Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes 

The following table presents the components of income tax provision for the years ended December 31, 2023, 2022, and 2021:

(in thousands)	2023		2022		2021
Current Expense:
Federal	$	72,224	$	70,982	$	71,969
State	37,365		28,461		25,086
Total current tax expense	$	109,589	$	99,443	$	97,055
Deferred tax expense:
Federal	$	6,794	$	11,636	$	32,099
State	6,101		2,747		8,706
Total deferred tax expense	12,895		14,383		40,805
Total	$	122,484	$	113,826	$	137,860

The following table presents a reconciliation of income taxes computed at the Federal statutory rate to the actual effective rate for the years ended December 31, 2023, 2022, and 2021:

	2023		2022		2021
Statutory Federal income tax rate	21.0	%	21.0	%	21.0	%
State tax, net of Federal benefit	6.2	%	5.8	%	5.6	%
Non-deductible FDIC Premiums	1.7	%	0.4	%	0.2	%
Net tax-exempt interest income	(2.2)	%	(1.5)	%	(0.9)	%
Other	(0.7)	%	(0.4)	%	(1.2)	%
Effective income tax rate	26.0	%	25.3	%	24.7	%

The following table reflects the effects of temporary differences that give rise to the components of the net deferred tax asset as of December 31, 2023 and 2022:

(in thousands)	December 31, 2023		December 31, 2022
Deferred tax assets:
Net unrealized losses on investment securities	$	303,465	$	140,227
Acquired loans	146,315		4,644
Allowance for credit losses	115,777		79,312
Accrued severance and deferred compensation	39,904		16,523
Operating lease liabilities	33,956		23,603
Other	54,181		35,459
Total gross deferred tax assets	693,598		299,768
Deferred tax liabilities:
Other intangible assets	155,642		156
Direct financing leases	42,825		41,120
Deferred loan fees and costs	34,402		25,676
Residential mortgage servicing rights	31,259		49,681
Operating lease right-of-use asset	30,117		20,235
Premises and equipment	20,579		1,575
Fair market value adjustment on junior subordinated debentures	17,287		15,081
Other	14,284		13,421
Total gross deferred tax liabilities	346,395		166,945
Net deferred tax asset	$	347,203	$	132,823

As of December 31, 2023 and 2022, the Company's gross deferred tax assets included $2.4 million and $689,000, respectively, of NOL carryforwards expiring in tax years 2024-2032. As of December 31, 2023, the Company has determined there is sufficient positive evidence to conclude that it is more likely than not that the benefit from certain of its federal and state NOL and tax carryforwards will be realized. The Company has determined that no valuation allowance for the deferred tax assets is required as management believes it is more likely than not that future taxable income will be sufficient to realize the remaining gross deferred tax assets of $693.6 million and $299.8 million at December 31, 2023 and 2022, respectively.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, as well as the majority of states. The Company no longer files income tax returns in Canada. The Company is no longer subject to U.S. and Canadian income tax examinations for years before 2020, and is no longer subject to state income tax examinations for years prior to 2019.

The Company periodically reviews its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This review takes into consideration the status of current taxing authorities' examinations of the Company's tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment.

The Company had no gross unrecognized tax benefits as of December 31, 2023 and December 31, 2022. Interest on unrecognized tax benefits is reported by the Company as a component of tax expense. There were no amounts related to interest and penalties recognized for the years ended December 31, 2023 and December 31, 2022.