Columbia Financial, Inc.CLBK
Columbia Financial, Inc. Income Taxes Disclosure
Income Taxes
The components of income tax expense (benefit) for the years ended December 31, 2025, 2024, and 2023 are as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 1,922 | $ | 967 | $ | 3,488 | |||||||||||
| State | 150 | 762 | 3,102 | ||||||||||||||
| Total current | 2,072 | 1,729 | 6,590 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | 9,188 | (3,426) | 6,615 | ||||||||||||||
| State | 4,963 | (2,560) | (3,240) | ||||||||||||||
| Total deferred | 14,151 | (5,986) | 3,375 | ||||||||||||||
| Total income tax expense (benefit) | $ | 16,223 | $ | (4,257) | $ | 9,965 | |||||||||||
The Company reported deferred tax (benefit) of $(10.9) million, $(21.6) million, and $(11.5) million for the years ended December 31, 2025, 2024, and 2023, respectively, related to the net unrealized gains (losses) on securities available for sale, which is reported in accumulated other comprehensive income, net of tax. Additionally, the Company recorded a deferred tax (benefit) expense of $(26,000), $378,000, and $218,000, respectively, related to the reclassification adjustment of actuarial net (loss) gain on employee benefit obligations, which is reported in accumulated other comprehensive income, net of tax.
A reconciliation between the amount of reported total income tax expense and the amount computed by multiplying the applicable statutory federal income tax rate of 21% is as follows:
| Years Ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||
| Amount | Rate | Amount | Rate | Amount | Rate | |||||||||||||||||||||
| U.S. federal tax at statutory tax rate | $ | 14,278 | 21.00 | % | $ | (3,341) | 21.00 | % | $ | 9,670 | 21.00 | % | ||||||||||||||
State and local income taxes, net of federal income tax effect (1) | 4,039 | 5.94 | (1,420) | 8.93 | (103) | (0.22) | ||||||||||||||||||||
Low-income housing tax credit, net of amortization (2) | (155) | (0.23) | 152 | (0.96) | 148 | 0.32 | ||||||||||||||||||||
| Nontaxable or nondeductible items | ||||||||||||||||||||||||||
| ESOP fair market value adjustment | 240 | 0.35 | 323 | (2.03) | 383 | 0.83 | ||||||||||||||||||||
| 162(m) | 39 | 0.06 | 505 | (3.17) | 549 | 1.19 | ||||||||||||||||||||
| Income from bank-owned life insurance | (1,719) | (2.53) | (1,265) | 7.95 | (1,865) | (4.05) | ||||||||||||||||||||
Other, net (3) | (499) | (0.73) | 789 | (4.96) | 1,183 | 2.57 | ||||||||||||||||||||
| Total income tax expense (benefit) | $ | 16,223 | 23.86 | % | $ | (4,257) | 26.76 | % | $ | 9,965 | 21.64 | % | ||||||||||||||
(1) State income taxes in New Jersey and New York make up the majority (greater than 50%) of the tax effect in this category. | ||||||||||||||||||||||||||
(2) Low-income housing tax credits are presented net of the related proportional amortization. | ||||||||||||||||||||||||||
(3) The non-taxable or non-deductible items represents non-taxable interest income, non-deductible FDIC premiums, and other non-deductible expenses. None of these items individually or in the aggregate exceed the 5% quantitative threshold for separate disaggregation in the current year. | ||||||||||||||||||||||||||
(15) Income Taxes (continued)
The net deferred tax asset/liability is included in other assets/liabilities in the Consolidated Statements of Financial Condition. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2025 and 2024 are as follows:
| At December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
| Deferred tax assets: | |||||||||||
| Allowance for credit losses | $ | 18,650 | $ | 16,684 | |||||||
| Post-retirement benefits | 7,527 | 6,294 | |||||||||
| Deferred compensation | 1,465 | 1,755 | |||||||||
| Retirement Income Maintenance plan | 3,479 | 3,369 | |||||||||
| ESOP | 1,315 | 1,240 | |||||||||
| Stock-based compensation | 1,719 | 3,098 | |||||||||
| Net unrealized losses on debt securities and defined benefit plans | 29,117 | 42,715 | |||||||||
