Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

(12) INCOME TAXES

The components of the Company’s income tax expense (benefit) are as follows:

	Year Ended December 31,
	2023			2022		2021
	(Dollars in thousands)
Current taxes:
Federal	$	53,247		$	39,197	$	28,359
State		7,023			4,813		5,365
Deferred taxes		(2,787	)		322		7,044
Total income taxes	$	57,483		$	44,332	$	40,768

Income tax (benefit) expense applicable to securities transactions approximated $(384,000), $453,000 and $220,000 for the years ended December 31, 2023, 2022 and 2021, respectively.

A reconciliation of tax expense at the federal statutory tax rate applied to income before taxes is presented in the following table. The federal statutory tax rate was 21% in 2023, 2022 and 2021:

	Year Ended December 31,
	2023			2022			2021
	(Dollars in thousands)
Tax expense at the federal statutory tax rate	$	56,689		$	49,861		$	43,764
Increase (decrease) in tax expense from:
Tax-exempt income, net		(343	)		(337	)		(436	)
Modified endowment life contracts		(497	)		(487	)		(501	)
Share based compensation excess tax benefit		(786	)		(2,905	)		(1,643	)
Tax deductible dividends paid on ESOP		(505	)		(481	)		(490	)
State tax expense, net of federal tax benefit		4,945			3,788			4,779
Bargain purchase gain		—			—			(1,007	)
Utilization of tax credits:
New markets tax credits, net of amortization		(777	)		(3,745	)		(3,192	)
Low-income housing tax credits, net of amortization		(1,106	)		(1,024	)		(1,533	)
Other tax credits, net of amortization		(192	)		(91	)		(379	)
Other, net		55			(247	)		1,406
Total tax expense	$	57,483		$	44,332		$	40,768

The net deferred tax asset consisted of the following and is reported in other assets:

	December 31,
	2023			2022
	(Dollars in thousands)
Unrealized net losses on securities	$	15,473		$	22,107
Provision for credit losses		22,782			20,988
Write-downs of other real estate owned		2,522			938
Deferred compensation		2,116			2,142
Stock-based compensation		2,199			1,643
Investments in partnership interests		7,260			6,056
Other		911			1,123
Gross deferred tax assets		53,263			54,997
Intangibles		(5,639	)		(6,346	)
Basis difference related to tax credits		(5,462	)		(4,118	)
Depreciation		(21,833	)		(20,360	)
Prepaid expense deducted		(1,243	)		(1,139	)
Other		(181	)		(283	)
Gross deferred tax liabilities		(34,358	)		(32,246	)
Net deferred tax asset	$	18,905		$	22,751

The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if applicable, in income tax expense. During the years ended December 31, 2023, 2022 and 2021, the Company did not recognize or accrue any interest and penalties related to unrecognized tax benefits. Federal and various state income tax statutes dictate that tax returns filed in any of the previous three reporting periods remain open to examination, which includes tax return years 2020 to 2022. The Company has no open examinations with either the Internal Revenue Service or any state agency.

Management performs an analysis of the Company’s tax position annually and believes it is more likely than not that all of its tax positions will be utilized in future years.