Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The following table presents the components of income tax expense (benefit):

(Dollars in thousands)
Years ended December 31,	2021	2020	2019
Current Tax Expense:
Federal	$17,032	$19,248	$17,298
State	2,130	3,213	3,254
Total current tax expense	19,162	22,461	20,552
Deferred Tax Expense (Benefit):
Federal	1,822	(2,375)	(1,294)
State	333	(755)	(197)
Total deferred tax expense (benefit)	2,155	(3,130)	(1,491)
Total income tax expense	$21,317	$19,331	$19,061

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,	2021			2020			2019
(Dollars in thousands)	Amount	Rate		Amount	Rate		Amount	Rate
Tax expense at Federal statutory rate	$20,619	21.0	%	$18,724	21.0	%	$18,518	21.0	%
Increase (decrease) in taxes resulting from:
State income tax expense, net of federal tax benefit	1,943	2.0		1,995	2.2		2,417	2.7
Tax-exempt income, net	(772)	(0.8)		(803)	(0.9)		(814)	(0.9)
BOLI	(614)	(0.6)		(523)	(0.6)		(494)	(0.6)
Share-based compensation	(159)	(0.2)		92	0.1		(221)	(0.3)
Investment in low-income housing limited partnership	(117)	(0.1)		(118)	(0.1)		—	—
Dividends received deduction	(28)	—		(28)	—		(36)	—
Federal tax credits	—	—		(93)	(0.1)		(364)	(0.4)
Other	445	0.4		85	0.1		55	0.1
Total income tax expense	$21,317	21.7	%	$19,331	21.7	%	$19,061	21.6	%

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,	2021	2020
Deferred Tax Assets:
Allowance for credit losses on loans	$9,381	$10,585
Operating lease liabilities	6,962	7,612
Deferred compensation	5,091	4,646
Net unrealized losses on available for sale debt securities	2,146	—
Deferred loan origination fees	2,044	2,654
Share-based compensation	1,859	1,825
Cash flow hedges	1,268	457
Defined benefit pension obligations	966	2,576
Other	2,002	2,126
Deferred tax assets	31,719	32,481
Deferred Tax Liabilities:
Operating lease right-of-use assets	(6,406)	(7,085)
Deferred loan origination costs	(4,982)	(4,321)
Loan servicing rights	(2,357)	(1,784)
Amortization of intangibles	(1,299)	(1,513)
Depreciation of premises and equipment	(1,237)	(1,215)
Net unrealized gains on available for sale debt securities	—	(3,120)
Other	(1,427)	(1,253)
Deferred tax liabilities	(17,708)	(20,291)
Net deferred tax asset	$14,011	$12,190

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, 2021 and 2020.

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 2018.