XML 42 R25.htm IDEA: XBRL DOCUMENT
v3.25.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The following table presents the components of income tax expense (benefit) for the years ended December 31:
| Year ended December 31,
($ in thousands) | 2025 |  | 2024 |  | 2023
Current: |  |  |  |  |
Federal | $ | 63,474 |  |  | $ | 41,477 |  |  | $ | 40,471 |
State and local | 13,283 |  |  | 8,022 |  |  | 9,616 |
Total current | 76,757 |  |  | 49,499 |  |  | 50,087 |
Deferred: |  |  |  |  |
Federal | 4,981 |  |  | (2,535) |  |  | 283 |
State and local | 605 |  |  | (986) |  |  | 2,097 |
Total deferred | 5,586 |  |  | (3,521) |  |  | 2,380 |
Total income tax expense | $ | 82,343 |  |  | $ | 45,978 |  |  | $ | 52,467 |
The following table presents a reconciliation by rate and amount of expected income tax expense computed by applying the statutory federal income tax rate to income before income taxes reflected in the Consolidated Statements of Income to the effective income tax expense:
| Year ended December 31,
| Amount |  | Rate |  | Amount |  | Amount
($ in thousands) | 2025 |  | 2024 |  | 2023
Income tax expense at federal statutory rate | $ | 59,581 |  |  | 21.0 | % |  | $ | 48,561 |  |  | $ | 51,770 |
Increase (decrease) in income tax resulting from: |  |  |  |  |  |  |
State and local income taxes, net (1) | 11,326 |  |  | 4.0 | % |  | 7,334 |  |  | 9,445 |
Federal tax credits: |  |  |  |  |  |  |
New Markets Tax Credits | (3,958) |  |  | (1.4) | % |  | — |  |  | — |
Low-income housing tax credits (“LIHTC”) | (1,764) |  |  | (0.6) | % |  | 285 |  |  | (56) |
Other federal tax credits | (1,611) |  |  | (0.6) | % |  | (5,619) |  |  | (4,364) |
Total federal tax credits | (7,333) |  |  | (2.6) | % |  | (5,334) |  |  | (4,420) |
ITC recapture | 24,148 |  |  | 8.5 | % |  | — |  |  | — |
Nontaxable or nondeductible items: |  |  |  |  |  |  |
Tax-exempt interest income, net | (7,137) |  |  | (2.5) | % |  | (5,124) |  |  | (4,942) |
Bank-owned life insurance | (1,558) |  |  | (0.6) | % |  | (892) |  |  | (888) |
Non-deductible expenses | 3,152 |  |  | 1.1 | % |  | 1,524 |  |  | 2,059 |
Excess tax benefits | (623) |  |  | (0.2) | % |  | 28 |  |  | (251) |
Total nontaxable or nondeductible items | (6,166) |  |  | (2.2) | % |  | (4,464) |  |  | (4,022) |
Other, net | 787 |  |  | 0.3 | % |  | (119) |  |  | (306) |
Total income tax expense | $ | 82,343 |  |  | 29.0 | % |  | $ | 45,978 |  |  | $ | 52,467 |
(1) State taxes in California made up the majority (greater than 50 percent) of the tax effect in this category. As of December 31, 2025 and 2024, the carrying value of the investments related to low-income housing tax credits was $19.9 million and $16.7 million, respectively. No impairment losses have been recognized from forfeiture or ineligibility of tax credits or other circumstances during the life of any of the LIHTC investments. The following table presents the components of income taxes paid disaggregated by jurisdiction for the year ended December 31:
($ in thousands) | 2025
Federal | $ | 71,051 |
State and local: |
California | 6,932 |
All other state and local | 4,888 |
Total state and local | 11,820 |
Total income taxes paid | $ | 82,871 |
A net deferred income tax asset of $59.3 million and $85.4 million is included in other assets in the Consolidated Balance Sheets at December 31, 2025 and 2024, respectively. The following table presents the tax effect of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities for the periods indicated:
| Year ended December 31,
($ in thousands) | 2025 |  | 2024
Deferred tax assets: |  |  |
Allowance for loan losses | $ | 34,325 |  |  | $ | 34,212 |
Loans held-for-sale | 2,633 |  |  | 3,304 |
OREO | — |  |  | 39 |
Deferred compensation | 6,413 |  |  | 5,209 |
Accrued compensation | 6,897 |  |  | 6,265 |
Unrealized losses on securities, net | 18,437 |  |  | 38,734 |
Net operating losses and tax credits | 5,042 |  |  | 5,299 |
Lease liability accrual | 6,812 |  |  | 6,485 |
Other investments | 11,216 |  |  | 5,587 |
Research and experimental expenses | — |  |  | 1,473 |
Fixed assets | — |  |  | 2,802 |
Deferred expenses | 2,610 |  |  | 3,021 |
Other deferred tax assets | 4,165 |  |  | 3,248 |
Total deferred tax assets | 98,550 |  |  | 115,678 |
Deferred tax liabilities: |  |  |
Acquired loans | 1,490 |  |  | 1,922 |
Intangible assets | 8,880 |  |  | 8,756 |
Right of use asset | 6,032 |  |  | 5,644 |
