Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, as well as in the majority of states. The Company acquired a $199.9 million net deferred tax asset before purchase accounting adjustments in the Merger, including $2.4 million of federal and state NOL and tax credit carryforwards. The Merger triggered an "ownership change" as defined in Section 382 of the Internal Revenue Code. However, the Company believes it is more likely than not that it will be able to fully realize the benefit of its federal and state NOL and tax carryforwards and has not provided a valuation allowance against its deferred tax assets.

As of March 31, 2023, the Company had a net deferred tax asset of $351.2 million, which includes $42.4 million of federal and state NOL carry-forwards. The federal and state NOL carry-forwards include $39.5 million generated in the current interim period, none of which is subject to expiration, and expected to reverse in future interim periods. The remaining $2.9 million of NOL carry-forwards expire in tax years of 2030-2032.

The Company's consolidated effective tax rate as a percentage of pre-tax income for the three months ended March 31, 2023 was 25.8%, as compared to 25.0% for the three months ended March 31, 2022. The effective tax rates differed from the statutory rate principally because of state taxes and income on tax-exempt investment securities.