Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The components of income tax expense were as follows:

	For the Year Ended December 31,
	2021		2020			2019
	(dollars in thousands)
Current tax expense
Federal	$	11,330	$	7,877		$	5,954
State		4,862		4,192			2,597
		16,192		12,069			8,551
Deferred tax expense (benefit)
Federal		1,840		(250	)		(63	)
State		1,059		(415	)		173
		2,899		(665	)		110
Total income tax expense	$	19,091	$	11,404		$	8,661

Reconciliation of Total Income Tax Expense, Calculated at Statutory Federal Income Tax Expense in Consolidated Statements of Income

The following is a reconciliation of the total income tax expense, calculated at statutory federal income tax rates, to the income tax provision in the consolidated statements of income:

	For the Year Ended December 31,
	2021			2020			2019
	(dollars in thousands)
Income tax expense at statutory rate of 21.0%	$	15,354		$	9,106		$	7,123
Increase/(decrease) resulting from:
State tax, net of federal tax benefit		4,678			2,984			2,188
Tax-exempt income		(795	)		(694	)		(599	)
ESOP dividends		(145	)		(125	)		(124	)
Bank owned life insurance		(165	)		(157	)		(129	)
Compensation limited under 162(m)		226			511			—
Benefit from stock compensation		(46	)		—			(150	)
Non-deductible acquisition costs		—			186			236
Non-deductible expenses		55			—			—
Impact of CARES Act		—			(539	)		—
Other		(71	)		132			116
Total income tax expense	$	19,091		$	11,404		$	8,661

Summary of Net Deferred Tax Asset

The Company’s 2021 and 2020 net deferred tax assets were measured using a 27.92% tax rate, and consisted of the following components:

	December 31, 2021			December 31, 2020
	(dollars in thousands)
Gross deferred tax assets
Allowance for credit losses	$	10,019		$	10,336
Accrued retirement benefits		—			1,576
Unrealized losses on available for sale securities		982			—
Incentive compensation		1,905			1,591
Equity based compensation		1,347			1,343
Lease liabilities		9,458			10,455
ESOP dividends		193			166
Intangibles and fair value marks (merger related)		658			1,971
Other		265			226
Total gross deferred tax assets		24,827			27,664
Gross deferred tax liabilities
Deferred loan origination costs		(2,324	)		(1,434	)
Retirement benefits		(535	)		—
Unrealized gains on available for sale securities		—			(641	)
Depreciation of premises and equipment		(1,997	)		(1,816	)
Right-of-use asset		(8,733	)		(9,751	)
Mortgage servicing rights		(303	)		(340	)
Goodwill		(115	)		(115	)
Derivative transactions		(835	)		(1,928	)
Total gross deferred tax liabilities		(14,842	)		(16,025	)
Net deferred tax asset	$	9,985		$	11,639