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Income Taxes
 12 Months Ended
Dec. 31, 2021
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)202120202019
Current tax provision
Federal$6,627 $7,108 $7,838 
State4,815 4,895 5,183 
Total current tax provision11,442 12,003 13,021 
Deferred tax provision (benefit)
Federal274 (964)(907)
State(58)(694)(461)
Total deferred tax provision (benefit)216 (1,658)(1,368)
Total income tax provision$11,658 $10,345 $11,653 
The following table shows the tax effect of our cumulative temporary differences as of December 31:
(in thousands)20212020
Deferred tax assets:
Operating and finance lease liabilities$7,642 $8,018 
Allowance for credit losses on loans and unfunded loan commitments7,335 7,584 
Deferred compensation plan and salary continuation plan3,911 2,343 
Accrued but unpaid expenses1,884 1,103 
Net operating loss carryforwards1,406 1,660 
State franchise tax930 1,017 
Fair value adjustment on acquired loans894 254 
Stock-based compensation599 658 
Depreciation and disposals on premises and equipment188 635 
Interest received on non-accrual loans24 23 
Other120 100 
  Total gross deferred tax assets24,933 23,395 
Deferred tax liabilities:
Operating and finance lease right-of-use assets(7,098)(7,589)
Core deposit intangible assets(1,953)(1,133)
Deferred loan origination costs and fees(1,526)(1,945)
Net unrealized gains on securities available-for-sale(745)(5,237)
Accretion on investment securities(33)(33)
Unaccreted discount on subordinated debenture— (398)
Other(259)(132)
  Total gross deferred tax liabilities(11,614)(16,467)
Net deferred tax assets$13,319 $6,928 

As of December 31, 2021, federal and California net operating loss carryforwards ("NOLs") of $304 thousand and $15.7 million, respectively, corresponded to the total $1.4 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 2030. 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, 2021 or 2020.

The effective tax rate for 2021, 2020 and 2019 differs from the current federal statutory income tax rate as follows:
202120202019
Federal statutory income tax rate21.0 %21.0 %21.0 %
Increase (decrease) due to:
California franchise tax, net of federal tax benefit8.4 %8.1 %8.2 %
Tax exempt interest on municipal securities and loans(2.5)%(2.4)%(1.8)%
Tax exempt earnings on bank owned life insurance(1.0)%(0.5)%(0.6)%
Non-deductible acquisition related expenses0.6 %— %— %
Non-deductible executive compensation0.4 %— %— %
Low income housing and qualified zone academy bond tax credits(0.4)%(0.5)%(0.4)%
Stock-based compensation and excess tax benefits(0.1)%(0.2)%(0.1)%
Other(0.4)%— %(0.9)%
Effective Tax Rate26.0 %25.5 %25.4 %

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 2018 for federal income tax and before 2017 for California. At December 31, 2021 and 2020, there were no unrecognized tax benefits, and neither the Bank nor Bancorp had accruals for interest and penalties related to unrecognized tax benefits.