XML 43 R29.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax expense is substantially due to Federal income taxes as the provision for the state of Oregon income taxes is insignificant and the state of Washington does not charge an income tax in lieu of a business and occupation tax. Income tax expense consisted of the following for the periods indicated:
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
| (In thousands)
Current tax expense | $ | 16,690 |  |  | $ | 20,896 |  |  | $ | 15,186 |
Deferred tax expense (benefit) | 871 |  |  | 1,576 |  |  | (8,576) |
Income tax expense | $ | 17,561 |  |  | $ | 22,472 |  |  | $ | 6,610 |
The CARES Act, among other things, permitted net operating loss carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allowed net operating loss carrybacks incurred in 2018, 2019 and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. During the year ended December 31, 2020, the Company recorded a tax benefit from net operating loss carryback related to prior acquisitions of $967,000. The effective tax rate was 17.7% for the December 31, 2022 compared to an effective tax rate of 18.6% and 12.4% for the years ended December 31, 2021 and 2020, respectively. The decrease in the effective tax rate during the year ended December 31, 2022 was due primarily to the change in income before income taxes earned between the periods, including a decrease in annual pre-tax income for the year ended December 31, 2022 which increased the impact of favorable permanent tax items such as tax-exempt investments, investments in bank owned life insurance and low-income housing tax credits. The following table presents the reconciliation of income taxes computed at the Federal statutory income tax rate of 21% to the actual effective rate for the periods indicated:
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
| (In thousands)
Income tax expense at Federal statutory rate | $ | 20,882 |  |  | $ | 25,307 |  |  | $ | 11,168 |
State tax, net of Federal tax benefit | 936 |  |  | 960 |  |  | 359 |
Tax-exempt instruments | (1,733) |  |  | (1,929) |  |  | (1,785) |
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
| (In thousands)
Federal tax credits and other benefits (1) | (1,979) |  |  | (1,630) |  |  | (1,928) |
Effects of BOLI | (735) |  |  | (474) |  |  | (827) |
Tax benefit of CARES Act carryback | — |  |  | — |  |  | (967) |
Other, net | 190 |  |  | 238 |  |  | 590 |
Income tax expense | $ | 17,561 |  |  | $ | 22,472 |  |  | $ | 6,610 |
(1) Federal tax credits are provided for under the NMTC and LIHTC programs as described in Note (1) Description of Business, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Pronouncements. Gross tax credits related to the Company's NMTC totaling $9.8 million were utilized during the seven year period ended December 31, 2020. The following table presents major components of the deferred income tax asset (liability) resulting from differences between financial reporting and tax basis:
| December 31, 2022 |  | December 31, 2021
| (In thousands)
Deferred tax assets: |  |  |
Allowance for credit losses | $ | 9,796 |  |  | $ | 9,756 |
Accrued compensation | 3,538 |  |  | 3,480 |
Stock compensation | 726 |  |  | 689 |
Market discount on acquired loans | 714 |  |  | 944 |
Foregone interest on nonaccrual loans | 705 |  |  | 967 |
Net operating loss carryforward acquired | 166 |  |  | 186 |
ROU lease liability | 5,337 |  |  | 6,257 |
Net unrealized losses on investment securities | 28,061 |  |  | — |
Other deferred tax assets | 120 |  |  | 1,156 |
Total deferred tax assets | 49,163 |  |  | 23,435 |
Deferred tax liabilities: |  |  |
Deferred loan fees, net | (1,508) |  |  | (1,838) |
Premises and equipment | (2,999) |  |  | (2,436) |
FHLB stock | (577) |  |  | (572) |
Goodwill and other intangible assets | (1,211) |  |  | (1,659) |
Junior subordinated debentures | (937) |  |  | (991) |
ROU lease asset | (4,967) |  |  | (5,995) |
Net unrealized gains on investment securities | — |  |  | (2,537) |
Other deferred tax liabilities | (163) |  |  | (181) |
Total deferred tax liabilities | (12,362) |  |  | (16,209) |
Deferred tax asset, net | $ | 36,801 |  |  | $ | 7,226 |
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. A valuation allowance is required to be recognized for the portion of the deferred tax asset that will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. As of December 31, 2022, based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management expects to realize the benefits of these deductible differences. At December 31, 2022 and December 31, 2021, the Company had a net operating loss carryforward of $789,000 and $888,000, respectively, that do not expire. The Company is limited to the amount of the net operating loss carryforward that it can deduct each year under Section 382 of the Internal Revenue Code. Due to sufficient earnings history and other positive evidence, management has not recorded a valuation allowance on the net operating loss carryforward as of December 31, 2022 and December 31, 2021. As of December 31, 2022 and December 31, 2021, the Company had an insignificant amount of unrecognized tax benefits, none of which would materially affect its effective tax rate if recognized. The Company does not anticipate that the amount of unrecognized tax benefits will significantly increase or decrease in the next 12 months. The amount of interest and penalties accrued as of December 31, 2022 and December 31, 2021 and recognized during the years ended December 31, 2022, 2021 and 2020 were immaterial. The Company has qualified under provisions of the Internal Revenue Code to compute income taxes after deductions of additions to the bad debt reserves when it was registered as a Savings Bank. At December 31, 2022, the Company had a taxable temporary difference of approximately $2.8 million that arose before 1988 (base-year amount). In accordance with FASB ASC 740, an estimated deferred tax liability of $588,000 has not been recognized for the temporary difference. Management does not expect this temporary difference to reverse in the foreseeable future. The Company and its Bank subsidiary file a United States consolidated federal income tax return and Oregon State and local income tax returns, and the tax years subject to examination by the Internal Revenue Service are the years ended December 31, 2022, 2021, 2020 and 2019.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration