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INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES
19. INCOME TAXES
 
Components of income tax expense (benefit) for the years ended December 31, 2022, 2021 and 2020 were as follows:
 
Year Ended December 31,
(Dollars in thousands)202220212020
Current expense:
Federal$996 $11,304 $22,014 
State(1,965)3,626 2,833 
Total current(969)14,930 24,847 
Deferred expense:
Federal18,854 8,654 (12,952)
State6,956 2,174 (135)
Total deferred25,810 10,828 (13,087)
Provision for income taxes$24,841 $25,758 $11,760 

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, 2022, 2021 and 2020, to income (loss) before income taxes) for the following reasons:
 
 Year Ended December 31,
(Dollars in thousands)202220212020
Computed "expected" tax expense (benefit)$20,741 $22,187 $10,297 
Increase (decrease) in taxes resulting from:  
Tax-exempt interest income(692)(526)(528)
Other tax-exempt income(392)(734)(799)
Low-income housing tax credits(530)(365)(332)
State income taxes, net of Federal income tax effect, excluding impact of deferred tax valuation allowance4,982 5,377 2,590 
Change in the beginning-of-the-year balance of the valuation allowance for deferred tax assets allocated to income tax expense39 (39)(22)
Other, net693 (142)554 
Total$24,841 $25,758 $11,760 
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)20222021
Deferred tax assets  
Lease liability$9,598 $10,891 
Allowance for credit losses13,534 14,382 
Accrued expenses3,737 3,616 
Employee retirement benefits1,941 2,547 
Federal net operating loss carryforwards16,363 — 
State net operating loss carryforwards7,583 3,091 
Restricted stock and non-qualified stock options388 611 
Premises and equipment4,717 4,678 
Other9,504 6,333 
Total deferred tax assets67,365 46,149 
Deferred tax liabilities 
Right-of-use lease asset9,356 10,546 
Intangible assets2,427 2,604 
Other3,647 3,808 
Total deferred tax liabilities15,430 16,958 
Less: Deferred tax valuation allowance3,398 3,359 
Net deferred tax assets$48,537 $25,832 
 
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, 2022, the valuation allowance on our net DTA totaled $3.4 million, which related to our DTA from net apportioned net operating loss ("NOL") carryforwards for California state income tax purposes as the Company does not expect to generate sufficient income in California to utilize the DTA. The net change in the valuation allowance was an increase of $39 thousand in 2022, compared to a decrease of $39 thousand in 2021.

Net of this valuation allowance, the Company's net DTA totaled $48.5 million as of December 31, 2022, compared to a net DTA of $25.8 million as of December 31, 2021, and is included in other assets in the Company's consolidated balance sheets.

At December 31, 2022, the Company had NOL carryforwards for U.S. Federal income tax purposes of $77.9 million and state income tax purposes of $132.0 million, which are available to offset future taxable income. The U.S. Federal NOL carryforwards can be carried forward indefinitely to offset future federal taxable income. The Hawaii NOL carryforwards can also be carried forward indefinitely, while the other state NOL carryforwards will begin to expire if not utilized beginning in 2028.

Utilization of the NOL carryforwards and credits may be subject to annual limitations due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before they are able to be utilized. The Company does not expect any previous ownership changes, as defined under Sections 382 and 383 of the Internal Revenue Code, to result in an ultimate limitation that will materially reduce the total amount of net operating loss carryforwards that can be utilized.
At December 31, 2022, the Company did not have any material unrecognized tax benefits that, if recognized would favorably affect the effective income tax rate in future periods. The Company does not expect our unrecognized tax benefits to change significantly over the next 12 months.

The Company is subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. As of December 31, 2022, the Company’s federal tax returns for 2016 and earlier, and the state tax returns for 2018 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.