Income taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income taxes

Income taxes:

An allocation of federal and state income taxes between current and deferred portions is presented below:

	Year Ended December 31,
	2021		2020		2019
Current	$	21,980	$	44,362	$	27,641
Deferred	30,770		(25,530)		(1,916)
Total	$	52,750	$	18,832	$	25,725

The following table presents a reconciliation of federal income taxes at the statutory federal rate of 21% to the Company's effective tax rates for the years ended December 31, 2021, 2020, and 2019:

	Year Ended December 31,
	2021				2020				2019
Federal taxes calculated at statutory rate	$	51,041	21.0	%	$	17,317	21.0	%	$	23,003	21.0	%
Increase (decrease) resulting from:
State taxes, net of federal benefit	8,788		3.5	%	3,197		3.8	%	4,792		4.4	%
(Benefit) expense from equity based compensation	(2,719)		(1.1)	%	153		0.2	%	(1,353)		(1.2)	%
Municipal interest income, net of interest    disallowance	(1,818)		(0.8)	%	(1,507)		(1.8)	%	(908)		(0.8)	%
Bank-owned life insurance	(324)		(0.1)	%	(327)		(0.4)	%	(51)		(0.1)	%
NOL Carryback provision under CARES Act	(3,424)		(1.4)	%	—		—	%	—		—	%
Merger and offering costs	123		0.1	%	289		0.4	%	66		0.1	%
Section 162(m) limitation	1,381		0.6	%	—		—	%	—		—	%
Other	(298)		(0.1)	%	(290)		(0.4)	%	176		0.1	%
Income tax expense, as reported	$	52,750	21.7	%	$	18,832	22.8	%	$	25,725	23.5	%

The Company is subject to Internal Revenue Code Section 162(m), which limits the deductibility of compensation paid to certain individuals. The restricted stock unit plans that existed prior to the corporation being public vested after the reliance period as defined in the underlying Treasury Regulations. It is the Company’s policy to apply the Section 162(m) limitations to stock-based compensation first and then followed by cash compensation. As a result of the vesting of these units and cash compensation paid to date, the Company has disallowed a portion of its compensation paid to the applicable individuals.

The components of the net deferred tax (liabilities) assets at December 31, 2021 and 2020, are as follows: 

	December 31,
	2021		2020
Deferred tax assets:
Allowance for credit losses	$	35,233	$	48,409
Operating lease liabilities	12,478		14,496
Federal net operating loss	1,370		1,753
Deferred compensation	5,484		8,872
Unrealized loss on cash flow hedges	205		499
Other assets	8,301		19,101
Subtotal	63,071		93,130
Deferred tax liabilities:
FHLB stock dividends	$	(484)	$	(561)
Operating leases - right of use assets	(11,287)		(13,197)
Depreciation	(7,938)		(7,491)
Amortization of core deposit intangibles	(116)		(684)
Unrealized gain on equity securities	(2,407)		(17)
Unrealized gain on debt securities	(1,324)		(13,027)
Mortgage servicing rights	(30,098)		(20,803)
Goodwill	(13,743)		(11,301)
Other liabilities	(2,494)		(9,653)
Subtotal	(69,891)		(76,734)
Net deferred tax (liabilities) assets	$	(6,820)	$	16,396

The Company has net operating loss carryforward acquired from Franklin of $6,523 as of December 31, 2021. The net operating loss carryforward can be used to offset taxable income in future periods and reduce income tax liabilities in those future periods. While net operating losses are subject to certain annual utilization limits under Section 382, the Company believes the net operating loss carryforward will be realized based on the projected annual limitation and the length of the net operating loss carryover period. The Company's determination of the realization of the net deferred tax asset is based on its assessment of all available positive and negative evidence. The net operating loss carryforward expires on December 31, 2029.