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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The following table presents the components of income tax expense (benefit) for the years ended December 31, 2023, 2022 and 2021:
Year Ended December 31,
($ in thousands)202320222021
Current income tax expense (benefit):
Federal$172,428 $163,797 $84,249 
State173,080 160,629 95,939 
Foreign2,240 3,133 (1,554)
Total current income tax expense347,748 327,559 178,634 
Deferred income tax (benefit) expense:
Federal(24,319)(23,484)1,528 
State(23,415)(21,835)3,259 
Foreign(1,405)1,331 (25)
Total deferred income tax (benefit) expense
(49,139)(43,988)4,762 
Income tax expense$298,609 $283,571 $183,396 

The following table presents the reconciliation of the federal statutory rate to the Company’s effective tax rate for the years ended December 31, 2023, 2022 and 2021:
Year Ended December 31,
202320222021
Statutory U.S. federal tax rate21.0 %21.0 %21.0 %
U.S. state income taxes, net of U.S. federal income tax effect8.1 7.8 7.4 
Tax credits and benefits, net of related expenses
(9.9)(8.9)(11.3)
Other, net1.3 0.2 0.3 
Effective tax rate20.5 %20.1 %17.4 %
The following table summarizes the tax effects of temporary differences that give rise to a significant portion of deferred tax assets and liabilities as of December 31, 2023 and 2022:
December 31,
($ in thousands)20232022
Deferred tax assets:
Allowance for credit losses and nonperforming assets valuation allowance$217,731 $191,187 
Investments in qualified affordable housing partnerships, tax credit and other investments, net28,216 21,011 
Stock compensation and other accrued compensation33,169 25,857 
Interest income on nonaccrual loans7,034 5,185 
State taxes9,885 13,259 
Net unrealized losses on debt securities and derivatives242,303 309,837 
Premises and equipment1,782 3,827 
Lease liabilities32,636 34,859 
FDIC special assessment charge
22,212 — 
Other9,019 6,169 
Total deferred tax assets$603,987 $611,191 
Deferred tax liabilities:
Equipment lease financing$15,564 $27,237 
Investments in qualified affordable housing partnerships, tax credit and other investments, net
23,103 7,709 
FHLB stock dividends1,947 1,926 
Mortgage servicing assets2,102 1,963 
Acquired debts1,398 1,477 
Prepaid expenses2,981 2,478 
Operating lease right-of-use assets30,272 32,606 
Other7,871 6,270 
Total deferred tax liabilities$85,238 $81,666 
Net deferred tax assets$518,749 $529,525 

As of both December 31, 2023 and 2022, the Company concluded that no valuation allowance was necessary to reduce the deferred tax assets since estimated future taxable income will be sufficient to utilize these assets. For further information on the Company’s valuation policy on deferred taxes, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Income Taxes to the Consolidated Financial Statements in this Form 10-K.

The following table presents a reconciliation of the beginning and ending balances of unrecognized tax benefits for the years ended December 31, 2023, 2022 and 2021:
Year Ended December 31,
($ in thousands)202320222021
Beginning balance$477 $5,045 $5,045 
Additions for tax positions related to prior years459 — — 
Additions for tax positions related to current year
257 — — 
Settlements with taxing authorities— (4,568)
(1)
— 
Ending balance$1,193 $477 $5,045 
(1)In 2022, the Company settled an issue regarding previously claimed tax credits related to DC Solar and affiliates.

The Company recognizes interest and penalties, as applicable, related to the underpayment of income taxes as a component of Income tax expense on the Consolidated Statement of Income. The amount of net interest and penalties related to unrecognized tax benefits was immaterial for all periods presented.
The Company files federal income tax returns, as well as returns in various state and foreign jurisdictions. We are routinely examined by tax authorities in these various jurisdictions. The Company is subject to federal income tax examination for the tax years 2020 and forward. The Company is also subject to tax examination in various state and local jurisdictions for the tax years 2017 and forward. The Company does not believe that the outcome of unresolved issues or claims in any of the tax jurisdictions is likely to be material on the Company’s Consolidated Financial Statements. The Company believes that adequate provisions have been recorded for all income tax uncertainties consistent with ASC 740, Income Taxes as of December 31, 2023.