Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 14 - INCOME TAXES

Income taxes were as follows for the years ended December 31:

	2023			2022		2021
Current	$	8,256		$	6,973	$	5,111
State		68			152		587
Deferred		(675	)		483		1,319
Income taxes	$	7,649		$	7,608	$	7,017

Effective tax rates differed from the statutory federal income tax rate of 21% in 2023, 2022 and 2021 due to the following:

	2023			2022			2021
Income taxes computed at the statutory federal tax    rate	$	10,629		$	9,878		$	9,988
Add (subtract) tax effect of:
Nontaxable interest income, net of nondeductible    interest expense		(1,938	)		(1,666	)		(1,315	)
Low income housing tax credit		(620	)		(679	)		(1,402	)
Cash surrender value of BOLI		(233	)		(207	)		(252	)
Other		(189	)		282			(2	)
Income tax expense	$	7,649		$	7,608		$	7,017

Year-end deferred tax assets and liabilities were due to the following:

	2023			2022
Deferred tax assets
Lease liability	$	343			—
Allowance for credit losses		7,711			6,106
Deferred compensation		1,155			1,143
Unfunded commitment liability		819			—
Pension costs		—			—
Intangible assets		103			154
Net operating loss carryforward		6			699
Deferred loan fees		576			347
Unrealized loss on securities available for sale		11,633			14,218
Unrealized loss on securities purchased		1,976			1,966
Other		923			295
Deferred tax asset		25,245			24,928
Deferred tax liabilities
Tax depreciation in excess of book depreciation		(2,625	)		(2,124	)
Discount accretion on securities		(502	)		(244	)
FHLB stock dividends		(223	)		(822	)
Purchase accounting adjustments		(1,841	)		(2,220	)
Unrealized gain on securities available for sale		—			—
Right of use asset		(343	)		—
Prepaids		(314	)		(334	)
Other		(1,040	)		(735	)
Deferred tax liability		(6,888	)		(6,479	)
Net deferred tax asset	$	18,357		$	18,449

NOTE 14 - INCOME TAXES (Continued)

At December 31, 2023, the Company had $30 in net operating losses subject to 382 limitations. No valuation allowance was established at December 31, 2023 and 2022, due to the Company’s ability to carryforward net operating losses to taxes paid in future years and certain tax strategies, coupled with the anticipated future income as evidenced by the Company’s earning potential.

There is currently no liability for uncertain tax positions and no known unrecognized tax benefits.

The Company’s federal tax returns for taxable years through 2019 have been closed for purposes of examination by the Internal Revenue Service.