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INCOME TAXES | 12 Months Ended
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Dec. 31, 2023
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) |  | 2023 |  |  | 2022 |  |  | 2021 |
Federal: |  |  |  |  |  |  |  |  |
Current expense |  | $ | 25,814 |  |  | $ | 27,228 |  |  | $ | 7,400 |
Deferred (benefit)/expense |  |  | (11,862 | ) |  |  | (7,817 | ) |  |  | 7,971 |
State: |  |  |  |  |  |  |  |  |
Current expense |  |  | 7,889 |  |  |  | 7,511 |  |  |  | 4,188 |
Deferred (benefit)/expense |  |  | (3,414 | ) |  |  | 1,176 |  |  |  | 1,481 |
Total income tax expense |  | $ | 18,427 |  |  | $ | 28,098 |  |  | $ | 21,040 |
Total income tax expense differed from the amounts computed by applying the U.S. Federal income tax rate of 21 percent for 2023, 2022, and 2021, respectively, to income before taxes as a result of the following:
(In thousands) |  | 2023 |  |  | 2022 |  |  | 2021 |
"Tax expense computed at applicable statutory rate" |  | $ | 14,129 |  |  | $ | 21,513 |  |  | $ | 16,309 |
(Decrease)/increase in taxes resulting from: |  |  |  |  |  |  |  |  |
Tax-exempt income |  |  | (261 | ) |  |  | (236 | ) |  |  | (146 | )
State income taxes, net of Federal benefit |  |  | 3,535 |  |  |  | 7,109 |  |  |  | 4,789 |
Bank owned life insurance income |  |  | (266 | ) |  |  | (261 | ) |  |  | (356 | )
Life insurance expense |  |  | 238 |  |  |  | 21 |  |  |  | 199 |
Interest disallowance |  |  | 143 |  |  |  | 34 |  |  |  | 14 |
Meals and entertainment expense |  |  | 78 |  |  |  | 39 |  |  |  | 39 |
Stock-based compensation |  |  | 889 |  |  |  | (130 | ) |  |  | 9 |
Other |  |  | (58 | ) |  |  | 9 |  |  |  | 183 |
Total income tax expense |  | $ | 18,427 |  |  | $ | 28,098 |  |  | $ | 21,040 |
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) |  | 2023 |  |  | 2022 |
Deferred tax assets: |  |  |  |  |  |
Allowance for credit losses |  | $ | 17,540 |  |  | $ | 14,924 |
Tax net operating loss carryforward |  |  | 262 |  |  |  | 648 |
Capital loss carryforward |  |  | 1,763 |  |  |  | — |
Organization costs |  |  | 7 |  |  |  | 7 |
Unrealized loss on securities available for sale |  |  | 25,408 |  |  |  | 25,424 |
Unrealized loss on equity security |  |  | 488 |  |  |  | 544 |
Stock compensation expense |  |  | 2,621 |  |  |  | 3,084 |
Nonaccrual interest |  |  | 115 |  |  |  | 202 |
Accrued compensation |  |  | 7,201 |  |  |  | 5,277 |
Accrued expenses |  |  | 1,079 |  |  |  | 803 |
Lease liabilities |  |  | 3,328 |  |  |  | 3,598 |
Finance lease |  |  | 672 |  |  |  | 1,072 |
Other |  |  | 1,080 |  |  |  | 727 |
Total gross deferred tax assets |  | $ | 61,564 |  |  | $ | 56,310 |
Deferred tax liabilities: |  |  |  |  |  |
Lease financing |  | $ | 48,002 |  |  | $ | 58,382 |
Cash flow hedge |  |  | 1,883 |  |  |  | 2,528 |
Deferred loan origination costs and fees |  |  | 1,878 |  |  |  | 1,827 |
Deferred income |  |  | 4,479 |  |  |  | 4,608 |
Amortization of intangible assets |  |  | 1,245 |  |  |  | 854 |
Lease right-of-use asset |  |  | 3,126 |  |  |  | 3,379 |
Other |  |  | 446 |  |  |  | 164 |
Total gross deferred tax liabilities |  |  | 61,059 |  |  |  | 71,742 |
Net deferred tax asset/(liability) |  | $ | 505 |  |  | $ | (15,432 | )
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, 2023, the Company had $5.1 million of state net operating loss ("NOL") carryforward available to offset future taxable income. These operating loss carryforwards have various expirations beginning in 2032. At December 31, 2022, the Company had a state NOL carryforward of $14.5 million. At December 31, 2022, the Company had no unrecognized tax benefits. The Company recognizes interest accrued related to uncertain tax positions and penalties as income tax expense. On July 1, 2018, New Jersey 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 2020. In September 2020, New Jersey extended the surtax through December 31, 2023. On July 3, 2023, New Jersey enacted comprehensive tax legislation which included the expiration of the 2.5 percent surtax as of December 31, 2023. The Bank made an adjustment to income tax expense and deferred tax assets/liabilities to reflect the new state tax rate. 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 2020 or by state and local tax authorities for years prior to 2019. The tax years of 2020, 2021 and 2022 remain open to federal examination.

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