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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following table shows the composition of income tax expense.
Year Ended December 31 (Dollars in thousands) |  | 2020 |  | 2019 |  | 2018
Current: |  |  |  |  |  |
Federal |  | $ | 42,411 |  |  | $ | 28,130 |  |  | $ | 20,167 |
State |  | 6,629 |  |  | 5,739 |  |  | 2,996 |
Total current |  | 49,040 |  |  | 33,869 |  |  | 23,163 |
Deferred: |  |  |  |  |  |
Federal |  | (21,865) |  |  | (5,135) |  |  | (875) |
State |  | (2,295) |  |  | (595) |  |  | 1,200 |
Deferred tax liability remeasurement |  | — |  |  | — |  |  | (875) |
Total deferred |  | (24,160) |  |  | (5,730) |  |  | (550) |
Total provision |  | $ | 24,880 |  |  | $ | 28,139 |  |  | $ | 22,613 |
The following table shows the reasons for the difference between income tax expense and the amount computed by applying the statutory federal income tax rate (21%) to income before income taxes.
|  | 2020 |  | 2019 |  | 2018
Year Ended December 31 (Dollars in thousands) |  | Amount |  | Percent of Pretax Income |  | Amount |  | Percent of Pretax Income |  | Amount |  | Percent of Pretax Income
Statutory federal income tax |  | $ | 22,332 |  |  | 21.0 | % |  | $ | 25,232 |  |  | 21.0 | % |  | $ | 22,056 |  |  | 21.0 | %
(Decrease) increase in income taxes resulting from: |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt interest income |  | (439) |  |  | (0.4) |  |  | (552) |  |  | (0.5) |  |  | (650) |  |  | (0.6) |
State taxes, net of federal income tax benefit |  | 3,424 |  |  | 3.2 |  |  | 4,064 |  |  | 3.4 |  |  | 3,315 |  |  | 3.2 |
Deferred tax liability remeasurement |  | — |  |  | — |  |  | — |  |  | — |  |  | (875) |  |  | (0.8) |
Other |  | (437) |  |  | (0.4) |  |  | (605) |  |  | (0.5) |  |  | (1,233) |  |  | (1.3) |
Total |  | $ | 24,880 |  |  | 23.4 | % |  | $ | 28,139 |  |  | 23.4 | % |  | $ | 22,613 |  |  | 21.5 | %
The tax expense related to gains (losses) on investment securities available-for-sale for the years 2020, 2019, and 2018 was approximately $67,000, $0, and $(83,000), respectively. The following table shows the composition of deferred tax assets and liabilities as of December 31, 2020 and 2019.
(Dollars in thousands) |  | 2020 |  | 2019
Deferred tax assets: |  |  |  |
Allowance for credit losses |  | $ | 35,696 |  |  | $ | 28,792 |
Tax credit carryforward |  | 8,606 |  |  | — |
Operating lease liability |  | 5,704 |  |  | 5,899 |
Accruals for employee benefits |  | 2,963 |  |  | 2,842 |
Capitalized loan costs |  | 893 |  |  | — |
Mortgage servicing |  | 173 |  |  | — |
Other |  | 678 |  |  | 222 |
Total deferred tax assets |  | 54,713 |  |  | 37,755 |
Deferred tax liabilities: |  |  |  |
Differing depreciable bases in premises and leased equipment |  | 13,118 |  |  | 18,614 |
Right of use assets - leases |  | 5,737 |  |  | 5,899 |
Differing bases in assets related to acquisitions |  | 4,160 |  |  | 4,092 |
Tax advantaged partnerships |  | 3,770 |  |  | 4,383 |
Net unrealized gains on securities available-for-sale |  | 5,827 |  |  | 1,640 |
Mortgage servicing |  | — |  |  | 394 |
Capitalized loan costs |  | — |  |  | 1,207 |
Prepaid expenses |  | 334 |  |  | 297 |
Other |  | 300 |  |  | 544 |
Total deferred tax liabilities |  | 33,246 |  |  | 37,070 |
Net deferred tax asset |  | $ | 21,467 |  |  | $ | 685 |
No valuation allowance for deferred tax assets was recorded at December 31, 2020 and 2019 as the Company believes it is more likely than not that all of the deferred tax assets will be realized. Additionally, the tax credit carryforward expires in 2040. The following table shows a reconciliation of the beginning and ending amounts of unrecognized tax benefits.
(Dollars in thousands) |  | 2020 |  | 2019 |  | 2018
Balance, beginning of year |  | $ | — |  |  | $ | — |  |  | $ | 1,112 |
Additions based on tax positions related to the current year |  | — |  |  | — |  |  | — |
Additions for tax positions of prior years |  | — |  |  | — |  |  | — |
Reductions for tax positions of prior years |  | — |  |  | — |  |  | — |
Reductions due to lapse in statute of limitations |  | — |  |  | — |  |  | — |
Settlements |  | — |  |  | — |  |  | (1,112) |
Balance, end of year |  | $ | — |  |  | $ | — |  |  | $ | — |
The total amount of unrecognized tax benefits that would affect the effective tax rate if recognized was zero at December 31, 2020, 2019 and 2018. Interest and penalties are recognized through the income tax provision. For the years 2020, 2019 and 2018, the Company recognized approximately $0.00 million, $0.00 million and $(0.09) million in interest, net of tax effect, and penalties, respectively. There were no accrued interest and penalties at December 31, 2020, 2019 and 2018. Tax years that remain open and subject to audit include the federal 2017-2020 years and the Indiana 2017-2020 years. Additionally, in 2018 the Company reached a state tax settlement for the 2015-2017 years and as a result, recorded a reduction of unrecognized tax benefits in the amount of $1.11 million. The Company does not anticipate a significant change in the amount of uncertain tax positions within the next 12 months. The Tax Cuts and Jobs Act was enacted on December 22, 2017. The Act reduced the U.S. federal corporate tax rate from 35% to 21%. At December 31, 2017, the Company had not fully completed its accounting for the tax effects of enactment of the Act and recorded a provisional benefit of $2.61 million which is included as a component of Income Tax Expense on the Consolidated Statements of Income related to the remeasurement of its deferred tax balance. During the third quarter of 2018, the Company completed its accounting for the provisional amounts recognized at December 31, 2017 and recorded an additional $0.88 million benefit as provided by the SEC’s Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act.

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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=84230637&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=116825942&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=84230637&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=116825942&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=84230637&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 + Details
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