Income Taxes |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | 6. Income Taxes During the three months ended March 31, 2026 and 2025, the Company recorded income tax provision expense of $2.6 million and $3.8 million, respectively, reflecting an effective tax rate of 13.8% and 21.7%, respectively. The effective tax rate for the three months ended March 31, 2026 was less than the statutory tax rate of 21% due to the utilization of purchased federal income tax credits which reduced our tax liability during the quarter. The effective tax rate for the three months ended March 31, 2025, was greater than the statutory tax rate of 21% due to the prospective reclassification of state income tax expense from noninterest expense. Purchased income tax credits are recorded in accordance with ASC Topic 740, “Income Taxes.” During March 2026, the Company purchased $22.0 million in discounted federal income tax credits and recognized $1.2 million as a reduction of income tax expense in the accompanying consolidated statements of income. The tax asset is expected to reduce current income tax obligations and is reported within other assets in the accompanying consolidated balance sheets. GAAP prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the consolidated financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of cumulative benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. GAAP also provides guidance on the accounting for and disclosure of unrecognized tax benefits, interest and penalties. |