Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of deferred tax assets and liabilities

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Corporation’s deferred tax assets and liabilities are as follows:


December 31 (In thousands)	2022		2021
Deferred tax assets:
Allowance for credit losses	$	18,615	$	18,153
Accumulated other comprehensive loss – Pension Plan	1,776		1,540
Accumulated other comprehensive loss – Unrealized losses on swaps	—		55
Accumulated other comprehensive loss – Unrealized losses on debt securities AFS	25,443		—
Deferred compensation	6,255		6,294
OREO valuation adjustments	11		909
Net deferred loan fees	1,898		2,569
Deferred contract bonus	317		432
Nonvested equity-based compensation	2,827		2,694
Net operating loss ("NOL") carryforward	2,654		3,197
Capital loss carryforward	299		—
Fixed assets	510		249
Operating lease liability	4,206		3,111
Partnership adjustments	—		69
Other	1,950		1,854
Total deferred tax assets	$	66,761	$	41,126
Deferred tax liabilities:
Accumulated other comprehensive loss - Unrealized gains on debt securities AFS	$	—	$	5,623
Deferred investment income	4,890		6,363
Pension Plan	19,678		19,182
MSRs	3,445		3,333
Partnership adjustments	884		—
Purchase accounting adjustments	952		880
Operating lease right-of-use asset	3,837		2,917
Lessor adjustments	2,325		2,764
Other	565		514
Total deferred tax liabilities	$	36,576	$	41,576
Net deferred tax asset (liability)	$	30,185	$	(450)

Schedule of Components of Income Tax Expense (Benefit)

The components of the provision for federal income taxes are shown below:


December 31, (In thousands)	2022		2021		2020
Currently payable
Federal	$	22,574	$	28,726	$	22,769
State	1,180		1,382		1,432
Amortization of qualified affordable housing projects	7,743		7,313		7,046

Deferred
Federal	464		(3,006)		(4,812)
State	147		(125)		287

Total	$	32,108	$	34,290	$	26,722

Schedule of income tax rate reconciliation

The following is a reconciliation of income tax expense to the amount computed at the statutory federal corporate income tax rate of 21% for the years ended December 31, 2022, 2021 and 2020.


	2022		2021		2020
Statutory federal corporate income tax rate	21.0	%	21.0	%	21.0	%
Changes in rates resulting from:
Tax exempt interest income, net of disallowed interest	(1.6)	%	(1.2)	%	(1.5)	%
Bank owned life insurance	(0.7)	%	(0.5)	%	(0.7)	%
Investments in qualified affordable housing projects, net of tax benefits	(0.8)	%	(0.8)	%	(1.1)	%
KSOP dividend deduction	(0.5)	%	(0.5)	%	(0.6)	%
Other	0.4	%	0.2	%	0.2	%
Effective Tax Rate	17.8	%	18.2	%	17.3	%

Schedule of Unrecognized Tax Benefits Roll Forward

The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits.


(In thousands)	2022		2021		2020
January 1 Balance	$	339	$	633	$	954
Additions based on tax positions related to the current year	—		—		12
Additions for tax positions of prior years	25		10		—
Reductions for tax positions of prior years	—		—		—
Reductions due to statute of limitations	(295)		(304)		(333)
December 31 Balance	$	69	$	339	$	633