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INCOME TAXES | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Provision for Income Taxes The components of the Company’s provision for income taxes for the years ended December 31, 2022, 2021, and 2020 were, as follows:
(In thousands) |  | 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |  |
Federal tax expense/(benefit) |  | $ | 17,915 |  |  | $ | 17,340 |  |  | $ | (19,889) |
State tax expense/(benefit) |  | 6,831 |  |  | 7,580 |  |  | (3,976) |
Total current tax expense/(benefit) (1) |  | 24,746 |  |  | 24,920 |  |  | (23,865) |
Deferred: |  |  |  |  |  |
Federal tax expense/(benefit) |  | (2,274) |  |  | 5,125 |  |  | 2,048 |
State tax expense/(benefit) |  | (1,187) |  |  | 112 |  |  | 1,964 |
Total deferred tax expense/(benefit) |  | (3,461) |  |  | 5,237 |  |  | 4,012 |
Change in valuation allowance |  | — |  |  | 200 |  |  | — |
Income tax expense/(benefit) from continuing operations |  | $ | 21,285 |  |  | $ | 30,357 |  |  | $ | (19,853) |
Income tax (benefit) from discontinued operations |  | — |  |  | — |  |  | (7,013) |
Total |  | $ | 21,285 |  |  | $ | 30,357 |  |  | $ | (26,866) |
(1) On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was signed into law. The CARES Act includes several provisions that temporarily modify the corporate net operating loss (“NOL”) carryback rules for federal income tax purposes. Specifically, the CARES Act allows a five-year carryback of any NOL generated in a taxable year beginning after December 31, 2017, and before January 1, 2021. The Company recorded a $6 million federal income tax benefit in 2020, and an additional $500 thousand benefit in 2021 resulting from the carryback of its 2020 NOL to recover federal income taxes paid in 2015 through 2018 (at a 35% federal income tax rate for years 2015 through 2017). Effective Tax Rate The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2022, 2021, and 2020:
|  | 2022 |  | 2021 |  | 2020
(In thousands, except rates) |  | Amount |  | Rate |  | Amount |  | Rate |  | Amount |  | Rate
Statutory tax rate |  | $ | 23,902 |  |  | 21.0 | % |  | $ | 31,294 |  |  | 21.0 | % |  | $ | (111,936) |  |  | 21.0 | %
Increase (decrease) resulting from: |  |  |  |  |  |  |  |  |  |  |  |
State taxes, net of federal tax benefit |  | 4,459 |  |  | 3.9 |  |  | 6,077 |  |  | 4.1 |  |  | (1,589) |  |  | 0.3 |
Tax exempt income - investments, net |  | (3,515) |  |  | (3.1) |  |  | (3,475) |  |  | (2.3) |  |  | (3,184) |  |  | 0.6 |
Bank-owned life insurance |  | (1,258) |  |  | (1.1) |  |  | (1,348) |  |  | (0.9) |  |  | (1,283) |  |  | 0.3 |
Goodwill impairment |  | — |  |  |  |  | — |  |  | — |  |  | 103,912 |  |  | (19.5) |
Tax credits, net of basis reduction |  | (2,129) |  |  | (1.9) |  |  | (2,881) |  |  | (1.9) |  |  | (1,812) |  |  | 0.3 |
Change in valuation allowance |  | — |  |  | — |  |  | 200 |  |  | 0.1 |  |  | — |  |  | — |
Tax rate benefit on net operating loss carryback |  | — |  |  | — |  |  | (493) |  |  | (0.3) |  |  | (6,040) |  |  | 1.1 |
Other, net |  | (174) |  |  | (0.1) |  |  | 983 |  |  | 0.6 |  |  | 2,079 |  |  | (0.4) |
Effective tax rate |  | $ | 21,285 |  |  | 18.7 | % |  | $ | 30,357 |  |  | 20.4 | % |  | $ | (19,853) |  |  | 3.7 | %
Deferred Tax Assets and Liabilities As of December 31, 2022 and 2021, significant components of the Company’s deferred tax assets and liabilities were, as follows:
(In thousands) |  | 2022 |  | 2021
Deferred tax assets: |  |  |  |
Allowance for credit losses |  | $ | 28,312 |  |  | $ | 30,441 |
Unrealized capital loss on tax credit investments |  | 1,603 |  |  | 1,451 |
Net unrealized loss on securities available for sale, swaps, and pension in OCI |  | 63,335 |  |  | 1,085 |
Employee benefit plans |  | 11,659 |  |  | 8,435 |
Purchase accounting adjustments |  | 4,342 |  |  | 4,829 |
Net operating loss carryforwards |  | 503 |  |  | 1,139 |
Deferred loan fees |  | 4,049 |  |  | 2,449 |
Lease liability |  | 14,148 |  |  | 14,940 |
Premises and equipment |  | 2,630 |  |  | 1,850 |
Nonaccrual interest |  | 1,069 |  |  | 1,722 |
Intangible amortization |  | 659 |  |  | — |
Other |  | 1,778 |  |  | 1,845 |
Deferred tax assets, net before valuation allowances |  | 134,087 |  |  | 70,186 |
Valuation allowance |  | (400) |  |  | (400) |
Deferred tax assets, net of valuation allowances |  | $ | 133,687 |  |  | $ | 69,786 |
Deferred tax liabilities: |  |  |  |
Loan servicing rights |  | $ | (1,212) |  |  | $ | (1,488) |
Intangible amortization |  | — |  |  | (545) |
Unamortized tax credit reserve |  | (1,687) |  |  | (1,075) |
