Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Provision for Federal and State Income Taxes

The provision for federal and state income taxes included in the accompanying consolidated statements of income consists of the following:

	For the Years Ended December 31,
(Dollars in thousands)	2018			2017		2016
Current:
Federal	$	9,770		$	9,273	$	2,400
State	972			961		539
Deferred:
Federal	(862		)	7,350		909
State	263			133		33
	$	10,143		$	17,717	$	3,881

Income Tax Provision Differences from Expected Statutory Provision

The provision for income taxes differs from the expected statutory provision as follows:

	For the Years Ended December 31,
	2018		2017		2016
Expected provision at statutory rate	21.0	%	35.0	%	35.0	%
Difference resulting from:
Tax exempt interest income, net of disallowance	(4.0	)	(6.1	)	(15.6	)
Increase in value of bank owned life insurance assets	(1.1	)	(2.2	)	(4.2	)
Stock-based compensation	(0.2	)	(1.0	)	(1.7	)
Non-deductible merger-related expenses	—		—		1.2
State income taxes, net of federal benefits	1.6		1.2		(1.5	)
Adjustment to deferred tax assets and liabilities for enacted changes in tax laws and rates	(0.5	)	1.7		—
Changes in valuation allowance	0.1		0.5		3.1
Other	(0.2	)	(0.4	)	0.3
Effective tax rate	16.7	%	28.7	%	16.6	%

Components of Deferred Tax Assets and Liabilities

The assets and liabilities giving rise to the Corporation’s deferred tax assets and liabilities are as follows:

	At December 31,
(Dollars in thousands)	2018			2017
Deferred tax assets:
Allowance for loan and lease losses	$	6,410		$	4,643
Deferred compensation	1,734			2,110
Actuarial adjustments on retirement benefits*	4,592			4,432
State net operating losses	4,730			4,166
Other-than-temporary impairments on equity securities	148			148
Net unrealized holding losses on securities available-for-sale and swaps*	2,968			1,316
Other deferred tax assets	1,368			1,243
Gross deferred tax assets	21,950			18,058
Valuation allowance	(3,830		)	(3,523		)
Total deferred tax assets, net of valuation allowance	18,120			14,535
Deferred tax liabilities:
Mortgage servicing rights	1,463			1,415
Retirement plans	5,263			4,304
Deferred loan fees and costs	1,163			2,614
Acquisition-related fair value adjustments	1,605			1,621
Intangible assets	1,987			1,513
Accounting method change adjustment	1,154			—
Depreciation	937			1,102
Other deferred tax liabilities	963			792
Total deferred tax liabilities	14,535			13,361
Net deferred tax assets	$	3,585		$	1,174

*Represents the amount of deferred taxes recorded in accumulated other comprehensive income.