| Income Taxes |
Note 11: Income Taxes Income tax expense (benefit) for the years ending December 31, were as follows: | | | | | | | | | | | | | | | | | | | | | | 2021 | | 2020 | | 2019 | Current federal | | $ | 750 | | $ | 6,269 | | $ | 4,815 | Current state | | | 594 | | | 3,960 | | | 1,151 | Deferred federal | | | 4,445 | | | (135) | | | 3,177 | Deferred state | | | 2,034 | | | (511) | | | 3,259 | Total income tax expenses | | $ | 7,823 | | $ | 9,583 | | $ | 12,402 | | | | | | | | | | |
The following were the components of the deferred tax assets and liabilities as of December 31: | | | | | | | | | 2021 | | 2020 | Allowance for credit losses | | $ | 15,601 | | $ | 11,058 | Deferred compensation | | | 1,378 | | | 1,093 | Goodwill amortization/impairment | | | 980 | | | 2,212 | Stock based compensation | | | 971 | | | 1,356 | Business combination adjustments | | | 940 | | | 255 | OREO write-downs | | | 573 | | | 614 | Federal recognized built-in loss ("RBIL") carryforward | | | 493 | | | 142 | State net operating loss and RBIL carryforward | | | - | | | 60 | Other assets | | | 2,129 | | | 2,182 | Total deferred tax assets | | | 23,065 | | | 18,972 | | | | | | | | Accumulated depreciation on premises and equipment | | | (1,701) | | | (1,237) | Mortgage servicing rights | | | (2,113) | | | (1,261) | Amortization of core deposit intangible | | | (4,550) | | | (171) | State tax benefits | | | (641) | | | (930) | Securities | | | (2,620) | | | - | Other liabilities | | | (1,931) | | | (1,481) | Total deferred tax liabilities | | | (13,556) | | | (5,080) | Net deferred tax asset before adjustments related to other comprehensive income | | | 9,509 | | | 13,892 | Tax effect of adjustments related to other comprehensive income | | | (3,410) | | | (5,771) | Net deferred tax asset | | $ | 6,099 | | $ | 8,121 | | | | | | | |
At December 31, 2021, the Company had $2,348,000 of federal net operating loss carryforward, which may be carried forward indefinitely, and no state net operating loss carryforward. The components of the provision for deferred income tax expense (benefit) for the years ending December 31, were as follows: | | | | | | | | | | | | | | | | | | | 2021 | | 2020 | | 2019 | Provision for credit losses | $ | (78) | | $ | (4,976) | | $ | (279) | Deferred compensation | | 1,388 | | | (186) | | | (242) | Amortization of core deposit intangible | | (18) | | | 27 | | | 14 | Stock based compensation | | 385 | | | 266 | | | (245) | Business combination adjustments | | 80 | | | 1,292 | | | 985 | OREO write-downs | | 1,543 | | | 1,317 | | | 406 | Federal net operating loss and RBIL carryforward | | (351) | | | 198 | | | 1,859 | State net operating loss and RBIL carryforward | | 60 | | | 266 | | | 3,708 | Depreciation | | (1,737) | | | 491 | | | 303 | Mortgage servicing rights | | 852 | | | (518) | | | (431) | Goodwill amortization/impairment | | 1,232 | | | 1,244 | | | 1,242 | State tax benefits | | (491) | | | 3 | | | (912) | Securities | | 4,188 | | | - | | | - | Other, net | | (574) | | | (70) | | | 28 | Total deferred tax (benefit) expense | $ | 6,479 | | $ | (646) | | $ | 6,436 | | | | | | | | | |
Effective tax rates differ from federal statutory rates applied to financial statement income for the years ended December 31, due to the following: | | | | | | | | | | | | 2021 | | 2020 | | 2019 | Tax at statutory federal income tax rate | | $ | 5,852 | | $ | 7,856 | | $ | 10,890 | Nontaxable interest income, net of disallowed interest deduction | | | (1,069) | | | (1,067) | | | (1,409) | BOLI income | | | (292) | | | (271) | | | (480) | State income taxes, net of federal benefit | | | 2,054 | | | 2,570 | | | 3,496 | Stock based compensation | | | 54 | | | 297 | | | (207) | Transaction costs | | | 396 | | | - | | | - | Other, net | | | 828 | | | 198 | | | 112 | Total tax at effective tax rate | | $ | 7,823 | | $ | 9,583 | | $ | 12,402 | | | | | | | | | | |
The Company evaluated positive and negative evidence in order to determine if it was more likely than not that the deferred tax asset would be recovered through future income. Significant positive evidence evaluated included recent and projected earnings, significantly improved asset quality and an improved capital position. No significant negative evidence was noted.
|