Note 7 - INCOME TAXES

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

INCOME TAXES

NOTE 7 – 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 nine months ended September 30, 2022 and September 30, 2021:

	For the Three Months Ended September 30,								For the Nine Months Ended September 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	$	7,165	21.0	%	$	8,293	21.0	%	$	16,130	21.0	%	$	18,512	21.0	%
Tax exempt income, net		(3,003)	(8.8)			(2,032)	(5.1)			(7,701)	(10.0)			(5,553)	(6.3)
Bank-owned life insurance		(127)	(0.4)			(93)	(0.2)			(273)	(0.4)			(287)	(0.3)
State income taxes, net of federal benefit, current year		1,616	4.7			1,799	4.6			3,889	5.1			4,070	4.6
Provision adjustment from accounting method change		—	—			—	—			(1,181)	(1.5)			—	—
Tax credits		(359)	(1.1)			(57)	(0.1)			(890)	(1.2)			(171)	(0.2)
Income from tax credit equity investments		(337)	(1.0)			(3)	—			(939)	(1.2)			(8)	—
Acquisition costs		78	0.2			—	—			450	0.6			—	—
Excess tax benefit on stock options exercised and restricted stock awards vested		(46)	(0.1)			(107)	(0.3)			(520)	(0.7)			(311)	(0.4)
Other		(163)	(0.5)			129	0.2			(316)	(0.4)			6	—
Federal and state income tax expense	$	4,824	14.1	%	$	7,929	20.1	%	$	8,649	11.3	%	$	16,258	18.4	%