Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The components of income tax expense were as follows:

	For the Year Ended December 31,
	2022		2021		2020
	(dollars in thousands)
Current tax expense
Federal	$	12,906	$	11,330	$	7,877
State		5,559		4,862		4,192
		18,465		16,192		12,069
Deferred tax expense (benefit)
Federal		455		1,840		(250	)
State		132		1,059		(415	)
		587		2,899		(665	)
Total income tax expense	$	19,052	$	19,091	$	11,404

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,
	2022			2021			2020
	(dollars in thousands)
Income tax expense at statutory rate of 21.0%	$	15,112		$	15,354		$	9,106
Increase/(decrease) resulting from:
State tax, net of federal tax benefit		4,496			4,678			2,984
Tax-exempt income		(814	)		(795	)		(694	)
ESOP dividends		(150	)		(145	)		(125	)
Bank owned life insurance		(133	)		(165	)		(157	)
Compensation limited under 162(m)		193			226			511
Benefit from stock compensation		(81	)		(46	)		—
Non-deductible acquisition costs		182			—			186
Non-deductible expenses		44			55			—
Impact of CARES Act		—			—			(539	)
BOLI surrender, death benefit		310			—			—
Other		(107	)		(71	)		132
Total income tax expense	$	19,052		$	19,091		$	11,404

Summary of Net Deferred Tax Asset

The Company’s 2022 and 2021 net deferred tax assets were measured using a 27.95% and 27.92% tax rate, respectively, and consisted of the following components:

	December 31, 2022			December 31, 2021
	(dollars in thousands)
Gross deferred tax assets
Allowance for credit losses	$	11,142		$	10,019
Unrealized losses on available for sale securities		7,390			982
Incentive compensation		1,819			1,905
Equity based compensation		1,298			1,347
Lease liabilities		7,661			9,458
ESOP dividends		200			193
Intangibles and fair value marks (merger related)		2,322			658
Other		931			265
Total gross deferred tax assets		32,763			24,827
Gross deferred tax liabilities
Deferred loan origination costs		(2,886	)		(2,324	)
Retirement benefits		(1,745	)		(535	)
Depreciation of premises and equipment		(2,551	)		(1,997	)
Right-of-use asset		(7,014	)		(8,733	)
Mortgage servicing rights		(465	)		(303	)
Goodwill		(115	)		(115	)
Derivative transactions		3			(835	)
Total gross deferred tax liabilities		(14,773	)		(14,842	)
Net deferred tax asset	$	17,990		$	9,985