Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

v3.24.2
INCOME TAXES
 12 Months Ended
Dec. 31, 2023
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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in Thousands)
2023
2022
2021
Current:
Federal
$
11,630
$
10,646
$
12,039
State
1,893
1,022
1,044
13,523
11,668
13,083
Deferred:
Federal
(391)
(2,994)
(3,246)
State
(351)
(899)
(10)
Change in Valuation
 
Allowance
259
23
8
(483)
(3,870)
(3,248)
Total:
Federal
11,239
7,652
8,793
State
1,542
123
1,034
Change in Valuation
 
Allowance
259
23
8
Total
$
13,040
$
7,798
$
9,835
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)
2023
2022
2021
Tax Expense at Federal
 
Statutory Rate
$
13,411
$
8,625
$
10,385
Increases (Decreases) Resulting From:
Tax-Exempt Interest
 
Income
(259)
(248)
(271)
State Taxes, Net of Federal
 
Benefit
1,218
94
819
Other
(1,695)
(546)
375
Change in Valuation
 
Allowance
259
23
8
Tax-Exempt Cash Surrender
 
Value
 
Life Insurance Benefit
(187)
(175)
(173)
Noncontrolling Interest
293
25
(1,308)
Actual Tax Expense
$
13,040
$
7,798
$
9,835
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, 2023 and 2022 are as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in Thousands)
2023
2022
Deferred Tax Assets Attributable
 
to:
Allowance for Credit Losses
$
7,236
$
6,042
Accrued Pension/SERP
144
1,530
State Net Operating Loss and Tax
 
Credit Carry-Forwards
2,069
1,920
Other Real Estate Owned
887
917
Accrued SERP Liability
2,594
3,246
Lease Liability
5,911
4,547
Net Unrealized Losses on Investment Securities
8,601
12,499
Other
2,665
3,043
Investment in Partnership
3,241
1,544
Total Deferred
 
Tax Assets
$
33,348
$
35,288
Deferred Tax Liabilities
 
Attributable to:
Depreciation on Premises and Equipment
$
3,733
$
3,382
Deferred Loan Fees and Costs
2,614
2,372
Intangible Assets
3,344
3,310
Accrued Pension Liability
1,688
1,043
Right of Use Asset
5,829
4,474
Investments
469
469
Other
1,851
2,099
Total Deferred
 
Tax Liabilities
19,528
17,149
Valuation
 
Allowance
1,930
1,671
Net Deferred Tax
 
Asset
$
11,890
$
16,468
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 $
1.9
 
million and $
1.7
 
million is recorded at December 31, 2023 and December 31, 2022,
respectively.
 
At December 31, 2023, the Company had state loss and tax credit carry-forwards of
 
approximately $
2.1
 
million,
which expire at various dates from
2024
 
through
2037
.
The following table presents a reconciliation of the beginning and ending amount
 
of unrecognized tax benefits:.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in Thousands)
2023
2022
2021
Balance at January 1,
$
136
$
52
$
-
Additions Based on Tax
 
Positions Related to Current Year
97
84
52
Balance at December 31
$
233
$
136
$
52
Of this total, $
0.2
 
million represents the amount of unrecognized tax benefits that, if recognized, would favorably
 
affect the
effective tax rate in future periods. The Company does not
 
expect the total amount of unrecognized tax benefits to significantly
increase or decrease in the next twelve months.
 
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, 2023, 2022,
 
and 2021.
 
There were
no
 
amounts accrued in the
Consolidated Statements of Financial Condition for penalties and interest
 
as of December 31, 2023 and 2022.
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 2020.