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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 for the years indicated:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
| (In thousands)
Current Tax Expense: |  |  |  |  |
Federal | $ | 45,554 |  |  | $ | 34,219 |  |  | $ | 63,833 |
State | 1,156 |  |  | 3,387 |  |  | 44,734 |
Total current tax expense | 46,710 |  |  | 37,606 |  |  | 108,567 |
Deferred Tax (Benefit) Expense: |  |  |  |  |
Federal | (6,082) |  |  | (238,865) |  |  | 35,789 |
State | 1,138 |  |  | (110,942) |  |  | (401) |
Total deferred tax (benefit) expense | (4,944) |  |  | (349,807) |  |  | 35,388 |
Total income tax (benefit) expense | $ | 41,766 |  |  | $ | (312,201) |  |  | $ | 143,955 |
The following table presents a reconciliation of the recorded income tax expense to the amount of taxes computed by applying the applicable federal statutory income tax rates of 21% for 2024, 2023, and 2022 to earnings before income taxes:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
| (In thousands)
Computed expected income tax (benefit) expense at federal statutory rate | $ | 35,417 |  |  | $ | (464,381) |  |  | $ | 119,189 |
State tax (benefit) expense, net of federal tax benefit | 12,657 |  |  | (156,669) |  |  | 36,310 |
Goodwill impairment | — |  |  | 286,811 |  |  | — |
Tax‑exempt interest benefit | (15,572) |  |  | (12,518) |  |  | (12,293) |
Increase in cash surrender value of life insurance | (1,246) |  |  | (1,455) |  |  | (1,246) |
Low income housing tax credits, net of amortization | (12,378) |  |  | (8,574) |  |  | (7,158) |
Nondeductible employee compensation | 1,683 |  |  | 3,947 |  |  | 6,067 |
Nondeductible acquisition‑related expense | — |  |  | 5,456 |  |  | — |
Nondeductible FDIC premiums | 9,377 |  |  | 18,973 |  |  | 4,257 |
Change in unrecognized tax benefits | 40 |  |  | 443 |  |  | (2,017) |
Valuation allowance change | (2,115) |  |  | (5,948) |  |  | 1,805 |
Disallowed interest | 11,043 |  |  | 12,318 |  |  | 2,455 |
Equity compensation shortfall (windfall) | 4,991 |  |  | 4,949 |  |  | (410) |
State rate and apportionment changes | (4,662) |  |  | 2,240 |  |  | (2,189) |
Other, net | 2,531 |  |  | 2,207 |  |  | (815) |
Recorded income tax (benefit) expense | $ | 41,766 |  |  | $ | (312,201) |  |  | $ | 143,955 |
The Company recognized $57.9 million, $42.7 million, and $34.4 million of tax credits and other tax benefits associated with its investments in LIHTC partnerships for the years ended December 31, 2024, 2023, and 2022. The amount of amortization of such investments reported in income tax expense under the proportional amortization method of accounting was $45.6 million for 2024, $34.1 million for 2023, and $28.0 million for 2022. As of December 31, 2024, for federal tax purposes, the Company had $115.5 million of LIHTC and solar tax credit carryforwards available to apply against future tax liability, expiring from 2042 to 2044. The Company had $16.3 million state LIHTC carryforwards, which can be carried forward indefinitely. At December 31, 2024, w e had $917.8 million of federal net operating loss carryforwards, almost all of which can be carried forward indefinitely, and approximately $1.37 billion of state net operating loss carryforwards available to be applied against future taxable income. A majority of the state net operating loss carryforwards will expire in varying amounts from 2025 through 2044. A portion of the state net operating loss carryforwards generated after December 31, 2017 can be carried forward indefinitely due to the state conformity to the federal net operating loss carryforward provisions as modified by the Tax Cuts and Jobs Act. The following table presents the tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities as of the dates indicated:
| December 31,
| 2024 |  | 2023
| (In thousands)
Deferred Tax Assets: |  |  |
Book allowance for loan losses in excess of tax specific charge-offs | $ | 78,096 |  |  | $ | 90,531 |
Fair value mark on acquired loans | 65,100 |  |  | 96,844 |
Interest on nonaccrual loans | 4,569 |  |  | 4,866 |
Deferred compensation | 4,902 |  |  | 5,256 |
Foreclosed assets valuation allowance | 335 |  |  | 663 |
Net operating losses | 292,843 |  |  | 282,127 |
Accrued liabilities | 102,232 |  |  | 106,834 |
Unrealized loss from FDIC‑assisted acquisitions | 413 |  |  | 767 |
Unrealized loss on securities available-for-sale | 79,977 |  |  | 101,602 |
Unrealized loss on securities held-to-maturity | 62,162 |  |  | 71,197 |
