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Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The current and deferred amounts of income tax expense (benefit) were as follows:
 Years Ended December 31,
(in thousands)202520242023
Current
Federal$62,599 $38,353 $29,319 
State19,289 9,436 5,283 
Total current81,888 47,789 34,602 
Deferred
Federal25,320 (30,701)(8,371)
State(4,075)(5,775)(3,135)
Total deferred21,245 (36,475)(11,506)
Total income tax expense$103,133 $11,314 $23,097 
Total federal$87,919 $7,652 $20,948 
Total state15,214 3,661 2,148 
Total income tax expense$103,133 $11,314 $23,097 

Income taxes paid (refunded) are as follows:
 Years Ended December 31,
(in thousands)202520242023
Federal$(3,266)$6,607 $42,500 
State4,787 11,142 26,917 
Total$1,521 $17,749 $69,417 

Income taxes paid (net of refunds) exceeds 5% of total income taxes paid (net of refunds) for the year in the following jurisdictions:
 Years Ended December 31,
(in thousands)202520242023
Federal$(3,266)$6,607 $42,500 
State
Illinois2,589 4,054 7,250 
Minnesota2,195 *4,000 
New York753 **
New York City443 **
Iowa585 **
Connecticut344 **
New Jersey280 **
Massachusetts118 **
Indiana99 **
Wisconsin(2,718)1,942 10,450 
Ohio*1,607 *
*Did not exceed 5% of total income taxes paid (net of refunds).
Temporary differences between the amounts reported on the financial statements and the tax bases of assets and liabilities resulted in deferred taxes. DTAs and liabilities, included in other assets and accrued expenses and other liabilities on the consolidated balance sheets, respectively, were as follows:
(in thousands)December 31, 2025December 31, 2024
Deferred tax assets
Allowance for loan losses$95,867 $89,295 
Allowance for other losses10,576 9,840 
Accrued liabilities33,931 26,109 
Deferred compensation34,086 30,404 
Federal tax credits carryforward— 18,160 
Benefit of state tax losses and credit carryforwards5,760 4,187 
Capital loss15,923 29,325 
Nonaccrual interest1,840 1,269 
Partnerships38,390 37,781 
Lease liability9,921 8,881 
Basis difference from equity securities and other investments4,302 — 
Net unrealized losses on AFS securities3,510 16,228 
Net unrealized losses on pension and postretirement benefits5,879 7,995 
Other8,510 3,353 
Total deferred tax assets$268,495 $282,828 
Valuation allowance for deferred tax assets(15,923)(32,702)
Total deferred tax assets after valuation allowance$252,572 $250,126 
Deferred tax liabilities
Prepaid expenses$102,491 $83,251 
Goodwill22,862 22,376 
Mortgage banking activities21,778 21,877 
Deferred loan fee income8,270 7,836 
Lease financing64,171 13,213 
Bank premises and equipment3,029 30,534 
Purchase accounting4,374 6,246 
Basis difference from equity securities and other investments— 3,104 
Total deferred tax liabilities$226,975 $188,437 
Net deferred tax assets$25,597 $61,689 
At December 31, 2025, the valuation allowance for DTAs was related to capital loss carryovers. The changes in the valuation allowance inclusive of state valuation allowances were as follows:
(in thousands)20252024
Valuation allowance for deferred tax assets, beginning of year$(32,702)$— 
Decrease (increase) in current year16,779 (32,702)
Valuation allowance for deferred tax assets, end of year$(15,923)$(32,702)
At December 31, 2025, the Corporation had state net operating loss carryforwards of $133.9 million (of which $2.0 million was acquired from various acquisitions) that will begin expiring in 2029.
The effective income tax rate differs from the statutory federal tax rate. The major reasons for this difference were as follows:
202520242023
(Dollars in thousands)DollarPercentDollarPercentDollarPercent
Federal income tax rate at statutory rate$121,361 21.0 %$28,236 21.0 %$43,271 21.0 %
Increases (decreases) resulting from:
State income taxes (net of federal benefit)(a)
10,105 1.9 %(1,276)(0.9)%(2,232)(1.1)%
Tax effect of tax credits and benefits, net of related expenses
Partnerships(5,904)(1.0)%(7,400)(5.5)%(7,248)(3.5)%
Research credits(992)(0.2)%(1,044)(0.8)%(1,574)(0.8)%
Other tax credits— — %— — %(194)(0.1)%
Nontaxable and nondeductible items
Tax-exempt interest and dividends(13,030)(2.3)%(13,921)(10.4)%(15,321)(7.4)%
Bank owned life insurance(3,611)(0.6)%(2,830)(2.1)%(2,149)(1.0)%
Net (benefit) tax from stock-based compensation(292)(0.1)%(208)(0.2)%7 — %
Net benefit of portfolio reallocation and legal entity rationalization plan(b)
— — %(29,109)(21.6)%— — %
FDIC premium6,760 1.2 %6,500 4.8 %6,220 3.0 %
Dividends(318)(0.1)%(336)(0.2)%(334)(0.2)%
Other1,943 0.3 %3,610 2.7 %2,177 1.1 %
Changes in valuation allowance(14,337)(2.5)%27,525 20.5 %— — %
Changes in unrecognized tax benefits1,017 0.2 %545 0.4 %(6)— %
Other adjustments431 0.1 %1,022 0.7 %480 0.2 %
Effective income tax$103,133 17.9 %$11,314 8.4 %$23,097 11.2 %
(a) State taxes from Illinois and Minnesota made up the majority (greater than 50%) of the tax effect in this category during 2025 and from Wisconsin and Illinois during 2024 and 2023.
(b) Related to the previously announced strategic reallocation of the investment portfolio and adoption of a legal entity rationalization plan in the second quarter of 2024.
Savings banks acquired by the Corporation in 1997 and 2004 qualified under provisions of the Internal Revenue Code that permitted them to deduct from taxable income an allowance for bad debts that differed from the provision for such losses charged to income for financial reporting purposes. Accordingly, no provision for income taxes has been made for $100 million of retained income at December 31, 2025. If income taxes had been provided, the deferred tax liability would have been $25.4 million. Management does not expect this amount to become taxable in the future; therefore, no provision for income taxes has been made.
The Corporation and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Corporation’s federal income tax returns are open and subject to examination from the 2022 tax return year and forward. The years open to examination by state and local government authorities varies by jurisdiction.
A reconciliation of the beginning and ending amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was as follows:
(in thousands)20252024
Balance at beginning of year$2,772 $2,227 
Changes for tax positions related to prior years234 83 
Changes for tax positions related to current year783 462 
Balance at end of year$3,789 $2,772 
The Corporation recognizes interest and penalties accrued related to unrecognized tax benefits in the income tax expense line on the consolidated statements of income. Interest and penalty benefits, as well as accrued interest and penalties, were immaterial at both December 31, 2025 and 2024. At December 31, 2025 and 2024, the Corporation believes it has appropriately accounted for any unrecognized tax benefits. Management does not anticipate significant adjustments to the total amount of unrecognized tax benefits within the next twelve months.