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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The provision for income taxes for the years ended December 31, 2024, 2023 and 2022 consisted of the following (in thousands):
 For the Year Ended December 31,
 202420232022
Current
Federal$23,315 $20,894 $32,981 
State7,288 8,655 11,807 
Total current30,603 29,549 44,788 
Deferred
Federal214 4,250 2,231 
State(551)(1,099)(454)
Total deferred(337)3,151 1,777 
Total provision for income taxes$30,266 $32,700 $46,565 
Included in other comprehensive income was the income tax impact attributable to the unrealized gain/loss on debt securities, accretion of unrealized losses on debt securities reclassified to held-to-maturity, unrealized loss on derivative hedges and the related reclassification adjustments included in net income. These items resulted in a tax expense of $1.8 million and $4.9 million for the years ended December 31, 2024 and 2023, respectively, and a tax benefit of $10.4 million for the year ended December 31, 2022.
The income tax provision reconciled to the income taxes that would have been computed at the statutory federal rate for the years ended December 31, 2024, 2023 and 2022 is as follows (dollars in thousands):
 For the Year Ended December 31,
 202420232022
Income before provision for income taxes$130,656 $136,765 $193,922 
Federal income tax, at statutory rates21.0 %21.0 %21.0 %
Computed “expected” federal income tax expense$27,438 $28,721 $40,724 
Increase (decrease) in federal income tax expense resulting from
State income taxes, net of federal benefit5,518 5,979 8,927 
Earnings on BOLI(1,660)(1,109)(1,381)
Tax exempt interest(547)(606)(786)
Merger related expenses— — 90 
Stock compensation391 (298)26 
Alternative minimum tax write-off1,196 — — 
Research and development and other credits (735)(557)(471)
Dividends received deduction(322)(368)(371)
Other items, net(1,013)938 (193)
Total provision for income taxes$30,266 $32,700 $46,565 
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 in the following table (in thousands):
 December 31,
 20242023
Deferred tax assets:
Allowance for credit losses on loans and debt securities HTM$18,981 $16,951 
Other reserves2,790 2,482 
Incentive compensation4,345 3,871 
Deferred compensation338 370 
Stock plans2,239 2,474 
Unrealized losses on assets held-for-sale347 392 
Unrealized losses on AFS securities5,346 7,274 
Net operating loss carryforwards related to acquisition19,053 21,077 
Section 174 capitalized costs5,457 3,737 
Federal and state alternative minimum tax— 1,196 
Other, net866 653 
Total gross deferred tax assets59,762 60,477 
Deferred tax liabilities:
Unrealized gain on equity securities(4,568)(3,386)
Premises and equipment(3,104)(4,891)
Deferred loan and commitment costs, net(2,814)(2,317)
Purchase accounting related adjustments(1,698)(1,716)
Investments, discount accretion(185)(73)
Other, net(402)— 
Total gross deferred tax liabilities(12,771)(12,383)
Net deferred tax assets$46,991 $48,094 
The Company has federal net operating losses from the acquisitions of Colonial American Bank (“Colonial American”) and Sun Bancorp, Inc. (“Sun”). At December 31, 2024 and 2023, the net operating losses from Colonial American were $3.3 million and $3.6 million, respectively. These net operating losses are subject to annual limitation under Code Section 382 of approximately $22,000, and will expire between 2029 and 2034. At December 31, 2024 and 2023, the net operating losses from Sun were $87.5 million and $96.8 million, respectively. These net operating losses are subject to annual limitation under Code Section 382 of approximately $9.3 million. These net operating losses will expire between 2029 and 2036.
At December 31, 2024 and 2023, the Company had $0 and $1.2 million, respectively, of Alternative Minimum Tax credits that were part of the Sun acquisition. These credits are subject to the same Code Section 382 limitation as indicated above but do not expire. During 2024, the Company wrote off the remaining tax credits of $1.2 million.
At December 31, 2024, 2023 and 2022, the Company determined that it is not required to establish a valuation reserve for the remaining net deferred tax assets since it is “more likely than not” that the net deferred tax assets will be realized through future reversals of existing taxable temporary differences, future taxable income and tax planning strategies. The conclusion that it is “more likely than not” that the remaining net deferred tax assets will be realized is based on the history of earnings and the prospects for continued growth. Management will continue to review the tax criteria related to the recognition of deferred tax assets.
Retained earnings at December 31, 2024 included approximately $10.8 million for which no deferred income tax liability has been recognized. This amount represents an allocation of income to bad debt deductions for tax purposes only for tax years prior to 1988. If the Bank were to liquidate, the entire amount would have to be recaptured and would create income for tax purposes only, which would be subject to the then-current corporate income tax rate.
The Company’s federal and state income tax returns are routinely subject to examination by the Internal Revenue Service and New Jersey, New York, Pennsylvania, and several other state and city tax authorities the Company operates in. The Company believes the assumptions used to record tax-related assets or liabilities have been appropriate. However, such examinations may result in challenges to the tax return treatment applied by the Company to specific transactions.
As of December 31, 2024, the Company is not under examination in connection to any tax years. The tax years that remain subject to examination by the federal government and most state or city tax authorities include the tax years 2021 and forward.
The Company incurred income tax expense of $1.8 million recognized in other comprehensive income related to Tax Reform in 2018. These amounts have been reported as separate components of accumulated other comprehensive income and reclassified and recognized as a net tax benefit in the periods in which the underlying transactions are settled through continuing operations. The amount included in accumulated other comprehensive income at December 31, 2024, subject to reclassification, was $295,000.
There were no unrecognized tax benefits for the years ended December 31, 2024, 2023 and 2022.