Income Tax

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Tax

Income Tax

Income tax expense was $3.4 million and $2.9 million during the three month periods ended June 30, 2023 and 2022, respectively and $6.3 million and $7.0 million during the six months ended June 30, 2023 and 2022, respectively. Our actual federal income tax expense is different than the amount computed by applying our statutory income tax rate to our income before income tax primarily due to tax-exempt interest income and tax-exempt income from the increase in the cash surrender value on life insurance. In addition, the three and six month periods ending June 30, 2023 include reductions of $0.01 million and $0.04 million, respectively, of income tax expense related to the impact of the excess value of stock awards that vested and stock options that were exercised as compared to the initial fair values that were expensed. These amounts during the same periods in 2022 were $0.02 million and $0.08 million, respectively.

We assess whether a valuation allowance should be established against our deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. The ultimate realization of this asset is primarily based on generating future income. We concluded at June 30, 2023, June 30, 2022 and December 31, 2022 that the realization of substantially all of our deferred tax assets continues to be more likely than not.

At both June 30, 2023 and December 31, 2022, we had approximately $0.2 million, respectively, of gross unrecognized tax benefits. We do not expect the total amount of unrecognized tax benefits to significantly increase or decrease during the remainder of 2023.