Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of income taxes are as follows:

	Years Ended December 31,
(in thousands)	2021		2020		2019
Current tax provision	$	26,872	$	24,022	$	20,418
Deferred tax (benefit) expense	5,422		(6,763)		2,854
Total provision for income taxes	$	32,294	$	17,259	$	23,272

    The income tax provision reconciled to the income taxes that would have been computed at the statutory federal rate of 21% as follows:

	Years Ended December 31,
(in thousands)	2021		2020		2019
Federal income tax, at statutory rates	$	26,740	$	15,703	$	19,728
Increase (deduction) in taxes resulting from:
Tax-exempt income	(1,114)		(961)		(952)
State income tax, net of federal income tax effect	6,176		2,178		4,322
Excess tax expense (benefits) from employee share-based payments	89		132		(189)
Other, net	403		207		363
Provision for income taxes	$	32,294	$	17,259	$	23,272

The net deferred tax asset consisted of the following:

	December 31,
(in thousands)	2021		2020
Deferred tax assets:
Allowance for credit losses	$	17,837	$	21,300
Stock based compensation plans	1,446		985
Purchase accounting fair market value adjustments	1,487		2,174
Non-accrued interest	504		664
Deferred compensation	2,796		2,570
Loss on equity securities	136		50
Federal net operating loss carryforward	303		875
Unrealized loss on pension plans	—		13
Unrealized loss on derivatives	—		42
Other, net	514		508
Gross deferred tax assets	25,023		29,181
Deferred tax liabilities:
Core deposit intangible from acquired companies	705		852
Undistributed income from subsidiary not consolidated for tax return purposes (REIT)	903		852
Deferred loan costs	2,150		1,822
Depreciation and amortization	1,660		793
Prepaid expenses	824		578
Unrealized gain on investment securities	1,228		4,746
Other	235		260
Gross deferred tax liabilities	7,705		9,903
Net deferred tax assets	$	17,318	$	19,278

Upon the adoption of ASU 2016-13 in 2020, the Company recorded a net deferred tax asset of $1.4 million.

The Company evaluates the realizability of its deferred tax assets by examining its earnings history and projected future earnings and by assessing whether it is more likely than not that carryforwards would not be realized. Based upon the majority of the Company’s deferred tax assets having no expiration date, the Company’s earnings history, and the projections of future earnings, the Company’s management believes that it is more likely than not that all of the Company’s deferred tax assets as of December 31, 2021 will be realized.

The Company evaluates tax positions that may be uncertain using a recognition threshold of more likely than not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. The Company had no unrecognized tax benefits or related interest or penalties at December 31, 2021 or 2020.

The Company is subject to U.S. federal income tax law as well as income tax of various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few significant exceptions, the Company is no longer subject to U.S. federal examinations by tax authorities for the years before 2018 or to state and local examinations by tax authorities for the years before 2018.