XML 69 R25.htm IDEA: XBRL DOCUMENT
v3.25.3

INCOME TAXES | 12 Months Ended
--- | ---
Sep. 30, 2025
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Under generally accepted accounting principles, the Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates applicable to taxable income in the years in which those temporary differences are expected to reverse. The table below provides a summary of the Company's tax assets and liabilities, including deferred tax assets and deferred tax liabilities by major source. Deferred tax balances represent temporary differences between the financial statement and corresponding tax treatment of income, gains, losses, deductions or credits. With the completion of the Merger in 2024, the deferred tax amounts now include a number of deferred tax items carried over from LBC, as well as new deferred tax items created as a consequence of the purchase accounting process and post-merger asset sales. In particular, deferred tax assets now include significant new items for loan purchase discount and loss carryover.
| September 30, 2025 | September 30, 2024
| (In thousands)
Deferred tax assets |  |
Allowance for credit losses | $52,275 | $53,227
Non-accrual loan interest | 4,752 | 3,124
Accrued bonus and deferred compensation | 7,497 | 7,815
Stock based compensation | 3,552 | 4,696
Lease liability | 12,314 | 9,626
Loan purchase discount | 42,273 | 48,064
Loss carryover | 62,413 | 68,483
Other | 1,289 | 2,219
Total deferred tax assets | 186,365 | 197,254
Deferred tax liabilities |  |
FHLB stock dividends | 5,932 | 6,171
Net unrealized gain on available-for-sale securities and cash flow hedges | 14,097 | 13,758
Loan origination fees and costs | 11,475 | 11,777
Premises and equipment | 16,637 | 16,390
Lease right-of-use assets | 11,337 | 9,304
Equity investments | 3,444 | 3,700
Acquired intangibles | 11,598 | 12,824
Other | 184 | 184
Total deferred tax liabilities | 74,704 | 74,108
Net deferred tax asset (liability) | 111,661 | 123,146
Current tax asset (liability) | 1,123 | (3,898)
Net tax asset (liability) | $112,784 | $119,248
At the end of the fiscal year, the Company had about $264 million of ordinary tax loss to be carried to future years. The loss carryover amount is primarily attributable to the tax loss realized from the portfolio loan sale following the Luther Burbank merger. Because of the annual loss limitation rules under Section 382 of the Internal Revenue Code, it will take another 15 years (or until the end of fiscal 2040) for the Company to utilize all that loss carryover against its future taxable income. However, there is no applicable time limit in this case, and therefore Company does not anticipate any expiration of the loss carryover amount. In its deferred tax assets at the end of the fiscal year, the Company also has about $0.6 million of remaining Oregon tax credits that the Company previously purchased as part of its community investments to support Oregon farmworkers housing. That remaining Oregon tax credit will be fully utilized under an installment schedule by the end of the next fiscal year. The table below presents a reconciliation of the statutory federal income tax rate to the Company's effective income tax rate.
Year ended September 30, | 2025 | 2024 | 2023
Statutory income tax rate | 21.0% | 21.0% | 21.0%
State income tax | 2.3 | 2.3 | 1.7
Tax-exempt interest income | (1.7) | (2.1) | (1.2)
Interest expense disallowance | 0.9 | 1.2 | 0.5
Low-income housing investments | (1.1) | (1.1) | (1.3)
Other differences | 0.6 | 0.6 | 0.1
Effective income tax rate | 22.0% | 21.9% | 20.8%
The following table summarizes the Company's income tax expense (benefit) for the respective periods.
Year ended September 30, | 2025 | 2024 | 2023
| (In thousands)
Federal: |  |  |
Current | $45,850 | $54,817 | $58,667
Deferred | 11,115 | (4,767) | 3,334
| 56,965 | 50,050 | 62,001
State: |  |  |
Current | 6,578 | 7,837 | 4,425
Deferred | 31 | (1,872) | 1,224
| 6,609 | 5,965 | 5,649
Total |  |  |
Current | 52,428 | 62,654 | 63,092
Deferred | 11,146 | (6,639) | 4,558
| $63,574 | $56,015 | $67,650
The Company does not have a liability for uncertain tax positions as of September 30, 2025 or September 30, 2024. The Company's federal income tax returns are open and subject to potential examination by the IRS for fiscal years 2022 and later. State income tax returns are generally subject to examination for a period of three to five years after filing. The state impact of any federal changes remains subject to examination by various states for a period of up to two years after formal notification to the states. As described above in Note N, the Company has LIHTC investments which are designed to promote qualified affordable housing projects. We account for our portfolio of LHITC investments under the proportional amortization method of ASU 2023-2. The tax benefits from pass-through tax credits and losses from our LIHTC investments are included in our estimate of income tax liability for the year, and therefore reflected in the Income Tax Expense line of the income statement. The amortization expense of the LIHTC investments is a component of our income tax expense and therefore also reflected in the Income Tax Expense line. The table below shows the total amounts of tax benefits and the amortization amounts from our LIHTC portfolio that are recognized in our income tax expense for the fiscal years ended September 30, 2025 and September 30, 2024.
| 2025 | 2024
| (In thousands)
LIHTC tax benefits as of September 30, | $19,135 | $19,156
LIHTC amortization expense for the year ended September 30, | 16,093 | 16,434

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477617/942-740-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480738/235-10-S50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478822/944-740-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 5: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration