v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
 
The provision for income taxes for the years ended December 31, 2025, 2024, and 2023 consisted of the following (in thousands):
FederalStateTotal
2025
Current$7,374 $4,527 $11,901 
Deferred1,737 722 2,459 
Provision for income taxes$9,111 $5,249 $14,360 
2024
Current$2,706 $1,493 $4,199 
Deferred(463)(404)(867)
Provision for income taxes$2,243 $1,089 $3,332 
2023
Current$4,692 $3,502 $8,194 
Deferred176 (66)110 
Provision for income taxes$4,868 $3,436 $8,304 
 
Deferred tax assets (liabilities) consisted of the following (in thousands):
 December 31,
20252024
Deferred tax assets:  
Unrealized loss on available-for-sale investment securities$16,631 $23,132 
Allowance for credit losses8,890 7,970 
Purchase accounting fair value adjustment8,866 11,218 
Deferred compensation3,693 4,081 
Operating lease liabilities3,382 3,049 
Net operating loss carryovers2,075 3,175 
Other deferred tax assets1,018 848 
State taxes945 253 
Mark-to-market adjustment318 411 
Loan and investment impairment113 133 
Partnership income72 128 
Other-than-temporary impairment29 30 
Low income housing tax credit carry-forward— 942 
Total deferred tax assets46,032 55,370 
Deferred tax liabilities:  
Operating lease right-of-use assets(3,032)(2,811)
Core deposit intangible(2,408)(2,814)
Loan origination costs(1,349)(1,643)
Bank premises and equipment(1,119)(920)
Finance leases(474)(570)
FHLB stock(189)(191)
Total deferred tax liabilities(8,571)(8,949)
Net deferred tax assets$37,461 $46,421 
The determination of the amount of deferred income tax assets which are more likely than not to be realized is primarily dependent on projections of future earnings, which are subject to uncertainty and estimates that may change given economic conditions and other factors. The realization of deferred income tax assets is assessed and a valuation allowance is recorded if it is more likely than not that all or a portion of the deferred tax asset will not be realized. More likely than not is defined as greater than a 50% chance. All available evidence, both positive and negative is considered to determine whether, based on the weight of the evidence, a valuation allowance is needed. Thus, management concludes no valuation allowance is necessary against deferred tax assets as of December 31, 2025 and 2024.

The provision for income taxes differs from amounts computed by applying the statutory Federal income tax rates to operating income before income taxes. The significant items comprising these differences for the years ended December 31, 2025, 2024, and 2023 consisted of the following (amounts in thousands):
 202520242023
AmountPercentAmountPercentAmountPercent
Federal income tax, at statutory rate$11,031 21.0 %$2,310 21.0 %$7,106 21.0 %
State taxes, net of federal tax benefit (1)
4,147 7.9 %860 7.8 %2,714 8.0 %
Tax credits:
Low income housing tax credits(1,912)(3.6)%(1,720)(15.6)%(847)(2.5)%
Other tax credits— — %— — %— — %
Nontaxable or nondeductible items:
Tax exempt investment security income, net(461)(0.9)%(438)(4.0)%(1,176)(3.5)%
Bank owned life insurance, net(322)(0.6)%(272)(2.4)%(214)(0.6)%
Compensation - stock compensation(48)(0.1)%(72)(0.6)%(13)— %
Nondeductible employee compensation— — %113 1.0 %— — %
Nondeductible acquisition‑related expense— — %416 3.8 %— — %
Other nontaxable or nondeductible items239 0.4 %194 1.7 %(64)(0.2)%
Other Adjustments:
Amortization - low income housing tax credit investments1,899 3.6 %1,976 17.9 %1,055 3.1 %
Other tax benefits - low income housing tax credit investments(399)(0.8)%(496)(4.5)%(257)(0.8)%
Other186 0.4 %461 4.2 %— — %
Total provision for income taxes$14,360 27.3 %$3,332 30.3 %$8,304 24.5 %
(1) State taxes in California accounted for the majority of the tax effect within this category.
 
As of December 31, 2025, the Company had federal and California net operating loss (“NOL”) carry-forwards of $4,703,000 and $13,366,000, respectively. These NOLs were acquired through business combinations and are subject to Section 382 of the Internal Revenue Code of 1986, as amended (“IRC 382”). The federal and California NOLs begin to expire at various dates between 2033 and 2044, if not used. While they are subject to IRC 382, management has determined that all of the NOLs are more than likely than not to be utilized before they expire.

The Company and its subsidiary file income tax returns in the U.S. federal and California jurisdictions. The Company conducts all of its business activities in the State of California. There are no pending U.S. federal or state income tax examinations by those taxing authorities. The Company is no longer subject to the examination by U.S. federal taxing authorities for the years ended before December 31, 2022 and by the state taxing authorities for the years ended before December 31, 2021.
The Company's investments, net of amortization, in low income housing tax credit funds were $16,731,000 and $18,630,000 as of December 31, 2025 and 2024. The Company had gross commitments of $24,526,000 and $24,526,000 at December 31, 2025 and 2024, respectively of which $6,453,000 and $9,289,000 were unfunded as of December 31, 2025 and 2024, respectively. These investments are included in other assets on the consolidated balance sheets and the unfunded commitments are included in other liabilities. The Company recognized tax credits and other income tax benefits of $2,311,000 and $2,216,000 for the year ended December 2025 and 2024, respectively. Amortization of the investments recorded for the same periods were $1,899,000 and $1,976,000, respectively.

As of December 31, 2025, the Company has no unrecognized tax benefits and does not expect any material changes in the next 12 months.

During the years ended December 31, 2025 and 2024, the Company recorded no interest or penalties related to uncertain tax positions.

The following table presents the income taxes paid, net of refunds, for the years ended December 31, 2025, 2024, and 2023:
202520242023
Federal$4,000 $1,400 $4,400 
State and local:
California4,000 1,170 3,300 
Other5 2 — 
Total state and local4,005 1,172 3,300 
Total income taxes paid, net of refunds$8,005 $2,572 $7,700