Anticipated insurance proceeds | 8,060 |  |  | — |
Other investments | 10,901 |  |  | 10,233 |
Other deferred tax liabilities | 1,049 |  |  | 951 |
Total deferred tax liabilities | 36,412 |  |  | 27,506 |
Net deferred tax asset before valuation allowance | 62,138 |  |  | 88,172 |
Less: valuation allowance | 2,812 |  |  | 2,812 |
Net deferred tax asset | $ | 59,326 |  |  | $ | 85,360 |
As part of an acquisition in 2019, the Company acquired net operating loss, tax credit, and capital loss deferred tax assets. Net operating losses originated in the years 2012, 2014-2017, and 2019 and will expire in the years between 2032-2037. Tax credit carryforwards originated in years 2010-2015 and will expire in the years between 2030-2035. A valuation allowance is provided on deferred tax assets when it is more likely than not that some portion of the assets will not be realized. The company determined it was more likely than not that some of the acquired net operating loss and tax credit assets would not be realized and has recognized a valuation allowance of $2.8 million at December 31, 2025 and 2024, respectively. The Company and its subsidiaries file income tax returns in the federal jurisdiction and in 31 states and localities. The Company is no longer subject to federal, state or local income tax audits by tax authorities for years before 2020, with the exception of 2016 and 2017 being open years by state taxing authorities. Net operating losses generated prior to 2016 that are utilized going forward would still be subject to examination. As of December 31, 2025, the gross amount of unrecognized tax benefits was $6.0 million and the total amount of net unrecognized tax benefits that would impact the effective tax rate, if recognized, was $4.7 million compared to $4.0 million and $2.4 million as of December 31, 2024 and 2023, respectively. The Company is under audit by the state of California, Minnesota, and Missouri, and while the Company has concluded it has adequately provided for uncertain tax positions, the outcome of such audits are always uncertain and could result in additional tax expense. The Company recognizes gross interest and penalties related to uncertain tax positions in income tax expense and classifies such interest and penalties in the liability for unrecognized tax benefits. The amount accrued for interest and penalties was $3.1 million as of 2025, $2.1 million as of 2024, and $1.0 million as of 2023. The following table summarizes the activity in the gross liability for unrecognized tax benefits for the periods presented:
($ in thousands) | 2025 |  | 2024 |  | 2023
Balance at beginning of year | $ | 5,016 |  |  | $ | 3,077 |  |  | $ | 2,724 |
Additions based on tax positions related to the current year | 1,347 |  |  | 1,212 |  |  | 727 |
Additions for tax positions of prior years | — |  |  | 1,128 |  |  | 24 |
Settlements or lapse of statute of limitations | (338) |  |  | (401) |  |  | (398) |
Balance at end of year | $ | 6,025 |  |  | $ | 5,016 |  |  | $ | 3,077 |
During 2025, a solar provider from which the Company had purchased $24.1 million of transferrable solar tax credits declared bankruptcy. The bankrupt solar provider indirectly owned, through a complex structure of multiple entities, the solar projects generating the tax credits that the Company purchased. As part of the bankruptcy, the bankrupt solar provider sold and transferred equity interests in certain of those entities. As a result of this transfer, the $24.1 million of solar tax credits purchased by the Company were recaptured. The Company previously purchased an insurance policy to insure against recapture risk and anticipates proceeds from the insurance policy to cover the $24.1 million of recaptured tax credits and approximately $8.0 million of incremental tax liability attributable to the anticipated insurance proceeds from the insured recaptured credits. The Company has a receivable of $32.1 million related to the pending insurance claim included in “Other assets” in the Consolidated Balance Sheets as of December 31, 2025, and the anticipated proceeds from the insurance policy and increased tax liability are included in “Noninterest Income” and “Income Tax Expense,” respectively, in the Consolidated Statements of Income for the year ended December 31, 2025.

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