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Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Taxes [Abstract]  
Income Taxes
14. Income Taxes

Significant components of deferred tax assets and liabilities included in the consolidated balance sheets as of the periods below were as follows.

    As of the Year Ended
  
 
December 31, 2025
    
December 31, 2024
  
    (In thousands)
  
Deferred tax assets:
            
Compensation
  
$
2,045
    
$
2,370
  
Provision for credit losses
    
792
      
747
  
Lease obligations - including closed clinics
    
29,888
      
36,205
  
Other
    94       -  
Deferred tax assets
  
$
32,819
    
$
39,322
  
Deferred tax liabilities:
                
Depreciation and amortization
  
$
(31,274
)
  
$
(32,392
)
Operating lease right-of-use assets
    
(28,109
)
    
(34,221
)
Gain on cash flow hedge
     (244 )     (960 )
Change in revaluation of put-right liability
     (312 )     (638 )
Other
    
(1,271
)
    
(576
)
Deferred tax liabilities
    
(61,210
)
    
(68,787
)
Net deferred tax liabilities
  
$
(28,391
)
  
$
(29,465
)

The deferred tax assets and liabilities related to purchased interests not yet finalized may result in an immaterial adjustment.

As of December 31, 2025, the Company has a federal tax payable of $0.9 million and state tax receivables of $3.1 million. The federal tax payable is included in accrued expenses and the state income tax receivable is included in other current assets on the accompanying consolidated balance sheets.

For the years ended December 31, 2025, 2024, and 2023 income taxes for financial reporting purposes differ from the amount computed by applying the statutory federal income tax rate of 21% as shown as in the following table:

 
Year Ended
  
   
December 31, 2025
  
U.S. federal statutory rate
  
$
12,472
      
21.0
%
State and local income taxes, net of federal income tax effect (1)
    
5,068
      
8.5
%
Non-deductible expenses
    
133
      
0.2
%
Shortfall equity compensation deduction
    
330
      
0.6
%
Non-deductible executive compensation
    
1,186
      
2.0
%
Other reconciling items
    
619
      
1.1
%
Income tax expense
  
$
19,808
      
33.4
%

(1)
 State and local income taxes primarily consist of taxes in Tennessee, Maryland, Pennsylvania, Oregon, Georgia, New Jersey, and Virginia (which collectively represent the majority of this category).

    Year Ended
  
 
December 31, 2024
  
U.S. tax at statutory rate
  
$
9,667
      
21.0
%
State income taxes, net of federal benefit
    
2,946
      
6.4
%
Shortfall equity compensation deduction
    
75
      
0.2
%
Non-deductible expenses
    
907
      
2.0
%
Return to provision adjustments
     1,014       2.1 %
Income tax expense
 
$
14,609
      
31.7
%

 
Year Ended
  
   
December 31, 2023
  
U.S. tax at statutory rate
  
$
8,483
      
21.0
%
State income taxes, net of federal benefit
    
2,135
      
5.3
%
Shortfall equity compensation deduction
    
123
      
0.3
%
Non-deductible expenses
    
710
      
1.8
%
Return to provision adjustments
    
705
      
1.7
%
Income tax expense
 
$
12,156
      
30.1
%

Significant components of the provision for income taxes for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands):

 
December 31, 2025
    
December 31, 2024
    
December 31, 2023
  
Current income tax expense:
                  
Federal
  
$
6,753
    
$
5,805
    
$
6,996
  
State
    
2,456
      
3,930
      
512
  
Total current expense
    
9,209
      
9,735
      
7,508
  
Deferred income tax expense:
                        
Federal
    
7,471
      
4,006
      
3,819
  
State
    
3,128
      
868
      
829
  
Total deferred expense
    
10,599
      
4,874
      
4,648
  
Total income tax expense
  
$
19,808
    
$
14,609
    
$
12,156
  


The components of income taxes paid for the period ended December 31, 2025, were as follows:

   
December 31, 2025
 
Total Income Taxes Paid
  
$
14,348
  
Federal
  
$
9,647
  
State & Local:
        
TN
  
$
1,181
  
Other
  
$
3,520
  

For 2025, 2024 and 2023, the Company performed a detailed reconciliation of its federal and state taxes payable and receivable accounts along with its federal and state deferred tax asset and liability accounts. The adjustments were immaterial. The Company considers this reconciliation process to be an annual control.

The Company is required to establish a valuation allowance for deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income in the periods which the deferred tax assets are deductible, management believes that a valuation allowance is not required, as it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.

The Company’s U.S. federal returns remain open to examination for 2022 through 2024 and U.S. state jurisdictions are open for periods ranging from 2021 through 2024.

The Company does not believe that it has any significant uncertain tax positions at December 31, 2025 and December 31, 2024, nor is this expected to change within the next twelve months due to the settlement and expiration of statutes of limitation.

The Company did not have any accrued interest or penalties associated with any unrecognized tax benefits nor was any interest expense recognized during the years ended December 31, 2025, 2024 and 2023.