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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
The components of income tax expense (benefit) for the years ended December 31, are as follows:
Year ended December 31,
($ in thousands)202220212020
Current:
Federal$42,718 $29,835 $25,132 
State and local11,505 5,198 5,009 
Total current54,223 35,033 30,141 
Deferred:
Federal1,853 870 (10,651)
State and local341 (325)(1,927)
Total deferred2,194 545 (12,578)
Total income tax expense$56,417 $35,578 $17,563 

A reconciliation of expected income tax expense, computed by applying the statutory federal income tax rate to income before income taxes reflected in the Consolidated Statements of Income is as follows:
Year ended December 31,
($ in thousands)202220212020
Income tax expense at statutory rate$54,487 $35,413 $19,309 
Increase (reduction) in income tax resulting from:
Tax-exempt interest income, net(4,351)(3,198)(2,010)
State and local income taxes, net9,767 4,936 3,254 
Bank-owned life insurance(545)(713)(778)
Non-deductible expenses926 1,090 637 
Tax benefit of low-income housing tax credit ("LIHTC") investments, net(195)(132)(444)
Excess tax benefits(68)146 (175)
Federal tax credits(3,661)(1,136)(1,327)
Non-taxable donation to charitable foundation— (263)— 
Other, net57 (565)(903)
       Total income tax expense$56,417 $35,578 $17,563 

The net amount recognized as a component of tax expense for tax credits, other tax benefits, and amortization from LIHTC investments recognized per the table above was $0.2 million, $0.1 million and $0.4 million for the years ended December 31, 2022, 2021, and 2020 respectively. As of December 31, 2022 and 2021, the carrying value of the investments related to low-income housing tax credits was $7.3 million and $7.6 million, respectively. No impairment losses have been recognized from forfeiture or ineligibility of tax credits or other circumstances during the life of any of the investments.
A net deferred income tax asset of $89.0 million and $40.9 million is included in other assets in the consolidated balance sheets at December 31, 2022 and 2021, respectively. The tax effect of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities is as follows:
Year ended December 31,
($ in thousands)20222021
Deferred tax assets:
Allowance for loan losses$34,507 $36,550 
Loans held-for-sale5,917 6,971 
Other real estate179 305 
Deferred compensation3,527 2,704 
Accrued compensation6,294 5,881 
Unrealized losses on securities, net44,094 — 
Net operating losses and tax credits5,829 6,061 
Lease liability accrual4,545 3,747 
Other investments4,293 3,169 
Other deferred tax assets6,463 5,594 
Total deferred tax assets115,648 70,982 
Deferred tax liabilities:
Acquired loans2,212 1,709 
Unrealized gains on securities, net— 6,171 
Intangible assets8,676 8,789 
Right of use asset4,374 3,670 
Other investments7,530 5,646 
Other deferred tax liabilities1,065 1,277 
Total deferred tax liabilities23,857 27,262 
Net deferred tax asset before valuation allowance91,791 43,720 
Less: valuation allowance2,830 2,830 
Net deferred tax asset$88,961 $40,890 

As part of an acquisition in 2019, the company acquired net operating loss, tax credit, and capital loss deferred tax assets. Net operating losses originated in the years 2012, 2014-2017, and 2019 and will expire in the years between 2032-2037. Tax credit carryforwards originated in years 2010-2015 and will expire in the years between 2030-2035.

A valuation allowance is provided on deferred tax assets when it is more likely than not that some portion of the assets will not be realized. The company determined it was more likely than not that some of the acquired note operating loss and tax credit assets would not be realized and has recognized a valuation allowance of $2.8 million at both December 31, 2022 and 2021, respectively.

The Company and its subsidiaries file income tax returns in the federal jurisdiction and in thirty-one states. The Company is no longer subject to federal, state or local income tax audits by tax authorities for years before 2017, with the exception of 2016 being an open year by one state taxing authority. Net operating losses generated prior to 2016 that are utilized going forward would still be subject to examination.

As of December 31, 2022, the gross amount of unrecognized tax benefits was $2.7 million and the total amount of net unrecognized tax benefits that would impact the effective tax rate, if recognized, was $2.2 million. As of December 31, 2021 and 2020, the total amount of the net unrecognized tax benefits that would impact the effective tax rate, if recognized, was $2.5 million and $3.1 million, respectively. The Company believes it is reasonably possible the gross amount of unrecognized benefits will be reduced by approximately $0.4 million as a result of a
lapse of statute of limitations in the next 12 months. The Company is under audit by the state of Missouri, and while the Company has concluded it has adequately provided for uncertain tax positions, the outcome of such audits are always uncertain and could result in additional tax expense, though immaterial.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense and classifies such interest and penalties in the liability for unrecognized tax benefits. The amount accrued for interest and penalties was $0.6 million as of December 31, 2022, $0.5 million for 2021, and $0.9 million for 2020.

The activity in the gross liability for unrecognized tax benefits was as follows:
($ in thousands)202220212020
Balance at beginning of year$2,697 $3,157 $1,497 
Additions based on tax positions related to the current year683 563 395 
Additions for tax positions of prior years47 436 1,556 
Settlements for tax positions of prior years(82)(1,289)— 
Settlements or lapse of statute of limitations(621)(170)(291)
Balance at end of year$2,724 $2,697 $3,157