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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Provision

The current and deferred components of the income tax provision for each of the three years ended December 31 are as follows:

(in thousands)			2021			2020			2019
Current tax provision
Federal			$	6,627		$	7,108		$	7,838
State			4,815			4,895			5,183
Total current tax provision			11,442			12,003			13,021
Deferred tax provision (benefit)
Federal			274			(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

Schedule of Deferred Tax Assets and Liabilities

The following table shows the tax effect of our cumulative temporary differences as of December 31:

(in thousands)			2021			2020
Deferred tax assets:
Operating and finance lease liabilities			$	7,642		$	8,018
Allowance for credit losses on loans and unfunded loan commitments			7,335			7,584
Deferred compensation plan and salary continuation plan			3,911			2,343
Accrued but unpaid expenses			1,884			1,103
Net operating loss carryforwards			1,406			1,660
State franchise tax			930			1,017
Fair value adjustment on acquired loans			894			254
Stock-based compensation			599			658
Depreciation and disposals on premises and equipment			188			635
Interest received on non-accrual loans			24			23
Other			120			100
Total gross deferred tax assets			24,933			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

Schedule of Effective Income Tax Rate Reconciliation

The effective tax rate for 2021, 2020 and 2019 differs from the current federal statutory income tax rate as follows:

			2021			2020			2019
Federal statutory income tax rate			21.0		%	21.0		%	21.0		%
Increase (decrease) due to:
California franchise tax, net of federal tax benefit			8.4		%	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 expenses			0.6		%	—		%	—		%
Non-deductible executive compensation			0.4		%	—		%	—		%
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 Rate			26.0		%	25.5		%	25.4		%

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- Definition

Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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