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Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following table presents the components of income before income taxes and income tax expense (benefit) for the years ended December 31, 2025, 2024 and 2023:
|  | Year Ended December 31,
($ in thousands) |  | 2025 |  | 2024 |  | 2023
Income before income taxes: |  |  |  |  |  |
U.S. |  | $ | 1,686,561 |  |  | $ | 1,429,104 |  |  | $ | 1,425,756 |
Foreign |  | 38,899 |  |  | 52,757 |  |  | 34,014 |
Total income before income taxes |  | 1,725,460 |  |  | 1,481,861 |  |  | 1,459,770 |
Current income tax expense: |  |  |  |  |  |
Federal |  | 250,521 |  |  | 166,268 |  |  | 172,428 |
State |  | 149,291 |  |  | 153,891 |  |  | 173,080 |
Foreign |  | 8,235 |  |  | 10,399 |  |  | 2,240 |
Total current income tax expense |  | 408,047 |  |  | 330,558 |  |  | 347,748 |
Deferred income tax (benefit) expense: |  |  |  |  |  |
Federal |  | (20,242) |  |  | (6,467) |  |  | (24,319) |
State |  | 12,897 |  |  | (5,582) |  |  | (23,415) |
Foreign |  | (430) |  |  | (2,234) |  |  | (1,405) |
Total deferred income tax benefit |  | (7,775) |  |  | (14,283) |  |  | (49,139) |
Total income tax expense: |  |  |  |  |  |
Federal |  | 230,279 |  |  | 159,801 |  |  | 148,109 |
State |  | 162,188 |  |  | 148,309 |  |  | 149,665 |
Foreign |  | 7,805 |  |  | 8,165 |  |  | 835 |
Total income tax expense |  | $ | 400,272 |  |  | $ | 316,275 |  |  | $ | 298,609 |
The following table presents the reconciliation of the federal statutory rate to the Company’s effective tax rate for the years ended December 31, 2025, 2024 and 2023:
|  | Year Ended December 31,
|  | 2025 |  | 2024 |  | 2023
($ in thousands) |  | Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
Statutory U.S. federal tax rate |  | $ | 362,347 |  |  | 21.0 | % |  | $ | 311,191 |  |  | 21.0 | % |  | $ | 306,552 |  |  | 21.0 | %
U.S. federal |  |  |  |  |  |  |  |  |  |  |  |
Tax credits (1) |  |  |  |  |  |  |  |  |  |  |  |
Tax credits and benefits under the PAM, net of amortization |  | (29,268) |  |  | (1.7) |  |  | (26,147) |  |  | (1.8) |  |  | (4,299) |  |  | (0.3) |
Energy tax credit — solar |  | (42,406) |  |  | (2.5) |  |  | (52,722) |  |  | (3.5) |  |  | (70,364) |  |  | (4.8) |
Energy tax credit — energy storage |  | (34,408) |  |  | (2.0) |  |  | (11,143) |  |  | (0.7) |  |  | — |  |  | — |
New markets tax credit |  | — |  |  | — |  |  | — |  |  | — |  |  | (21,378) |  |  | (1.5) |
Other tax credits |  | (23,802) |  |  | (1.4) |  |  | (18,906) |  |  | (1.3) |  |  | (34,076) |  |  | (2.3) |
Changes in valuation allowance |  | 13,353 |  |  | 0.8 |  |  | — |  |  | — |  |  | — |  |  | — |
Nontaxable or nondeductible items |  |  |  |  |  |  |  |  |  |  |  |
Nondeductible FDIC insurance premiums |  | 8,474 |  |  | 0.5 |  |  | 7,719 |  |  | 0.5 |  |  | 7,007 |  |  | 0.5 |
Other nontaxable or nondeductible items |  | 4,899 |  |  | 0.3 |  |  | (15,041) |  |  | (1.0) |  |  | 217 |  |  | 0.0 |
Other, net |  | 7,549 |  |  | 0.4 |  |  | (3,879) |  |  | (0.3) |  |  | (4,544) |  |  | (0.3) |
U.S. state and local income taxes, net of U.S. federal income tax effect (2) |  | 125,638 |  |  | 7.3 |  |  | 116,091 |  |  | 7.8 |  |  | 118,236 |  |  | 8.1 |
Foreign tax effects |  | 7,805 |  |  | 0.5 |  |  | 8,165 |  |  | 0.5 |  |  | 835 |  |  | 0.1 |
Changes in unrecognized tax benefits |  | 91 |  |  | 0.0 |  |  | 947 |  |  | 0.1 |  |  | 423 |  |  | 0.0 |
Effective tax rate |  | $ | 400,272 |  |  | 23.2 | % |  | $ | 316,275 |  |  | 21.3 | % |  | $ | 298,609 |  |  | 20.5 | %
