Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Components of Consolidated Income Tax Expense

The components of consolidated income tax expense are as follows (in thousands):

	Year Ended December 31,
	2021		2020		2019
Current tax expense
Federal	$	28,763	$	22,104	$	20,403
State	18,221		14,586		12,655
	$	46,984	36,690		33,058
Deferred tax expense
Federal	(872)		(9,500)		695
State	(64)		(4,654)		997
	(936)		(14,154)		1,692
Total tax expense	$	46,048	$	22,536	$	34,750

Schedule of Components of Investments in Qualified Affordable Housing Projects

The Company recognized, as components of tax expense, tax credits and other tax benefits, and amortization expense relating to our investments in Qualified Affordable Housing Projects as follows for the periods indicated (in thousands):

	Year Ended December 31,
	2021		2020		2019
Tax credits and other tax benefits – decrease in tax expense	$	(4,224)	$	(4,200)	$	(2,546)
Amortization – increase in tax expense	$	3,604	$	3,581	$	2,705

Reconciliation of Effective Tax Rate and Statutory Federal Income Tax Rate

The effective tax rate and the statutory federal income tax rate are reconciled as follows:

	Year Ended December 31,
(in thousands)	2021		2020		2019
Federal statutory income tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal tax benefit	7.9		7.7		7.9
Tax-exempt interest on municipal obligations	(0.5)		(0.9)		(0.7)
Tax-exempt life insurance related income	(0.5)		(0.8)		(0.6)
Low income housing tax credits	(2.6)		(4.8)		(2.3)
Low income housing tax credit amortization	2.2		4.1		2.1
Equity compensation	(0.1)		0.4		(0.4)
Non-deductible merger expenses	0.1		—		—
Other	0.6		(0.9)		0.4
Effective Tax Rate	28.1	%	25.8	%	27.4	%

Company's Net Deferred Tax Asset Recorded in Other Assets

The temporary differences, tax effected, which give rise to the Company’s net deferred tax asset recorded in other assets are as follows as of December 31 for the years indicated (in thousands):

	December 31,
	2021		2020
Deferred tax assets:
Allowance for losses and reserve for unfunded commitments	$	26,361	$	28,159
Deferred compensation	1,758		1,786
Accrued pension liability	—		383
Other accrued expenses	1,994		1,537
Additional unfunded status of the supplemental retirement plans	13,693		13,275
Operating lease liability	7,769		8,270
State taxes	3,251		2,870
Share based compensation	952		837
Nonaccrual interest	937		725
Acquisition cost basis	506		2,372
Unrealized loss on securities	116		—
Tax credits	513		513
Net operating loss carryforwards	1,131		1,131
Other	813		327
Total deferred tax assets	59,794		62,185
Deferred tax liabilities:
Securities income	(762)		(762)
Depreciation	(6,198)		(7,231)
Right of use asset	(7,588)		(8,232)
Funded pension liability	(709)		—
Securities accretion	(846)		(702)
Mortgage servicing rights valuation	(1,726)		(1,490)
Unrealized gain on securities	—		(5,671)
Core deposit intangible	(3,248)		(4,812)
Junior subordinated debt	(1,422)		(1,553)
Prepaid expenses and other	(488)		(532)
Total deferred tax liability	(22,987)		(30,985)
Net deferred tax asset	$	36,807	$	31,200