Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company's income from continuing operations is derived entirely from domestic sources. The components of income tax expense related to continuing operations for the years ended December 31, 2025 and 2024 are as follows:

	December 31,
	2025		2024
	(dollars in thousands)
Current income tax expense:
Federal	$	103,748	$	88,526
State	15,398		6,044
Total current income tax expense	119,146		94,570
Deferred income tax expense:
Federal	(2,923)		(5,656)
State	(518)		(1,004)
Total deferred income tax expense	(3,441)		(6,660)
Total income tax expense:
Federal	100,825		82,870
State	14,880		5,040
Total income tax expense on operations	$	115,705	$	87,910

The components of income tax expense record directly to shareholders' equity for the years ended 2025 and 2024 were as follows:

	December 31,
	2025		2024
	(dollars in thousands)
Unrealized gain on AFS debt securities	$	34,270	$	34,309
Accumulated pension loss	4,248		5,653
Income tax expense allocated to shareholders' equity	$	38,518	$	39,962

The reasons for the difference between the effective tax rates of 22.8% and 22.3% for 2025 and 2024, respectively, and the current federal statutory income tax rate of 21%, are as follows:

	December 31,
	2025				2024
	Amount		Percent		Amount		Percent
	(dollars in thousands)
Income tax expense at federal statutory rate	$	106,375	21.0	%	$	82,681	21.0	%
Increase (reduction) in income taxes resulting from:
Tax-exempt interest	(2,517)		(0.5)	%	(2,165)		(0.6)	%
Other tax-exempt income	(143)		-	%	(134)		-	%
Dividend exclusion	(35)		-	%	(41)		-	%
State income taxes, net of federal income tax and excluding state credits1	12,553		2.5	%	10,103		2.6	%
Nondeductible expenses	1,433		0.3	%	819		0.2	%
Partnership Amortization	3,993		0.8	%	6,189		1.6	%
Tax credits2	(5,689)		(1.1)	%	(9,528)		(2.4)	%
Changes in unrecognized tax benefits	-		-	%	100		-	%
Other, net	(265)		(0.1)	%	(114)		-	%
Total income tax expense	$	115,705	22.8	%	$	87,910	22.3	%
¹ Missouri accounted for the majority of our state income tax expense.
² Tax credits were comprised primarily of Low Income Housing Tax Credits, totaling $4.6 million in 2025 and $8.8 million in 2024

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2025 and 2024 are presented below:

	December 31,
	2025		2024
	(dollars in thousands)
Deferred tax assets:
Loans, principally due to allowance for loan losses	$	35,766	$	36,901
Accrued expenses	25,958		26,983
Buildings and equipment	711		928
Unrealized loss on available-for-sale securities	11,303		45,573
Core deposit intangible	1,201		749
Unearned revenue	297		526
Total gross deferred tax assets	75,236		111,660
Deferred tax liabilities:
Prepaid pension expense	10,802		10,602
Mortgage servicing rights	7,007		7,253
Goodwill	37,014		35,924
Lease financing	22,063		29,502
Unrealized gain on equity securities	909		698
Capitalized loan costs	1,766		1,214
Defined benefit plan	6,021		1,773
Other	1,399		1,362
Total gross deferred tax liabilities	86,981		88,328
Net deferred taxes	$	(11,745)	$	23,332

The Company has not recorded a valuation allowance related to the net deferred tax assets at December 31, 2025 or 2024 due to historical and expected future earnings of the Company.

The Company classifies interest and penalties on uncertain tax benefits as income tax expense. In the normal course of business, the Company provides for uncertain tax positions and the related interest and penalties and adjusts its unrecognized tax benefits and related interest and penalties accordingly. Unrecognized tax benefits remained the same during 2025, totaling $1.5 million at December 31, 2025.

Federal net operating loss (NOL) carryovers were acquired in certain acquisitions. The remaining amount of NOL carryover is $0.5 million and $0.6 million as of December 31, 2025 and 2024, respectively. The NOL expires in 2033. The annual use of the NOL is limited and the Company expects to use the remaining carryover before expiration.

The Company’s U.S. federal tax returns for years prior to 2022 are no longer subject to examination by federal tax authorities, and with few exceptions, state tax returns prior to 2022 are no longer subject to examination by state tax authorities.

The following table presents income taxes paid by jurisdiction in amounts exceeding 5% of total income taxes paid, net of refunds for 2025 and 2024. As required by ASU 2023‑09, these amounts are presented on a net‑of‑refund basis, whereas cash paid for income taxes for the 2024 period reported in the Consolidated Statements of Cash Flows was presented on a gross basis.

	December 31,
	2025		2024
	(dollars in thousands)
Federal	$	124,250	$	77,200
Missouri	15,629		8,395
Other, net	4,501		2,953
Total income taxes paid	$	144,380	$	88,548