INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

The provision for income taxes is comprised of the following components:


	Years Ended December 31
	2021		2020		2019
	(Dollars in thousands)
Current expense
Federal	$	21,539	$	32,171	$	27,980
State	11,054		17,004		14,359
Total current expense	32,593		49,175		42,339
Deferred expense (benefit)
Federal	3,032		(10,872)		9,080
State	58		(6,634)		1,514
Total deferred expense (benefit)	3,090		(17,506)		10,594
Total expense	$	35,683	$	31,669	$	52,933

Schedule of Income Tax Rate Reconciliation

The difference between the statutory federal income tax rate and the effective income tax rate reported for the last three years is detailed below:


	Years Ended December 31
	2021				2020				2019
	(Dollars in thousands)
Computed statutory federal income tax provision	$	32,902	21.00	%	$	32,096	21.00	%	$	45,803	21.00	%
State taxes, net of federal tax benefit	8,754		5.59	%	8,147		5.33	%	12,262		5.63	%
CARES Act - net operating loss carryback (1)	—		—	%	(4,809)		(3.15)	%	—		—	%
Change in valuation allowance	26		0.02	%	—		—	%	17		0.01	%
Increase in cash surrender value of life insurance	(1,405)		(0.90)	%	(1,345)		(0.88)	%	(1,144)		(0.52)	%
Low Income Housing Project Investments	(2,308)		(1.47)	%	(1,851)		(1.21)	%	(1,696)		(0.78)	%
Merger and other related costs (non-deductible)	630		0.40	%	—		—	%	582		0.27	%
New Markets Tax Credits	—		—	%	—		—	%	(2,675)		(1.23)	%
Nontaxable interest, net	(1,022)		(0.65)	%	(723)		(0.47)	%	(757)		(0.35)	%
Stock-based compensation	(372)		(0.24)	%	(1,067)		(0.70)	%	(824)		(0.38)	%

Other, net	(1,522)		(0.97)	%	1,221		0.80	%	1,365		0.63	%
Total expense	$	35,683	22.78	%	$	31,669	20.72	%	$	52,933	24.28	%

Schedule of Net Deferred Tax Asset

The tax-effected components of the net deferred tax asset at December 31 of the years presented were as follows:


	2021		2020
	(Dollars in thousands)
Deferred tax assets
Accrued expenses not deducted for tax purposes	$	15,909	$	13,804
Allowance for credit losses	41,541		32,265


Employee and director equity compensation	1,489		1,548

Foreign Tax Credit Carryforward	89		89
Loan basis difference fair value adjustment	2,286		4,791
Net operating loss carry-forward	637		226
Net unrealized loss on securities available for sale	2,921		—
Operating lease liability	17,970		15,846


Other	1,188		999
Gross deferred tax assets	$	84,030	$	69,568
Valuation allowance	(306)		(280)
Total deferred tax assets net of valuation allowance	$	83,724	$	69,288
Deferred tax liabilities
Core deposit and other intangibles	$	5,927	$	4,344
Deferred loan fees, net	6,107		336
Derivatives fair value adjustment	5,536		13,036
Fixed assets	18,437		7,786
Goodwill	11,249		10,947

Net unrealized gain on securities available for sale	—		4,152

Prepaid pension	3,296		3,404
Right of use asset	16,829		12,979
Other	1,825		1,573
Gross deferred tax liabilities	$	69,206	$	58,557
Total net deferred tax asset	$	14,518	$	10,731

Reconciliation of Unrecognized Tax Benefits

The Company accounts for uncertainties in income taxes by providing a tax reserve for certain positions. The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits:


	(Dollars in thousands)
Balance at December 31, 2019	$	532
Reduction of tax positions for prior years	(58)


Balance at December 31, 2020	474
Reduction of tax positions for prior years	(29)

Increase for current year tax positions	2,433
Balance at December 31, 2021	$	2,878

Schedule of changes in accrued interest and penalties related to uncertain tax positions

The following table summarizes the changes in accrued interest and penalties related to uncertain tax positions for the periods presented:


	As of December 31
	2021		2020		2019
	(Dollars in thousands)
Beginning Balance	$	95	$	43	$	53
Expense (benefit) recognized in provision for income taxes	69		52		(10)
Acquired obligation for interest and penalties (1)	756		n/a		n/a
Ending Balance	$	920	$	95	$	43