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INCOME TAXES
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The effective income tax rate was 22.1% for the third quarter of 2025, compared with 22.7% for the third quarter of 2024. For the nine months ended September 30, the effective tax rates were 23.9% in 2025 and 23.5% in 2024. The tax rates during these periods were increased by the nondeductibility of certain Federal Deposit Insurance Corporation (“FDIC”) premiums, specific executive compensation, and other fringe benefits. While the FDIC insurance premiums are not deductible for tax purposes, FDIC special assessments are tax deductible. Conversely, the tax rates were reduced by nontaxable municipal interest income and nontaxable income from certain bank-owned life insurance policies.
The tax rates for the nine months ended September 30, 2025 were further impacted by the enactment of new state tax legislation across multiple jurisdictions during the first and second quarters of 2025. These legislative changes required a revaluation of our net deferred tax asset (“DTA”), which primarily arises from unrealized losses in AOCI on certain securities.
At September 30, 2025 and December 31, 2024, our net DTA totaled $756 million and $904 million, respectively. The net DTA or deferred tax liability (“DTL”) is included in either “Other assets” or “Other liabilities,” respectively, on the consolidated balance sheet.
We regularly evaluate DTAs to determine whether a valuation allowance is required, applying a “more-likely-than-not” threshold for realization. Based on this evaluation, management concluded that no valuation allowance was required at both September 30, 2025 and December 31, 2024.