Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

Schedule of Income Tax Expense (Benefit)

The following table presents the composition of income tax expense (benefit) for the years ended December 31:


(dollars in thousands)	2024		2023		2022
Federal
Current	$	32,536	$	33,070	$	35,514
Deferred	(31)		459		(2,801)
Total Federal	32,505		33,529		32,713
State
Current	1,313		352		828
Deferred	(265)		142		(131)
Total State	1,048		494		697
Total Federal and State(1)	$	33,553	$	34,023	$	33,410

[1]With the adoption of PAM on January 1, 2024, the amortization related to LIHTC and HTC equity investments is recognized in income tax expense in the Consolidated Statements of Net Income in 2024 and other noninterest expense in 2023 and 2022.

Schedule of Statutory to Effective Tax Rate Reconciliation

The following table presents a reconciliation of the statutory tax rate to the effective tax rate for the years ended December 31:


	2024		2023		2022
Statutory tax rate	21.0	%	21.0	%	21.0	%
Tax-exempt interest	(0.8)	%	(0.8)	%	(1.0)	%
Low income housing tax credits	(0.2)	%	(1.5)	%	(0.7)	%
Bank owned life insurance	(0.3)	%	(0.2)	%	(0.2)	%


Other	0.7	%	0.5	%	0.7	%

Effective Tax Rate(1)	20.4	%	19.0	%	19.8	%

Schedule of Significant Components of Temporary Differences

The following table presents significant components of our temporary differences as of the dates presented:


	December 31,
(dollars in thousands)	2024		2023
Deferred Tax Assets:
Allowance for credit losses and other reserves	$	22,953	$	24,465
Net unrealized holding losses on securities available-for-sale	15,431		17,452
Lease liabilities	10,271		10,572
State net operating loss carryforwards	3,782		3,464
Net unrealized losses on interest rate swaps	2,063		3,137
Cumulative adjustment to funded status of pension	3,606		3,987
Low income housing partnerships and other investments	—		174
Other employee benefits	4,688		3,740
Depreciation on premises and equipment	5		—
Capital loss carryforward	1,300		2,092
Other	1,243		1,202
Deferred Tax Assets	65,342		70,285
Less: Valuation allowance	(3,782)		(3,464)
Total Deferred Tax Assets	61,560		66,821
Deferred Tax Liabilities:
Right-of-use lease assets	(8,825)		(9,127)
Deferred loan income, net	(5,216)		(4,633)
Prepaid pension	(3,131)		(3,360)
Purchase accounting adjustments	(1,650)		(1,823)

Mortgage servicing rights	(61)		(1,350)
Depreciation on premises and equipment	—		(1,182)
Other partnership investments(1)	(491)		—
Other	(113)		(78)
Total Deferred Tax liabilities	(19,487)		(21,553)
Net Deferred Tax Asset	$	42,073	$	45,268
(1)With the adoption of PAM on January 1, 2024, the LIHTC and HTC equity investments no longer have a deferred tax impact.

Schedule of Reconciliation of Change in Federal and State Gross Unrecognized Tax Benefits

The following table reconciles the change in Federal and State gross unrecognized tax benefits, or UTB, for the years ended December 31:


(dollars in thousands)	2024		2023		2022
Balance at beginning of year	$	1,940	$	1,648	$	1,331

Prior period tax positions	146		(434)		—
Current period tax positions	—		726		317

Balance at End of Year	$	2,086	$	1,940	$	1,648
Amount That Would Affect the Effective Tax Rate if Recognized	$	1,648	$	1,551	$	1,148