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INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The provision for income taxes is comprised of the following components:
 Years Ended December 31
 202220212020
 (Dollars in thousands)
Current expense
Federal$60,216 $21,539 $32,171 
State24,979 11,054 17,004 
Total current expense85,195 32,593 49,175 
Deferred expense (benefit)
Federal(970)3,032 (10,872)
State(284)58 (6,634)
Total deferred expense (benefit)(1,254)3,090 (17,506)
Total expense$83,941 $35,683 $31,669 

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
 202220212020
 (Dollars in thousands)
Computed statutory federal income tax provision$73,028 21.00 %$32,902 21.00 %$32,096 21.00 %
State taxes, net of federal tax benefit19,728 5.67 %8,754 5.59 %8,147 5.33 %
Low Income Housing Project Investments(3,364)(0.97)%(2,308)(1.47)%(1,851)(1.21)%
Nontaxable interest, net(3,191)(0.92)%(1,022)(0.65)%(723)(0.47)%
Increase in cash surrender value of life insurance (1,885)(0.54)%(1,405)(0.90)%(1,345)(0.88)%
Increase (decrease) in uncertain positions(1,035)(0.30)%50 0.03 %— — %
Stock-based compensation(202)(0.06)%(372)(0.24)%(1,067)(0.70)%
CARES Act - net operating loss carryback (1)— — %— — %(4,809)(3.15)%
Change in valuation allowance52 0.01 %26 0.02 %— — %
Merger and other related costs (non-deductible)— — %630 0.40 %— — %
Other, net810 0.25 %(1,572)(1.00)%1,221 0.80 %
Total expense$83,941 24.14 %$35,683 22.78 %$31,669 20.72 %
    
(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:
20222021
 (Dollars in thousands)
Deferred tax assets
Accrued expenses not deducted for tax purposes$16,162 $15,909 
Allowance for credit losses42,748 41,541 
Derivatives fair value adjustment14,328 — 
Employee and director equity compensation1,388 1,489 
Foreign Tax Credit Carryforward89 89 
Loan basis difference fair value adjustment2,273 2,286 
Net operating loss carry-forward606 637 
Net unrealized loss on securities available for sale38,968 2,921 
Operating lease liability17,069 17,970 
Other791 1,188 
Gross deferred tax assets$134,422 $84,030 
Valuation allowance(358)(306)
Total deferred tax assets net of valuation allowance$134,064 $83,724 
Deferred tax liabilities
Core deposit and other intangibles$4,137 $5,927 
Deferred loan fees, net8,281 6,107 
Derivatives fair value adjustment— 5,536 
Fixed assets18,132 18,437 
Goodwill11,432 11,249 
Prepaid pension3,469 3,296 
Right of use asset16,565 16,829 
Other2,112 1,825 
Gross deferred tax liabilities$64,128 $69,206 
Total net deferred tax asset$69,936 $14,518 

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.
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 2019 through 2021 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 positions2,433 
Balance at December 31, 20212,878 
Reduction of tax positions for prior years(1,047)
Increase for prior year tax positions128 
Increase for current year tax positions761 
Balance at December 31, 2022$2,720 
Increases to the Company's unrealized tax positions occur as a result of accruing for any unrecognized tax benefit, as well as 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. Additionally, the balances noted in the table above do not include the indirect federal benefit of state tax positions of approximately $544,000 and $604,000, at December 31, 2022 and 2021 respectively.