Income Taxes

9 Months Ended

Sep. 30, 2021

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):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Current income tax expense	$	3,387	$	3,133	$	9,002	$	11,376
Deferred income tax expense (benefit)	1,590		650		3,612		(4,305)
Income tax expense	$	4,977	$	3,783	$	12,614	$	7,071

The net deferred tax liability totaled $12.5 million at September 30, 2021 and $15.5 million at December 31, 2020.  No valuation allowance was recorded at September 30, 2021 or December 31, 2020, 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 September 30, 2021 or December 31, 2020.

We recognized income tax expense of $5.0 million and $12.6 million, resulting in an ETR of 14.5% and 13.0% for the three and nine months ended September 30, 2021, respectively, compared to income tax expense of $3.8 million and $7.1 million, with an ETR of 12.3% and 11.9%, for the three and nine months ended September 30, 2020, respectively. The higher ETR for the three and nine months ended September 30, 2021 was primarily due to a decrease in tax-exempt income as a percentage of pre-tax income as compared to the same periods in 2020. The ETR differs from the statutory rate of 21% for the three and nine months ended September 30, 2021 and 2020 primarily due to the effect of tax-exempt income from municipal loans and securities, as well as BOLI. We file income tax returns in the U.S. federal jurisdictions and in certain states. We are no longer subject to U.S. federal income tax examinations by tax authorities for years before 2018 or Texas state tax examinations by tax authorities for years before 2017.