(1)Following the adoption of ASU 2023-02 on January 1, 2024, the Company expanded the PAM to include qualifying investments in new markets, historic, production and energy tax credit programs, in addition to affordable housing partnerships. (2)California state taxes made up the majority (greater than 50 percent) of state and local taxes. The following table presents the income taxes paid (net of refunds received) by the Company for the years ended December 31, 2025, 2024 and 2023:
|  | Year Ended December 31,
($ in thousands) |  | 2025 |  | 2024 |  | 2023
Federal |  | $ | 65,981 |  |  | $ | 68,371 |  |  | $ | 140,000 |
State |  |  |  |  |  |
California |  | 120,000 |  |  | 102,061 |  |  | 100,000 |
New York |  | 67,001 |  |  | 59,049 |  |  | 36,732 |
Other states |  | 12,080 |  |  | 11,278 |  |  | 14,953 |
Foreign |  | 13,120 |  |  | 6,186 |  |  | — |
Total |  | $ | 278,182 |  |  | $ | 246,945 |  |  | $ | 291,685 |
The following table summarizes the tax effects of temporary differences that give rise to a significant portion of deferred tax assets and liabilities as of December 31, 2025 and 2024:
|  |  |  |  |  |  |  | December 31,
($ in thousands) |  |  |  |  |  |  |  | 2025 |  |  |  |  |  |  |  | 2024
Deferred tax assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses and nonperforming assets valuation allowance |  |  |  |  |  |  |  | $ | 251,494 |  |  |  |  |  |  |  |  | $ | 233,879 |
Net unrealized losses on AFS debt and transferred securities |  |  |  |  |  |  |  | 142,141 |  |  |  |  |  |  |  |  | 223,814 |
Stock compensation and other accrued compensation |  |  |  |  |  |  |  | 46,825 |  |  |  |  |  |  |  |  | 41,118 |
Lease liabilities |  |  |  |  |  |  |  | 40,714 |  |  |  |  |  |  |  |  | 27,644 |
Tax credit and capital loss carryforwards |  |  |  |  |  |  |  | 51,193 |  |  |  |  |  |  |  |  | 11,122 |
Basis difference in investments |  |  |  |  |  |  |  | 16,430 |  |  |  |  |  |  |  |  | 17,708 |
Nonaccrual loans’ interest income |  |  |  |  |  |  |  | 8,306 |  |  |  |  |  |  |  |  | 8,809 |
State taxes |  |  |  |  |  |  |  | 6,548 |  |  |  |  |  |  |  |  | 5,808 |
FDIC special assessment charge |  |  |  |  |  |  |  | 2,615 |  |  |  |  |  |  |  |  | 16,843 |
Other |  |  |  |  |  |  |  | 13,435 |  |  |  |  |  |  |  |  | 14,665 |
Total deferred tax assets |  |  |  |  |  |  |  | $ | 579,701 |  |  |  |  |  |  |  |  | $ | 601,410 |
Valuation allowance |  |  |  |  |  |  |  | (13,353) |  |  |  |  |  |  |  |  | — |
Total deferred tax assets, net of valuation allowance |  |  |  |  |  |  |  | $ | 566,348 |  |  |  |  |  |  |  |  | $ | 601,410 |
Deferred tax liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating lease right-of-use assets |  |  |  |  |  |  |  | $ | 37,225 |  |  |  |  |  |  |  |  | $ | 25,647 |
Basis difference in investments |  |  |  |  |  |  |  | 26,203 |  |  |  |  |  |  |  |  | 25,587 |
Net unrealized gains on derivative hedges |  |  |  |  |  |  |  | 14,704 |  |  |  |  |  |  |  |  | — |
Equipment lease financing |  |  |  |  |  |  |  | 7,206 |  |  |  |  |  |  |  |  | 10,395 |
Other |  |  |  |  |  |  |  | 7,006 |  |  |  |  |  |  |  |  | 26,437 |
Total deferred tax liabilities |  |  |  |  |  |  |  | $ | 92,344 |  |  |  |  |  |  |  |  | $ | 88,066 |
Net deferred tax assets |  |  |  |  |  |  |  | $ | 474,004 |  |  |  |  |  |  |  |  | $ | 513,344 |
