Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The components of income tax expense were as follows:

	For the Year Ended December 31,
	2019			2018			2017
	(dollars in thousands)
Current
Federal	$	5,954		$	5,524		$	8,446
State		2,597			2,404			2,225
		8,551			7,928			10,671
Deferred
Federal		(63	)		(490	)		2,948
State		173			(231	)		(261	)
Total deferred		110			(721	)		2,687
Total income tax expense	$	8,661		$	7,207		$	13,358

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

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

	For the Year Ended December 31,
	2019			Rate			2018			Rate			2017			Rate
	(dollars in thousands)
Provision at statutory rates	$	7,123			21.00	%	$	6,528			21.00	%	$	9,861			35.00	%
Increase/(decrease) resulting from:
State tax, net of federal tax benefit		2,188			6.45			1,717			5.52			1,277			4.53
Tax-exempt income		(599	)		(1.77	)		(580	)		(1.87	)		(1,079	)		(3.83	)
ESOP dividends		(124	)		(0.37	)		(127	)		(0.41	)		(216	)		(0.77	)
Bank owned life insurance		(129	)		(0.38	)		(140	)		(0.45	)		(205	)		(0.73	)
Benefit from stock compensation		(150	)		(0.44	)		(168	)		(0.54	)		(190	)		(0.67	)
Non-deductible Acquisition Costs		236			0.70			—			—			—			—
Impact of Tax Cuts and Jobs Act		—			—			—			—			3,870			13.74
Other		116			0.34			(23	)		(0.07	)		40			0.15
Total income tax expense	$	8,661			25.53	%	$	7,207			23.18	%	$	13,358			47.42	%

Summary of Net Deferred Tax Asset

The Company’s 2019 and 2018 net deferred tax assets were measured using a 27.86% and 28.11% tax rate, respectively, and consisted of the following components:

	December 31, 2019			December 31, 2018
	(dollars in thousands)
Gross deferred tax assets
Allowance for loan losses	$	5,029		$	4,715
Accrued retirement benefits		1,592			2,082
Unrealized losses on AFS securities		171			957
Incentive compensation		1,248			1,189
Equity based compensation		1,034			849
Lease Liability		9,765			333
ESOP dividends		165			169
Loss carryforwards as a result of the Optima merger		877			—
Intangibles (merger related)		472			—
Other		252			155
Total gross deferred tax assets		20,605			10,449
Gross deferred tax liabilities
Deferred loan origination costs		(911	)		(459	)
Depreciation of premises and equipment		(1,021	)		(678	)
Right of Use Asset		(9,356	)		—
Mortgage servicing rights		(368	)		(187	)
Goodwill		(113	)		(114	)
Derivative transactions		(607	)		(294	)
Total gross deferred tax liabilities		(12,376	)		(1,732	)
Net deferred tax asset	$	8,229		$	8,717