Deferred income taxes reflect the net tax effects of temporary differences between the carrying 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 (in thousands):


	2020		2019
Allowance for credit losses	$	5,883	$	2,708
Deferred compensation payable	3,165		2,912
Underfunded pension liability	1,784		1,912
Accrued expenses	2,218		1,196
Other	4,543		8,570
Total Deferred Tax Assets	17,593		17,298

Unrealized securities gains	11,637		3,709
Other	9,158		6,920
Total Deferred Tax Liabilities	20,795		10,629
Net Deferred Tax (Liabilities)/Assets	$	(3,202)	$	6,669

No material valuation allowances for deferred tax assets were recorded at December 31, 2020 or 2019 as the Company believes it is more likely than not that all of the deferred tax assets will be realized because they were supported by recoverable taxes paid in prior years.

Significant components of the provision for income taxes are as follows (in thousands):


	2020		2019		2018
Current:
Federal	$	16,599	$	16,636	$	16,846
State	2,478		2,560		2,413
Total current tax expense	19,077		19,196		19,259

Total deferred tax expense	2,640		4,939		(1,244)
Income tax expense	$	21,717	$	24,135	$	18,015

A reconciliation of the significant differences between the federal statutory income tax rate and the Company’s effective income tax rate is as follows (in thousands):


	2020		2019		2018

Computed federal taxes at statutory rate	$	23,376	$	23,832	$	18,483
State income taxes, net of federal tax benefit	2,070		2,376		1,730
Tax effects of:
Tax-exempt interest income	(944)		(733)		(694)
Bank-owned life insurance	(929)		(791)		(649)
Income tax credits	(1,113)		(889)		(575)
Other items, net	(743)		340		(280)
Income tax expense	$	21,717	$	24,135	$	18,015

The entire amount of the Company’s unrecognized tax benefits, if recognized, would favorably affect the Company’s effective tax rate. The Company anticipates that it will release $0.6 million over the next 12 months. A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows (in thousands):


	2020		2019

Beginning balance	$	1,807	$	1,811
Additions for current year tax positions	413		115
Additions for prior year tax positions	434		377
Decreases related to lapse of applicable statute of limitation	(565)		(496)
Ending balance	$	2,089	$	1,807

Interest and penalties on income tax uncertainties are included in income tax expense. During 2020, 2019 and 2018, the provision related to interest and penalties was approximately $0.2 million, $0.6 million, and $0.2 million, respectively. The balance of accrued interest and penalties at December 31, 2020 and 2019 was $0.9 million and $0.7 million, respectively.

The Company is currently open to audit under the statute of limitations by the Internal Revenue Service and various state taxing authorities for the years ended December 31, 2017 and forward.