Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

v3.22.0.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax [Abstract]  
INCOME TAXES
Note 13
 
INCOME TAXES
The provision for income taxes reflected in the statements of comprehensive
 
income is comprised of the following components:
(Dollars in Thousands)
2021
2020
2019
Current:
Federal
$
12,039
$
8,625
$
8,481
State
1,044
1,658
247
13,083
10,283
8,728
Deferred:
Federal
(3,246)
(143)
(680)
State
(10)
130
1,913
Change in Valuation
 
Allowance
8
(40)
(8)
(3,248)
(53)
1,225
Total:
Federal
8,793
8,482
7,801
State
1,034
1,788
2,160
Change in Valuation
 
Allowance
8
(40)
(8)
Total
$
9,835
$
10,230
$
9,953
Income taxes provided were different than the tax expense
 
computed by applying the statutory federal income tax rate of
21
% to
pre-tax income as a result of the following:
(Dollars in Thousands)
2021
2020
2019
Tax Expense at Federal
 
Statutory Rate
$
10,385
$
11,106
$
8,560
Increases (Decreases) Resulting From:
Tax-Exempt Interest
 
Income
(271)
(341)
(425)
State Taxes, Net of Federal
 
Benefit
819
1,413
1,342
Other
375
601
294
Change in Valuation
 
Allowance
8
(40)
(8)
Tax-Exempt Cash Surrender
 
Value
 
Life Insurance Benefit
(173)
(173)
(175)
Expense Due to Reduction of Florida Corporate Income Tax
 
Rate
-
-
365
Noncontrolling Interest
(1,308)
(2,336)
-
Actual Tax Expense
$
9,835
$
10,230
$
9,953
Deferred income tax liabilities and assets result from differences between
 
assets and liabilities measured for financial reporting
purposes and for income tax return purposes.
 
These assets and liabilities are measured using the enacted tax rates and laws that
are currently in effect.
 
The net deferred tax asset and the temporary differences comprising
 
that balance at December 31, 2021 and 2020 are as follows:
(Dollars in Thousands)
2021
2020
Deferred Tax Assets Attributable
 
to:
Allowance for Credit Losses
$
5,308
$
6,037
Accrued Pension/SERP
4,468
16,052
State Net Operating Loss and Tax
 
Credit Carry-Forwards
1,984
2,335
Other Real Estate Owned
1,029
1,066
Accrued SERP Liability
2,442
2,104
Lease Liability
2,597
2,581
Net Unrealized Losses on Investment Securities
1,532
-
Other
2,325
2,637
Total Deferred
 
Tax Assets
$
21,685
$
32,812
Deferred Tax Liabilities
 
Attributable to:
Depreciation on Premises and Equipment
$
3,208
$
4,408
Deferred Loan Fees and Costs
2,016
2,824
Intangible Assets
3,276
3,290
Accrued Pension Liability
2,138
4,723
Right of Use Asset
2,453
2,411
Investments
469
469
Other
857
1,165
Total Deferred
 
Tax Liabilities
14,417
19,290
Valuation
 
Allowance
1,648
1,640
Net Deferred Tax Asset
$
5,620
$
11,882
In the opinion of management, it is more likely than not that all of the deferred tax
 
assets, with the exception of certain state net
operating loss carry-forwards and certain state tax credit carry-forwards expected
 
to expire prior to utilization, will be realized.
 
Accordingly, a valuation
 
allowance of $
1.6
 
million is recorded at December 31, 2021.
 
At December 31, 2021, the Company had
state loss and tax credit carry-forwards of approximately $
2.0
 
million, which expire at various dates from
2022
 
through
2041
.
The Company had $
0.1
 
million in unrecognized tax benefits at December 31, 2021 for tax positions relating to
 
current-year
operations.
 
The Company had no unrecognized tax benefits at December 31, 2020 and December
 
31, 2019.
It is the Company’s policy to recognize
 
interest and penalties accrued relative to unrecognized tax benefits in their respective
federal or state income taxes accounts.
 
There were
no
 
penalties and interest related to income taxes recorded in the consolidated
statements of income for the years ended December 31, 2021, 2020, and 2019.
 
There were
no
 
amounts accrued in the
consolidated statements of financial condition for penalties and interest
 
as of December 31, 2021 and 2020.
The Company files a consolidated U.S. federal income tax return and a separate
 
U.S. federal income tax return for CCHL. Each
subsidiary files various returns in states where its banking offices
 
are located.
 
The Company is no longer subject to U.S. federal
or state tax examinations for years before 2018.