Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Net Deferred Tax Asset

Significant components of the Corporation’s net deferred tax asset at December 31, 2020 and 2019 are shown below.

(Dollars in thousands)	2020			2019
Deferred tax assets:
Allowance for loan and lease losses	$	2,810		$	1,998
Loan fees		1,908			227
Deferred compensation		722			581
Benefit plans		68			127
Unrealized loss on securities		—			34
Sale/leaseback adjustment		—			—
Lease adjustments		219			231
Business combination adjustments		148			164
Acquired NOL, Section 1231, and charitable contribution carryforwards		91			862
Acquired AMT carryforward		—			860
Other		101			114
		6,067			5,198
Deferred tax liabilities:
Depreciation		(394	)		(717	)
Bond accretion		(30	)		(23	)
Goodwill and intangibles		(359	)		(354	)
Prepaid expenses		(474	)		(405	)
Business combination adjustments		(641	)		(240	)
Benefit plans		(549	)		(649	)
Unrealized gain on securities		(1	)		—
		(2,448	)		(2,388	)
Deferred tax asset, net	$	3,619		$	2,810

Provision for Income Taxes

The provision for income taxes consists of the following:

(Dollars in thousands)	2020			2019		2018
Current tax provision
Federal	$	6,340		$	2,875	$	812
State		157			185		—
Total current tax provision		6,497			3,060		812
Deferred tax (benefit) expense
Federal	$	(1,367	)		665	$	1,317
State		—			—		—
Total deferred tax expense	$	(1,367	)		665		1,317
Total provision for income taxes	$	5,130		$	3,725	$	2,129

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the federal income tax provision at the statutory rate of 21% for 2020, 2019 and 2018 to Mid Penn's actual federal income tax provision at its effective rate is as follows:

(Dollars in thousands)	2020			2019			2018
Provision at the expected statutory rate	$	6,581		$	4,499		$	2,672
Effect of tax-exempt income		(499	)		(683	)		(704	)
Effect of investment in life insurance		(63	)		(66	)		(60	)
State income taxes, net of federal tax benefit		124			146			—
Nondeductible interest		26			59			40
Low income housing partnership tax credits		(861	)		(83	)		(168	)
Nondeductible merger and acquisition expense		—			—			193
Rate change adjustment		—			—			—
Other items		(178	)		(147	)		156
Provision for income taxes	$	5,130		$	3,725		$	2,129