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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

10. INCOME TAXES

The components of income tax expense are as follows:

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

 

 

(Dollars in thousands)

 

Current

 

$

130,663

 

 

$

107,823

 

 

$

135,611

 

Deferred

 

 

2,616

 

 

 

7,321

 

 

 

6,046

 

Total

 

$

133,279

 

 

$

115,144

 

 

$

141,657

 

 

The provision for federal income taxes differs from the amount computed by applying the federal income tax statutory rate of 21% for 2024, 2023 and 2022 to income before income taxes as follows:

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

 

 

(Dollars in thousands)

 

Taxes calculated at statutory rate

 

$

128,660

 

 

$

112,241

 

 

$

139,901

 

Increase (decrease) resulting from:

 

 

 

 

 

 

 

 

 

Excess FMV on restricted stock vesting

 

 

245

 

 

 

17

 

 

 

9

 

Certain compensation >$1 million

 

 

877

 

 

 

887

 

 

 

948

 

Nondeductible compensation

 

 

945

 

 

 

845

 

 

 

945

 

Tax-exempt interest

 

 

(1,725

)

 

 

(1,718

)

 

 

(1,625

)

Qualified School Construction Bond credit

 

 

(969

)

 

 

(1,255

)

 

 

(1,288

)

Nontaxable death benefits

 

 

(23

)

 

 

(424

)

 

 

(215

)

BOLI income

 

 

(1,676

)

 

 

(1,397

)

 

 

(1,075

)

State tax, net

 

 

2,425

 

 

 

1,889

 

 

 

2,315

 

Other, net

 

 

4,520

 

 

 

4,059

 

 

 

1,742

 

Total

 

$

133,279

 

 

$

115,144

 

 

$

141,657

 

Year-end deferred taxes are presented in the table below. Deferred taxes as of December 31, 2024 and 2023 are based on the U.S. statutory federal corporate income tax rate of 21%.

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

(Dollars in thousands)

 

Deferred tax assets:

 

 

 

 

 

 

Allowance for credit losses

 

$

63,166

 

 

$

69,796

 

CECL unfunded loans

 

 

7,906

 

 

 

7,665

 

Loan purchase discounts

 

 

7,466

 

 

 

5,927

 

Restricted stock

 

 

4,905

 

 

 

6,643

 

Securities

 

 

3,961

 

 

 

3,368

 

Deferred compensation

 

 

1,892

 

 

 

2,022

 

Accrued liabilities

 

 

1,068

 

 

 

2,059

 

Unrealized loss on available for sale securities

 

 

432

 

 

 

372

 

Certificates of Deposit

 

 

32

 

 

 

51

 

Other

 

 

2,803

 

 

 

30

 

Total deferred tax assets

 

 

93,631

 

 

 

97,933

 

Deferred tax liabilities:

 

 

 

 

 

 

Goodwill and core deposit intangibles

 

 

(42,838

)

 

 

(41,421

)

Deferred loan fees and costs

 

 

(11,822

)

 

 

(12,245

)

Bank premises and equipment

 

 

(5,109

)

 

 

(7,018

)

Prepaid expenses

 

 

(1,607

)

 

 

(1,592

)

Other

 

 

(20

)

 

 

(20

)

Total deferred tax liabilities

 

 

(61,396

)

 

 

(62,296

)

Net deferred tax assets

 

$

32,235

 

 

$

35,637

 

 

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and estimates of future taxable income over the periods for which the deferred tax assets are deductible, management believes it is more likely than not the Company will realize the benefits of these deductible differences at December 31, 2024.

 

Benefits from tax positions are recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company had no tax positions at December 31, 2024 or December 31, 2023 that did not meet the more-likely-than not recognition threshold. FASB ASC Topic 740 “Income Taxes” also provides guidance on the accounting for and disclosure of unrecognized tax benefits, interest and penalties. The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. Penalties are recorded in other (gains) losses and interest paid or received is recorded in interest expense or interest income, respectively, in the consolidated statement of income. As of December 31, 2024 and 2023, the Company has not accrued any interest and penalties related to unrecognized tax benefits. The Company has identified its federal tax return and its state tax returns in Texas, Oklahoma, Colorado, New Mexico and New York as “major” tax jurisdictions, as defined. The Bank has identified its state returns in Arkansas, Florida, Georgia, Idaho, North Carolina, Pennsylvania, Tennessee and Washington as “major” tax jurisdictions, as defined. The periods subject to examination for the Company’s federal return are the 2021 through 2024 tax years. The Company has assumed net operating loss carryforwards, “acquired NOLs”, through its previous acquisitions. The tax periods of the acquired entities from which these acquired NOLs originated are considered open years for purposes of adjusting the amount of the acquired NOLs used in the Company’s open years. As of December 31, 2024, the Company has fully utilized all acquired NOLs.