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Income Taxes

12 Months Ended

Dec. 31, 2024

Income Taxes

Income Taxes

Note 19 Income Taxes

​

Income tax expense attributable to income before taxes was $26.4 million, $33.6 million and $14.9 million for 2024, 2023 and 2022, respectively.

​

(a) Income taxes

​

Total income taxes for 2024, 2023 and 2022 were allocated as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	For the years ended December 31,
​	​	2024		​	2023		​	2022
Current expense:	​	​	​	​	​	​	​	​	​
U.S. federal	​	$	19,076	​	$	30,319	​	$	7,193
State and local	​	​	3,502	​	​	5,750	​	​	1,831
Total current income tax expense	​	​	22,578	​	​	36,069	​	​	9,024
Deferred expense (benefit):	​	​	​	​	​	​	​	​	​
U.S. federal	​	​	2,993	​	​	(1,564)	​	​	5,100
State and local	​	​	861	​	​	(951)	​	​	786
Total deferred income tax expense (benefit)	​	​	3,854	​	​	(2,515)	​	​	5,886
Income tax expense	​	$	26,432	​	$	33,554	​	$	14,910

​

(b) Tax Rate Reconciliation

​

The reconciliation between the income tax expenses and the amounts computed by applying the U.S. federal income tax rate to pretax income is as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	For the years ended December 31,
​	​	2024		​	2023		​	2022
Income tax at federal statutory rates (21%)	​	$	30,502	​	$	36,876	​	$	18,098
State income taxes, net of federal benefits	​	​	3,447	​	​	3,791	​	​	2,067
Non-deductible compensation	​	​	579	​	​	642	​	​	514
Non-deductible acquisition costs	​	​	—	​	​	—	​	​	427
Tax-exempt loan interest income, net	​	​	(4,480)	​	​	(4,437)	​	​	(5,208)
Research and development tax credits	​	​	(1,600)	​	​	(2,400)	​	​	—
Bank-owned life insurance income	​	​	(959)	​	​	(777)	​	​	(374)
Stock-based compensation	​	​	(451)	​	​	(345)	​	​	(402)
Other	​	​	(606)	​	​	204	​	​	(212)
Income tax expense	​	$	26,432	​	$	33,554	​	$	14,910

​

(c) Significant Components of Deferred Taxes

​

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2024 and 2023 are presented below:

​

​	​	​	​	​	​
​	December 31, 2024		​	December 31, 2023
Deferred tax assets:	​	​	​	​	​
Allowance for credit losses	$	22,471	​	$	23,685
Net unrealized losses on investment securities	​	21,864	​	​	24,367
Lease liability	​	6,884	​	​	7,764
Accrued compensation	​	5,479	​	​	4,939
Accrued stock-based compensation	​	2,276	​	​	2,116
Net unrealized losses on equity securities	​	1,845	​	​	945
Nonaccrual interest income	​	1,034	​	​	1,083
Net deferred loan fees	​	919	​	​	419
Other reserves	​	499	​	​	434
Excess tax basis of acquired loans over carrying value	​	401	​	​	438
Net operating loss	​	393	​	​	461
Capitalized research and development costs	​	—	​	​	1,108
Other	​	2,391	​	​	3,098
Total deferred tax assets	​	66,456	​	​	70,857
Deferred tax liabilities:	​	​	​	​	​
Intangible assets	​	(13,660)	​	​	(11,883)
Right of use assets	​	(6,459)	​	​	(7,404)
Premises and equipment	​	(4,126)	​	​	(4,840)
Mortgage servicing rights	​	(1,511)	​	​	(1,702)
Excess book basis in partnerships	​	(1,174)	​	​	(908)
Capitalized research and development costs	​	(1,123)	​	​	—
Other	​	(3,098)	​	​	(2,458)
Total deferred tax liabilities	​	(31,151)	​	​	(29,195)
Net deferred tax asset	$	35,305	​	$	41,662

​

At December 31, 2024, the Company had federal and state net operating loss carryovers (“NOLs”) of $1.4 million and $2.9 million, respectively, which are available to offset future taxable income. The federal NOLs expire in varying amounts through 2034, and the state NOLs expire in varying amounts between 2026 and 2035. While these NOLs are subject to

certain restrictions on the amount that can be utilized per year, the Company does not expect any tax attribute carryovers to expire before they are utilized.

​

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. 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, if any (including the impact of available carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. For the years ended December 31, 2024 and 2023, management believes a valuation allowance on the deferred tax asset is not necessary based on the current and future projected earnings of the Company. The Company has no ASC 740-10 unrecognized tax benefits recorded as of December 31, 2024 and 2023 and does not expect the total amount of unrecognized tax benefits to significantly increase within the next 12 months. The Company and its subsidiary banks are subject to income tax by federal, state and local government taxing authorities. The Company is not currently subject to any open income tax examinations; however, the Company’s tax returns for the years ended December 31, 2021 through 2024 remain subject to examination by U.S. federal income tax authorities. The years open to examination by state and local government authorities vary by jurisdiction.

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The entire disclosure for income tax.

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