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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The current and deferred components of the income tax provision for each of the three years ended December 31 are as follows:
(in thousands) | 2020 | 2019 | 2018
Current tax provision |  |  |
Federal | $ | 7,108 |  | $ | 7,838 |  | $ | 7,289 |
State | 4,895 |  | 5,183 |  | 4,722 |
Total current tax provision | 12,003 |  | 13,021 |  | 12,011 |
Deferred tax benefit |  |  |
Federal | (964) |  | (907) |  | (898) |
State | (694) |  | (461) |  | (318) |
Total deferred tax provision | (1,658) |  | (1,368) |  | (1,216) |
Total income tax provision | $ | 10,345 |  | $ | 11,653 |  | $ | 10,795 |
The following table shows the tax effect of our cumulative temporary differences as of December 31:
(in thousands) | 2020 | 2019
Deferred tax assets: |  |
Operating and finance lease liabilities | $ | 8,018 |  | $ | 3,792 |
Allowance for credit losses on loans and unfunded loan commitments | 7,584 |  | 5,252 |
Deferred compensation plan and salary continuation plan | 2,343 |  | 2,188 |
Net operating loss carryforwards | 1,660 |  | 1,914 |
Accrued but unpaid expenses | 1,103 |  | 1,067 |
State franchise tax | 1,017 |  | 1,015 |
Stock-based compensation | 658 |  | 623 |
Depreciation and disposals on premises and equipment | 635 |  | 562 |
Fair value adjustment on acquired loans | 254 |  | 299 |
Interest received on non-accrual loans | 23 |  | 12 |
Other | 100 |  | 154 |
Total gross deferred tax assets | 23,395 |  | 16,878 |
Deferred tax liabilities: |  |
Operating and finance lease right-of-use assets | (7,589) |  | (3,314) |
Net unrealized gains on securities available-for-sale | (5,237) |  | (1,738) |
Deferred loan origination costs and fees | (1,945) |  | (1,619) |
Core deposit intangible assets | (1,133) |  | (1,385) |
Unaccreted discount on subordinated debenture | (398) |  | (418) |
Accretion on investment securities | (33) |  | (70) |
Other | (132) |  | (172) |
Total gross deferred tax liabilities | (16,467) |  | (8,716) |
Net deferred tax assets | $ | 6,928 |  | $ | 8,162 |
As of December 31, 2020, federal and California net operating loss carryforwards ("NOLs") of $1.5 million and $15.7 million, respectively, corresponded to the total $1.7 million deferred tax asset above. If not fully utilized, the federal NOLs will begin to expire in 2031, and the California NOLs will begin to expire in 2029. Based upon the level of historical taxable income and projections for future taxable income over the periods during which the deferred tax assets are expected to be deductible, management believes it is more likely than not we will realize the benefit of the remaining deferred tax assets. Accordingly, no valuation allowance has been established as of December 31, 2020 or 2019. The effective tax rate for 2020, 2019 and 2018 differs from the current federal statutory income tax rate as follows:
| 2020 | 2019 | 2018
Federal statutory income tax rate | 21.0 | % | 21.0 | % | 21.0 | %
Increase (decrease) due to: |  |  |
California franchise tax, net of federal tax benefit | 8.1 | % | 8.2 | % | 8.0 | %
Tax exempt interest on municipal securities and loans | (2.4) | % | (1.8) | % | (2.4) | %
Tax exempt earnings on bank owned life insurance | (0.5) | % | (0.6) | % | (0.4) | %
Low income housing and qualified zone academy bond tax credits | (0.5) | % | (0.4) | % | (0.5) | %
Stock-based compensation and excess tax benefits | (0.2) | % | (0.1) | % | (0.6) | %
Other | — | % | (0.9) | % | (0.2) | %
Effective Tax Rate | 25.5 | % | 25.4 | % | 24.9 | %
Bancorp and the Bank have entered into a tax allocation agreement, which provides that income taxes shall be allocated between the parties on a separate entity basis. The intent of this agreement is that each member of the consolidated group will incur no greater tax liability than it would have incurred on a stand-alone basis. We file a consolidated return in the U.S. federal tax jurisdiction and a combined return in the State of California tax jurisdiction. There were no ongoing federal or state income tax examinations at the issuance of this report. We are no longer subject to examinations by tax authorities for years before 2017 for federal income tax and before 2016 for California. At December 31, 2020 and 2019, there were no unrecognized tax benefits, and neither the Bank nor Bancorp had accruals for interest and penalties related to unrecognized tax benefits.

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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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