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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The provision for income taxes consists of the following:202120202019
Current Federal$13,437 $14,186 $8,263 
Current State2,547 2,265 1,004 
Deferred Federal2,056 (2,765)3,545 
Deferred State608 (852)(795)
Total$18,648 $12,834 $12,017 

Effective tax rates differ from the federal statutory rate of 21% for 2021, 2020 and 2019 applied to income before income taxes due to the following:
 202120202019
Statutory Rate Times Pre-tax Income$21,585 $15,759 $14,960 
Add (Subtract) the Tax Effect of:
Income from Tax-exempt Loans and Investments(3,872)(2,681)(2,246)
State Income Tax, Net of Federal Tax Effect2,492 1,116 165 
General Business Tax Credits(1,013)(1,085)(1,039)
Company Owned Life Insurance(321)(484)(421)
Other Differences(223)209 598 
Total Income Taxes$18,648 $12,834 $12,017 

The net deferred tax liability at December 31 consists of the following:
 20212020
Deferred Tax Assets:  
Allowance for Credit Losses$8,470 $10,568 
Lease Liability (Operating Leases)1,542 2,055 
Deferred Compensation and Employee Benefits878 823 
Other-than-temporary Impairment246 246 
Accrued Expenses1,288 1,200 
Business Combination Fair Value Adjustments138 777 
Pension and Postretirement Plans200 200 
Other Real Estate Owned— 25 
Non-Accrual Loan Interest Income567 678 
Net Operating Loss Carryforward447 1,010 
Mortgage Servicing Rights49 — 
Other1,860 1,000 
Total Deferred Tax Assets15,685 18,582 
Deferred Tax Liabilities:  
Depreciation(2,496)(2,331)
Leasing Activities, Net(10,878)(10,638)
Unrealized Gain on Securities(4,366)(9,734)
FHLB Stock Dividends(199)(206)
Prepaid Expenses(646)(641)
Intangibles(1,651)(1,670)
Deferred Loan Fees(790)(730)
Mortgage Servicing Rights— (9)
Right of Use Asset (Operating Leases)(1,515)(2,028)
Other(75)(230)
Total Deferred Tax Liabilities(22,616)(28,217)
Valuation Allowance— — 
Net Deferred Tax Liability$(6,931)$(9,635)
Under the Internal Revenue Code, through 1996, three acquired banking companies, which are now a part of the Company’s single banking subsidiary, were allowed a special bad debt deduction related to additions to tax bad debt reserves established for the purpose of absorbing losses. The acquired banks were formerly known as River Valley Financial Bank (acquired in March 2016), Peoples Community Bank (acquired in October 2005) and First American Bank (acquired in January 1999). Subject to certain limitations, these banks were permitted to deduct from taxable income an allowance for bad debts based on a percentage of taxable income before such deductions or actual loss experience. Each of the banks generally computed its annual addition to its bad debt reserves using the percentage of taxable income method; however, due to certain limitations in 1996, the banks were only allowed a deduction based on actual loss experience.

Retained earnings at December 31, 2021, include approximately $5,095 for which no provision for federal income taxes has been made. This amount represents allocations of income for allowable bad debt deductions. Reduction of amounts so allocated for purposes other than tax bad debt losses will create taxable income, which will be subject to the then current corporate income tax rate. It is not contemplated that amounts allocated to bad debt deductions will be used in any manner to create taxable income. The unrecorded deferred income tax liability on the above amount at December 31, 2021 was approximately $1,070.

As of December 31, 2021, the Company had net operating loss carryforwards of $11,317, which expire in years ranging from 2022 through 2039. These net operating loss carryforwards were primarily derived from the acquisition of First Security and Citizens First.

 Unrecognized Tax Benefits

The Company had no unrecognized tax benefits as of December 31, 2021, 2020, and 2019, and did not recognize any increase in unrecognized benefits during 2021 relative to any tax positions taken in 2021. Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, it is the Company’s policy to record such accruals in its income tax expense accounts; no such accruals existed as of December 31, 2021, 2020, and 2019. The Company and its corporate subsidiaries file a consolidated U.S. Federal income tax return, which is subject to examination for all years after 2016. The Company and its corporate subsidiaries doing business in Indiana file a combined Indiana unitary return, which is subject to examination for all years after 2016.