Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

The following is a summary of income tax expense for the years ended December 31, 2019, 2018, and 2017:



	2019			2018			2017
Current – federal	$	8,265		$	7,520		$	8,978
Current – state	499			66			29
Deferred – federal	(204		)	(1,076		)	376
Deferred tax adjustment related to reduction in U.S. federal statutory income tax rate	0			0			3,009
Income tax expense	$	8,560		$	6,510		$	12,392

The reconciliation of income tax attributable to pre-tax income at the federal statutory tax rates to income tax expense is as follows:



	2019			%		2018			%		2017			%
Tax at statutory rate	$	10,214		21.0		$	8,448		21.0		$	12,688		35.0
Tax exempt income, net	(1,382		)	(2.8	)	(1,403		)	(3.5	)	(1,899		)	(5.2	)
Deferred tax adjustment related to reduction in U.S. federal statutory income tax rate	0			0.0		0			0.0		3,009			8.3
Bank owned life insurance	(276		)	(0.6	)	(296		)	(0.7	)	(581		)	(1.6	)
Other	4			0.0		(239		)	(0.6	)	(825		)	(2.3	)
Income tax expense	$	8,560		17.6		$	6,510		16.2		$	12,392		34.2

The following table sets forth deferred taxes as of December 31, 2019 and 2018 based on the enacted U.S. statutory federal income tax rate of 21%.



	2019		2018
Deferred tax assets:
Allowance for loan losses	$	4,014	$	3,088
Fair value adjustments – business combination	854		966
Deferred compensation	2,405		2,056
Post-retirement benefits	754		836
Unrealized loss on interest rate swap	102		42
Nonaccrual loan interest	557		589
Accrued expenses	1,210		1,254
Deferred fees and costs	472		588
Unrealized loss on securities available for sale	0		940
Operating lease liability	4,216		0
Other	381		366
	14,965		10,725
Deferred tax liabilities:
Unrealized gain on securities available for sale	1,913		0
Premises and equipment	2,089		1,459
Unrealized gain on trading securities	340		63
Intangibles – section 197	2,305		2,414
Mortgage servicing rights	330		314
Operating lease asset	4,136		0
Other	259		178
	11,372		4,428
Net deferred tax asset	$	3,593	$	6,297