Tax mark-to-market on loans | 250 |  |  | — |
Goodwill | 73,863 |  |  | 81,607 |
Tax credits | 130,522 |  |  | 80,610 |
Lease liability | 35,447 |  |  | 45,742 |
FDIC indemnification asset | 7,028 |  |  | 9,273 |
Other | 3,159 |  |  | 1,582 |
Gross deferred tax assets | 940,898 |  |  | 979,501 |
Valuation allowance | (19,015) |  |  | (21,061) |
Deferred tax assets, net of valuation allowance | 921,883 |  |  | 958,440 |
Deferred Tax Liabilities: |  |  |
Core deposit and customer relationship intangibles | 27,292 |  |  | 29,885 |
Deferred loan fees and costs | 2,193 |  |  | 1,039 |
Unrealized gain on credit-linked notes | 1,452 |  |  | 2,212 |
Premises and equipment, principally due to differences in depreciation | 5,710 |  |  | 6,682 |
FHLB stock | 553 |  |  | 4,717 |
Tax mark-to-market on loans | — |  |  | 539 |
Subordinated debt | 14,789 |  |  | 15,862 |
Equity investments | 9,695 |  |  | 9,953 |
Operating leases | 110,415 |  |  | 110,522 |
ROU assets | 29,197 |  |  | 37,918 |
Gross deferred tax liabilities | 201,296 |  |  | 219,329 |
Total net deferred tax assets | $ | 720,587 |  |  | $ | 739,111 |
Based upon our taxpaying history and estimates of taxable income over the years in which the items giving rise to the DTAs are deductible, management believes it is more likely than not the Company will realize the benefits of these DTAs. The Company's net DTAs decreased at December 31, 2024, compared to December 31, 2023 due primarily to a decrease in unrealized loss on AFS securities. The Company had net income taxes receivable of $18.0 million and $34.5 million at December 31, 2024 and December 31, 2023. As of December 31, 2024 and 2023, the Company had a valuation allowance of $19.0 million and $21.1 million against DTAs. Periodic reviews of the carrying amount of DTAs are made to determine if a valuation allowance is necessary. A valuation allowance is required, based on available evidence, when it is more likely than not that all or a portion of a DTA will not be realized due to the inability to generate sufficient taxable income in the period and/or of the character necessary to utilize the benefit of the DTA. All available evidence, both positive and negative, that may affect the realizability of the DTA is identified and considered in determining the appropriate amount of the valuation allowance. It is more likely than not that these DTAs subject to a valuation allowance will not be realized primarily due to their character and/or the expiration of the carryforward periods. The net decrease of $2.1 million in the total valuation allowance during the year ended December 31, 2024 was primarily related to the expiration and the expected realization of state net operating losses DTA that were previously reserved. The following table summarizes the activity related to the Company's unrecognized tax benefits for the years indicated:
| Year Ended December 31,
Unrecognized Tax Benefits | 2024 |  | 2023
| (In thousands)
Balance, beginning of year | $ | 1,598 |  |  | $ | 407 |
Increase based on tax positions related to prior years | — |  |  | 1,598 |
Reductions for tax positions related to prior years | (953) |  |  | (407) |
Balance, end of year | $ | 645 |  |  | $ | 1,598 |
Unrecognized tax benefits that would affect the effective tax rate if recognized | $ | 645 |  |  | $ | 1,598 |
Our gross unrecognized tax benefits are not expected to decrease within the next 12 months. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. For the year ended December 31, 2024, we reduced our accrual for interest expense and penalties by $0.4 million and recognized tax expense of $0.1 million. For the year ended December 31, 2023, we increased our accrual for interest expense and penalties and recognized tax expense of $0.3 million. For the year ended December 31, 2022, we reduced our accrual for interest expense and penalties and recognized tax benefits of $0.7 million. We had $0.2 million and $0.6 million accrued for the payment of interest and penalties as of December 31, 2024 and 2023. We file federal and state income tax returns with the Internal Revenue Service (“IRS”) and various state and local jurisdictions and generally remain subject to examinations by these tax jurisdictions for tax years 2020 through 2023. We are currently under examination by the IRS and certain state and local jurisdictions for various tax years ranging between 2014 and 2022.

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