The Company has not repatriated and does not intend to repatriate earnings from its foreign subsidiary. The Company determined such earnings are to be indefinitely reinvested in the local jurisdiction. The related unrecognized deferred tax liability on these earnings is immaterial. As of December 31, 2025, the Company had deferred tax assets of $46 million related to tax credit carryforwards and $5 million related to state capital loss carryforwards. The Company’s tax credit carryforwards included $13 million of foreign tax credits as of December 31, 2025, which may not be fully utilized before they expire in 2034. The Company’s remaining carryforwards are expected to be fully utilized before they start to expire in 2028. The Company concluded that a valuation allowance was necessary to reduce the deferred tax assets associated with the foreign tax credits and recorded a $13 million valuation allowance as of December 31, 2025. For the remaining deferred tax assets it is more likely than not that there will be sufficient taxable income of appropriate nature in future years to realize these assets. For further information on the Company’s valuation policy on deferred taxes, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Income Taxes to the Consolidated Financial Statements in this Form 10-K. The following table presents a reconciliation of the beginning and ending balances of unrecognized tax benefits for the years ended December 31, 2025, 2024 and 2023:
|  | Year Ended December 31,
($ in thousands) |  | 2025 |  | 2024 |  | 2023
Beginning balance |  | $ | 4,670 |  |  | $ | 1,193 |  |  | $ | 477 |
Additions for tax positions related to prior years |  | — |  |  | 2,698 |  | (1) | 459 |
Deductions for tax positions related to prior years |  | (446) |  |  | — |  |  | — |
Additions for tax positions related to current year |  | 547 |  |  | 779 |  |  | 257 |
Settlements with taxing authorities |  | (2,019) |  | (2) | — |  |  | — |
Ending balance |  | $ | 2,752 |  |  | $ | 4,670 |  |  | $ | 1,193 |
(1)In 2024, the increase in positions related to prior years primarily related to proposed adjustments resulting from examination of the Company’s state tax returns. (2)In 2025, the Company settled an issue related to the examination of the Company’s prior years’ state tax returns. The Company recognizes interest and penalties, as applicable, related to the underpayment of income taxes as a component of Income tax expense on the Consolidated Statement of Income. The Company recorded net interest expense of $1 million for each of the years ended December 31, 2025 and 2024. In comparison, net interest and penalties expense was immaterial for the year ended 2023. Total accrued interest included in Accrued expenses and other liabilitie s on the Consolidated Balance Sheet was $232 thousand and $1 million as of December 31, 2025 and 2024, respectively. The Company files federal income tax returns, as well as returns in various state and foreign jurisdictions. We are routinely examined by tax authorities in these various jurisdictions. The Company is subject to federal income tax examination for the tax years 2022 and forward. With few exceptions, the Company is also subject to tax examination in various state and local jurisdictions for the tax years 2021 and forward. The Company does not believe that the outcome of unresolved issues or claims in any of the tax jurisdictions is likely to have a material impact on the Company’s Consolidated Financial Statements. The Company believes that adequate provisions have been recorded for all income tax uncertainties consistent with ASC 740, Income Taxes as of December 31, 2025.

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