Right-of-use asset |  | (12,457) |  |  | (14,058) |
Deferred tax liabilities |  | $ | (15,356) |  |  | $ | (17,166) |
Deferred tax assets, net |  | $ | 118,331 |  |  | $ | 52,620 |
The Company’s net deferred tax asset increased by $65.7 million during 2022 and $62.3 million of this change is related to unrealized losses in OCI. Deferred tax assets, net of valuation allowances, are expected to be realized through the reversal of existing taxable temporary differences and future taxable income. Valuation Allowances The components of the Company’s valuation allowance on its deferred tax asset, net as of December 31, 2022 and 2021 were, as follows:
(in thousands) |  | 2022 |  | 2021
State valuation allowances |  | $ | (400) |  |  | $ | (400) |
The state tax basis difference, net of Federal benefit, was originally recorded in 2012, due to management’s assessment that it is more likely than not that certain deferred tax assets recorded for the difference between the book basis and the state tax basis in certain tax credit limited partnership investments (LPs) will not be realized. Management anticipates that the remaining excess state tax basis will be realized as a capital loss upon disposition, and that it is unlikely that the Company will have capital gains against which to offset such capital losses. The valuation allowance as of December 31, 2022 is subject to change in the future as the Company continues to periodically assess the likelihood of realizing its deferred tax assets. Tax Attributes At December 31, 2022, the Company has $1.5 million of federal net operating loss carryforwards, the utilization of which are limited under Internal Revenue Code Section 382. These net operating losses begin to expire in 2029. The related deferred tax asset is $315 thousand. State net operating loss carryforwards, net of valuation allowance described above, are expected to be utilized in the future and begin to expire in 2023. The related gross deferred tax asset is $188 thousand. Unrecognized Tax Benefits On a periodic basis, the Company evaluates its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This evaluation takes into consideration the status of taxing authorities’ current examinations of the Company’s tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment in relation to uncertain tax positions. The following table presents changes in unrecognized tax benefits for the years ended December 31, 2022, 2021, and 2020:
(In thousands) |  | 2022 |  | 2021 |  | 2020
Unrecognized tax benefits at January 1 |  | $ | 1,025 |  |  | $ | 516 |  |  | $ | 238 |
Increase in gross amounts of tax positions related to prior years |  | 17 |  |  | 509 |  |  | 309 |
Decrease in gross amounts of tax positions related to prior years |  | — |  |  | — |  |  | — |
Decrease due to settlement with taxing authority |  | — |  |  | — |  |  | — |
Decrease due to lapse in statute of limitations |  | — |  |  | — |  |  | (31) |
Unrecognized tax benefits at December 31 |  | $ | 1,042 |  |  | $ | 1,025 |  |  | $ | 516 |
It is reasonably possible that over the next twelve months the amount of unrecognized tax benefits may change from the reevaluation of uncertain tax positions arising in examinations, in appeals, or in the courts, or from the closure of tax statutes.The Company does not expect any significant changes in unrecognized tax benefits during the next twelve months. All of the Company’s unrecognized tax benefits, if recognized, would be recorded as a component of income tax expense, therefore, affecting the effective tax rate. The Company recognizes interest and penalties, if any, related to the liability for uncertain tax positions as a component of income tax expense. The accrual for interest and penalties was not material for all years presented. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction as well as in various states. In the normal course of business, the Company is subject to U.S. federal, state, and local income tax examinations by tax authorities. Other than open statutes of limitation pertaining specifically to the amended returns filed for 2015 through 2018 to claim NOL carryback refunds, the Company is no longer subject to examination for tax years prior to 2019 including any related income tax filings from its recent acquisitions. The Company is not under audit in any jurisdiction as of December 31, 2022.

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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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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