Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income tax expense consisted of the following:


	Years Ended December 31,
(Dollars in thousands)	2020		2019		2018
Income tax expense:
Current	$	22,766	$	12,971	$	14,091
Deferred	(2,080)		3,908		708
Change in valuation allowance for deferred tax asset	—		23		(7)
Income tax expense	$	20,686	$	16,902	$	14,792

Summary of Effective Income Tax Rate Reconciliation

Effective tax rates differ from federal statutory rates applied to income before income taxes due to the following:


	Years Ended December 31,
(Dollars in thousands)	2020		2019		2018
Tax provision computed at federal statutory rate	$	17,789	$	15,844	$	13,965
Effect of:
State taxes, net	2,919		1,704		1,716
Bank-owned life insurance	(121)		(114)		(141)
Tax exempt interest	(250)		(442)		(436)
Change in valuation allowance for deferred tax asset	—		23		(7)
Other	349		(113)		(305)
Income tax expense	$	20,686	$	16,902	$	14,792

Significant Components of Deferred Tax Assets and Liabilities

Deferred income taxes reflect the net tax effects of temporary differences between the recorded amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:


(Dollars in thousands)	2020		2019
Deferred tax assets
Federal net operating loss carryforwards	$	4,067	$	5,034
State net operating loss carryforwards	459		552
Acquired loan basis	(184)		450
Other real estate owned	64		44
AMT credit carryforward	—		714
Allowance for loan losses	24,317		6,828
Accrued liabilities	2,675		1,744
Lease liability	4,598		4,994
Other	2,181		1,925
Total deferred tax assets	38,177		22,285
Deferred tax liabilities
Goodwill and intangible assets	2,452		2,143
Fair value adjustment on junior subordinated debentures	2,449		2,564
Premises and equipment	10,767		6,142
Installment gain on sale of subsidiary	1,049		1,816
Lease right-of-use asset	4,172		4,815
Unrealized gain on securities available for sale	1,601		339
Derivative financial instruments	193		—
Indemnification asset	8,575		—
Other	214		376
Total deferred tax liabilities	31,472		18,195
Net deferred tax asset before valuation allowance	6,705		4,090
Valuation allowance	(278)		(278)
Net deferred tax asset	$	6,427	$	3,812