v3.25.4

INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Schedule of Income Tax Expense | Net income before income tax expense and significant components of income tax expense consisted of the following:
| Years Ended
(Dollars in thousands) | December 31, 2025 |  |  |  |
Net income before income tax expense | $ | 32,991 |  |  |  |  |
Income tax expense: |  |  |  |  |
Current |  |  |  |  |
Federal | $ | 884 |  |  |  |  |
State | 457 |  |  |  |  |
Deferred |  |  |  |  |
Federal | 4,939 |  |  |  |  |
State | 1,332 |  |  |  |  |
Change in valuation allowance for deferred tax asset | 20 |  |  |  |  |
Income tax expense | $ | 7,632 |  |  |  |  |
|  |  | Years Ended December 31,
(Dollars in thousands) |  |  | 2024 |  | 2023
Income tax expense: |  |  |  |  |
Current |  |  | $ | 9,162 |  |  | $ | 5,195 |
Deferred |  |  | (4,760) |  |  | 6,549 |
Change in valuation allowance for deferred tax asset |  |  | (24) |  |  | (10) |
Income tax expense |  |  | $ | 4,378 |  |  | $ | 11,734 |
Schedule of Income Taxes Paid, Net of Refunds | Income taxes paid, net of refunds received by jurisdiction consisted of the following:
| Years Ended December 31,
(Dollars in thousands) | 2025 |  |  |  |
Income taxes paid, net of refunds received: |  |  |  |  |
Federal | $ | (1,500) |  |  |  |  |
State |  |  |  |  |
California | 401 |  |  |  |  |
Illinois | 289 |  |  |  |  |
Texas | 346 |  |  |  |  |
Other | 418 |  |  |  |  |
Total state taxes paid, net of refunds received | 1,454 |  |  |  |  |
Total income taxes paid, net of refunds received | $ | (46) |  |  |  |  |
Schedule of Effective Income Tax Rate Reconciliation | Effective tax rates differ from federal statutory rates applied to income before income taxes due to the following for the year ended December 31, 2025:
| Years Ended December 31,
| 2025 |  |  |  |
(Dollars in thousands) | Amount |  | Percent |  |  |  |  |  |  |  |
Tax provision computed at federal statutory rate | $ | 6,928 |  |  | 21.0 | % |  |  |  |  |  |  |  |
State and local income taxes, net of federal income tax effect(1) | 1,374 |  |  | 4.2 | % |  |  |  |  |  |  |  |
Effects of changes in tax laws or rates enacted in the current period | (199) |  |  | (0.6) | % |  |  |  |  |  |  |  |
Tax Credits |  |  |  |  |  |  |  |  |  |  |
Research and development tax credits | (2,990) |  |  | (9.1) | % |  |  |  |  |  |  |  |
Other | (1) |  |  | — | % |  |  |  |  |  |  |  |
Changes in valuation allowances | 20 |  |  | 0.1 | % |  |  |  |  |  |  |  |
Nontaxable or nondeductible items |  |  |  |  |  |  |  |  |  |  |
Stock-based compensation(2) | 1,119 |  |  | 3.4 | % |  |  |  |  |  |  |  |
Non-deductible executive compensation | 331 |  |  | 1.0 | % |  |  |  |  |  |  |  |
Non-deductible meals and entertainment | 834 |  |  | 2.5 | % |  |  |  |  |  |  |  |
Bank-owned life insurance | (443) |  |  | (1.3) | % |  |  |  |  |  |  |  |
Other | 250 |  |  | 0.8 | % |  |  |  |  |  |  |  |
Other | 409 |  |  | 1.1 | % |  |  |  |  |  |  |  |
Effective tax rate | $ | 7,632 |  |  | 23.1 | % |  |  |  |  |  |  |  |
(1) State taxes in Illinois and California made up the majority (greater than 50%) of the tax effect in this category for 2025. (2) Includes excess benefits and shortfalls from restricted stock vesting and stock option exercises. Effective tax rates differ from federal statutory rates applied to income before income taxes due to the following for the years ended December 31, 2024 and 2023:
| Years Ended Years Ended December 31,
(Dollars in thousands) | 2024 |  | 2023
Tax provision computed at federal statutory rate | $ | 4,298 |  |  | $ | 11,091 |
Effect of: |  |  |
State taxes, net | 1,417 |  |  | 1,920 |
Stock-based compensation | (168) |  |  | (2,661) |
Non-deductible executive compensation | 562 |  |  | 1,943 |
Non-deductible meals and entertainment | 887 |  |  | 808 |
Federal tax credits | (835) |  |  | (835) |
Bank-owned life insurance | (138) |  |  | (78) |
Changes in valuation allowances | (24) |  |  | (10) |
Other | (1,621) |  |  | (444) |
Effective tax rate | $ | 4,378 |  |  | $ | 11,734 |
Schedule of Significant Components of Deferred Tax Assets and Liabilities | Deferred income taxes reflect the net tax effects of temporary differences between the recorded amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
(Dollars in thousands) | 2025 |  | 2024
Deferred tax assets |  |  |
Federal net operating loss carryforwards | $ | 10,560 |  |  | $ | 4,727 |
State net operating loss carryforwards | 1,812 |  |  | 1,432 |
Stock-based compensation | 4,995 |  |  | 5,132 |
Unrealized loss on securities available for sale | 566 |  |  | 985 |
Allowance for credit losses | 10,289 |  |  | 11,538 |
Accrued liabilities | 5,931 |  |  | 5,949 |
Lease liability | 6,004 |  |  | 6,939 |
Qualified research expenses | 245 |  |  | 9,251 |
Other | 5,034 |  |  | 919 |
Total deferred tax assets | 45,436 |  |  | 46,872 |
Deferred tax liabilities |  |  |
Goodwill and intangible assets | 22,431 |  |  | 10,633 |
Fair value adjustment on junior subordinated debentures | 1,867 |  |  | 1,970 |
Premises and equipment | 11,891 |  |  | 12,228 |
Lease right-of-use asset | 5,510 |  |  | 6,320 |
Equity securities without readily determinable fair value | 1,704 |  |  | 1,669 |
Other | 1,539 |  |  | 178 |
Total deferred tax liabilities | 44,942 |  |  | 32,998 |
Net deferred tax asset before valuation allowance | 494 |  |  | 13,874 |
Valuation allowance | (313) |  |  | (293) |
Net deferred tax asset | $ | 181 |  |  | $ | 13,581 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-9 + Details
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