INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Components of Income Tax Expense (Benefit)

The following table presents the components of the provision for income taxes included in the Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 (in thousands):


	Years Ended December 31
	2021		2020		2019
Current
Federal	$	20,461	$	30,325	$	25,278
State	4,359		6,964		2,494
Total Current	24,820		37,289		27,772

Deferred
Federal	18,278		(8,134)		7,738
State	2,448		(2,630)		1,344
Total Deferred	20,726		(10,764)		9,082


Provision for income taxes	$	45,546	$	26,525	$	36,854

Schedule of Effective Income Tax Rate Reconciliation

The following table presents the reconciliation of the federal statutory rate to the actual effective rate for the years ended December 31, 2021, 2020 and 2019:


	Years Ended December 31
	2021		2020		2019
Federal income tax statutory rate	21.0	%	21.0	%	21.0	%
Increase (decrease) in tax rate due to:
Tax-exempt interest	(3.0)		(4.4)		(2.2)
Investment in life insurance	(0.4)		(0.9)		(0.5)
State income taxes, net of federal tax offset	2.2		2.5		2.0
Tax credits	(1.5)		(2.6)		(1.2)
Merger and acquisition costs	—		—		0.1


State audits and amended returns	—		—		(0.5)
Low income housing partnerships, net of amortization	1.1		1.6		0.7
Other	(0.9)		1.4		0.7
Effective income tax rate	18.5	%	18.6	%	20.1	%

Schedule of Net Deferred Tax Asset

The following table reflects the effect of temporary differences that gave rise to the components of the net deferred tax asset as of December 31, 2021 and 2020 (in thousands):


	December 31
	2021		2020
Deferred tax assets:
Loan loss and REO	$	34,753	$	43,158
Deferred compensation	21,193		18,309
Net operating loss carryforward	20,159		26,126
Federal and state tax credits	7,631		7,517
State net operating losses	5,179		5,400
Loan discount	1,830		3,365
Lease liability	14,136		14,088
Other	5,091		9,177
Total deferred tax assets	109,972		127,140
Deferred tax liabilities:

Depreciation	(7,119)		(7,537)
Deferred loan fees, servicing rights and loan origination costs	(12,696)		(11,646)
Intangibles	(4,977)		(6,278)
Right of use asset	(13,071)		(13,144)
Unrealized loss (gain) on securities - available-for-sale	91		(21,662)
Financial instruments accounted for under fair value accounting	(878)		(947)

Total deferred tax liabilities	(38,650)		(61,214)
Deferred income tax asset	71,322		65,926
Valuation allowance	(184)		(184)

Deferred tax asset, net	$	71,138	$	65,742

Schedule of Unrecognized Tax Benefits Roll Forward


	Years Ended December 31
	2021		2020
Balance, beginning of year	$	450	$	275
Changes related to prior year tax positions	365		—

Changes related to current year tax positions	185		175


Balance, end of year	$	1,000	$	450

Schedule of Affordable Housing Tax Credit Information

The following table presents the balances of the Company’s tax credit investments and related unfunded commitments at December 31, 2021 and 2020 (in thousands):


	December 31, 2021		December 31, 2020
Tax credit investments	$	56,589	$	33,528
Unfunded commitments—tax credit investments	31,174		18,306

The following table presents other information related to the Company’s tax credit investments for the years ended December 31, 2021, 2020 and 2019 (in thousands):


	For the years ended December 31,
	2021		2020		2019
Tax credits and other tax benefits recognized	$	4,390	$	3,842	$	1,916
Tax credit amortization expense included in provision for income taxes	3,816		2,992		1,633