INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Components of Income Tax Expense (Benefit)

The following table presents the components of the provision for income taxes included in the Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 (in thousands):


	Years Ended December 31
	2023		2022		2021
Current
Federal	$	28,805	$	26,653	$	20,461
State	6,296		5,882		4,359
Total Current	35,101		32,535		24,820

Deferred
Federal	7,698		11,595		18,278
State	664		1,267		2,448
Total Deferred	8,362		12,862		20,726


Provision for income taxes	$	43,463	$	45,397	$	45,546

Schedule of Effective Income Tax Rate Reconciliation

The following table presents the reconciliation of the federal statutory rate to the actual effective rate for the years ended December 31, 2023, 2022 and 2021:


	Years Ended December 31
	2023		2022		2021
Federal income tax statutory rate	21.0	%	21.0	%	21.0	%
Increase (decrease) in tax rate due to:
Tax-exempt interest	(3.6)		(3.6)		(3.0)
Investment in life insurance	(0.9)		(0.7)		(0.4)
State income taxes, net of federal tax offset	2.6		2.3		2.2
Tax credits	(2.7)		(1.9)		(1.5)




Low income housing partnerships, net of amortization	2.0		1.3		1.1
Other	0.7		0.5		(0.9)
Effective income tax rate	19.1	%	18.9	%	18.5	%

Schedule of Net Deferred Tax Asset

The following table reflects the effect of temporary differences that gave rise to the components of the net deferred tax asset as of December 31, 2023 and 2022 (in thousands):


	December 31
	2023		2022
Deferred tax assets:
Loan loss and REO	$	39,495	$	37,615
Deferred compensation	21,470		22,033
Net operating loss carryforward	12,967		15,470
Federal and state tax credits	758		1,545
State net operating losses	3,978		4,558
Loan discount	625		1,104
Lease liability	11,547		12,997
Unrealized loss on securities - available-for-sale, net	91,455		114,708
Other	4,222		4,782
Total deferred tax assets	186,517		214,812
Deferred tax liabilities:

Depreciation	(5,428)		(6,458)
Deferred loan fees, servicing rights and loan origination costs	(13,008)		(13,331)
Intangibles	(3,313)		(3,929)
Right of use asset	(10,378)		(11,603)
Financial instruments accounted for under fair value accounting	(841)		(1,176)

Total deferred tax liabilities	(32,968)		(36,497)
Deferred income tax asset	153,549		178,315
Valuation allowance	(184)		(184)

Deferred tax asset, net	$	153,365	$	178,131

Schedule of Unrecognized Tax Benefits Roll Forward


	Years Ended December 31
	2023		2022
Balance, beginning of year	$	1,600	$	1,000
Changes related to prior year tax positions	149		415

Changes related to current year tax positions	251		185


Balance, end of year	$	2,000	$	1,600

Schedule of Affordable Housing Tax Credit Information

The following table presents the balances of the Company’s tax credit investments and related unfunded commitments at December 31, 2023 and 2022 (in thousands):


	December 31, 2023		December 31, 2022
Tax credit investments	$	103,453	$	71,430
Unfunded commitments—tax credit investments	62,594		44,563

The following table presents other information related to the Company’s tax credit investments for the years ended December 31, 2023, 2022 and 2021 (in thousands):


	For the years ended December 31,
	2023		2022		2021
Tax credits and other tax benefits recognized	$	8,018	$	5,621	$	4,390
Tax credit amortization expense included in provision for income taxes	6,449		4,638		3,816