Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes

An allocation of federal and state income taxes between current and deferred portions is presented below:

	Years Ended December 31,
	2024		2023		2022
Current	$	32,382	$	31,467	$	22,451
Deferred	(1,763)		(1,415)		12,552
Total	$	30,619	$	30,052	$	35,003

The following table presents a reconciliation of federal income taxes at the statutory federal rate of 21% to the Company's effective tax rates for the years ended December 31, 2024, 2023, and 2022:

	Years Ended December 31,
	2024				2023				2022
Federal taxes calculated at statutory rate	$	30,801	21.0	%	$	31,561	21.0	%	$	33,510	21.0	%
(Decrease) increase resulting from:
State taxes, net of federal benefit	(404)		(0.3)	%	(158)		(0.1)	%	3,845		2.4	%
Expense (benefit) from equity based compensation	56		0.0	%	219		0.1	%	(392)		(0.2)	%
Municipal interest income, net of interest disallowance	(1,325)		(0.9)	%	(1,804)		(1.2)	%	(1,774)		(1.1)	%
Bank-owned life insurance	(788)		(0.5)	%	(393)		(0.3)	%	(305)		(0.2)	%
Section 162(m) limitation	284		0.2	%	244		0.2	%	241		0.1	%
Nondeductible expenses	2,029		1.4	%	384		0.3	%	326		0.2	%
Other	(34)		—	%	(1)		—	%	(448)		(0.3)	%
Income tax expense, as reported	$	30,619	20.9	%	$	30,052	20.0	%	$	35,003	21.9	%

The Company is subject to Internal Revenue Code Section 162(m), which limits the deductibility of compensation paid to certain individuals. It is the Company’s policy to apply the Section 162(m) limitations to stock-based compensation first followed by cash compensation. As a result of the vesting of this stock-based compensation and cash compensation paid to date, the Company has disallowed a portion of its compensation paid to the applicable individuals.

The components of the deferred tax assets and liabilities at December 31, 2024 and 2023, are as follows: 

	December 31,
	2024		2023
Deferred tax assets:
Allowance for credit losses	$	39,155	$	39,228
Operating lease liabilities	21,864		24,607
Net operating loss	523		805
Amortization of core deposit intangibles	1,482		1,135
Deferred compensation	10,372		7,433
Unrealized loss on debt securities	36,766		48,714
Other assets	5,616		4,863
Subtotal	115,778		126,785
Deferred tax liabilities:
FHLB stock dividends	$	(252)	$	(263)
Operating leases - right of use assets	(19,252)		(21,312)
Depreciation	(8,117)		(5,996)
Unrealized gain on equity securities	(948)		(2,122)
Unrealized gain on cash flow hedges	—		(151)
Mortgage servicing rights	(42,221)		(42,797)
Goodwill	(20,121)		(17,995)
Other liabilities	(3,270)		(4,518)
Subtotal	(94,181)		(95,154)
Net deferred tax assets	$	21,597	$	31,631

The Company had a net operating loss carryforward generated as a result of a previous merger amounting to $2,491 and $3,835 as of December 31, 2024 and 2023, respectively. The net operating loss carryforward can be used to offset taxable income in future periods and reduce income tax liabilities in those future periods. While net operating losses are subject to certain annual utilization limits under Section 382, the Company believes the net operating loss carryforwards will be realized based on the projected annual limitation and the length of the net operating loss carryover period. The Company's determination of the realization of the net deferred tax asset is based on its assessment of all available positive and negative evidence. The net operating loss carryforward will begin to expire in 2029.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is generally no longer subject to U.S. federal and state income tax examinations by tax authorities for tax years before 2021.