Income Taxes

3 Months Ended

Mar. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s income tax provision consists of the following components:

	Three Months Ended
(In thousands)	March 31, 2025		March 31, 2024
Current:
Federal	$	12,145	$	10,981
State	650		647
Total current	12,795		11,628
Deferred:
Federal	11,780		8,225
State	562		483
Total deferred	12,342		8,708
Income tax expense	$	25,137	$	20,336

The Company is subject to U.S. federal income tax and margin tax in the state of Texas. The Company estimates its annual effective tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which it operates. The Company’s effective tax rates for the three months ended March 31, 2025 and 2024 were 19.1% and 17.2%, respectively. The primary differences between the annual effective tax rate and the statutory rate of 21.0% are income attributable to noncontrolling interest, state taxes, and tax credits.

As of March 31, 2025, the Company’s total gross deferred tax assets were $73.6 million. Management assessed whether it is more-likely-than-not that the Company will generate sufficient taxable income to realize its deferred income tax assets, including the investment in partnership and net operating loss carryforwards. In making this determination, the Company considered all available positive and negative evidence and made certain assumptions. The Company considered, among other things, the overall business environment, its historical earnings and losses, current industry trends, and its outlook for future years. As of March 31, 2025, the Company maintains a valuation allowance of $7.8 million, the majority of which offsets a deferred tax asset associated with a tax capital loss that will expire in 2028, unless offset by future capital gains.