Income Taxes

12 Months Ended

Dec. 31, 2022

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,	2022	2021	2020
Current Tax Expense:
Federal	$16,127	$17,032	$19,248
State	2,202	2,130	3,213
Total current tax expense	18,329	19,162	22,461
Deferred Tax Expense (Benefit):
Federal	1,012	1,822	(2,375)
State	148	333	(755)
Total deferred tax expense (benefit)	1,160	2,155	(3,130)
Total income tax expense	$19,489	$21,317	$19,331

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,	2022			2021			2020
(Dollars in thousands)	Amount	Rate		Amount	Rate		Amount	Rate
Tax expense at Federal statutory rate	$19,146	21.0	%	$20,619	21.0	%	$18,724	21.0	%
Increase (decrease) in taxes resulting from:
State income tax expense, net of federal tax benefit	1,856	2.1		1,943	2.0		1,995	2.2
Tax-exempt income, net	(721)	(0.8)		(772)	(0.8)		(803)	(0.9)
BOLI	(544)	(0.6)		(614)	(0.6)		(523)	(0.6)
Investments in low-income housing limited partnerships	(261)	(0.3)		(117)	(0.1)		(118)	(0.1)
Share-based compensation	(68)	(0.1)		(159)	(0.2)		92	0.1
Other	81	0.1		417	0.4		(36)	—
Total income tax expense	$19,489	21.4	%	$21,317	21.7	%	$19,331	21.7	%

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,	2022	2021
Deferred Tax Assets:
Net unrealized losses on available for sale debt securities	$41,379	$2,146
Allowance for credit losses on loans	9,127	9,381
Cash flow hedges	7,151	1,268
Operating lease liabilities	7,094	6,962
Deferred compensation	4,486	5,091
Deferred loan origination fees	2,106	2,044
Share-based compensation	1,884	1,859
Defined benefit pension obligations	—	966
Other	1,809	2,002
Deferred tax assets	75,036	31,719
Deferred Tax Liabilities:
Operating lease ROU assets	(6,518)	(6,406)
Deferred loan origination costs	(6,394)	(4,982)
Loan servicing rights	(2,163)	(2,357)
Depreciation of premises and equipment	(1,494)	(1,237)
Amortization of intangibles	(1,093)	(1,299)
Defined benefit pension obligations	(333)	—
Other	(669)	(1,427)
Deferred tax liabilities	(18,664)	(17,708)
Net deferred tax asset	$56,372	$14,011

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, 2022 and 2021.

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 2019.