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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 provision for income taxes is comprised of the following components:
| Years Ended December 31
| 2024 |  | 2023 |  | 2022
| (Dollars in thousands)
Current expense |  |  |  |  |
Federal | $ | 47,830 |  |  | $ | 51,771 |  |  | $ | 60,216 |
State | 17,816 |  |  | 21,123 |  |  | 24,979 |
Total current expense | 65,646 |  |  | 72,894 |  |  | 85,195 |
Deferred expense (benefit) |  |  |  |  |
Federal | (7,671) |  |  | 1,336 |  |  | (970) |
State | (2,929) |  |  | 1,402 |  |  | (284) |
Total deferred expense (benefit) | (10,600) |  |  | 2,738 |  |  | (1,254) |
Total expense | $ | 55,046 |  |  | $ | 75,632 |  |  | $ | 83,941 |
The difference between the statutory federal income tax rate and the effective income tax rate reported for the last three years is detailed below:
| Years Ended December 31
| 2024 |  | 2023 |  | 2022
| (Dollars in thousands)
Computed statutory federal income tax provision | $ | 51,897 |  | 21.00 | % |  | $ | 66,178 |  | 21.00 | % |  | $ | 73,028 |  | 21.00 | %
State taxes, net of federal tax benefit | 12,143 |  | 4.91 | % |  | 17,992 |  | 5.71 | % |  | 19,728 |  | 5.67 | %
Low Income Housing Project Investments | (4,496) |  | (1.82) | % |  | (3,740) |  | (1.19) | % |  | (3,364) |  | (0.97) | %
Nontaxable interest, net | (3,653) |  | (1.48) | % |  | (3,508) |  | (1.11) | % |  | (3,191) |  | (0.92) | %
Increase in cash surrender value of life insurance | (1,794) |  | (0.73) | % |  | (2,133) |  | (0.68) | % |  | (1,885) |  | (0.54) | %
Increase (decrease) in uncertain positions | (1,215) |  | (0.49) | % |  | (655) |  | (0.21) | % |  | (1,035) |  | (0.30) | %
Revaluation of net deferred tax assets | (29) |  | (0.01) | % |  | 255 |  | 0.08 | % |  | — |  | — | %
Stock-based compensation | 165 |  | 0.07 | % |  | (127) |  | (0.04) | % |  | (202) |  | (0.06) | %
Change in valuation allowance | 65 |  | 0.03 | % |  | 109 |  | 0.03 | % |  | 52 |  | 0.01 | %
Other tax credits | — |  | — | % |  | (76) |  | (0.02) | % |  | — |  | — | %
Other, net | 1,963 |  | 0.79 | % |  | 1,337 |  | 0.43 | % |  | 810 |  | 0.25 | %
Total expense | $ | 55,046 |  | 22.27 | % |  | $ | 75,632 |  | 24.00 | % |  | $ | 83,941 |  | 24.14 | %
The tax-effected components of the net deferred tax asset at December 31 of the years presented were as follows:
| 2024 |  | 2023
| (Dollars in thousands)
Deferred tax assets |  |  |
Accrued expenses not deducted for tax purposes | $ | 17,720 |  |  | $ | 14,646 |
Allowance for credit losses | 46,372 |  |  | 38,774 |
Derivatives fair value adjustment | 5,304 |  |  | 7,825 |
Employee and director equity compensation | 1,930 |  |  | 1,660 |
Foreign Tax Credit Carryforward | 89 |  |  | 89 |
Loan basis difference fair value adjustment | 1,612 |  |  | 1,811 |
Net operating loss carry-forward | 627 |  |  | 633 |
Net unrealized loss on securities available for sale | 23,795 |  |  | 29,536 |
Operating lease liability | 15,471 |  |  | 15,387 |
State purchased credits | 21,448 |  |  | — |
Other | 621 |  |  | 587 |
Gross deferred tax assets | $ | 134,989 |  |  | $ | 110,948 |
Valuation allowance (1) | (531) |  |  | (467) |
Total deferred tax assets net of valuation allowance | $ | 134,458 |  |  | $ | 110,481 |
Deferred tax liabilities |  |  |
Core deposit and other intangibles | $ | 1,453 |  |  | $ | 2,865 |
Deferred loan fees, net | 8,080 |  |  | 8,160 |
Fixed assets | 14,747 |  |  | 16,606 |
Goodwill | 11,476 |  |  | 11,291 |
Prepaid pension | 7,260 |  |  | 3,482 |
Right of use asset | 14,921 |  |  | 14,781 |
Other | 1,868 |  |  | 1,884 |
Gross deferred tax liabilities | $ | 59,805 |  |  | $ | 59,069 |
Total net deferred tax asset | $ | 74,653 |  |  | $ | 51,412 |
(1)Deferred tax assets are to be reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of the tax benefit depends upon the existence of sufficient taxable income in future periods. Uncertainty in Income Taxes The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction as well as in various states. The Company is subject to U.S. federal, state and local income tax examinations by tax authorities for the 2021 through 2023 tax years including any related income tax filings from its recent acquisitions. The Company believes that its income tax returns have been filed based upon applicable statutes, regulations and case law in effect at the time of filing, however, the Internal Revenue Service (“IRS”) and /or state jurisdictions could disagree with the Company’s interpretation upon examination. The Company accounts for uncertainties in income taxes by providing a tax reserve for certain positions. The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits:
| (Dollars in thousands)
Balance at December 31, 2021 | $ | 2,878 |
Reduction of tax positions for prior years | (1,047) |
Increase for prior year tax positions | 128 |
Increase for current year tax positions | 761 |
Balance at December 31, 2022 | $ | 2,720 |
Reduction of tax positions for prior years | (959) |
Balance at December 31, 2023 | $ | 1,761 |
Reduction of tax positions for prior years | (999) |
Balance at December 31, 2024 | $ | 762 |
Increases to the Company’s unrealized tax positions occur as a result of accruing for any unrecognized tax benefit, as well as the accrual of interest and penalties related to prior year positions. Decreases in the Company’s unrealized tax positions occur as a result of the statute of limitation lapsing on prior year positions and/or settlements relating to outstanding positions. Additionally, the balances noted in the table above do not include the indirect federal benefit of state tax positions of approximately $160,000, $343,000, and $544,000 at December 31, 2024, 2023, and 2022, respectively.

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