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INCOME TAXES | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES 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 |
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 | %
(1)On March 27, 2020 the CARES Act was signed into law, allowing the Company to realize a $4.8 million discrete tax benefit. This discrete benefit was associated with revised net operating loss (NOL) carryback provisions. The difference in enacted tax rates between the year of carryback versus carryforward resulted in a benefit recognized in income during the period that included the enactment date. Accordingly, the discrete benefit was fully recognized during the first quarter of 2020. 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 |
Deferred tax assets are to be reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of the tax benefit depends upon the existence of sufficient taxable income in future periods. At December 31, 2021, the Company had a foreign tax credit carryforward with a related deferred tax asset of $89,000, which if not utilized, will expire in 2026. The Company does not expect to utilize this deferred tax asset prior to the statute expiration and has recorded a partial valuation allowance against this asset. Additionally, the Company has a state net operating loss carryforward totaling $251,000, which if not utilized, will expire in 2041. The Company has recorded a full valuation allowance against this state net operating loss carryforward. In total, the Company recorded a valuation allowance of $306,000 at December 31, 2021. Uncertainty in Income Taxes The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction as well as in various states. The Company is subject to U.S. federal, state and local income tax examinations by tax authorities for the 2018 through 2020 tax years including any related income tax filings from its recent acquisitions. The Company believes that its income tax returns have been filed based upon applicable statutes, regulations and case law in effect at the time of filing, however, the Internal Revenue Service ("IRS") and /or state jurisdictions could disagree with the Company's interpretation upon examination. 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 |
Increases to the Company's unrealized tax positions occur as a result of accruing for any unrecognized tax benefit, as well the accrual of interest and penalties related to prior year positions. Decreases in the Company's unrealized tax positions occur as a result of the statute of limitation lapsing on prior year positions and/or settlements relating to outstanding positions. The table above does not include the indirect federal benefit of state tax positions of approximately $604,000.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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