Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

v3.23.4
INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax [Abstract]  
INCOME TAXES
Note 13
 
INCOME TAXES
The provision for income taxes reflected in the Consolidated Statements of Comprehensive
 
Income is comprised of the following
components:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2022
(Dollars in Thousands)
(As Restated)
2021
2020
Current:
Federal
$
10,646
$
12,039
$
8,625
State
1,022
1,044
1,658
11,668
13,083
10,283
Deferred:
Federal
(2,994)
(3,246)
(143)
State
(899)
(10)
130
Change in Valuation
 
Allowance
23
8
(40)
(3,870)
(3,248)
(53)
Total:
Federal
7,652
8,793
8,482
State
123
1,034
1,788
Change in Valuation
 
Allowance
23
8
(40)
Total
$
7,798
$
9,835
$
10,230
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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2022
(Dollars in Thousands)
(As Restated)
2021
2020
Tax Expense at Federal
 
Statutory Rate
$
8,625
$
10,385
$
11,106
Increases (Decreases) Resulting From:
Tax-Exempt Interest
 
Income
(248)
(271)
(341)
State Taxes, Net of Federal
 
Benefit
94
819
1,413
Other
(546)
375
601
Change in Valuation
 
Allowance
23
8
(40)
Tax-Exempt Cash Surrender
 
Value
 
Life Insurance Benefit
(175)
(173)
(173)
Noncontrolling Interest
25
(1,308)
(2,336)
Actual Tax Expense
$
7,798
$
9,835
$
10,230
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, 2022 and 2021 are as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(As Restated)
(Dollars in Thousands)
2022
2021
Deferred Tax Assets Attributable
 
to:
Allowance for Credit Losses
$
6,042
$
5,308
Accrued Pension/SERP
1,530
4,468
State Net Operating Loss and Tax
 
Credit Carry-Forwards
1,920
1,984
Other Real Estate Owned
917
1,029
Accrued SERP Liability
3,246
2,442
Lease Liability
4,547
2,597
Net Unrealized Losses on Investment Securities
12,499
1,532
Other
3,043
2,325
Investment in Partnership
1,544
Total Deferred
 
Tax Assets
$
35,288
$
21,685
Deferred Tax Liabilities
 
Attributable to:
Depreciation on Premises and Equipment
$
3,382
$
3,208
Deferred Loan Fees and Costs
2,372
2,016
Intangible Assets
3,310
3,276
Accrued Pension Liability
1,043
2,138
Right of Use Asset
4,474
2,453
Investments
469
469
Other
2,099
857
Total Deferred
 
Tax Liabilities
17,149
14,417
Valuation
 
Allowance
1,671
1,648
Net Deferred Tax Asset
$
16,468
$
5,620
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, 2022.
 
At December 31, 2022, the Company had
state loss and tax credit carry-forwards of approximately $
1.9
 
million, which expire at various dates from
2023
 
through
2037
.
At December 31, 2022, and December 31, 2021, the Company had
no
 
material unrecognized gross tax benefits.
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, 2022, 2021,
 
and 2020.
 
There were
no
 
amounts accrued in the
Consolidated Statements of Financial Condition for penalties and interest
 
as of December 31, 2022 and 2021.
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 2019.