Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income tax is summarized as follows for the years ended December 31,:

	2021		2020		2019
Current	$	5,533	$	12,957	$	(175)
Deferred	3,145		(3,377)		1,611
Total income tax expense	$	8,678	$	9,580	$	1,436

A reconciliation of the provision for income taxes, with the amount computed by applying the statutory U.S. federal income tax rates to income before provision for income taxes is as follows for the years ended December 31,:

	2021		2020		2019
Income tax provision computed at U.S. federal statutory rate	$	10,887	$	12,005	$	4,607
State tax expense, net of U.S. federal effect	1,836		1,536		928
Tax exempt interest	(4,562)		(4,381)		(2,912)
Net increase in cash surrender value of BOLI	(268)		(269)		(369)
Non-deductible professional fees	648		—		—
Carryback claim refund	—		—		(1,512)
Other	137		689		694
Income tax provision	$	8,678	$	9,580	$	1,436
Effective tax provision rate	16.7%		16.8%		6.5%

Significant components of deferred tax assets and liabilities are as follows as of December 31,:

	2021		2020
Deferred tax assets:
Federal and state net operating loss	$	16,266	$	17,534
Allowance for loan losses	11,207		12,352
Deferred compensation	4,720		3,113
Share-based compensation	2,235		1,981
Deferred loan fees	2,059		—
Accrued expenses	1,039		2,126
State tax credits	48		388
Other real estate owned and foreclosed assets	40		44
Fair value adjustments on loans	35		528
Fair value adjustments on deposits	—		12
Other	2,120		2,934
Total deferred tax assets	39,769		41,012
Deferred tax liabilities:
Mortgage servicing rights	11,170		7,537
Fair value adjustments on intangible assets	1,731		1,929
Prepaid expenses	1,078		856
Fair value adjustments on debt	1,029		1,267
Premises and equipment	1,018		1,799
Unrealized gain on securities	541		2,956
FHLB stock	165		181
Loan commitments	—		712
Other	7		12
Total deferred tax liabilities	16,739		17,249
Total deferred tax assets, net	$	23,030	$	23,763

As of December 31, 2021, we had net operating loss carryforwards for U.S. federal income tax purposes of approximately $74,165 which begin to expire in 2033. As of December 31, 2021, we had net operating loss carryforwards for state tax purposes of approximately $17,374 which begin to expire in 2026. Utilization of a portion of the net operating losses may be subject to a substantial annual limitation due to the ownership change limitations set forth in Internal Revenue Code Section 382 and similar state provisions. Such an annual limitation could result in the expiration of the net operating loss and tax credit carryforwards before utilization. We believe that all of the net operating loss carryforwards will be used prior to expiration.

We evaluate uncertain tax positions at the end of each reporting period. We may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefit recognized in the financial statements from any such position is measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. As of December 31, 2021 and 2020, we concluded there were no material uncertain tax positions.