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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
We are organized and conduct our operations to qualify as a REIT and to comply with the provisions of the Internal Revenue Code. A REIT is generally not subject to federal income tax on taxable income which it distributes to its stockholders; provided that it distributes at least 90% of its taxable income and meets certain other requirements. Certain REIT income may be subject to state and local income taxes. We did not have any REIT–federal taxable income, net of dividends paid and net operating loss deductions, for 2024, 2023 and 2022, and therefore, have not provided for REIT federal income tax expense in any of those years. In 2024, 2023 and 2022, the REIT incurred no state income tax expense. We have elected to retain excess inclusion income rather than passing it through to our stockholders.
Certain of our assets and operations that would not otherwise comply with the REIT requirements, such as the Agency Business and our residential mortgage banking joint venture, are owned or conducted through our TRS Consolidated Group, the majority of the income of which is subject to U.S. federal, state and local income taxes.
A summary of our pre-tax GAAP income is as follows (in thousands):
Year Ended December 31,
202420232022
Pre‑tax GAAP income:
REIT$247,068 $320,045 $303,320 
TRS Consolidated Group50,329 107,858 67,991 
Total pre‑tax GAAP income$297,397 $427,903 $371,311 
Our provision for income taxes is comprised as follows (in thousands):
Year Ended December 31,
202420232022
Current tax provision:
Federal$18,880 $26,269 $14,167 
State6,211 8,427 5,058 
Total25,091 34,696 19,225 
Deferred tax (benefit) provision:
Federal$(8,795)$(5,272)$(1,373)
State(2,818)(1,783)(370)
Valuation allowance— (294)2 
Total(11,613)(7,349)(1,741)
Total income tax expense$13,478 $27,347 $17,484 
A reconciliation of our effective income tax rate as a percentage of pre-tax income to the U.S. federal statutory rate is as follows:
Year Ended December 31,
202420232022
U.S. federal statutory rate21.0 %21.0 %21.0 %
REIT non‑taxable income(17.4)%(15.7)%(17.2)%
State and local income taxes, net of federal tax benefit0.9 %1.2 %1.0 %
Other0.1 %(0.1)%(0.1)%
Effective income tax rate4.6 %6.4 %4.7 %
The significant components of our deferred tax assets and liabilities of our TRS Consolidated Group are as follows (in thousands):
December 31,
20242023
Deferred tax assets:
Expenses not currently deductible$33,189 $27,144 
Loan loss reserves7,084 7,088 
Net operating loss carryforwards234 188 
Other396 346 
Deferred tax assets, net$40,903 $34,766 
Deferred tax liabilities:
Mortgage servicing rights$24,420 $28,286 
Intangibles5,106 5,565 
Interest in equity affiliates, net1,568 2,719 
Deferred tax liabilities, net$31,094 $36,570 
At both December 31, 2024 and 2023, the REIT (excluding the TRS Consolidated Group) had no federal net operating loss carryforwards and no capital loss carryforwards.
At both December 31, 2024 and 2023, the TRS Consolidated Group had no federal net operating loss carryforwards remaining.
At both December 31, 2024 and 2023, the TRS Consolidated Group had state net operating loss carryforwards of $0.2 million, which will begin to expire in 2036.
The TRS Consolidated Group is currently under audit in certain state and local jurisdictions for tax years 2017-2021. While the impact of the current income tax examinations were undetermined, it is not expected to be material to our consolidated financial statements.
We have assessed our tax positions for all open years, which includes 2017-2024, and have concluded that there were no material uncertainties to be recognized. We have not recognized any interest and penalties related to tax uncertainties for the years ended 2017 through 2024.