Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense for the years ended December 31, were calculated using the asset and liability method as follows:


(Dollars in thousands)	2020		2019		2018
Current expense:
Federal	$	11,305	$	7,728	$	6,485
State	4,542		3,028		2,835
Total current expense	15,847		10,756		9,320
Deferred benefit:
Federal	(3,940)		(339)		(392)
State	(1,735)		(36)		(112)
Total deferred benefit	(5,675)		(375)		(504)

Total income tax expense	$	10,172	$	10,381	$	8,816

Schedule of Effective Income Tax Rate Reconciliation

The provision for income taxes differs from the amount computed by applying the statutory U.S. federal income tax rate of 21% for 2020, 2019, and 2018 to income before taxes as follows:


(Dollars in thousands)	2020			2019			2018
Computed income tax expense at statutory rate	$	8,742		$	9,362		$	7,916
State income taxes, net of federal tax benefit	2,218			2,364			2,151
Tax-exempt income, net of disallowance	(865)			(894)			(1,034)
Bank-owned life insurance income, net	(123)			(134)			(141)

Tax expense (benefit) from stock compensation	25			(137)			(302)
Other	175			(180)			226
Total income tax expense	$	10,172		$	10,381		$	8,816

Effective income tax rate	24.4		%	23.3		%	23.4		%

Schedule of Deferred Tax Assets and Liabilities

At December 31, the tax effects of each type of income and expense item that give rise to deferred taxes are as follows:


(Dollars in thousands)	2020		2019
Deferred tax asset:
Allowance for loan losses	$	12,415	$	9,383
Depreciation	2,174		2,355



Supplemental employee retirement plans	717		695
Non-accrual interest	610		793
Stock-based compensation expense	662		573
Lease liability	4,886		5,054
Cashflow hedge swap	791		—
Deferred fees on PPP loans	2,808		—
Other	343		334
Total	25,406		19,187

Deferred tax liability:
Goodwill	1,576		1,579
Net unrealized gains on equity securities	31		37
Net unrealized gains on debt securities	6,896		2,988
Deferred origination costs	645		725
Lease ROU asset	4,886		5,054
Other	82		72
Total	14,116		10,455

Net deferred tax asset	$	11,290	$	8,732