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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Income tax expense consisted of the following:
| Years Ended December 31,
(Dollars in thousands) | 2021 |  | 2020 |  | 2019
Income tax expense: |  |  |  |  |
Current | $ | 37,812 |  |  | $ | 22,766 |  |  | $ | 12,971 |
Deferred | (5,832) |  |  | (2,080) |  |  | 3,908 |
Change in valuation allowance for deferred tax asset | — |  |  | — |  |  | 23 |
Income tax expense | $ | 31,980 |  |  | $ | 20,686 |  |  | $ | 16,902 |
Effective tax rates differ from federal statutory rates applied to income before income taxes due to the following:
| Years Ended December 31,
(Dollars in thousands) | 2021 |  | 2020 |  | 2019
Tax provision computed at federal statutory rate | $ | 30,440 |  |  | $ | 17,789 |  |  | $ | 15,844 |
Effect of: |  |  |  |  |
State taxes, net | 3,335 |  |  | 2,919 |  |  | 1,704 |
Stock-based compensation | (1,778) |  |  | (109) |  |  | (23) |
Bank-owned life insurance | (332) |  |  | (121) |  |  | (114) |
Tax exempt interest | (201) |  |  | (250) |  |  | (442) |
Change in valuation allowance for deferred tax asset | — |  |  | — |  |  | 23 |
Other | 516 |  |  | 458 |  |  | (90) |
Income tax expense | $ | 31,980 |  |  | $ | 20,686 |  |  | $ | 16,902 |
Deferred income taxes reflect the net tax effects of temporary differences between the recorded amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
(Dollars in thousands) | 2021 |  | 2020
Deferred tax assets |  |  |
Federal net operating loss carryforwards | $ | 7,231 |  |  | $ | 4,067 |
State net operating loss carryforwards | 1,458 |  |  | 459 |
Stock-based compensation | 5,742 |  |  | 1,799 |
Allowance for credit losses | 11,341 |  |  | 24,317 |
Accrued liabilities | 4,465 |  |  | 2,675 |
Lease liability | 8,348 |  |  | 4,598 |
Other | 707 |  |  | 446 |
Total deferred tax assets | 39,292 |  |  | 38,361 |
Deferred tax liabilities |  |  |
Goodwill and intangible assets | 9,449 |  |  | 2,452 |
Fair value adjustment on junior subordinated debentures | 2,324 |  |  | 2,449 |
Premises and equipment | 4,786 |  |  | 10,767 |
Installment gain on sale of subsidiary | 626 |  |  | 1,049 |
Lease right-of-use asset | 7,598 |  |  | 4,172 |
Unrealized gain on securities available for sale | 1,023 |  |  | 1,601 |
Derivative financial instruments | 1,475 |  |  | 193 |
Indemnification asset | 1,123 |  |  | 8,575 |
Acquired loan basis | 525 |  |  | 184 |
Other | 62 |  |  | 214 |
Total deferred tax liabilities | 28,991 |  |  | 31,656 |
Net deferred tax asset before valuation allowance | 10,301 |  |  | 6,705 |
Valuation allowance | (278) |  |  | (278) |
Net deferred tax asset | $ | 10,023 |  |  | $ | 6,427 |
The Company's federal and state net operating loss carryforwards as of December 31, 2021 were $34,433,000 and $24,157,000, respectively, which will expire at various dates from 2031 through 2035, with the exception of $16,268,000 of net operating loss carryforwards generated after 2017 that will not expire. The Company has a valuation allowance on certain net operating loss carryforwards that are not expected to be realized before expiration. The Company's federal and state net operating loss carryforwards as of December 31, 2020 were $19,365,000 and $10,649,000, respectively. An Internal Revenue Code Section 382 (“Section 382”) ownership change was triggered as part of previous acquisitions. A significant portion of the deferred tax asset relating to the Company's net operating loss carryforwards is subject to the annual limitation rules under Section 382. The utilization of tax carryforward attributes acquired from the EJ Financial Corp. (2010) acquisition is subject to an annual limitation of $341,000. The utilization of tax carryforward attributes acquired from the National Bancshares, Inc. (2013) acquisition is subject to an annual limitation of $2,040,000. The utilization of tax carryforward attributes acquired from HubTran, Inc. (2021) is subject to an annual limitation of $1,594,000. The utilization of deferred tax assets related to the net operating loss and tax credit carryforwards acquired from the ColoEast (2016) stock acquisition are subject to an annual limitation of $1,906,000 under Section 382 rules. At December 31, 2021 and 2020, the Company had no amounts recorded for uncertain tax positions and does not expect any material changes in uncertain tax benefits during the next 12 months. The Company recognizes interest and penalties related to income tax matters in income tax expense. The Company is subject to U.S. federal income tax as well as income tax in various states. The Company is generally not subject to examination by taxing authorities for years prior to 2018.

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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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