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Income Taxes | 3 Months Ended
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Mar. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income taxes: An allocation of federal and state income taxes between current and deferred portions is presented below:
|  | Three Months Ended March 31,
|  | 2022 |  |  | 2021 |  |  |
Current |  | $ | — |  |  | $ | 5,949 |  |  |
Deferred |  | 9,313 |  |  | 9,639 |  |  |
Total |  | $ | 9,313 |  |  | $ | 15,588 |  |  |
The following table presents a reconciliation of federal income taxes at the statutory federal rate of 21% to the Company's effective tax rates for the three months ended March 31, 2022 and 2021:
|  | Three Months Ended March 31,
|  | 2022 |  |  | 2021 |  |  |
Federal taxes calculated at statutory rate |  | $ | 9,355 |  | 21.0 | % |  | $ | 14,377 |  | 21.0 | % |  |  |
Increase (decrease) resulting from: |  |  |  |  |  |  |  |  |
State taxes, net of federal benefit |  | 951 |  | 2.1 | % |  | 1,750 |  | 2.6 | % |  |  |
(Benefit) expense from equity based compensation |  | (291) |  | (0.7) | % |  | (221) |  | (0.3) | % |  |  |
Municipal interest income, net of interest disallowance |  | (444) |  | (1.0) | % |  | (424) |  | (0.6) | % |  |  |
Bank-owned life insurance |  | (74) |  | (0.2) | % |  | (84) |  | (0.1) | % |  |  |
Section 162(m) limitation |  | 122 |  | 0.3 | % |  | 227 |  | 0.3 | % |  |  |
Other |  | (306) |  | (0.6) | % |  | (37) |  | (0.1) | % |  |  |
Income tax expense, as reported |  | $ | 9,313 |  | 20.9 | % |  | $ | 15,588 |  | 22.8 | % |  |  |
The Company is subject to Internal Revenue Code Section 162(m), which limits the deductibility of compensation paid to certain individuals. It is the Company’s policy to apply the Section 162(m) limitations to stock-based compensation first and then followed by cash compensation. As a result of the vesting of these units and cash compensation paid to date, the Company has disallowed a portion of its compensation paid to the applicable individuals. The components of the net deferred tax (liabilities) assets at March 31, 2022 and December 31, 2021, are as follows:
|  | March 31, |  | December 31,
|  | 2022 |  |  | 2021 |
Deferred tax assets: |  |  |  |
Allowance for credit losses |  | $ | 34,146 |  |  | $ | 35,233 |
Operating lease liabilities |  | 12,251 |  |  | 12,478 |
Net operating loss |  | 3,644 |  |  | 1,370 |
Amortization of core deposit intangibles |  | 53 |  |  | — |
Deferred compensation |  | 2,243 |  |  | 5,484 |
Unrealized loss on debt securities |  | 26,158 |  |  | — |
Unrealized loss on cash flow hedges |  | — |  |  | 205 |
Other assets |  | 7,684 |  |  | 8,301 |
Subtotal |  | 86,179 |  |  | 63,071 |
Deferred tax liabilities: |  |  |  |
FHLB stock dividends |  | $ | (484) |  |  | $ | (484) |
Operating leases - right of use assets |  | (11,111) |  |  | (11,287) |
Depreciation |  | (7,930) |  |  | (7,938) |
Amortization of core deposit intangibles |  | — |  |  | (116) |
Unrealized gain on equity securities |  | (2,167) |  |  | (2,407) |
Unrealized gain on cash flow hedges |  | (68) |  |  | — |
Unrealized gain on debt securities |  | — |  |  | (1,324) |
Mortgage servicing rights |  | (37,696) |  |  | (30,098) |
Goodwill |  | (14,276) |  |  | (13,743) |
Other liabilities |  | (2,699) |  |  | (2,494) |
Subtotal |  | (76,431) |  |  | (69,891) |
Net deferred tax assets (liabilities) |  | $ | 9,748 |  |  | $ | (6,820) |
The Company had a net operating loss carryforward generated as a result of a previous acquisition amounting to $6,523 as of both March 31, 2022 and December 31, 2021. The net operating loss carryforward can be used to offset taxable income in future periods and reduce income tax liabilities in those future periods. While net operating losses are subject to certain annual utilization limits under Section 382, the Company believes the net operating loss carryforwards will be realized based on the projected annual limitation and the length of the net operating loss carryover period. The Company's determination of the realization of the net deferred tax asset is based on its assessment of all available positive and negative evidence. The net operating loss carryforward expires on December 31, 2029. During the three months ended March 31, 2022, the Company generated a federal net operating loss carryforward of $6,602 and state net operating loss carryforward of $17,560. While the federal loss has no expiration period and the state loss may have varying expiration periods, the Company expects to generate sufficient taxable income to utilize the loss generated.

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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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