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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Federal and state income tax expense consists of the following for the years ended December 31:

(dollars in thousands)202320222021
Current federal income tax expense$25,291 $37,182 $39,865 
Current state income tax expense5,072 5,008 15,348 
Total current tax expense30,363 42,190 55,213 
Deferred federal income tax (benefit) expense
(2,966)3,532 5,185 
Deferred state income tax (benefit) expense
(411)3,028 585 
Total deferred tax (benefit) expense
(3,377)6,560 5,770 
Total income tax expense$26,986 $48,750 $60,983 
The Company had net deferred tax assets (deferred tax assets in excess of deferred tax liabilities) of $86.6 million and $96.6 million for the years ended at December 31, 2023 and 2022, respectively, which related primarily to our unrealized loss on securities, allowance for credit losses and loan origination fees. Management believes it is more likely than not that all of the deferred tax assets will be realized with the exception of certain state net operating losses.

Temporary timing differences between the amounts reported in the Consolidated Financial Statements and the tax bases of assets and liabilities result in deferred taxes. The table below summarizes significant components of our deferred tax assets and liabilities as of December 31, 2023 and 2022:

(dollars in thousands)20232022
Deferred tax assets    
Allowance for credit losses$21,281 $18,490 
Deferred loan fees and costs6,372 6,736 
Leases5,713 7,195 
Stock-based compensation2,003 1,796 
Net operating loss7,964 7,736 
Unrealized loss on securities available-for-sale39,671 50,442 
Unrealized loss on securities held-to-maturity11,725 14,366 
Unrealized loss on interest rate swap derivatives59 — 
Supplemental executive retirement and death benefit agreements
2,066 2,495 
Other assets2,669 1,344 
Valuation allowances(7,428)(7,008)
Total deferred tax assets92,095 103,592 
Deferred tax liabilities
Excess servicing(561)(589)
Premises and equipment
(211)(205)
Leases(4,703)(6,034)
Other liabilities— (197)
Total deferred tax liabilities(5,475)(7,025)
Net deferred income tax assets$86,620 $96,567 
As of December 31, 2023. the Company has $2.9 million of federal net operating loss carryforward in conjunction with the Fidelity & Trust Financial Corporation acquisition, that is subject to annual limits under Section 382 of the Internal Revenue Code and expires in 2027. The Company has concluded, based on the weight of available positive and negative
evidence, a portion of its state net operating loss deferred tax asset is not more likely than not to be realized and accordingly, a valuation allowance of $7.4 million and $7.0 million is carried as of December 31, 2023 and 2022, respectively.
A reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate for the years ended December 31, 2023, 2022 and 2021 follows:
202320222021
Statutory federal income tax rate21.00 %21.00 %21.00 %
Increase (decrease) due to:
State income taxes2.75 %3.28 %5.45 %
Non-deductible fines and penalties— %2.54 %— %
Tax-exempt interest and dividend income(3.11)%(1.57)%(0.91)%
Stock-based compensation expense0.40 %0.19 %0.44 %
Other0.12 %0.26 %(0.32)%
Effective tax rate21.16 %25.70 %25.66 %
The Company remains subject to examination by taxing authorities for the years ending after December 31, 2019. Management has identified no uncertain tax positions at December 31, 2023.