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Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

14. INCOME TAXES

 

The Company invests in low income housing tax credit and solar tax funds that are designed to generate a return primarily through the realization of federal tax credits. The Company accounts for these investments by amortizing the cost of tax credit investments over the life of the investment using a proportional amortization method and tax credit investment amortization expense is a component of the provision for income taxes.

 

The following table presents the balances of the Company's tax credit investments and related unfunded commitments at September 30, 2025 and December 31, 2024:

 

 

September 30, 2025

 

 

December 31, 2024

 

 

(Dollars in thousands)

 

Tax credit investments

 

$

125,687

 

 

$

57,264

 

Unfunded commitments - tax credit investments

 

 

116,767

 

 

 

45,809

 

 

The following table presents other information related to the Company's tax credit investments at September 30, 2025 and December 31, 2024:

 

 

September 30, 2025

 

 

December 31, 2024

 

 

(Dollars in thousands)

 

Tax credits and other tax benefits recognized

 

$

71,849

 

 

$

21,257

 

Tax credit amortization expense included in provision for income taxes

 

 

64,994

 

 

 

17,421

 

 

On June 27, 2025, California Senate Bill 132 ("SB 132") was passed and signed into law by Governor Newsom. Effective for taxable years beginning on or after January 1, 2025, SB 132 amends California Revenue and Tax Code ("CRTC") to require financial institutions to apportion income using the single sales factor formula. Prior to this change, businesses were required by CRTC Section 25128 (b) to use an evenly weighted three-factor apportionment formula contemplating a payroll factor, property and sales factor. The impact on the Company's tax expense as of September 30, 2025 is not material. The Company will continue to evaluate the impact of this bill on its deferred tax assets and liabilities.

 

The One Big Beautiful Bill Act (“OBBBA”) was signed and enacted into law by the President of the United States on July 4, 2025. Except for certain provisions, the Tax Act is effective for tax years beginning on or after January 1, 2025. Changes from OBBBA include modifications to allow for immediate expensing of certain business investments and provides certain permanent extensions of key business tax breaks originally enacted under the 2017 Tax Cuts and Job Act. We believe the impact of the OBBBA on Company's tax expense as of September 30, 2025 is not material.