Investar Holding Corp Income Taxes Disclosure

NOTE 16. INCOME TAXES

 

Income tax expense is displayed in the table below for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands).

 

		December 31,
		2024				2023				2022
Current federal income tax expense		$	3,352			$	3,971			$	9,075
Current state income tax expense			143				129				219
Deferred federal income tax expense			659				(350	)			(655	)
Total income tax expense		$	4,154			$	3,750			$	8,639

 

The provision for federal income taxes differs from that computed by applying the federal statutory rate of 21% as indicated in the following analysis for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands).

 

		December 31,
		2024				2023				2022
Tax based on statutory rate		$	5,125			$	4,290			$	9,313
(Decrease) increase resulting from:
Effect of tax-exempt interest income			(567	)			(533	)			(599	)
BOLI impact			(741	)			(297	)			(274	)
State taxes			143				129				219
Other			194				161				(20	)
Total income tax expense		$	4,154			$	3,750			$	8,639
Effective tax rate			17.0	%			18.4	%			19.5	%

 

The Company records deferred income tax on the tax effect of changes in timing differences.

 

The net deferred tax asset was comprised of the following items as of the dates indicated (dollars in thousands).

 

		December 31,
		2024				2023
Deferred tax liabilities:
Depreciation		$	(2,674	)		$	(3,072	)
FHLB stock dividend			(90	)			(88	)
Basis difference in acquired assets and liabilities			(1,029	)			(1,018	)
Operating lease ROU asset			(428	)			(443	)
Other			(94	)			(55	)
Gross deferred tax liability			(4,315	)			(4,676	)
Deferred tax assets:
Allowance for credit losses			5,620				6,474
Unrealized loss on AFS securities			13,085				12,216
NOL carryforward			—				69
Deferred compensation			1,169				1,117
Basis difference in acquired assets and liabilities			201				270
Employee and director stock awards			534				580
Operating lease liability			448				463
Unearned loan fees			208				227
Other			170				170
Gross deferred tax asset			21,435				21,586
Net deferred tax asset		$	17,120			$	16,910

 

The Company acquired NOL carryforwards through tax free acquisitions. As of December 31, 2024, the Company had fully utilized all NOL carryforwards. As of  December 31, 2023, the Company’s gross NOL carryforwards were approximately $0.3 million.

 

The Company files income tax returns under U.S. federal jurisdiction and the states of Alabama, Florida, Texas and Louisiana, although the state of Louisiana does not assess an income tax on income resulting from banking operations. The Company is open to examination in the U.S. and the states of Louisiana, Alabama, and Florida for tax years ended December 31, 2021 through December 31, 2024; and Texas for tax years ended December 31, 2020 through  December 31, 2024.