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Income Taxes
 12 Months Ended
Dec. 31, 2024
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, 2024, 2023 and 2022:
Year Ended December 31,
($ in thousands)202420232022
Current income tax expense:
Federal$166,268 $172,428 $163,797 
State153,891 173,080 160,629 
Foreign10,399 2,240 3,133 
Total current income tax expense330,558 347,748 327,559 
Deferred income tax (benefit) expense:
Federal(6,467)(24,319)(23,484)
State(5,582)(23,415)(21,835)
Foreign(2,234)(1,405)1,331 
Total deferred income tax benefit
(14,283)(49,139)(43,988)
Income tax expense$316,275 $298,609 $283,571 

The following table presents the reconciliation of the federal statutory rate to the Company’s effective tax rate for the years ended December 31, 2024, 2023 and 2022:
Year Ended December 31,
202420232022
Statutory U.S. federal tax rate21.0 %21.0 %21.0 %
U.S. state income taxes, net of U.S. federal income tax effect7.7 8.1 7.8 
Tax credits and benefits, net of amortization
(7.4)(9.9)(8.9)
Other, net— 1.3 0.2 
Effective tax rate21.3 %20.5 %20.1 %
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, 2024 and 2023:
December 31,
($ in thousands)20242023
Deferred tax assets:
Allowance for credit losses and nonperforming assets valuation allowance$233,879 $217,731 
Net unrealized losses on AFS debt and transferred securities
223,814 246,835 
Stock compensation and other accrued compensation41,118 33,169 
Lease liabilities27,644 32,636 
FDIC special assessment charge16,843 22,212 
Basis difference in investments
17,708 28,216 
State capital loss and tax credit carryforwards
11,122 266 
Nonaccrual loans’ interest income
8,809 7,034 
State taxes5,808 9,885 
Other14,665 10,535 
Total deferred tax assets$601,410 $608,519 
Deferred tax liabilities:
Operating lease right-of-use assets$25,647 $30,272 
Basis difference in investments
25,587 23,103 
Equipment lease financing10,395 15,564 
Prepaid expenses2,319 2,981 
FHLB stock dividends1,961 1,947 
Mortgage servicing assets1,678 2,102 
Other20,479 13,801 
Total deferred tax liabilities$88,066 $89,770 
Net deferred tax assets$513,344 $518,749 

The Company has not repatriated and does not intend to repatriate earnings from its foreign subsidiary. The Company determined such earnings are to be indefinitely reinvested in the local jurisdiction. The related unrecognized deferred tax liability on these earnings is immaterial.

As of December 31, 2024, the Company had deferred tax assets of $8 million and $3 million related to state capital loss carryforwards and state tax credit carryforwards, respectively. These carryforwards are expected to be fully utilized before they start to expire in 2027. As of both December 31, 2024 and 2023, 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, 2024, 2023 and 2022:
Year Ended December 31,
($ in thousands)202420232022
Beginning balance$1,193 $477 $5,045 
Additions for tax positions related to prior years2,698 
(1)
459 — 
Additions for tax positions related to current year779 257 — 
Settlements with taxing authorities— — (4,568)
(2)
Ending balance$4,670 $1,193 $477 
(1)In 2024, the increase in positions related to prior years primarily related to proposed adjustments resulting from examination of the Company’s state tax returns.
(2)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 Company recorded net interest expense of $1 million for the year ended December 31, 2024. In comparison, the net interest and penalties related to unrecognized tax benefits were immaterial for the years ended December 31, 2023 and 2022. Total accrued interest included in Accrued expenses and other liabilities on the Consolidated Balance Sheet was $1 million as of December 31, 2024 and immaterial as of December 31, 2023.

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 2021 and forward. With few exceptions, the Company is also subject to tax examination in various state and local jurisdictions for the tax years 2020 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, 2024.