Note 14 - Federal and State Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Federal and state income tax expense

	2019		2018		2017
	(dollars in thousands)
Current	$	8,255	$	2,723	$	10,976
Deferred		6,364		6,292		(6,030)
	$	14,619	$	9,015	$	4,946

Reconciliation of the expected federal income tax expense

	Year Ended December 31,
	2019				2018				2017
			% of				% of				% of
			Pretax				Pretax				Pretax
	Amount		Income		Amount		Income		Amount		Income
	(dollars in thousands)
Computed "expected" tax expense	$	15,126	21.0	%	$	10,948	21.0	%	$	14,229	35	%
Tax exempt income, net		(4,470)	(6.2)			(3,958)	(7.6)			(5,654)	(13.9)
Bank-owned life insurance		(360)	(0.5)			(343)	(0.6)			(631)	(1.5)
State income taxes, net of federal benefit, current year		3,668	5.1			2,681	5.2			1,765	4.3
Change in unrecognized tax benefits		(93)	(0.1)			(45)	(0.1)			(54)	(0.1)
Goodwill impairment		630	0.9			—	—			—	—
Intended liquidation of bank-owned life insurance		790	1.1			—	—			—	—
Tax credits		(705)	(1.0)			(154)	(0.3)			(341)	(0.8)
Acquisition costs		—	—			227	0.4			—	—
Excess tax benefit on stock options exercised and restricted stock awards vested		(287)	(0.4)			(425)	(0.8)			(1,220)	(3.0)
Re-measurement of deferred tax asset to incorporate newly enacted tax rates		—	—			—	—			(2,919)	(7.2)
Other		320	0.4			84	0.1			(229)	(0.6)
Federal and state income tax expense	$	14,619	20.3	%	$	9,015	17.3	%	$	4,946	12.2	%

Schedule of Unrecognized tax benefits

	2019		2018
	(dollars in thousands)
Balance, beginning	$	1,249	$	1,293
Impact of tax positions taken during current year		375		287
Gross increase (decrease) related to tax positions of prior years		44		(178)
Reduction as a result of a lapse of the applicable statute of limitations		(414)		(153)
Balance, ending	$	1,254	$	1,249

Schedule of Deferred Tax Assets and Liabilities

	2019		2018
	(dollars in thousands)
Deferred tax assets:
Alternative minimum tax credits	$	—	$	2,911
Historic tax credits		68		1,937
Net unrealized losses on securities available for sale and derivative instruments		126		1,687
Compensation		8,433		6,772
Loan/lease losses		11,332		9,549
Net operating loss carryforwards, federal and state		739		849
Other		605		53
		21,303		23,758
Deferred tax liabilities:
Premises and equipment		4,616		2,717
Equipment financing leases		16,252		18,329
Acquisition fair value adjustments		3,963		2,739
Intended liquidation of bank-owned life insurance		850		—
Gain on sale of assets and liabilities of subsidiary		794		—
Investment accretion		28		31
Deferred loan origination fees, net		704		482
Other		832		424
		28,039		24,722
Net deferred tax liabilities	$	(6,736)	$	(964)

Change in deferred income taxes

	2019		2018		2017
	(dollars in thousands)
Provision for income taxes	$	6,364	$	6,292	$	(6,030)
Net deferred tax asset resulting from market value adjustments of acquisitions		(381)		(52)		243
Net deferred tax liabilities resulting from sale of bank subsidiary		(1,644)		—		—
Re-measurement of deferred tax asset to incorporate newly enacted tax rates		—		—		2,919
Statement of stockholders' equity- Other comprehensive income (loss)		1,433		(1,000)		668
	$	5,772	$	5,240	$	(2,200)