XML 38 R27.htm IDEA: XBRL DOCUMENT v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

Note 15. Income Taxes

Income tax expense included in net income consisted of the following components:

 

 

Years Ended December 31,

 

($ in thousands)

2025

 

2024

 

2023

 

Included in net income

 

 

 

 

 

 

Current federal

$

89,830

 

$

94,382

 

$

72,884

 

Current state

 

13,270

 

 

14,477

 

 

10,656

 

Total current provision

 

103,100

 

 

108,859

 

 

83,540

 

Deferred federal

 

21,114

 

 

3,648

 

 

12,139

 

Deferred state

 

2,108

 

 

651

 

 

1,847

 

Total deferred provision

 

23,222

 

 

4,299

 

 

13,986

 

Total expense included in net income

$

126,322

 

$

113,158

 

$

97,526

 

 

Income tax expense does not reflect the tax effects of amounts recognized in other comprehensive income and in AOCI, a separate component of stockholders’ equity. These amounts include unrealized gains and losses on securities available for sale or transferred to held to maturity, unrealized gains and losses on derivatives and hedging transactions, and valuation adjustments of defined benefit and other post-retirement benefit plans. Refer to Note 13 – Stockholders’ Equity for additional information.

Temporary differences arise between the tax bases of assets or liabilities and their carrying amounts for financial reporting purposes. The expected tax effects from when these differences are resolved are recorded currently as deferred tax assets or liabilities.

 

Significant components of the Company’s deferred tax assets and liabilities were as follows:

 

 

December 31,

 

($ in thousands)

2025

 

2024

 

Deferred tax assets:

 

 

 

 

Allowance for loan losses

$

73,479

 

$

80,270

 

Federal and state net operating loss

 

8,483

 

 

2,560

 

Lease liability

 

27,399

 

 

26,686

 

Net unrealized losses on securities available-for-sale and cash flow hedges

 

93,189

 

 

155,432

 

Derivatives

 

12,304

 

 

22,840

 

Other

 

10,015

 

 

14,271

 

Gross deferred tax assets

 

224,869

 

 

302,059

 

Valuation allowance

 

(5,928

)

 

(4,623

)

Net deferred tax assets

$

218,941

 

$

297,436

 

Deferred tax liabilities:

 

 

 

 

Employee compensation and benefits

$

(20,660

)

$

(14,708

)

Fixed assets & intangibles

 

(35,435

)

 

(33,500

)

Lease financing

 

(66,455

)

 

(60,354

)

Right-of-use asset

 

(23,014

)

 

(22,383

)

Loan purchase accounting adjustments

 

—

 

 

(8

)

Other

 

(17,579

)

 

(19,916

)

Gross deferred tax liabilities

$

(163,143

)

$

(150,869

)

Net deferred tax asset

$

55,798

 

$

146,567

 

 

Reported income tax expense differed from amounts computed by applying the statutory income tax rate of 21% for the years ended December 31, 2025, 2024 and 2023 to earnings or loss before income taxes. Historically, the primary differences have been due to tax-exempt income, federal and state tax credits and excess tax benefits from stock-based compensation. The main source of tax credits has been investments in tax-advantaged securities and tax credit projects. These investments are made primarily in the markets we serve and directed at tax credits issued under the Federal and State New Market Tax Credit (NMTC) programs, Low-Income Housing Tax Credit (LIHTC) programs, as well as pre-2018 Qualified Zone Academy Bonds (QZAB) and Qualified School Construction Bonds (QSCB). A reconciliation between reported income tax expense and the amounts computed by applying the U.S. federal statutory income tax rate of 21% to income before taxes, prepared in accordance with the revised disclosure requirements of Topic 740, is presented in the table below. Disclosures for the comparative prior periods have been reclassified to conform to the current presentation.

