XML 38 R18.htm IDEA: XBRL DOCUMENT v3.25.4
INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The provision for income taxes for the years ended December 31 is comprised of the following components:
     
(In thousands)202520242023
Income taxes currently payable:
Federal$9,701 $18,987 $27,129 
State13,717 2,410 877 
Deferred income taxes:
Federal(138,025)(712)(784)
State(15,494)(2,070)(1,676)
Total income tax expense (benefit)$(130,101)$18,615 $25,546 
_________________________
The Company does not have income from foreign sources and therefore does not have any foreign income tax.
The tax effects of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to deferred income tax assets and liabilities, and their approximate tax effects, are as follows as of December 31, 2025 and 2024:
(In thousands)20252024
Deferred tax assets:  
Loans acquired$1,241 $2,141 
Allowance for credit losses52,923 55,196 
Valuation of foreclosed assets31 374 
Tax NOLs from acquisition6,507 9,945 
Deferred compensation payable3,960 3,989 
Accrued equity and other compensation11,626 9,323 
Acquired securities7,010 7,504 
Capitalized intangibles(1)
145,126 — 
Right-of-use lease liability12,653 16,416 
Unrealized loss on AFS securities98,492 128,873 
Allowance for unfunded commitments6,094 6,069 
Other7,488 7,163 
Gross deferred tax assets353,151 246,993 
Deferred tax liabilities:  
Goodwill and other intangible amortization(36,335)(38,139)
Accumulated depreciation(22,475)(24,489)
Right-of-use lease asset(12,175)(15,920)
Unrealized gain on swaps(14,437)(25,174)
Deferred loan fees and costs— (2,075)
Other(1,271)(11,193)
Gross deferred tax liabilities(86,693)(116,990)
Net deferred tax asset$266,458 $130,003 
 _______________________
(1)    Capitalized intangibles primarily consist of deferred loan origination costs, net with deferred loan origination fees, capitalized under Treas. Reg. §1.263(a)-4 and amortized as ordinary deductions over the estimated life of the related loans.
A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax expense and effective tax rate percentage is shown below for the years ended December 31: 

(Dollars in thousands)202520242023
$%$%$%
Federal income tax expense computed at the US statutory rate(110,807)21.0 %35,974 21.0 %42,127 21.0 %
Increase (decrease) in taxes resulting from:
State income taxes, net of federal tax benefit(1)
(4,748)0.9 (165)(0.1)(983)(0.5)
Income tax credits:
Tax credits(2)
(1,575)0.3 (500)(0.3)(218)(0.1)
Nontaxable or nondeductible items:
Tax exempt interest income(11,596)2.2 (15,330)(9.0)(15,357)(7.7)
Tax exempt earnings on bank owned life insurance(3,741)0.7 (3,136)(1.8)(2,607)(1.3)
Other4,475 (0.9)3,512 2.1 2,646 1.3 
Other differences:
Discrete items related to share-based compensation15 — 468 0.3 596 0.3 
Other differences, net(2,124)0.4 (2,208)(1.3)(658)(0.3)
Total income tax expense (benefit)$(130,101)24.7 %$18,615 10.9 %$25,546 12.7 %
_________________________
(1)    In 2025, state taxes in Arkansas and Tennessee made up the majority (greater than 50 percent) of the tax effect in this category. In 2024, state taxes in Arkansas, Illinois, Missouri, Tennessee and Texas made up the majority (greater than 50 percent) of the tax effect in this category. In 2023, state taxes in Arkansas, Tennessee and Texas made up the majority (greater than 50 percent) of the tax effect in this category.

(2)    Tax credits consist of low income housing, new markets and historic tax credits along with investment amortization, partnership losses and basis adjustments.

Income taxes paid (net of refunds) for the years ended December 31:

(In thousands)202520242023
Federal taxes paid$3,500 $7,200 $17,702 
State and city taxes paid:
Arkansas2,868  *  *
Missouri1,647 505  *
Tennessee4,605  *  *
Texas974 932  *
Other5,708 1,322 3,216 
Total state and city taxes paid15,802 2,759 3,216 
Total income taxes paid (net of refunds)$19,302 $9,959 $20,918 
_________________________
Jurisdiction below 5 percent of total income taxes paid (net of refunds) threshold for the period presented.
The Company follows ASC Topic 740, Income Taxes, which prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. ASC Topic 740 also provides guidance on the accounting for and disclosure of unrecognized tax benefits, interest and penalties. The Company has no history of expiring net operating loss carryforwards and is projecting significant pre-tax and financial taxable income in future years. The Company expects to fully realize its deferred tax assets in the future.

The amount of unrecognized tax benefits may increase or decrease in the future for various reasons including adding amounts for current tax year positions, expiration of open income tax returns due to the statutes of limitation, changes in management’s judgment about the level of uncertainty, status of examinations, litigation and legislative activity and the addition or elimination of uncertain tax positions.

Section 382 of the Internal Revenue Code imposes an annual limit on the ability of a corporation that undergoes an “ownership change” to use its U.S. net operating losses to reduce its tax liability. The Company has engaged in three tax-free reorganization transactions in which acquired net operating losses are limited pursuant to Section 382. In total, approximately $27.8 million of federal net operating losses subject to the IRC Section 382 annual limitation are expected to be utilized by the Company. All of the acquired net operating loss carryforwards are expected to be fully utilized by 2036.

The Company files income tax returns in the U.S. federal jurisdiction. The Company’s U.S. federal income tax returns are open and subject to examinations from the 2022 tax year and forward. The Company’s various state income tax returns are generally open from the 2022 and later tax return years based on individual state statute of limitations.