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INCOME TAXES | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
INCOME TAXES | 11. INCOME TAXES The income tax expense included in the consolidated financial statements for the years ended December 31 is allocated as follows:
(In thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Federal: |  |  |  |  |  |  |  |  |  |  |  |
Current (benefit)/expense |  | $ | (4,741 | ) |  | $ | 5,647 |  |  | $ | (7,046 | )
Deferred expense |  |  | 10,161 |  |  |  | 6,087 |  |  |  | 16,908 |
State: |  |  |  |  |  |  |  |  |  |  |  |
Current expense |  |  | 2,327 |  |  |  | 3,028 |  |  |  | 3,554 |
Deferred (benefit)/expense |  |  | (1,936 | ) |  |  | 3,926 |  |  |  | 134 |
Total income tax expense |  | $ | 5,811 |  |  | $ | 18,688 |  |  | $ | 13,550 |
Total income tax expense differed from the amounts computed by applying the U.S. Federal income tax rate of 21 percent for 2020, 2019, and 2018, respectively, to income before taxes as a result of the following:
(In thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Computed “expected” tax expense |  | $ | 6,721 |  |  | $ | 13,886 |  |  | $ | 12,121 |
(Decrease)/increase in taxes resulting from: |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt income |  |  | (287 | ) |  |  | (431 | ) |  |  | (402 | )
State income taxes, net of Federal benefit |  |  | 1,813 |  |  |  | 2,540 |  |  |  | 2,942 |
Impact of state tax reform, net of Federal benefit |  |  | — |  |  |  | 2,954 |  |  |  | — |
Bank owned life insurance income |  |  | (267 | ) |  |  | (277 | ) |  |  | (290 | )
Life insurance expense |  |  | 225 |  |  |  | 234 |  |  |  | 148 |
Gain on death benefit |  |  | — |  |  |  | — |  |  |  | (630 | )
Interest disallowance |  |  | 66 |  |  |  | 146 |  |  |  | 115 |
Meals and entertainment expense |  |  | 40 |  |  |  | 40 |  |  |  | 25 |
Stock-based compensation |  |  | 569 |  |  |  | (46 | ) |  |  | (481 | )
Impact of CARES Act |  |  | (3,009 | ) |  |  | — |  |  |  | — |
Other |  |  | (60 | ) |  |  | (358 | ) |  |  | 2 |
Total income tax expense |  | $ | 5,811 |  |  | $ | 18,688 |  |  | $ | 13,550 |
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31 are as follows:
(In thousands) |  | 2020 |  |  | 2019 |
Deferred tax assets: |  |  |  |  |  |  |  |
Allowance for loan losses |  | $ | 18,044 |  |  | $ | 11,369 |
Tax net operating loss carryforward |  |  | 3,476 |  |  |  | 6,163 |
Organization costs |  |  | 12 |  |  |  | 13 |
Cash flow hedge |  |  | 2,703 |  |  |  | 925 |
Unrealized loss on equity security |  |  | — |  |  |  | 43 |
Stock option expense |  |  | 2,131 |  |  |  | 2,874 |
Nonaccrual interest |  |  | 24 |  |  |  | 74 |
Accrued compensation |  |  | 4,058 |  |  |  | 2,956 |
Accrued expenses |  |  | 1,420 |  |  |  | 1,402 |
Lease liabilities |  |  | 2,610 |  |  |  | 3,234 |
Finance lease |  |  | 762 |  |  |  | 768 |
Other |  |  | 52 |  |  |  | 188 |
Total gross deferred tax assets |  | $ | 35,292 |  |  | $ | 30,009 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Lease financing |  | $ | 55,823 |  |  | $ | 44,841 |
Unrealized gain on securities available for sale |  |  | 1,772 |  |  |  | 330 |
Unrealized gain on equity security |  |  | 31 |  |  |  | — |
Deferred loan origination costs and fees |  |  | 1,175 |  |  |  | 1,355 |
Deferred income |  |  | 5,205 |  |  |  | 5,329 |
Amortization of intangible assets |  |  | 1,738 |  |  |  | 239 |
Purchase accounting |  |  | — |  |  |  | 908 |
Lease right-of-use asset |  |  | 2,526 |  |  |  | 3,158 |
Total gross deferred tax liabilities |  |  | 68,270 |  |  |  | 56,160 |
Net deferred tax liability |  | $ | (32,978 | ) |  | $ | (26,151 | )
Based upon taxes paid and projected future taxable income, Management believes that it is more likely than not that the Company’s gross deferred tax assets will be realized. However, there can be no assurance that such assets will be realized if circumstances change. At December 31, 2020 and 2019, the Company had no unrecognized tax benefits. The Company does not expect the amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. The Company recognizes interest accrued related to uncertain tax positions and penalties as income tax expense. On July 1, 2018, the 2019 New Jersey Budget was passed, which established a 2.5 percent surtax on businesses that have New Jersey allocated net income in excess of $1.0 million. The surtax was effective as of January 1, 2018 and continued through 20 20. In September 2020, New Jersey extended the surtax through December 31, 2023. In addition, effective for taxable years beginning on or after January 1, 2019, banks will be required to file combined reports of taxable income including their parent holding company. New Jersey requires entities to report their real estate investment trust, registered investment company and investment company on a separate entity basis. The Bank made an adjustment to income tax expense and deferred tax assets/liabilities to reflect the new state tax rate. The CARES Act was signed into law on March 27, 2020 and subsequently has been amended several times. Among other provisions the CARES Act allowed a five-year carryback of any NOL generated in a taxable year beginning after December 31, 2017 and before January 1, 2021. The tax benefit recorded in 2020 was primarily due to a $3.0 million Federal income tax benefit that resulted from the federal NOL carryback. The Company had a $23 million operating loss for tax purposes in 2018 (when the Federal tax rate was 21 percent) resulting from accelerated tax depreciation. The Company carried back all eligible NOLs and has no federal NOLs remaining. The Company is subject to U.S. Federal income tax as well as income tax of various state jurisdictions. The Company is no longer subject to federal examination for tax years prior to 2017. The tax years of 2017, 2018 and 2019 remain open to federal examination.

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://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 http://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 http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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