 

 

2025

 

2024

 

2023

 

($ in thousands)

Amount

 

%

 

Amount

 

%

 

Amount

 

%

 

U.S. federal statutory tax rate

$

128,603

 

 

21.0

%

$

120,534

 

 

21.0

%

$

102,927

 

 

21.0

%

State income taxes, net of federal income tax effect

 

11,808

 

 

1.9

%

 

11,953

 

 

2.1

%

 

9,703

 

 

2.0

%

Effects of cross-border tax laws

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

19

 

 

0.0

%

 

—

 

 

0.0

%

 

2

 

 

0.0

%

Tax credits

 

 

 

 

 

 

 

 

 

 

 

 

New market tax credit

 

(4,805

)

 

(0.8

)%

 

(7,268

)

 

(1.3

)%

 

(6,924

)

 

(1.4

)%

Other

 

(2,098

)

 

(0.3

)%

 

(1,743

)

 

(0.3

)%

 

(2,650

)

 

(0.5

)%

Changes in valuation allowances

 

205

 

 

0.0

%

 

234

 

 

0.0

%

 

1,679

 

 

0.3

%

Nontaxable or nondeductible Items

 

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt interest

 

(7,773

)

 

(1.3

)%

 

(8,443

)

 

(1.5

)%

 

(8,755

)

 

(1.8

)%

Life insurance contracts

 

(5,882

)

 

(1.0

)%

 

(6,017

)

 

(1.0

)%

 

(4,020

)

 

(0.8

)%

Other

 

5,571

 

 

1.0

%

 

3,908

 

 

0.7

%

 

5,136

 

 

1.0

%

Changes in unrecognized tax benefits

 

674

 

 

0.1

%

 

—

 

 

0.0

%

 

428

 

 

0.1

%

Income tax expense

$

126,322

 

 

20.6

%

$

113,158

 

 

19.7

%

$

97,526

 

 

19.9

%

 

There were no activities or transactions with foreign tax effects or effects of changes in tax laws or rates enacted in any of the periods presented. In 2025, state and local income taxes in Florida and Mississippi comprise the majority of the domestic state and local income taxes, net of federal effect category. In 2024, state and local income taxes in Florida, Mississippi, and Tennessee

comprise the majority of the domestic state and local income taxes, net of federal effect category. While in 2023, state and local income taxes in Alabama, Florida and Mississippi comprise the majority of the domestic state and local income taxes, net of federal effect category.

 

The Company had approximately $79.2 million in state net operating loss carryforwards that originated in the tax years 2003 through 2025 and begin expiring in 2032. A $79.2 million gross state valuation allowance has been established for all non-bank entity level state net operating loss carryforwards, which translates to a net $3.7 million valuation allowance in the Company’s deferred tax inventory. The remainder of the allowance is related to deferred executive compensation. The impact of this valuation allowance is not material to the financial statements.

 

The tax benefit of a position taken or expected to be taken in a tax return should be recognized when it is more likely than not that the position will be sustained on its technical merits. The liability for unrecognized tax benefits was immaterial as of December 31, 2025, 2024 and 2023. The Company recognizes interest and penalties, if any, related to income tax matters in income tax expense, and the amounts recognized during 2025, 2024 and 2023 were insignificant.

 

Income taxes paid (net of refunds received), disaggregated by jurisdictional categories (U.S. federal, U.S. state and local and non-U.S.) required by the revised requirements of Topic 740, is presented in the table below. The Company did not pay any non-U.S. taxes in years ended December 31, 2025, 2024 or 2023.

 

 

Years Ended December 31,

 

($ in thousands)

2025

 

2024

 

2023

 

U.S. Federal

$

90,888

 

$

52,731

 

$

88,668

 

U.S. state and local

 

 

 

 

 

 

Florida

*

 

 

3,480

 

*

 

Other

 

12,254

 

 

9,900

 

 

13,081

 

Total U.S. state and local

 

12,254

 

 

13,380

 

 

13,081

 

Total income taxes paid (net of refunds received)

$

103,142

 

$

66,111

 

$

101,749

 

* The amount of income tax paid (net of refunds received) during this year does not meet the 5% disaggregation threshold.

 

The Company and its subsidiaries file a consolidated U.S. federal income tax return, as well as filing various state returns. Generally, the federal returns for years prior to 2022 are no longer subject to examination. State returns that are open to examination vary by jurisdiction and are generally open three to four years.