Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure

Income Taxes

4. INCOME TAXES

Our effective tax rate for the three and nine months ended September 30, 2024 was 18.7 percent and 19.8 percent, respectively, compared to 9.9 percent and 18.7 percent, respectively, for the same periods in 2023. Effective rates are dependent upon components of pretax earnings and the related tax effects. The effective tax rate was higher for the three and nine-month periods in 2024 due to higher levels of pretax income, which decreased the percentage impact of tax-favored adjustments.

Income tax expense attributable to income from operations for the three and nine-month periods ended September 30, 2024 and 2023 differed from the amounts computed by applying the U.S. federal tax rate of 21 percent to pretax income by the items detailed in the table below. In interim periods, income taxes are adjusted to reflect the effective tax rate we anticipate for the year, with adjustments flowing through the other items, net line.

	For the Three Months Ended September 30,								For the Nine Months Ended September 30, 2024
	2024				2023				2024				2023
(in thousands)	Amount		%		Amount		%		Amount		%		Amount		%
Provision for income taxes at the statutory rate of 21%	$	24,533	21.0	%	$	3,154	21.0	%	$	79,825	21.0	%	$	49,107	21.0	%
Increase (reduction) in taxes resulting from:
Excess tax benefit on share-based compensation		(1,967)	(1.7)	%		(395)	(2.6)	%		(4,264)	(1.1)	%		(3,263)	(1.4)	%
Tax exempt interest income		(216)	(0.2)	%		(270)	(1.8)	%		(725)	(0.2)	%		(827)	(0.4)	%
Dividends received deduction		(588)	(0.5)	%		(164)	(1.1)	%		(1,056)	(0.3)	%		(597)	(0.3)	%
Tax credit		(1,093)	(0.9)	%		(779)	(5.2)	%		(2,629)	(0.7)	%		(2,338)	(1.0)	%
ESOP dividends paid deduction		(149)	(0.1)	%		(142)	(1.0)	%		(439)	(0.1)	%		(423)	(0.2)	%
Nondeductible expenses		1,160	1.0	%		158	1.1	%		2,819	0.7	%		1,505	0.6	%
Other items, net		118	0.1	%		(79)	(0.5)	%		1,669	0.5	%		678	0.4	%
Total tax expense	$	21,798	18.7	%	$	1,483	9.9	%	$	75,200	19.8	%	$	43,842	18.7	%

We have recorded our deferred tax assets and liabilities using the statutory federal tax rate of 21 percent. We believe it is more likely than not that all deferred tax assets will be recovered, given the carry back availability as well as the result of future operations, which we believe will generate sufficient taxable income to realize the deferred tax asset.