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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following table presents the components of income tax expense (benefit) for the years ended December 31, 2024, 2023 and 2022:
|  | Year Ended December 31,
($ in thousands) |  | 2024 |  | 2023 |  | 2022
Current income tax expense: |  |  |  |  |  |
Federal |  | $ | 166,268 |  |  | $ | 172,428 |  |  | $ | 163,797 |
State |  | 153,891 |  |  | 173,080 |  |  | 160,629 |
Foreign |  | 10,399 |  |  | 2,240 |  |  | 3,133 |
Total current income tax expense |  | 330,558 |  |  | 347,748 |  |  | 327,559 |
Deferred income tax (benefit) expense: |  |  |  |  |  |
Federal |  | (6,467) |  |  | (24,319) |  |  | (23,484) |
State |  | (5,582) |  |  | (23,415) |  |  | (21,835) |
Foreign |  | (2,234) |  |  | (1,405) |  |  | 1,331 |
Total deferred income tax benefit |  | (14,283) |  |  | (49,139) |  |  | (43,988) |
Income tax expense |  | $ | 316,275 |  |  | $ | 298,609 |  |  | $ | 283,571 |
The following table presents the reconciliation of the federal statutory rate to the Company’s effective tax rate for the years ended December 31, 2024, 2023 and 2022:
|  | Year Ended December 31,
|  | 2024 |  | 2023 |  | 2022
Statutory U.S. federal tax rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
U.S. state income taxes, net of U.S. federal income tax effect |  | 7.7 |  |  | 8.1 |  |  | 7.8 |
Tax credits and benefits, net of amortization |  | (7.4) |  |  | (9.9) |  |  | (8.9) |
Other, net |  | — |  |  | 1.3 |  |  | 0.2 |
Effective tax rate |  | 21.3 | % |  | 20.5 | % |  | 20.1 | %
The following table summarizes the tax effects of temporary differences that give rise to a significant portion of deferred tax assets and liabilities as of December 31, 2024 and 2023:
|  |  |  |  |  |  |  | December 31,
($ in thousands) |  |  |  |  |  |  |  | 2024 |  |  |  |  |  |  |  | 2023
Deferred tax assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses and nonperforming assets valuation allowance |  |  |  |  |  |  |  | $ | 233,879 |  |  |  |  |  |  |  |  | $ | 217,731 |
Net unrealized losses on AFS debt and transferred securities |  |  |  |  |  |  |  | 223,814 |  |  |  |  |  |  |  |  | 246,835 |
Stock compensation and other accrued compensation |  |  |  |  |  |  |  | 41,118 |  |  |  |  |  |  |  |  | 33,169 |
Lease liabilities |  |  |  |  |  |  |  | 27,644 |  |  |  |  |  |  |  |  | 32,636 |
FDIC special assessment charge |  |  |  |  |  |  |  | 16,843 |  |  |  |  |  |  |  |  | 22,212 |
Basis difference in investments |  |  |  |  |  |  |  | 17,708 |  |  |  |  |  |  |  |  | 28,216 |
State capital loss and tax credit carryforwards |  |  |  |  |  |  |  | 11,122 |  |  |  |  |  |  |  |  | 266 |
Nonaccrual loans’ interest income |  |  |  |  |  |  |  | 8,809 |  |  |  |  |  |  |  |  | 7,034 |
State taxes |  |  |  |  |  |  |  | 5,808 |  |  |  |  |  |  |  |  | 9,885 |
Other |  |  |  |  |  |  |  | 14,665 |  |  |  |  |  |  |  |  | 10,535 |
Total deferred tax assets |  |  |  |  |  |  |  | $ | 601,410 |  |  |  |  |  |  |  |  | $ | 608,519 |
Deferred tax liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating lease right-of-use assets |  |  |  |  |  |  |  | $ | 25,647 |  |  |  |  |  |  |  |  | $ | 30,272 |
Basis difference in investments |  |  |  |  |  |  |  | 25,587 |  |  |  |  |  |  |  |  | 23,103 |
Equipment lease financing |  |  |  |  |  |  |  | 10,395 |  |  |  |  |  |  |  |  | 15,564 |
Prepaid expenses |  |  |  |  |  |  |  | 2,319 |  |  |  |  |  |  |  |  | 2,981 |
FHLB stock dividends |  |  |  |  |  |  |  | 1,961 |  |  |  |  |  |  |  |  | 1,947 |
Mortgage servicing assets |  |  |  |  |  |  |  | 1,678 |  |  |  |  |  |  |  |  | 2,102 |
