Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Components of Income Tax Expense (Benefit)

The provision for income taxes follows (dollars in thousands):


	Year Ended December 31,
	2019		2018		2017
Federal:
Current	$	7,081	$	5,780	$	8,456
Effect of tax act		—		—		2,710
Deferred		(228)		179		(828)
		6,853		5,959		10,338
State:
Current		4,771		3,819		3,604
Deferred		133		129		(302)
		4,904		3,948		3,302
	$	11,757	$	9,907	$	13,640

Schedule of Deferred Tax Assets and Liabilities

The components of the net deferred tax asset, included in other assets, are as follows (dollars in thousands):


	December 31,
	2019		2018
Deferred tax assets:
Allowance for loan losses	$	2,934	$	2,882
Foreclosed assets		200		704
Deferred compensation		3,895		3,538
Accrued reserves		312		421
Non accrual loans		181		205
Net operating loss carryforward		1,909		2,131
Net unrealized loss on securities available-for-sale		—		2,798
Other		3,536		3,510
Total deferred tax assets		12,967		16,189
Deferred tax liabilities:
Premises and equipment		(324)		(833)
Deferred loan costs		(2,656)		(2,656)
Net unrealized gain on securities available-for-sale		(2,490)		—
Other		(4,034)		(4,046)
Total deferred tax liabilities		(9,504)		(7,535)
Net deferred tax assets	$	3,463	$	8,654

Schedule of Effective Income Tax Rate Reconciliation

The expense for income taxes differs from amounts computed by applying the statutory Federal income tax rates to income before income taxes. The significant items comprising these differences consisted of the following (dollars in thousands):


	Year Ended December 31,
	2019		2018		2017
Income tax expense at federal statutory rate	$	10,021	$	8,313	$	11,613
Increase (decrease) resulting from:
State franchise tax expense, net of federal tax effect		3,872		3,390		2,363
Tax exempt municipal income		(952)		(852)		(1,299)
Affordable housing tax credits		(538)		(632)		(711)
Effect of the tax act		—		—		2,710
Excess tax benefit of stock-based compensation		(133)		(177)		(248)
Other		(513)		(135)		(788)
		11,757		9,907		13,640
Effective tax rate		24.6%		25.0%		41.1%