Annual report pursuant to Section 13 and 15(d)

Note 15 - Federal Income Taxes

v3.24.0.1
Note 15 - Federal Income Taxes
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

NOTE 15 - FEDERAL INCOME TAXES

 

Income tax expense was as follows (dollars in thousands):

 

   

2023

    

2022

  

Current

   $ 9,988     $ 7,567  

Deferred

     535       766  
    $ 10,523     $ 8,333  

 

The difference between the financial statement tax expense and amount computed by applying the statutory federal tax rate to pretax income was reconciled as follows (dollars in thousands):

 

   

2023

    

2022

  

Statutory rate

     21 %     21 %

Statutory rate applied to income before taxes

   $ 11,287     $ 9,044  

Adjust for:

                

Tax-exempt interest income

     (483 )     (589 )

Bank-owned life insurance

     (190 )     (184 )

Other, net

     (91 )     62  
    $ 10,523     $ 8,333  

 

The realization of deferred tax assets is largely dependent upon future taxable income, future reversals of existing taxable temporary differences and the ability to carryback losses to available tax years. In assessing the need for a valuation allowance, we consider positive and negative evidence, including taxable income in carry-back years, scheduled reversals of deferred tax liabilities, expected future taxable income and tax planning strategies. Management believes it is more likely than not that all of the deferred tax assets at December 31, 2023 will be realized against deferred tax liabilities and projected future taxable income.

 

The net deferred tax asset recorded included the following amounts of deferred tax assets and liabilities (dollars in thousands):

 

   

2023

    

2022

  

Deferred tax assets

                

Allowance for credit losses

   $ 3,663     $ 3,210  

Nonaccrual loan interest

     13       12  

Unrealized loss on securities available for sale

     6,095       8,394  

Other

     262       257  

Gross deferred tax assets

     10,033       11,873  

Valuation allowance

     —       —  

Total net deferred tax assets

     10,033       11,873  
                 

Deferred tax liabilities

                

Depreciation

   $ (1,003 )   $ (1,098 )

Prepaid expenses

     (303 )     (309 )

Net deferred loan costs

     (35 )     (21 )

Accretion

     (1,139 )     (414 )

Other

     (351 )     (319 )

Gross deferred tax liabilities

     (2,831 )     (2,161 )

Deferred tax asset - net

   $ 7,202     $ 9,712  

 

 

 

There were no unrecognized tax benefits at December 31, 2023 and 2022 and the Company does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. The Company is no longer subject to examination by the Internal Revenue Service for years before 2020.