| Federal and State NOLs | 12,748 | 24,129 | |||||||||
| Alternative minimum assessment carryforwards | 2,156 | 2,156 | |||||||||
| Lease liability | 4,585 | 4,960 | |||||||||
| Other items | 5,809 | 5,066 | |||||||||
| Gross deferred tax assets | 88,570 | 111,466 | |||||||||
| Valuation allowance | — | — | |||||||||
| 88,570 | 111,466 | ||||||||||
| Deferred tax liabilities: | |||||||||||
| Pension expense | 80,321 | 75,489 | |||||||||
| Depreciation | 1,931 | 2,448 | |||||||||
| Deferred loan costs | 14,262 | 13,490 | |||||||||
| Intangible assets | 1,586 | 1,590 | |||||||||
| Lease right-of-use asset | 4,354 | 4,700 | |||||||||
| Other items | 1,434 | 1,318 | |||||||||
| Total gross deferred tax liabilities | 103,888 | 99,035 | |||||||||
| Net deferred tax (liability) asset | $ | (15,318) | $ | 12,431 | |||||||
Retained earnings at both December 31, 2025 and 2024 includes approximately $21.5 million, respectively, for which no provision for income tax has been made. This amount represents an allocation of income to bad debt deductions for tax purposes only. Events that would result in taxation of these reserves include the failure to qualify as a bank for tax purposes, distributions in complete or partial liquidation, stock redemptions and excess distributions to stockholders.
(15) Income Taxes (continued)
The following table presents income taxes paid:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Federal taxes | $ | — | $ | (44) | $ | 8,400 | |||||||||||
| State taxes : | |||||||||||||||||
| New Jersey | (115) | 821 | 436 | ||||||||||||||
| New York | 103 | 119 | 117 | ||||||||||||||
| New York City | 12 | 43 | 300 | ||||||||||||||
Other(1) | 2 | 1 | — | ||||||||||||||
| Total | $ | 2 | $ | 940 | $ | 9,253 | |||||||||||
(1) The amount of income taxes paid during these years does not meet the 5% disaggregation threshold. | |||||||||||||||||
Management believes, based on current facts, that it is more likely than not that there will be sufficient taxable income in future years to realize federal deferred tax assets. At both December 31, 2025 and 2024, the Company's had no valuation allowance recorded.
The Company had federal net operating losses of approximately $1.9 million and $42.7 million at December 31, 2025 and 2024, respectively. Net operating losses have an indefinite carryover subject to an 80% taxable income utilization and are subject to an annual limitation under Code Section 382.
The Company had New Jersey net operating loss carryforwards of $173.2 million and $236.3 million, respectively, at December 31, 2025 and 2024. If not utilized, these carryforwards will expire periodically through 2044. At both December 31, 2025 and 2024, the Company had approximately $2.2 million of New Jersey AMA Tax Credits. These credits do not expire. At December 31, 2025, and 2024 the Company also had New York net operating loss carryforwards of $556,000 and $1.5 million, respectively, which are subject to a 20 year carryforward. At both December 31, 2025, and 2024 the Company also had Florida net operating loss carryforwards of $18,000 which do not expire.
The Company files income tax returns in the United States federal jurisdiction and in the states of New Jersey and New York and various other states. At December 31, 2025, the Company is no longer subject to federal income tax examination for the years prior to 2022. Columbia Bank MHC and subsidiaries' New York State returns were audited for tax years ended December 31, 2021, 2022 and 2023, and closed with no changes during the year ended December 31, 2025. The Company's state income tax returns are subject to examination by the respective state taxing authorities with open years varying by jurisdiction but generally including 2022 and later.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 6, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 29, 2019 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.