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INCOME TAXES | 12 Months Ended
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Dec. 31, 2019
INCOME TAXES |
INCOME TAXES | 14. INCOME TAXES The following table details the components of income tax expense:
|  | Year Ended December 31,
(In thousands) |  | 2019 |  | 2018 |  | 2017
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 12,665 |  | $ | 5,270 |  | $ | 8,762
State |  |  | 639 |  |  | 1,023 |  |  | 937
Total current |  |  | 13,304 |  |  | 6,293 |  |  | 9,699
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (419) |  |  | 3,299 |  |  | 10,251
State |  |  | 1,175 |  |  | (451) |  |  | (1,004)
Total deferred |  |  | 756 |  |  | 2,848 |  |  | 9,247
Total income tax expense |  | $ | 14,060 |  | $ | 9,141 |  | $ | 18,946
The following table is a reconciliation of the expected federal income tax expense at the statutory tax rate to the actual provision:
|  | Year Ended December 31, |
|  | 2019 | 2018 | 2017 |
|  |  |  |  | Percentage |  |  |  |  | Percentage |  |  |  |  | Percentage |
|  |  |  |  | of Pre-tax |  |  |  |  | of Pre-tax |  |  |  |  | of Pre-tax |
(Dollars in thousands) |  | Amount |  | Earnings |  | Amount |  | Earnings |  | Amount |  | Earnings |
Federal income tax expense computed by applying the statutory rate to income before income taxes |  | $ | 13,808 |  | 21 | % | $ | 10,157 |  | 21 | % | $ | 13,820 |  | 35 | %
Tax-exempt income |  |  | (920) |  | (1) |  |  | (1,002) |  | (2) |  |  | (1,808) |  | (5) |
State taxes, net of federal income tax benefit |  |  | 1,425 |  | 2 |  |  | 1,999 |  | 4 |  |  | 725 |  | 2 |
Deferred tax asset remeasurement (1) |  |  | — |  | — |  |  | — |  | — |  |  | 7,572 |  | 19 |
Other |  |  | (253) |  | (1) |  |  | (2,013) |  | (4) |  |  | (1,363) |  | (3) |
Income tax expense |  | $ | 14,060 |  | 21 | % | $ | 9,141 |  | 19 | % | $ | 18,946 |  | 48 | %
| (1) |  | 2017 amount includes a charge to write-down deferred tax assets due to the enactment of the Tax Act of $7.6 million.
The following table summarizes the composition of deferred tax assets and liabilities:
|  | December 31,
(In thousands) |  | 2019 |  | 2018
Deferred tax assets: |  |  |  |  |  |
Allowance for loan losses and off-balance sheet credit exposure |  | $ | 10,305 |  | $ | 9,309
Net unrealized losses on securities |  |  | 343 |  |  | 4,810
Compensation and related benefit obligations |  |  | 2,368 |  |  | 2,427
Purchase accounting fair value adjustments |  |  | 4,735 |  |  | 4,141
Net change in pension and other post-retirement benefits plans |  |  | 2,809 |  |  | 2,630
Net operating loss carryforward |  |  | 3,229 |  |  | 4,746
Net loss on cash flow hedges |  |  | 304 |  |  | —
Operating lease liabilities |  |  | 13,444 |  |  | —
Other |  |  | 200 |  |  | 671
Total deferred tax assets |  |  | 37,737 |  |  | 28,734
Deferred tax liabilities: |  |  |  |  |  |
Pension and SERP expense |  |  | (4,904) |  |  | (4,559)
Depreciation |  |  | (956) |  |  | (1,163)
REIT undistributed net income |  |  | (2,403) |  |  | (2,110)
Net deferred loan costs and fees |  |  | (2,413) |  |  | (2,206)
Net gain on cash flow hedges |  |  | — |  |  | (1,210)
State and local taxes |  |  | (1,227) |  |  | (1,468)
Operating lease right-of-use assets |  |  | (12,934) |  |  | —
Other |  |  | (835) |  |  | (353)
Total deferred tax liabilities |  |  | (25,672) |  |  | (13,069)
Net deferred tax asset |  | $ | 12,065 |  | $ | 15,665
On December 22, 2017, the President signed the Tax Cuts and Jobs Act (“Tax Act”), resulting in significant changes to existing tax law, including a lower federal statutory tax rate of 21%. The Tax Act was generally effective as of January 1, 2018. In the fourth quarter of 2017, the Company recorded a charge of $7.6 million, which consisted primarily of the deferred tax asset remeasurement from the previous 35% federal statutory rate to the current 21% federal statutory tax rate. On December 22, 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides a measurement period of up to one year from the enactment date to refine and complete the accounting. The Company has completed its accounting for the effects of the Tax Act, and has made reasonable estimates of the effect of the change in federal statutory tax rate and remeasurement of deferred tax assets based on the rate at which they are expected to reverse in the future. The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the State and City of New York and the State of New Jersey. The Company is no longer subject to examination by taxing authorities for years before 2015. There are no unrecorded tax benefits, and the Company does not expect the total amount of unrecognized income tax benefits to significantly increase in the next twelve months. In connection with the acquisition of FNBNY, the Company acquired a federal net operating loss (“NOL”) carryforward subject to Internal Revenue Code Section 382. The Company recorded a deferred tax asset that it expects to realize within the carryforward period. At December 31, 2019, the remaining federal NOL carryforward was $3.1 million. At December 31, 2019, the Company had New York State and New York City NOL carryforwards of $26.3 million and $4.4 million, respectively, and recorded a deferred tax asset that it expects to recover within the carryforward period. The New York State and New York City NOLs at December 31, 2019 included NOLs acquired in connection with the CNB and FNBNY acquisitions.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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