v3.26.1
Income Taxes
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
 
The provision for income taxes is comprised of the following components for the periods indicated below:
 
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2026202520262025
Income taxes currently payable$12,578 $10,529 $17,158 $17,428 
Deferred income taxes4,124 (1,658)17,070 (2,745)
Provision for income taxes$16,702 $8,871 $34,228 $14,683 
The tax effects of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to deferred income tax assets and liabilities, and their approximate tax effects, are as follows: 

June 30,December 31,
(In thousands)20262025
Deferred tax assets:
Loans acquired$831 $1,241 
Allowance for credit losses55,326 52,923 
Valuation of foreclosed assets31 31 
Tax NOLs from acquisition6,109 6,507 
Deferred compensation payable3,939 3,960 
Accrued equity and other compensation7,674 11,626 
Acquired securities6,987 7,010 
Capitalized intangibles(1)
128,719 145,126 
Right-of-use lease liability9,209 12,653 
Unrealized loss on AFS securities96,727 98,492 
Allowance for unfunded commitments6,082 6,094 
Other7,418 7,488 
Gross deferred tax assets329,052 353,151 
Deferred tax liabilities:
Goodwill and other intangible amortization(35,286)(36,335)
Accumulated depreciation(21,558)(22,475)
Right-of-use lease asset(8,859)(12,175)
Unrealized gain on swaps(11,431)(14,437)
Other— (1,271)
Gross deferred tax liabilities(77,134)(86,693)
Net deferred tax asset$251,918 $266,458 
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(1)Capitalized intangibles primarily consist of deferred loan origination costs, net with deferred loan origination fees, capitalized under Treas. Reg §1.263(a)-4 and amortized as ordinary deductions over the estimated life of the related loans.

A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax expense is shown for the periods indicated below:
 
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2026202520262025
Computed at the statutory rate (21%)$17,512 $13,365 $35,587 $21,387 
Increase (decrease) in taxes resulting from:
State income taxes, net of federal tax benefit1,795 708 2,999 436 
Discrete items related to share-based compensation(89)(64)52 131 
Tax exempt interest income(1,797)(3,809)(3,585)(7,617)
Tax exempt earnings on BOLI(882)(754)(1,821)(1,550)
Federal tax credits(493)(653)(1,038)(1,300)
Other differences, net656 78 2,034 3,196 
Actual tax provision$16,702 $8,871 $34,228 $14,683 
The Company follows ASC Topic 740, Income Taxes, which 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 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 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. ASC Topic 740 also provides guidance on the accounting for and disclosure of unrecognized tax benefits, interest and penalties. The Company has no history of expiring net operating loss carryforwards and is projecting significant pre-tax and financial taxable income in future years. The Company expects to fully realize its deferred tax assets in the future.

The amount of unrecognized tax benefits may increase or decrease in the future for various reasons including adding amounts for current tax year positions, expiration of open income tax returns due to the statutes of limitation, changes in management’s judgment about the level of uncertainty, status of examinations, litigation and legislative activity and the addition or elimination of uncertain tax positions.

Section 382 of the Internal Revenue Code imposes an annual limit on the ability of a corporation that undergoes an “ownership change” to use its U.S. net operating losses to reduce its tax liability. The Company has engaged in three tax-free reorganization transactions in which acquired net operating losses are limited pursuant to Section 382. In total, approximately $24.9 million of federal net operating losses subject to the IRC Section 382 annual limitation are expected to be utilized by the Company. All of the acquired net operating loss carryforwards are expected to be fully utilized by 2036.

The Company files income tax returns in the U.S. federal jurisdiction. The Company’s U.S. federal income tax returns are open and subject to examinations from the 2022 tax year and forward. The Company’s various state income tax returns are generally open from the 2022 and later tax return years based on individual state statute of limitations.