INCOME TAXES

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The income tax expense included in the accompanying consolidated statements of income consists of the following (in thousands):

	Years Ended December 31,
	2020		2019		2018
Current income tax expense	$	15,766	$	13,099	$	4,009
Deferred income tax (benefit) expense	(4,430)		122		6,154
Income tax expense	$	11,336	$	13,221	$	10,163

The components of the net deferred tax liability as of December 31, 2020 and 2019 are summarized below (in thousands):

	Assets		Liabilities
Allowance for loan losses	$	10,291	$
Retirement and other benefit plans			1,582
Premises and equipment			9,057
Operating lease liabilities	3,514
Operating lease ROU assets			3,163
Core deposit intangible			1,385
Unrealized gains on securities AFS			30,940
Effective hedging derivatives	4,543
Fair value adjustment on loans	1,037
Unfunded status of defined benefit plan	7,950
State business tax credit	362
Stock-based compensation	1,105
Other	1,776
Gross deferred tax assets/liabilities	30,578		46,127
Net deferred tax liability at December 31, 2020			$	15,549
Allowance for loan losses	$	5,207	$
Retirement and other benefit plans			2,179
Premises and equipment			6,842
Operating lease liabilities	2,137
Operating lease ROU assets			2,049
Core deposit intangible			1,990
Unrealized gains on securities AFS			10,278
Effective hedging derivatives	445
Fair value adjustment on loans	1,478
Unfunded status of defined benefit plan	8,540
State business tax credit	423
Stock-based compensation	914
Other			629
Gross deferred tax assets/liabilities	19,144		23,967
Net deferred tax liability at December 31, 2019			$	4,823

A reconciliation of tax at statutory rates and total tax expense is as follows (dollars in thousands):

	Years Ended December 31,
	2020				2019				2018
	Amount		Percent of Pre-Tax Income		Amount		Percent of Pre-Tax Income		Amount		Percent of Pre-Tax Income
Statutory tax expense	$	19,633	21.0	%	$	18,433	21.0	%	$	17,703	21.0	%
Increase (decrease) in taxes from:
Tax rate changes	—		—		—		—		(767)		(0.9)	%
Tax exempt interest	(8,137)		(8.7)	%	(4,875)		(5.5)	%	(6,257)		(7.4)	%
BOLI	(536)		(0.6)	%	(484)		(0.5)	%	(613)		(0.7)	%
Share-based compensation	(70)		(0.1)	%	(167)		(0.2)	%	(191)		(0.2)	%
State business tax	329		0.4	%	217		0.2	%	297		0.3	%
Other, net	117		0.1	%	97		0.1	%	(9)		—
Income tax expense	$	11,336	12.1	%	$	13,221	15.1	%	$	10,163	12.1	%

We file income tax returns in the U.S. federal jurisdiction and in certain states.  We are no longer subject to U.S. federal income tax examinations by tax authorities for years before 2017 or Texas state tax examinations by tax authorities for years before 2016.  No valuation allowance was recorded at December 31, 2020 or 2019 as management believes it is more likely than not that all of the deferred tax asset items will be realized in future years. Unrecognized tax benefits were not material at December 31, 2020 or 2019.