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Income Taxes | 12 Months Ended
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Dec. 31, 2022
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) | 2022 | 2021 | 2020
Current tax provision |  |  |
Federal | $ | 10,670 |  | $ | 6,627 |  | $ | 7,108 |
State | 6,687 |  | 4,815 |  | 4,895 |
Total current tax provision | 17,357 |  | 11,442 |  | 12,003 |
Deferred tax (benefit) provision |  |  |
Federal | (441) |  | 274 |  | (964) |
State | 7 |  | (58) |  | (694) |
Total deferred tax (benefit) provision | (434) |  | 216 |  | (1,658) |
Total income tax provision | $ | 16,923 |  | $ | 11,658 |  | $ | 10,345 |
The following table shows the tax effect of our cumulative temporary differences as of December 31:
(in thousands) | 2022 | 2021
Deferred tax assets: |  |
Net unrealized losses on securities available-for-sale | $ | 29,458 |  | $ | — |
Operating and finance lease liabilities | 8,002 |  | 7,642 |
Allowance for credit losses on loans and unfunded loan commitments | 7,229 |  | 7,335 |
Deferred compensation and salary continuation plans | 3,481 |  | 3,911 |
Accrued but unpaid expenses | 1,751 |  | 1,884 |
State franchise tax | 1,396 |  | 930 |
Net operating loss carryforwards | 1,239 |  | 1,406 |
Fair value adjustment on acquired loans | 905 |  | 894 |
Stock-based compensation | 697 |  | 599 |
Depreciation and disposals on premises and equipment | 236 |  | 188 |
Other | 194 |  | 144 |
Total gross deferred tax assets | 54,588 |  | 24,933 |
Deferred tax liabilities: |  |
Operating and finance lease right-of-use assets | (7,465) |  | (7,098) |
Core deposit intangible assets | (1,512) |  | (1,953) |
Deferred loan origination costs and fees | (1,476) |  | (1,526) |
Net unrealized gains on securities available-for-sale | — |  | (745) |
Other | (279) |  | (292) |
Total gross deferred tax liabilities | (10,732) |  | (11,614) |
Net deferred tax assets | $ | 43,856 |  | $ | 13,319 |
As of December 31, 2022, California net operating loss carryforwards ("NOLs") of $14.5 million corresponded to the total $1.2 million deferred tax asset above. If not fully utilized, 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, 2022 or 2021. The effective tax rate for 2022, 2021 and 2020 differs from the current federal statutory income tax rate as follows:
| 2022 | 2021 | 2020
Federal statutory income tax rate | 21.0 | % | 21.0 | % | 21.0 | %
Increase (decrease) due to: |  |  |
California franchise tax, net of federal tax benefit | 8.3 | % | 8.4 | % | 8.1 | %
Tax exempt interest on municipal securities and loans | (1.9) | % | (2.5) | % | (2.4) | %
Tax exempt earnings on bank owned life insurance | (0.4) | % | (1.0) | % | (0.5) | %
Non-deductible acquisition related expenses | — | % | 0.6 | % | — | %
Non-deductible executive compensation | — | % | 0.4 | % | — | %
Low income housing and qualified zone academy bond tax credits | (0.2) | % | (0.4) | % | (0.5) | %
Stock-based compensation and excess tax benefits | — | % | (0.1) | % | (0.2) | %
Other | (0.2) | % | (0.4) | % | — | %
Effective Tax Rate | 26.6 | % | 26.0 | % | 25.5 | %
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 2019 for federal income tax and before 2018 for California. At December 31, 2022 and 2021, 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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://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 https://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 https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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