Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

The current and deferred components of income tax expense on the consolidated statements of income were as follows:



	For The Year Ended December 31,
(In thousands)	2019		2018			2017
Current:
Federal	$	11,876	$	14,102		$	14,529
State	1,241		1,206			1,289
	13,117		15,308			15,818
Deferred:
Federal	1,230		(2,541		)	4,117
State	29		(61		)	(320		)
Change in federal corporate income tax rate⁽¹⁾	—		—			14,263
	1,259		(2,602		)	18,060
Income tax expense	$	14,376	$	12,706		$	33,878

Reconciliation of Expected Income Tax Benefit Computed Using Federal Statutory Income Tax Rate

The income tax expense differs from the amount computed by applying the statutory federal income tax rate as a result of the following:



	For The Year Ended December 31,
(Dollars in thousands)	2019			2018			2017
Computed tax expense⁽¹⁾	$	15,032		$	13,813		$	21,824
Increase (reduction) in income taxes resulting from:
State taxes, net of federal benefit	1,003			905			630
Tax exempt income	(738		)	(741		)	(1,291		)
Income from life insurance	(509		)	(510		)	(829		)
Low income housing credits	(430		)	(465		)	(366		)
Share-based awards	(60		)	(250		)	(390		)
Change in federal corporate income tax rate⁽¹⁾	—			—			14,263
Other	78			(46		)	37
Income tax expense	$	14,376		$	12,706		$	33,878
Income before income taxes	$	71,579		$	65,777		$	62,354
Effective tax rate	20.1		%	19.3		%	54.3		%


(1)	On December 22, 2017, the Tax Act was enacted, reducing the U.S. federal corporate income tax rate from 35.0% to 21.0%. The Company recognized the effect of the tax law changes in the period of enactment, which resulted in a reduction to net deferred tax assets and a corresponding charge to income tax expense of $14.3 million.

Schedule of Deferred Tax Assets and Deferred Tax Liabilities

Temporary differences between the financial statements carrying amounts and the tax bases of assets and liabilities gave rise to the following deferred tax assets and liabilities as of the dates indicated:



	December 31,
	2019					2018
(In thousands)	Asset		Liability			Asset		Liability
Net operating loss and tax credit carryforward	$	10,421	$	—		$	11,250	$	—
Allowance for loan losses	5,416		—			5,318		—
Pension and other benefits	4,492		—			3,881		—
Net unrealized losses on derivative instruments	1,656		—			1,215		—
Deferred compensation and benefits	919		—			927		—
Depreciation	—		(3,053		)	—		(2,913		)
Deferred loan origination fees	—		(2,119		)	—		(1,860		)
Net unrealized (gains) losses on AFS debt securities			(890		)	4,882		—
Other			(19		)	353		—
Gross deferred tax assets (liabilities)	$	22,904	$	(6,081	)	$	27,826	$	(4,773	)
Valuation allowance on deferred tax assets			—					—
Net deferred tax assets			$	16,823				$	23,053