Income Taxes

3 Months Ended

Mar. 31, 2025

Income Tax Disclosure

Income Taxes

4. INCOME TAXES

Our effective tax rate for the three months ended March 31, 2025 was 19.6 percent, compared to 20.1 percent for the same period in 2024. Effective rates are dependent upon components of pretax earnings and the related tax effects. The effective tax rate was lower for the three-month period in 2025 due to lower levels of pretax income, which increased the percentage impact of tax-favored adjustments.

Income tax expense attributable to income from operations for the three-month period ended March 31, 2025 and 2024 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 March 31,
	2025				2024
(in thousands)	Amount		%		Amount		%
Provision for income taxes at the statutory rate of 21%	$	16,513	21.0	%	$	33,598	21.0	%
Increase (reduction) in taxes resulting from:
Excess tax benefit on share-based compensation		(2,750)	(3.5)	%		(1,874)	(1.2)	%
Tax exempt interest income		(169)	(0.2)	%		(260)	(0.2)	%
Dividends received deduction		(252)	(0.3)	%		(235)	(0.1)	%
Tax credit		(645)	(0.8)	%		(768)	(0.5)	%
ESOP dividends paid deduction		(148)	(0.2)	%		(138)	(0.1)	%
Nondeductible expenses		677	0.9	%		713	0.4	%
Other items, net		2,191	2.7	%		1,055	0.8	%
Total tax expense	$	15,417	19.6	%	$	32,091	20.1	%

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.