Income Tax

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Tax

Income Tax

Income tax expense was $3.5 million and $4.1 million during the three month periods ended September 30, 2024 and 2023, respectively and $11.9 million and $10.4 million during the nine months ended September 30, 2024 and 2023, respectively. Our actual federal income tax expense is different than the amount computed by applying our statutory income tax rate to our income before income tax primarily due to tax-exempt interest income and tax-exempt income from the increase in the cash surrender value on life insurance. In addition, the three and nine month periods ending September 30, 2024 include reductions of $0.008 million and $0.117 million, respectively of income tax expense related to the impact of the excess value of stock awards that vested and stock options that were exercised as compared to the initial fair values that were expensed. These amounts during the same periods in 2023 were $0.003 million and $0.047 million, respectively.

We assess whether a valuation allowance should be established against our deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. The ultimate realization of this asset is primarily based on generating future income. We concluded at September 30, 2024, September 30, 2023 and December 31, 2023 that the realization of substantially all of our deferred tax assets continues to be more likely than not.

At both September 30, 2024 and December 31, 2023, we had approximately $0.2 million, respectively, of gross unrecognized tax benefits. We do not expect the total amount of unrecognized tax benefits to significantly increase or decrease during the remainder of 2024.