Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The following table presents the components of income tax expense:

(Dollars in thousands)
Years ended December 31,	2020	2019	2018
Current Tax Expense:
Federal	$19,248	$17,298	$15,460
State	3,213	3,254	2,863
Total current tax expense	22,461	20,552	18,323
Deferred Tax (Benefit) Expense:
Federal	(2,375)	(1,294)	63
State	(755)	(197)	(126)
Total deferred tax (benefit) expense	(3,130)	(1,491)	(63)
Total income tax expense	$19,331	$19,061	$18,260

Total income tax expense varies from the amount determined by applying the Federal income tax rate to income before income taxes.  The following table presents the reasons for the differences:

Years ended December 31,	2020			2019			2018
(Dollars in thousands)	Amount	Rate		Amount	Rate		Amount	Rate
Tax expense at Federal statutory rate	$18,724	21.0	%	$18,518	21.0	%	$18,205	21.0	%
Increase (decrease) in taxes resulting from:
State income tax expense, net of federal tax benefit	1,995	2.2		2,417	2.7		2,162	2.5
Tax-exempt income, net	(803)	(0.9)		(814)	(0.9)		(809)	(0.9)
BOLI	(523)	(0.6)		(494)	(0.6)		(461)	(0.5)
Investment in low-income housing limited partnership	(118)	(0.1)		—	—		—	—
Federal tax credits	(93)	(0.1)		(364)	(0.4)		(364)	(0.4)
Dividends received deduction	(28)	—		(36)	—		(45)	(0.1)
Change in fair value of contingent consideration	—	—		—	—		(39)	(0.1)
Share-based compensation	92	0.1		(221)	(0.3)		(444)	(0.5)
Other	85	0.1		55	0.1		55	0.1
Total income tax expense	$19,331	21.7	%	$19,061	21.6	%	$18,260	21.1	%

The following table presents the approximate tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities:

(Dollars in thousands)
December 31,	2020	2019
Deferred Tax Assets:
Allowance for credit losses on loans	$10,585	$6,348
Operating lease liabilities	7,612	6,782
Deferred compensation	4,646	4,200
Deferred loan origination fees	2,654	1,505
Defined benefit pension obligations	2,576	1,361
Share-based compensation	1,825	1,358
Other	2,583	2,031
Deferred tax assets	32,481	23,585
Deferred Tax Liabilities:
Operating lease right-of-use assets	(7,085)	(6,296)
Deferred loan origination costs	(4,321)	(4,084)
Net unrealized gains on available for sale debt securities	(3,120)	(991)
Loan servicing rights	(1,784)	(829)
Amortization of intangibles	(1,513)	(1,696)
Depreciation of premises and equipment	(1,215)	(669)
Other	(1,253)	(719)
Deferred tax liabilities	(20,291)	(15,284)
Net deferred tax asset	$12,190	$8,301

The Corporation’s net deferred tax asset is included in other assets in the Consolidated Balance Sheets. Management has determined that a valuation allowance is not required for any of the deferred tax assets since it is more-likely-than-not that these assets will be realized primarily through future reversals of existing taxable temporary differences or by offsetting projected future taxable income. The Corporation had no unrecognized tax benefits as of December 31, 2020 and 2019.

The Corporation files income tax returns in the U.S. federal jurisdiction and various state jurisdictions.  Generally, the Corporation is no longer subject to U.S. federal income and state tax examinations by tax authorities for years before 2017.