v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

(7) INCOME TAXES

The Company is subject to federal and applicable state corporate income taxes on its taxable ordinary income and capital gains. As a corporation taxed under Subchapter C of the Internal Revenue Code, the Company is able, and intends, to file a consolidated federal income tax return with corporate subsidiaries in which it holds 80% or more of the outstanding equity interest measured by both vote and fair value.

The following table presents the significant components of the Company's deferred tax assets and liabilities as of December 31, 2025 and 2024.

 

 

December 31,

 

(Dollars in thousands)

 

2025

 

 

2024

 

Deferred tax assets:

 

 

 

 

 

 

Provision for credit losses

 

$

17,700

 

 

$

14,530

 

Accrued expenses, compensation, and other assets

 

 

5,868

 

 

 

5,612

 

Net operating loss carryforwards (1)

 

 

2,648

 

 

 

3,168

 

Other investments and investment securities

 

 

2,553

 

 

 

2,885

 

Valuation allowance

 

 

(5,957

)

 

 

(4,418

)

Total deferred tax assets

 

 

22,812

 

 

 

21,777

 

Deferred tax liabilities:

 

 

 

 

 

 

Goodwill and other intangibles

 

 

42,408

 

 

 

42,772

 

Total deferred tax liabilities

 

 

42,408

 

 

 

42,772

 

Deferred tax liability, net

 

$

19,596

 

 

$

20,995

 
(1)
As of December 31, 2025, the Company had an estimated $11.1 million of net operating loss carryforwards, $1.7 million of which expires at various dates between December 31, 2026 and December 31, 2035, which had no net carrying value as of December 31, 2025.

The following table presents the components of the Company's tax provision for the years ended December 31, 2025, 2024, and 2023.

 

 

Year Ended December 31,

 

(Dollars in thousands)

 

2025

 

 

2024

 

 

2023

 

Current

 

 

 

 

 

 

 

 

 

Federal

 

$

19,532

 

 

$

15,634

 

 

$

18,634

 

State

 

 

7,928

 

 

 

4,789

 

 

 

6,014

 

Deferred

 

 

 

 

 

 

 

 

 

Federal

 

 

(2,010

)

 

 

1,455

 

 

 

(52

)

State

 

 

(906

)

 

 

(867

)

 

 

314

 

Net provision for income taxes

 

$

24,544

 

 

$

21,011

 

 

$

24,910

 

The following table presents a reconciliation of statutory federal income tax provision to consolidated actual income tax provision reported for the years ended December 31, 2025, 2024, and 2023.

 

 

Year Ended December 31,

 

(Dollars in thousands)

 

2025

 

 

2024

 

 

2023

 

 

 

Amount

 

 

Percent (1)

 

 

Amount

 

 

Percent (1)

 

 

Amount

 

 

Percent (1)

 

Statutory Federal income tax provision

 

$

16,776

 

 

 

21

%

 

$

13,217

 

 

 

21

%

 

$

18,068

 

 

 

21

%

State and local income taxes, net of federal income tax benefit

 

 

4,525

 

 

 

6

 

 

 

2,623

 

 

 

4

 

 

 

3,534

 

 

 

4

 

Valuation allowance against deferred tax assets

 

 

1,539

 

 

 

2

 

 

 

558

 

 

 

1

 

 

 

1,565

 

 

 

2

 

Change in effective state income tax rates and accrual

 

 

424

 

 

 

1

 

 

 

109

 

 

*

 

 

 

(222

)

 

*

 

Non-deductible expenses

 

 

457

 

 

 

1

 

 

 

3,899

 

 

 

6

 

 

 

2,024

 

 

 

2

 

Other

 

 

823

 

 

 

1

 

 

 

605

 

 

 

1

 

 

 

(59

)

 

*

 

Total income tax provision

 

$

24,544

 

 

 

31

%

 

$

21,011

 

 

 

33

%

 

$

24,910

 

 

 

29

%

(1) Percentage may not foot due to rounding.

(*) Less than 1%.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible pursuant to ASC 740. The Company considers the reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company’s evaluation of the realizability of deferred tax assets must consider both positive and negative evidence. The weight given to the potential effects of positive and negative evidence is based on the extent to which it can be objectively verified. The Company has determined that a valuation allowance is necessary for net operating losses which the Company does not believe will be utilized as well as for deferred compensation in excess of statutory limits. Based upon these considerations, the Company determined the necessary valuation allowance as of December 31, 2025.

The Company has filed tax returns in many states. Federal, Utah, California, New York, Florida, and Texas tax filings of the Company for the tax years 2022 through the present are the more significant filings that are open for examination.