Note 6 - INCOME TAXES

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

INCOME TAXES

NOTE 6 – INCOME TAXES

A reconciliation of the expected federal income tax expense to the income tax expense included in the consolidated statements of income is as follows for the three and six months ended June 30, 2022 and June 30, 2021:

	For the Three Months Ended June 30,								For the Six Months Ended June 30,
	2022				2021				2022				2021
			% of				% of				% of				% of
			Pretax				Pretax				Pretax				Pretax
	Amount		Income		Amount		Income		Amount		Income		Amount		Income
	(dollars in thousands)
Computed "expected" tax expense	$	3,514	21.0	%	$	5,699	21.0	%	$	8,965	21.0	%	$	10,219	21.0	%
Tax exempt income, net		(2,476)	(14.8)			(1,802)	(6.6)			(4,698)	(11.0)			(3,521)	(7.2)
Bank-owned life insurance		(73)	(0.4)			(95)	(0.4)			(146)	(0.3)			(194)	(0.4)
State income taxes, net of federal benefit, current year		982	5.9			1,247	4.6			2,273	5.3			2,271	4.7
Provision adjustment from accounting method change		—	—			—	—			(1,181)	(2.8)			—	—
Tax credits		(289)	(1.7)			(57)	(0.2)			(531)	(1.2)			(114)	(0.2)
Income from tax credit equity investments		158	0.9			—	—			(143)	(0.3)			—	—
Acquisition costs		242	1.4			—	—			372	0.9			—	—
Excess tax benefit on stock options exercised and restricted stock awards vested		(40)	(0.2)			(40)	(0.1)			(474)	(1.1)			(204)	(0.4)
Other		(526)	(3.2)			(164)	(0.7)			(612)	(1.5)			(128)	(0.3)
Federal and state income tax expense	$	1,492	8.9	%	$	4,788	17.6	%	$	3,825	9.0	%	$	8,329	17.2	%