Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) are as follows:

	Year Ended December 31,
(Dollars in thousands)	2025		2024		2023
Income tax expense (benefit)
Current:
Federal	$	10,871	$	14,196	$	23,025
State		1,981		8,574		10,817
Total current income tax expense		12,852		22,770		33,842

Deferred:
Federal		13,803		7,284		(6,546	)
State		8,516		3,733		943
Total deferred income tax expense (benefit)		22,319		11,017		(5,603	)
Total provision for income tax expense	$	35,171	$	33,787	$	28,239

Reconciliation of Federal and State Income Tax Expense with Statutory Corporate Tax Rate

The combined federal and state income tax expense differs from that computed at the federal statutory corporate tax rate as follows and is presented on a retrospective basis under ASU 2023-09:

	Year Ended December 31,
	2025						2024						2023
(Dollars in thousands)	Amount			Rate			Amount			Rate			Amount			Rate
Effective income tax rate
Federal statutory rate	$	27,043			21.00	%	$	25,671			21.00	%	$	24,476			21.00	%
State taxes, net of federal income tax benefit*		8,119			6.30	%		9,730			7.96	%		9,290			7.97	%
Tax credits
Low-income housing tax credits		(5,560	)		(4.32	%)		(4,253	)		(3.48	%)		(3,528	)		(3.03	%)
Nontaxable and nondeductible items
Bank-owned life insurance		(558	)		(0.43	%)		(521	)		(0.43	%)		(1,338	)		(1.15	%)
Tax-exempt interest income, net of TEFRA		(780	)		(0.61	%)		(512	)		(0.45	%)		(470	)		(0.40	%)
Other		164			0.13	%		123			0.10	%		76			0.07	%
Nondeductible items		5,250			4.08	%		-			-			-			-
Other
Compensation expense		(3,685	)		(2.86	%)		(137	)		(0.11	%)		(267	)		(0.23	%)
Tax effect of low-income housing tax credit losses		(1,137	)		(0.88	%)		(921	)		(0.75	%)		-			-
Low-income housing tax credit amortization		6,031			4.68	%		4,566			3.73	%		-			-
Other, net		284			0.22	%		41			0.07	%		-			-
Total income tax expense and effective tax rate	$	35,171			27.31	%	$	33,787			27.64	%	$	28,239			24.23	%

*State taxes in California made up the majority (greater than 50%) of the tax effect in the category.

Income Taxes Paid (Net of Refunds)

The cash paid for income taxes (net of refunds) during the year was as follows:

	Year Ended December 31,
(Dollars in thousands)	2025		2024		2023

Payments:
Federal	$	4,255	$	3,805	$	-

State and local:
California		10,431		9,116		12,647
Other		253		28		15
Total income taxes paid	$	14,939	$	12,949	$	12,662

Significant Portions of Deferred Tax Assets and Deferred Tax Liabilities

The components of net deferred tax assets and liabilities at the periods shown are summarized as follows:

	December 31,
(Dollars in thousands)	2025			2024
Deferred tax assets:
Allowance for credit losses	$	23,688		$	23,185
Deferred compensation		4,110			23,849
Unrealized losses on debt securities		1,594			8,250
Accrued liabilities		4,097			3,685
Loss carryforwards		1,863			476
State income taxes		522			1,793
Lease liabilities		489			692
Tax credit carry forward		21,351			2,402
Acquired loans fair valuation and other		437			188
Total deferred tax assets		58,151			64,520

Deferred tax liabilities:
Commercial leasing	$	(30,297	)	$	(25,704	)
Premises and equipment		(2,144	)		(2,034	)
Deferred loan and lease costs		(902	)		(936	)
Right of use leasing asset		(459	)		(659	)
Core deposit intangible asset		(345	)		(499	)
Accretion on investment securities		(1,782	)		(1,200	)
FHLB dividends		(348	)		(348	)
Investments (other K-1s)		(75	)		(225	)
Prepaid assets		(17	)		(17	)
Total deferred tax liabilities		(36,369	)		(31,622	)
Net deferred tax assets	$	21,782		$	32,898