INCOME TAXES

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The components of income tax expense are as follows ($ in thousands):

	Years Ended December 31,
	2022		2021		2020
Current:
Federal	$	12,071	$	12,546	$	11,270
State	2,759		2,630		2,308
Deferred	940		1,739		(3,015)
Total income tax expense	$	15,770	$	16,915	$	10,563

The Company's income tax expense differs from the amounts computed by applying the federal income tax statutory rates to income before income taxes. A reconciliation of the differences is as follows ($ in thousands):

	Years Ended December 31,
	2022				2021				2020
	Amount		%		Amount		%		Amount		%
Income taxes at statutory rate	$	16,525	21	%	$	17,027	21	%	$	13,244	21	%
Tax-exempt income, net	(2,369)		(3)	%	(1,692)		(2)	%	(1,868)		(2)	%
Bargain purchase gain	—		—	%	—		—	%	(1,645)		(3)	%
Nondeductible expenses	391		—	%	29		—	%	188		—	%
State income tax, net of federal tax effect	2,251		3	%	2,299		3	%	1,600		3	%
Federal tax credits, net	(715)		(1)	%	(715)		(1)	%	(715)		(1)	%
Other, net	(313)		—	%	(33)		—	%	(241)		(1)	%
	$	15,770	17	%	$	16,915	17	%	$	10,563	17	%

The components of deferred income taxes included in the consolidated financial statements were as follows ($ in thousands):

	December 31,
	2022		2021
Deferred tax assets:
Allowance for loan losses	$	9,581	$	7,566
Net operating loss carryover	24,531		2,109
Nonaccrual loan interest	600		1,447
Other real estate	894		247
Deferred compensation	1,205		1,267
Loan purchase accounting	2,554		966
Unrealized loss on available-for-sale securities	48,738		—
Lease liability	2,395		1,547
Other	3,299		2,421
	93,797		17,570
Deferred tax liabilities:
Unrealized gain on available-for-sale securities	—		(2,702)
Securities	(627)		(778)
Premises and equipment	(6,588)		(7,637)
Core deposit intangible	(7,628)		(6,255)
Goodwill	(2,388)		(2,121)
Right-of-use asset	(2,517)		(1,702)
Other	(596)		(485)
	(20,344)		(21,680)
Net deferred tax asset/(liability), included in other assets/(liabilities)	$	73,453	$	(4,110)

With the acquisition of Baldwin Bancshares, Inc. in 2013, BCB Holding Company, Inc. in 2014, Gulf Coast Community Bank in 2017, Sunshine Financial, Inc. in 2018, and FPB Financial Corp. in 2019, SWG in 2020, and BBI in 2022 the Company assumed federal tax net operating loss carryovers. $200.2 million of net operating losses remain available to the Company and begin to expire in 2026. The Company expects to fully utilize the net operating losses.

The Company follows the guidance of ASC Topic 740, Income Taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of December 31, 2022, the Company had no uncertain tax positions that it believes should be recognized in the financial statements. The tax years still subject to examination by taxing authorities are years subsequent to 2018.