Other |  |  |  |  |  |  |  | 20,479 |  |  |  |  |  |  |  |  | 13,801 |
Total deferred tax liabilities |  |  |  |  |  |  |  | $ | 88,066 |  |  |  |  |  |  |  |  | $ | 89,770 |
Net deferred tax assets |  |  |  |  |  |  |  | $ | 513,344 |  |  |  |  |  |  |  |  | $ | 518,749 |
The Company has not repatriated and does not intend to repatriate earnings from its foreign subsidiary. The Company determined such earnings are to be indefinitely reinvested in the local jurisdiction. The related unrecognized deferred tax liability on these earnings is immaterial. As of December 31, 2024, the Company had deferred tax assets of $8 million and $3 million related to state capital loss carryforwards and state tax credit carryforwards, respectively. These carryforwards are expected to be fully utilized before they start to expire in 2027. As of both December 31, 2024 and 2023, the Company concluded that no valuation allowance was necessary to reduce the deferred tax assets since estimated future taxable income will be sufficient to utilize these assets. For further information on the Company’s valuation policy on deferred taxes, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Income Taxes to the Consolidated Financial Statements in this Form 10-K. The following table presents a reconciliation of the beginning and ending balances of unrecognized tax benefits for the years ended December 31, 2024, 2023 and 2022:
|  | Year Ended December 31, |
($ in thousands) |  | 2024 |  | 2023 |  | 2022 |
Beginning balance |  | $ | 1,193 |  |  | $ | 477 |  |  | $ | 5,045 |  |
Additions for tax positions related to prior years |  | 2,698 |  | (1) | 459 |  |  | — |  |
Additions for tax positions related to current year |  | 779 |  |  | 257 |  |  | — |  |
Settlements with taxing authorities |  | — |  |  | — |  |  | (4,568) |  | (2)
Ending balance |  | $ | 4,670 |  |  | $ | 1,193 |  |  | $ | 477 |  |
(1)In 2024, the increase in positions related to prior years primarily related to proposed adjustments resulting from examination of the Company’s state tax returns. (2)In 2022, the Company settled an issue regarding previously claimed tax credits related to DC Solar and affiliates. The Company recognizes interest and penalties, as applicable, related to the underpayment of income taxes as a component of Income tax expense on the Consolidated Statement of Income. The Company recorded net interest expense of $1 million for the year ended December 31, 2024. In comparison, the net interest and penalties related to unrecognized tax benefits were immaterial for the years ended December 31, 2023 and 2022. Total accrued interest included in Accrued expenses and other liabilitie s on the Consolidated Balance Sheet was $1 million as of December 31, 2024 and immaterial as of December 31, 2023. The Company files federal income tax returns, as well as returns in various state and foreign jurisdictions. We are routinely examined by tax authorities in these various jurisdictions. The Company is subject to federal income tax examination for the tax years 2021 and forward. With few exceptions, the Company is also subject to tax examination in various state and local jurisdictions for the tax years 2020 and forward. The Company does not believe that the outcome of unresolved issues or claims in any of the tax jurisdictions is likely to be material on the Company’s Consolidated Financial Statements. The Company believes that adequate provisions have been recorded for all income tax uncertainties consistent with ASC 740, Income Taxes as of December 31, 2024.

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