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Income Taxes
 12 Months Ended
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)202020192018
Current tax provision
Federal$7,108 $7,838 $7,289 
State4,895 5,183 4,722 
Total current tax provision12,003 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)20202019
Deferred tax assets:
Operating and finance lease liabilities$8,018 $3,792 
Allowance for credit losses on loans and unfunded loan commitments7,584 5,252 
Deferred compensation plan and salary continuation plan2,343 2,188 
Net operating loss carryforwards1,660 1,914 
Accrued but unpaid expenses1,103 1,067 
State franchise tax1,017 1,015 
Stock-based compensation658 623 
Depreciation and disposals on premises and equipment635 562 
Fair value adjustment on acquired loans254 299 
Interest received on non-accrual loans23 12 
Other100 154 
  Total gross deferred tax assets23,395 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:
202020192018
Federal statutory income tax rate21.0 %21.0 %21.0 %
Increase (decrease) due to:
California franchise tax, net of federal tax benefit8.1 %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 Rate25.5 %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.