Income Taxes

12 Months Ended

Dec. 31, 2020

Income Taxes

Income Taxes

NOTE 21 Income Taxes

The components of income tax expense (benefit) for the years ended December 31, 2020, 2019, and 2018 are as follows:

	Year ended
	December 31,
(dollars in thousands)	2020		2019		2018
Federal
Current	$	14,541	$	7,091	$	5,801
Deferred		(3,615)		267		(49)
Federal income tax		10,926		7,358		5,752
State
Current		3,736		1,926		1,265
Deferred		(819)		72		155
State income tax		2,917		1,998		1,420
Total income tax expense	$	13,843	$	9,356	$	7,172

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2020 and 2019 are as follows:

	December 31,		December 31,
(dollars in thousands)	2020		2019
Deferred Tax Assets
Allowance for loan losses	$	8,556	$	5,893
Employee compensation and benefit accruals		2,608		2,542
Expense accruals		352		935
Identifiable intangible amortization		3,388		3,369
Deferred loan fees		1,204		266
Net operating loss carry forwards		173		236
Nonaccrual loan interest		62		—
Other		505		341
Total deferred tax assets from temporary differences		16,848		13,582
Deferred Tax Liabilities
Accumulated depreciation		314		1,431
Goodwill and intangible amortization		2,258		1,835
Servicing assets		511		965
Prepaid expenses		785		804
Unrealized loss on available‑for‑sale investment securities		3,566		649
Other		5		7
Total deferred tax liabilities from temporary differences		7,439		5,691
Net Deferred Tax Assets	$	9,409	$	7,891

The reconciliation between applicable income taxes and the amount computed at the applicable statutory Federal tax rate for years ending December 31, 2020, 2019, and 2018 is as follows:

	Year ended December 31,
	2020				2019				2018
			Percent of				Percent of				Percent of
(dollars in thousands)	Amount		Pretax Income		Amount		Pretax Income		Amount		Pretax Income
Taxes at statutory federal income tax rate	$	12,289	21.0	%	$	8,168	21.0	%	$	6,938	21.0	%
Tax effect of:
Tax exempt income		(527)	(0.9)	%		(442)	(1.1)	%		(365)	(1.1)	%
State income taxes, net of federal benefits		2,522	4.3			1,618	4.2			1,399	4.2
Nondeductible items and other		(441)	(0.8)			12	—			(800)	(2.4)
Applicable income taxes	$	13,843	23.6	%	$	9,356	24.1	%	$	7,172	21.7	%

It is the opinion of management that the Company has no significant uncertain tax positions that would be subject to change upon examination.