend deduction		(221	)	(0.32	)		(203	)	(0.28	)		(188	)	(0.27	)
Stock option exercises and restricted stock vesting		(10	)	(0.01	)		(10	)	(0.01	)		(39	)	(0.06	)
Effect of KY tax legislation		(7	)	(0.01	)		(2,719	)	(3.78	)		0		-
State income taxes		621		0.88			405		0.56			409		0.58
Split dollar life insurance		529		0.75			0		-			0		-
Other		112		0.16			179		0.24			234		0.33
Total	$	10,761		15.31	%	$	7,452		10.35	%	$	11,314		16.04	%

Components of Net Deferred Tax Liability

The components of the net deferred tax liability as of December 31 are as follows:

(in thousands)	2020			2019
Deferred tax assets:
Allowance for credit/loan and lease losses*	$	11,982		$	8,757
Interest on nonaccrual loans		471			485
Accrued expenses		1,444			1,100
Allowance for other real estate owned		593			1,437
State net operating loss carryforward		3,975			3,786
Lease liabilities		3,468			3,859
Other		470			294
Total deferred tax assets		22,403			19,718
Deferred tax liabilities:
Depreciation and amortization		(15,006	)		(15,048	)
FHLB stock dividends		(1,245	)		(1,441	)
Loan fee income		(238	)		(656	)
Mortgage servicing rights		(1,015	)		(814	)
Unrealized gains on AFS securities		(4,807	)		(1,534	)
Limited partnership investments		(414	)		(326	)
Right of use assets		(3,297	)		(3,698	)
Other		(1,068	)		(1,101	)
Total deferred tax liabilities		(27,090	)		(24,618	)
Beginning balance for valuation allowance for deferred tax asset		210			3,957
Change in valuation allowance		(210	)		(3,747	)
Ending balance for valuation allowance for deferred tax asset		0			210
Net deferred tax liability	$	(4,687	)	$	(5,110	)

*Effective January 1, 2020, the allowance for loan and lease losses became the allowance for credit losses with the implementation of ASU 2016-13, commonly referred to as CECL.