Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of Components of Income Before Income Taxes and Income Tax Expense (Benefit)

The following table presents the components of income before income taxes and income tax expense (benefit) for the years ended December 31, 2025, 2024 and 2023:



	Year Ended December 31,
($ in thousands)	2025		2024		2023
Income before income taxes:
U.S.	$	1,686,561	$	1,429,104	$	1,425,756
Foreign	38,899		52,757		34,014
Total income before income taxes	1,725,460		1,481,861		1,459,770
Current income tax expense:
Federal	250,521		166,268		172,428
State	149,291		153,891		173,080
Foreign	8,235		10,399		2,240
Total current income tax expense	408,047		330,558		347,748
Deferred income tax (benefit) expense:
Federal	(20,242)		(6,467)		(24,319)
State	12,897		(5,582)		(23,415)
Foreign	(430)		(2,234)		(1,405)
Total deferred income tax benefit	(7,775)		(14,283)		(49,139)
Total income tax expense:
Federal	230,279		159,801		148,109
State	162,188		148,309		149,665
Foreign	7,805		8,165		835
Total income tax expense	$	400,272	$	316,275	$	298,609

Schedule of Reconciliation of the Federal Statutory Rate to the Effective Tax Rate

The following table presents the reconciliation of the federal statutory rate to the Company’s effective tax rate for the years ended December 31, 2025, 2024 and 2023:



	Year Ended December 31,
	2025				2024				2023
($ in thousands)	Amount		Percent		Amount		Percent		Amount		Percent
Statutory U.S. federal tax rate	$	362,347	21.0	%	$	311,191	21.0	%	$	306,552	21.0	%
U.S. federal
Tax credits (1)
Tax credits and benefits under the PAM, net of amortization	(29,268)		(1.7)		(26,147)		(1.8)		(4,299)		(0.3)
Energy tax credit — solar	(42,406)		(2.5)		(52,722)		(3.5)		(70,364)		(4.8)
Energy tax credit — energy storage	(34,408)		(2.0)		(11,143)		(0.7)		—		—
New markets tax credit	—		—		—		—		(21,378)		(1.5)
Other tax credits	(23,802)		(1.4)		(18,906)		(1.3)		(34,076)		(2.3)
Changes in valuation allowance	13,353		0.8		—		—		—		—
Nontaxable or nondeductible items
Nondeductible FDIC insurance premiums	8,474		0.5		7,719		0.5		7,007		0.5
Other nontaxable or nondeductible items	4,899		0.3		(15,041)		(1.0)		217		0.0
Other, net	7,549		0.4		(3,879)		(0.3)		(4,544)		(0.3)
U.S. state and local income taxes, net of U.S. federal income tax effect (2)	125,638		7.3		116,091		7.8		118,236		8.1
Foreign tax effects	7,805		0.5		8,165		0.5		835		0.1
Changes in unrecognized tax benefits	91		0.0		947		0.1		423		0.0
Effective tax rate	$	400,272	23.2	%	$	316,275	21.3	%	$	298,609	20.5	%

(1)Following the adoption of ASU 2023-02 on January 1, 2024, the Company expanded the PAM to include qualifying investments in new markets, historic, production and energy tax credit programs, in addition to affordable housing partnerships.

(2)California state taxes made up the majority (greater than 50 percent) of state and local taxes.

Schedule of Cash Flow, Supplemental Disclosures

The following table presents the income taxes paid (net of refunds received) by the Company for the years ended December 31, 2025, 2024 and 2023:



	Year Ended December 31,
($ in thousands)	2025		2024		2023
Federal	$	65,981	$	68,371	$	140,000
State
California	120,000		102,061		100,000
New York	67,001		59,049		36,732
Other states	12,080		11,278		14,953
Foreign	13,120		6,186		—
Total	$	278,182	$	246,945	$	291,685

Schedule of Temporary Differences that Give Rise to a Significant Portion of Deferred Tax Assets and Liabilities

The following table summarizes the tax effects of temporary differences that give rise to a significant portion of deferred tax assets and liabilities as of December 31, 2025 and 2024:



	December 31,
($ in thousands)	2025		2024

Deferred tax assets:
Allowance for credit losses and nonperforming assets valuation allowance	$	251,494	$	233,879
Net unrealized losses on AFS debt and transferred securities	142,141		223,814
Stock compensation and other accrued compensation	46,825		41,118
Lease liabilities	40,714		27,644
Tax credit and capital loss carryforwards	51,193		11,122
Basis difference in investments	16,430		17,708
Nonaccrual loans’ interest income	8,306		8,809
State taxes	6,548		5,808
FDIC special assessment charge	2,615		16,843

Other	13,435		14,665
Total deferred tax assets	$	579,701	$	601,410
Valuation allowance	(13,353)		—
Total deferred tax assets, net of valuation allowance	$	566,348	$	601,410
Deferred tax liabilities:
Operating lease right-of-use assets	$	37,225	$	25,647
Basis difference in investments	26,203		25,587
Net unrealized gains on derivative hedges	14,704		—
Equipment lease financing	7,206		10,395



Other	7,006		26,437
Total deferred tax liabilities	$	92,344	$	88,066
Net deferred tax assets	$	474,004	$	513,344

Schedule of Reconciliation of the Beginning and Ending Amounts of Unrecognized Tax Benefits

The following table presents a reconciliation of the beginning and ending balances of unrecognized tax benefits for the years ended December 31, 2025, 2024 and 2023:



	Year Ended December 31,
($ in thousands)	2025			2024			2023
Beginning balance	$	4,670		$	1,193		$	477
Additions for tax positions related to prior years	—			2,698		(1)	459
Deductions for tax positions related to prior years	(446)			—			—
Additions for tax positions related to current year	547			779			257
Settlements with taxing authorities	(2,019)		(2)	—			—
Ending balance	$	2,752		$	4,670		$	1,193

(1)In 2024, the increase in positions related to prior years primarily related to proposed adjustments resulting from examination of the Company’s state tax returns.

(2)In 2025, the Company settled an issue related to the examination of the Company’s prior years’ state tax returns.