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Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income tax expense (benefit) for the years ended December 31, 2025, 2024, and 2023 are as follows:
($ in thousands)202520242023
Current - Federal$(2,615)$23,134 $24,750 
  - State439 3,637 3,857 
Deferred  - Federal29,235 (4,569)(481)
  - State1,393 (300)(301)
Total$28,452 $21,902 $27,825 
Beginning in 2025 on a prospective basis, the Company adopted ASU 2023-09. See Accounting Standards Adopted in 2025 in Note 1 for additional details on the adoption.
The following is a reconciliation of federal income tax expense at the statutory rate of 21% at December 31, 2025 to the income tax provision reported in the financial statements.
($ in thousands)2025
AmountPercent
Tax provision at statutory rate$29,295 21.00 %
State and local income taxes, net of federal income tax effect (1)
1,444 1.04 %
Non-taxable / non-deductible items(2,032)(1.46)%
Tax credits (2)
(828)(0.59)%
Other adjustments573 0.41 %
Total provision for income taxes and effective tax rate$28,452 20.40 %
(1) - State taxes in North Carolina made up the majority (greater than 50 percent) of this category.
(2) - Net of proportional amortization of qualifying affordable housing investments.
As previously disclosed for the years ended December 31, 2024 and December 31, 2023, the following is a reconciliation of federal income tax expense at the statutory rate of 21% to the income tax provision reported in the financial statements.
($ in thousands)20242023
Tax provision at statutory rate$20,605 $27,711 
Increase (decrease) in income taxes resulting from:
Tax-exempt interest income, net(1,937)(1,934)
State income taxes, net of federal benefit2,928 2,809 
Other, net306 (761)
Total$21,902 $27,825 
In the table above, for 2024, the Other, net amount includes $1.7 million related to incremental state tax-related expenses for prior years, net of associated federal benefit amounts and $0.8 million related to deferred tax adjustments.
The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025.
($ in thousands)2025
US Federal$9,000 
North Carolina1,070 
Other US State and Local950 
Total$11,020 
The sources and tax effects of temporary differences that give rise to significant portions of the deferred tax assets, which are included in Other assets on the consolidated balance sheets are as follows at December 31, 2025 and 2024:
($ in thousands)20252024
Deferred tax assets:
Net operating loss carryforwards$134,335 $— 
Unrealized losses on securities available for sale44,764 85,940 
Allowance for credit losses on loans and unfunded commitments— 30,257 
Operating lease liability3,211 3,342 
Purchase accounting adjustments1,254 3,358 
All other7,086 8,077 
Gross deferred tax assets190,650 130,974 
Deferred tax liabilities:
Security valuation(58,352)— 
Loan valuation(72,232)— 
Amortizable basis of intangible assets(13,427)(14,442)
Depreciable basis of fixed assets(5,777)(4,647)
Right of use lease asset(3,015)(3,161)
Loan fees(2,485)(2,483)
All other(882)(578)
Gross deferred tax liabilities(156,170)(25,311)
Net deferred tax asset$34,480 $105,663 
The Company recorded de minimis valuation allowances for 2025 and 2024 related to state net operating loss carryforwards for which the realization of the remaining deferred tax assets is determined to be more likely than not. The Company had no significant uncertain tax positions, and thus no such reserve for uncertain tax positions has been recorded. Additionally, the Company determined that it has no material unrecognized tax benefits that if recognized would affect the effective tax rate. The Company’s general policy is to record tax penalties and interest as a component of “Other operating expenses.”
The Company is subject to routine audits of its tax returns by the Internal Revenue Service and various state taxing authorities. The Company’s tax returns are subject to income tax audit by federal and state agencies beginning with the year 2021. There are no indications of any material adjustments relating to any examination currently being conducted by any taxing authority.