CVB FINANCIAL CORP Income Taxes Disclosure

9. INCOME TAXES

Temporary differences between the amounts reported in the financial statements and the tax bases of assets and liabilities resulted in deferred taxes. The components of the net deferred tax asset are as follows.

Annual Effective Tax Rate

The Company invests in low income housing tax credit and solar tax funds that are designed to generate a return primarily through the realization of federal tax credits. The Company accounts for these investments by amortizing the cost of tax credit investments over the life of the investment using a proportional amortization method and tax credit investment amortization expense is a component of the provision for income taxes. For the year ended December 31, 2025, tax credits and other benefits recognized was $65.3 million and the tax credit amortization expense included in the provision for income taxes was $59.4 million.

There were no significant unrecognized tax benefits at December 31, 2025 and 2024. We do not expect the total amount of unrecognized tax benefits to significantly increase or decrease within the next twelve months.

The Company is subject to income taxes in the federal, California, Arizona and three other non-material jurisdictions. The Company is no longer subject to examinations by taxing jurisdictions for periods before 2021, with the exception of California, for which the Company is no longer subject to examination for years before 2013.

At December 31, 2025, the Company has net operating loss (“NOL”) carryforwards of approximately $4.5 million for federal and $11.3 million California tax purposes, as a result of the acquisition of Suncrest Bank. The federal and California NOLs of approximately $3.0 million and $8.8 million, respectively, are subject to annual IRC Section 382 limitations of $3.4 million and have no expiration for federal tax purposes but will expire in 2032 for California if not utilized. The balance of the NOLs are subject to annual IRC Section 382 limitations of $314,000 and will begin to expire in 2030. At December 31, 2025, the Company has general business credit carryforwards of $3.5 million that will expire in 2045 if not utilized.

The Company considered the need for a valuation allowance on its deferred tax assets for the year ended December 31, 2025. The Company considered income in prior periods, projected future income, and projected future reversals of deferred tax items in making the determination that the deferred tax assets are more likely than not to be realized.

On June 27, 2025, California Senate Bill 132 (“SB 132”) was passed and signed into law by Governor Newsom. Effective for taxable years beginning on or after January 1, 2025, SB 132 amends California Revenue and Tax Code (“CRTC”) to require financial institutions to apportion income using the single sales factor formula. Prior to this change, businesses were required by CRTC Section 25128 (b) to use an evenly weighted three-factor apportionment formula contemplating a payroll factor, property and sales factor. The impact on the Company's tax expense as of December 31, 2025 is not material. The Company will continue to evaluate the impact of this bill on its deferred tax assets and liabilities.

The One Big Beautiful Bill Act (“OBBBA”) was signed and enacted into law on July 4, 2025. Except for certain provisions, this is effective for tax years beginning on or after January 1, 2025. Changes from OBBBA include modifications to allow for immediate expensing of certain business investments and provides certain permanent extensions of key business tax breaks originally enacted under the 2017 Tax Cuts and Job Act. All changes related to the 2025 provisions of OBBBA have been considered for Company's tax expense as of December 31, 2025, and are not material. Provisions applicable for periods beginning 2026 are not material to the financial statements.