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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Note 11—Income Taxes The following were the components of provision for income taxes for the years ended December 31, 2024, 2023, and 2022:
|  | 2024 |  |  | 2023 |  |  | 2022 |
Current tax expense (benefit): |  |  |  |  |  |  |  |  |
Federal |  | $ | 30,663 |  |  | $ | 6,349 |  |  | $ | (3,774 | )
State and local |  |  | 12,211 |  |  |  | 4,875 |  |  |  | 4,939 |
Total current tax expense |  |  | 42,874 |  |  |  | 11,224 |  |  |  | 1,165 |
Deferred tax expense (benefit): |  |  |  |  |  |  |  |  |
Federal |  |  | 1,344 |  |  |  | 23,569 |  |  |  | 25,157 |
State and local |  |  | (3,898 | ) |  |  | 3,009 |  |  |  | 407 |
Total deferred tax expense (benefit) |  |  | (2,554 | ) |  |  | 26,578 |  |  |  | 25,564 |
Provision for income taxes |  | $ | 40,320 |  |  | $ | 37,802 |  |  | $ | 26,729 |
The following is a reconciliation between the statutory U.S. federal income tax rate of 21% for 2024, 2023, and 2022, and the effective tax rate:
|  | 2024 |  |  | 2023 |  |  | 2022 |  |
Calculated tax expense at statutory rate |  |  | 21.0 |  | % |  | 21.0 |  | % |  | 21.0 |  | %
Increase (decrease) in income taxes resulting from: |  |  |  |  |  |  |  |  |  |
State taxes, net of federal income tax |  |  | 5.3 |  |  |  | 5.4 |  |  |  | 4.8 |  |
Tax exempt income |  |  | (0.8 | ) |  |  | (0.8 | ) |  |  | (1.0 | ) |
Share-based compensation |  |  | (0.8 | ) |  |  | (0.2 | ) |  |  | (1.7 | ) |
Non-deductible expenses |  |  | 0.3 |  |  |  | 0.5 |  |  |  | 0.2 |  |
Total income tax expense |  |  | 25.0 |  | % |  | 25.9 |  | % |  | 23.3 |  | %
The following were the significant components of the deferred tax assets and liabilities as of December 31, 2024 and 2023:
|  | 2024 |  |  | 2023 |
Deferred tax assets: |  |  |  |  |  |
Net operating losses |  | $ | 22,144 |  |  | $ | 22,292 |
Interest on non-accrual loans |  |  | 6,837 |  |  |  | 5,652 |
Allowance for credit losses - loans and leases and loan basis |  |  | 32,693 |  |  |  | 38,204 |
Servicing assets |  |  | 2,332 |  |  |  | 2,702 |
Premises and equipment |  |  | 5,998 |  |  |  | 5,603 |
Other real estate owned |  |  | 180 |  |  |  | 441 |
Net unrealized holding loss on securities available-for-sale |  |  | 47,022 |  |  |  | 46,492 |
Accrued expenses |  |  | 6,317 |  |  |  | 5,365 |
Other |  |  | 5,670 |  |  |  | 5,761 |
Total deferred tax assets |  |  | 129,193 |  |  |  | 132,512 |
Deferred tax liabilities: |  |  |  |  |  |
Equipment leasing |  |  | (54,532 | ) |  |  | (59,218 | )
Core deposit intangibles |  |  | (4,285 | ) |  |  | (5,807 | )
Deposits |  |  | (43 | ) |  |  | (343 | )
Trust preferred securities |  |  | (4,211 | ) |  |  | (4,413 | )
Net unrealized holding gain on cash flow hedges |  |  | (7,643 | ) |  |  | (10,959 | )
Other |  |  | (2,021 | ) |  |  | (1,714 | )
Total deferred tax liabilities |  |  | (72,735 | ) |  |  | (82,454 | )
Net deferred tax assets |  | $ | 56,458 |  |  | $ | 50,058 |
Note 11—Income Taxes (continued) The following were the gross carryforwards available to offset future taxable income as of December 31, 2024 and 2023:
|  | 2024 |  |  | 2023 |
Federal gross NOL carryforwards - begin to expire in 2030 |  | $ | 6,804 |  |  | $ | 7,560 |
Federal gross NOL carryforwards - with no expiration |  |  | 200 |  |  |  | 2,468 |
Illinois gross NLD carryforwards - begin to expire in 2031 |  |  | 268,469 |  |  |  | 268,969 |
All other state gross NOL carryforwards - begin to expire in 2036 |  |  | 4,724 |  |  |  | — |
All other state gross NOL carryforwards - with no expiration |  |  | 5,790 |  |  |  | — |
Pursuant to Sections 382 and 383 of the Internal Revenue Code, annual use of net operating loss ("NOL") and credit carryforwards may be limited in the event a cumulative change in ownership of more than 50 percent occurs within a three‑year period. The Company has determined that such an ownership change occurred as of June 28, 2013 as a result of our recapitalization. This ownership change resulted in estimated annual limitations on the utilization of tax attributes, including net operating loss carryforwards. Approximately $756,000 of the restricted Federal net operating losses will become available each year related to Federal net operating losses generated prior to the 2013 recapitalization. In connection with the Company’s acquisition of Oak Park River Forest, the Company acquired $4.3 million of additional Federal net operating losses that are subject to an annual Section 382 limitation of approximately $781,000. In connection with the Company’s acquisition of Inland, the Company acquired $4.1 million of additional Federal net operating losses that are subject to an annual Section 382 limitation of approximately $4.2 million, which is pro-rated to $2.1 million for 2023 and the remainder utilized during 2024, based on the Inland acquisition date. The Federal net operating losses acquired in connection with the Oak Park River Forest and Inland acquisitions have no expiration. During the second quarter of 2021, Illinois Senate Bill 2017 was passed which created a temporary limitation on Net Loss Deduction ("NLD") usage. For tax years 2022 and 2023, C Corporations are limited to applying a maximum of $100,000 of NLD to taxable income. During the second quarter of 2024, Illinois House Bill 4951 as enacted, which amends numerous Illinois tax law provisions, including a temporary limitation on NLD usage. For tax years 2024, 2025, and 206, C Corporations are limited to applying a maximum of $500,000 of NLD to taxable income. NLDs that are limited during these years have an extended expiration date for the years in which they are limited. The extended expiration of the Company’s NLD carryforwards are from December 31, 2031 to December 31, 2043. The Company and the Bank file consolidated income tax returns. The Company and the Bank are no longer subject to United States federal income tax examinations for years before 2021 and state income tax examinations for years before 2020.

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