Income Taxes

3 Months Ended

Mar. 31, 2024

Income Tax Disclosure

Income Taxes

4. INCOME TAXES

Our effective tax rate for the three months ended March 31, 2024 was 20.1 percent, compared to 19.5 percent for the same period 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-month period in 2024, as higher pretax income decreased the percentage impact of tax-favored adjustments.

Income tax expense attributable to income from operations for the three-month period ended March 31, 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 below table. 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,
	2024				2023
(in thousands)	Amount		%		Amount		%
Provision for income taxes at the statutory rate of 21%	$	33,598	21.0	%	$	25,786	21.0	%
Increase (reduction) in taxes resulting from:
Excess tax benefit on share-based compensation		(1,874)	(1.2)	%		(1,990)	(1.6)	%
Tax exempt interest income		(260)	(0.2)	%		(283)	(0.2)	%
Dividends received deduction		(235)	(0.1)	%		(224)	(0.2)	%
Tax credit		(768)	(0.5)	%		(513)	(0.4)	%
ESOP dividends paid deduction		(138)	(0.1)	%		(137)	(0.1)	%
Nondeductible expenses		713	0.4	%		601	0.5	%
Other items, net		1,055	0.8	%		740	0.5	%
Total tax expense	$	32,091	20.1	%	$	23,980	19.5	%

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.