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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES
20. INCOME TAXES
 
Components of income tax expense (benefit) for the years ended December 31, 2021, 2020 and 2019 were as follows:
 
Year Ended December 31,
(Dollars in thousands)202120202019
Current expense:
Federal$11,304 $22,014 $23,359 
State3,626 2,833 211 
Total current14,930 24,847 23,570 
Deferred expense:
Federal8,654 (12,952)(8,970)
State2,174 (135)5,005 
Total deferred10,828 (13,087)(3,965)
Provision for income taxes$25,758 $11,760 $19,605 

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law to provide certain relief as a result of COVID-19. As of December 31, 2021, the Company has determined that neither the CARES Act nor changes to income tax laws or regulations in other jurisdictions have a significant impact on income tax expense. On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law and extends several provisions of the CARES Act. As of December 31, 2021, the Company has determined that neither this Act nor changes to income tax laws or regulations in other jurisdictions have a significant impact on income tax expense.

Income tax expense (benefit) for the periods presented differed from the "expected" tax expense (computed by applying the U.S. federal corporate tax rate of 21% for the years ended December 31, 2021, 2020 and 2019, to income (loss) before income taxes) for the following reasons:
 
 Year Ended December 31,
(Dollars in thousands)202120202019
Computed "expected" tax expense (benefit)$22,187 $10,297 $16,365 
Increase (decrease) in taxes resulting from:  
Tax-exempt interest income(526)(528)(675)
Other tax-exempt income(734)(799)(652)
Low-income housing and energy tax credits(365)(332)(182)
State income taxes, net of Federal income tax effect, excluding impact of deferred tax valuation allowance5,377 2,590 4,345 
Change in the beginning-of-the-year balance of the valuation allowance for deferred tax assets allocated to income tax expense(39)(22)(41)
Other, net(142)554 445 
Total$25,758 $11,760 $19,605 
The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows:
 
 December 31,
(Dollars in thousands)20212020
Deferred tax assets  
Lease liability$10,891 $12,624 
Allowance for credit losses14,382 17,576 
Accrued expenses3,616 2,447 
Employee retirement benefits2,547 3,143 
State net operating loss carryforwards3,091 3,134 
Restricted stock and non-qualified stock options611 963 
Premises and equipment4,678 3,996 
Other6,333 4,787 
Total deferred tax assets46,149 48,670 
Deferred tax liabilities 
Right-of-use lease asset10,546 12,267 
Intangible assets2,604 3,174 
Other3,808 3,383 
Total deferred tax liabilities16,958 18,824 
Less: Deferred tax valuation allowance3,359 3,398 
Net deferred tax assets$25,832 $26,448 
 
In assessing the realizability of our net DTA, management considers whether it is more likely than not that some portion or all of the DTA 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. Management considers the reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income and tax-planning strategies in making this assessment.
 
As of December 31, 2021, the valuation allowance on our net DTA totaled $3.4 million, of which $3.2 million related to our DTA from net apportioned net operating loss ("NOL") carryforwards for California state income tax purposes as we do not expect to generate sufficient income in California to utilize the DTA. The remaining $0.2 million relates to a valuation allowance on a Hawaii capital loss carry forward balance of $6.2 million that we do not expect to be able to utilize. The net change in the valuation allowance was a decrease of $39 thousand in 2021, compared to a decrease of $22 thousand in 2020.

Net of this valuation allowance, the Company's net DTA totaled $25.8 million as of December 31, 2021, compared to a net DTA of $26.4 million as of December 31, 2020.

At December 31, 2021, the Company had NOL carryforwards for California state income tax purposes of $36.1 million, which are available to offset future state taxable income. California NOL carryforwards will expire if not utilized beginning in 2028. The Company does not have any NOL carryforwards for U.S. federal or Hawaii state income tax purposes.

At December 31, 2021, we have no material unrecognized tax benefits that, if recognized would favorably affect the effective income tax rate in future periods. We do not expect our unrecognized tax benefits to change significantly over the next 12 months.
 
We are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. As of December 31, 2021, the Company’s federal tax returns for 2016 and earlier, and the state tax returns for 2017 and earlier were no longer subject to examination by the taxing authorities. However, tax periods closed in a prior period may be subject to audit and re-examination by tax authorities for which tax carryforwards are utilized in subsequent years.