Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes [Abstract]

Income Taxes

11.          Income Taxes

The significant components of income tax expense attributable to operations are as follows:

	Years Ended December 31,
(In thousands)	2022			2021		2020
Current
Federal	$	51,077		$	35,483	$	36,358
State		12,934			8,626		9,768
Total Current	$	64,011		$	44,109	$	46,126
Deferred
Federal	$	(15,862	)	$	507	$	(14,021	)
State		(3,988	)		357		(3,406	)
Total Deferred	$	(19,850	)	$	864	$	(17,427	)
Total income tax expense	$	44,161		$	44,973	$	28,699

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

	December 31,
(In thousands)	2022		2021
Deferred tax assets:
Allowance for loan losses	$	24,792	$	22,479
Lease liability		6,273		6,744
Deferred compensation		9,181		9,584
Loan fees		33,389		12,936
Stock-based compensation expense		2,822		2,679
Unrealized losses on securities		53,663		1,482
Other		6,027		7,109
Total deferred tax assets	$	136,147	$	63,013
Deferred tax liabilities:
Pension benefits	$	13,103	$	16,137
Lease right-of-use asset		5,877		5,681
Amortization of intangible assets		14,112		13,187
Premises and equipment, primarily due to accelerated depreciation		4,889		4,962
Other		846		1,008
Total deferred tax liabilities	$	38,827	$	40,975
Net deferred tax asset at year-end	$	97,320	$	22,038
Net deferred tax asset at beginning of year		22,038		15,117
Increase in net deferred tax asset	$	75,282	$	6,921

Realization of deferred tax assets is dependent upon the generation of future taxable income. A valuation allowance is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Based on available evidence, gross deferred tax assets will ultimately be realized and a valuation allowance was not deemed necessary at December 31, 2022 and 2021.

The following is a reconciliation of the provision for income taxes to the amount computed by applying the applicable Federal statutory rate to income before taxes:

	Years Ended December 31,
(In thousands)	2022			2021			2020
Federal income tax at statutory rate	$	41,193		$	41,971		$	27,948
Tax exempt income		(984	)		(1,014	)		(981	)
Net increase in cash surrender value of life insurance		(1,215	)		(1,230	)		(1,135	)
Federal tax credits		(2,417	)		(1,884	)		(1,705	)
State taxes, net of federal tax benefit		7,067			7,097			5,026
Other, net		517			33			(454	)
Income tax expense	$	44,161		$	44,973		$	28,699

A reconciliation of the beginning and ending balance of Federal and State gross unrecognized tax benefits (“UTBs”) is as follows:

(In thousands)	2022		2021
Balance at January 1	$	1,545	$	1,178
Additions for tax positions of prior years		3		80
Current period tax positions		394		287
Balance at December 31	$	1,942	$	1,545
Amount that would affect the effective tax rate if recognized, gross of tax	$	1,535	$	1,221

The Company recognizes interest and penalties on the income tax expense line in the accompanying consolidated statements of income. The Company monitors changes in tax statutes and regulations to determine if significant changes will occur over the next 12 months. As of December 31, 2022, no significant changes to UTBs are projected; however, tax audit examinations are possible, but it is not reasonably possible to estimate when examinations in subsequent years will be completed. The Company recognized an insignificant amount of interest expense related to UTBs in the consolidated statement of income for the year ended December 31, 2022.

As of December 31, 2022, the Company is no longer subject to U.S. Federal tax examination by tax authorities for years prior to 2019. The tax years 2015 to 2019 are currently being audited by New York State.