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Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Taxes [Abstract] |
Income Taxes | Note 9—Income Taxes The Company operates in the United States and is subject to corporate net income taxes for federal and state purposes. The components of income tax expense included in the statements of continuing operations are as follows:
|  | For the years ended
|  | December 31,
|  | 2025 |  | 2024 |  | 2023
|  |  | (Dollars in thousands)
Current tax provision |  |  |  |  |  |  |  |  |
Federal |  | $ | 70,206 |  | $ | 54,569 |  | $ | 55,314
State |  |  | 13,864 |  |  | 17,730 |  |  | 14,845
|  |  | 84,070 |  |  | 72,299 |  |  | 70,159
Deferred tax provision (benefit) |  |  |  |  |  |  |  |  |
Federal |  |  | (8,318) |  |  | 2,272 |  |  | (4,925)
State |  |  | (928) |  |  | 45 |  |  | (756)
|  |  | (9,246) |  |  | 2,317 |  |  | (5,681)
|  | $ | 74,824 |  | $ | 74,616 |  | $ | 64,478
The specific categories in the rate reconciliation and additional information for reconciling items are as follows:
|  | For the year ended
|  | December 31,
|  | 2025
|  |  | (Dollars in thousands)
Federal statutory tax rate |  | $ | 63,638 |  |  | 21.0%
State and local income taxes, net of federal income tax effect(1) |  |  | 9,757 |  |  | 3.2%
Nontaxable or nondeductible items |  |  |  |  |  |
Excess tax benefits from vesting or settlement of stock compensation awards |  |  | (5,381) |  |  | (1.8%)
Limitation on executive compensation |  |  | 6,501 |  |  | 2.2%
Other |  |  | (714) |  |  | (0.2%)
Other |  |  | 1,023 |  |  | 0.3%
|  | $ | 74,824 |  |  | 24.7%
(1)State taxes in Florida, South Dakota, and New York made up the majority (greater than 50 percent) of the tax effect in this category. The differences between applicable income tax expense (benefit) from continuing operations and the amounts computed by applying the statutory federal income tax rate of 21% for 2024 and 2023, are as follows:
|  | For the years ended
|  | December 31,
|  | 2024 |  | 2023
|  |  | (Dollars in thousands)
Computed tax expense at statutory rate |  | $ | 61,353 |  | $ | 53,923
State taxes |  |  | 12,011 |  |  | 10,885
Tax-exempt interest income |  |  | (766) |  |  | (459)
Meals and entertainment |  |  | 57 |  |  | 82
Other net nondeductible (deductible) items |  |  | 1,281 |  |  | (49)
Other |  |  | 680 |  |  | 96
|  | $ | 74,616 |  | $ | 64,478
Income taxes paid, net of refunds received, is disaggregated by federal and state jurisdictions as follows:
|  | For the year ended
|  | December 31,
|  | 2025
|  | (Dollars in thousands)
Tax summary |  |  |
Federal |  | $ | 63,500
State: |  |  |
Delaware |  |  | (4,279)
Other |  |  | 10,599
State subtotal |  | $ | 6,320
Total cash paid for income taxes (net of refunds) |  | $ | 69,820
Deferred income taxes are provided for the temporary difference between the financial reporting basis and the tax basis of the Company’s assets and liabilities. Cumulative temporary differences recognized in the financial statement of position are as follows:
|  | For the years ended
|  | December 31,
|  | 2025 |  | 2024
|  |  | (Dollars in thousands)
Deferred tax assets: |  |  |  |  |  |
Allowance for credit losses |  | $ | 16,621 |  | $ | 8,526
Non-accrual interest |  |  | 3,569 |  |  | 1,993
Deferred compensation |  |  | 728 |  |  | 747
Nonqualified stock options |  |  | 2,023 |  |  | 1,623
Capital loss limitations |  |  | 4,255 |  |  | 5,701
Tax deductible goodwill |  |  | 627 |  |  | 682
Operating lease liabilities |  |  | 4,887 |  |  | 5,515
Unrealized losses on investment securities available-for-sale |  |  | — |  |  | 5,909
Deferred income |  |  | 299 |  |  | 225
Other |  |  | 912 |  |  | 1,044
Total gross deferred tax assets |  |  | 33,921 |  |  | 31,965
Federal and state valuation allowance |  |  | (4,255) |  |  | (5,701)
Deferred tax liabilities: |  |  |  |  |  |
Depreciation |  |  | 2,842 |  |  | 2,140
Unrealized gain on investment securities available-for-sale |  |  | 3,532 |  |  | —
Right of use asset |  |  | 4,613 |  |  | 5,250
Total deferred tax liabilities |  |  | 10,987 |  |  | 7,390
Net deferred tax asset |  | $ | 18,679 |  | $ | 18,874
The table below presents the changes in the Company’s valuation allowance:
|  | For the years ended
|  | December 31,
|  | 2025 |  | 2024
|  | (in thousands)
Beginning balance at January 1 |  | $ | 5,701 |  | $ | 6,280
Allowances written off |  |  | (1,446) |  |  | (579)
Valuation allowance at December 31 |  | $ | 4,255 |  | $ | 5,701
Management assesses all available positive and negative evidence to determine whether it is more likely than not that the Company will be able to recognize the existing deferred tax assets. If that threshold is not met, a valuation allowance is established against the deferred tax asset. The federal and state valuation allowance at December 31, 2025 and 2024, respectively, was $4.3 million and $5.7 million and resulted from Walnut Street assets, primarily because related capital losses will likely be non-deductible. Walnut Street reflected the Bank’s prior investment in an entity through which a portion of its discontinued loan portfolio was sold. For the years ended December 31, 2025, 2024, or 2023 there were no unrecognized tax benefits and no amounts of interest or penalties related to unrecognized tax benefits have been recognized. Tax years after 2022 remain subject to examination by the federal authorities, and tax years 2021 and after remain subject to examination by most state tax authorities. On July 4, 2025, the United States enacted the One Big Beautiful Bill Act of 2025 (the “Act”). The Act includes, among other provisions, changes to the U.S. corporate income tax system, including permanent extensions of certain provisions of the Tax Cuts and Jobs Act. The Act contains multiple effective dates, with certain provisions effective beginning in calendar year 2025 and others phased in through calendar year 2027. Based on the Company’s current analysis of the Act’s provisions, the Company does not expect the Act to have a material impact on its financial position, results of operations, or cash flows.

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