Note 5 - INCOME TAXES

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

INCOME TAXES

NOTE 5 – 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, 2023 and 2022:

	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2023				2022				2023				2022
			% of				% of				% of				% of
			Pretax				Pretax				Pretax				Pretax
	Amount		Income		Amount		Income		Amount		Income		Amount		Income
	(dollars in thousands)
Computed "expected" tax expense	$	5,661	21.0	%	$	7,165	21.0	%	$	18,751	21.0	%	$	16,130	21.0	%
Tax exempt income, net		(3,705)	(13.7)			(3,003)	(8.8)			(10,103)	(11.3)			(7,701)	(10.0)
Bank-owned life insurance		(376)	(1.4)			(127)	(0.4)			(700)	(0.8)			(273)	(0.4)
State income taxes, net of federal benefit, current year		955	3.5			1,616	4.7			3,383	3.8			3,889	5.1
Provision adjustment from accounting method change		—	—			—	—			—	—			(1,181)	(1.5)
Tax credits		(202)	(0.7)			(359)	(1.1)			(411)	(0.5)			(890)	(1.2)
Income from tax credit equity investments		(449)	(1.7)			(337)	(1.0)			(1,340)	(1.5)			(939)	(1.2)
Acquisition costs		—	—			78	0.2			—	—			450	0.6
Excess tax benefit on stock options exercised and restricted stock awards vested		(7)	(0.0)			(46)	(0.1)			(451)	(0.5)			(520)	(0.7)
Other		(37)	(0.2)			(163)	(0.4)			(540)	(0.6)			(316)	(0.4)
Federal and state income tax expense	$	1,840	6.8	%	$	4,824	14.1	%	$	8,589	9.6	%	$	8,649	11.3	%