Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of Components of Income Tax Expense

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

Schedule of Effective Income Tax Rate Reconciliation

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	%

Schedule of Deferred Tax Assets and Liabilities

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