PCB BANCORPPCB

PCB BANCORP Income Taxes Disclosure

10-KFiled Mar 16, 20263 min read
Income Taxes
The following table presents the components of income tax expense from continuing operations for the periods indicated:
Year Ended December 31,
($ in thousands)202520242023
Current:
Federal$12,431 $12,213 $5,506 
State6,451 6,242 2,948 
Foreign
— — — 
Total current income tax expense18,882 18,455 8,454 
Deferred:
Federal(2,469)(5,250)2,489 
State(1,378)(2,729)1,614 
Foreign
— — — 
Total deferred income tax expense (benefit)(3,847)(7,979)4,103 
Total
$15,035 $10,476 $12,557 
The following table presents a summary of income taxes paid, net of refunds received for the periods indicated:
Year Ended December 31,
($ in thousands)202520242023
Federal
$15,120 $3,800 $2,600 
State and local
California
7,115 2,400 1,460 
All other states
820 166 224 
Total state and local
7,935 2,566 1,684 
Foreign
— — — 
Total
$23,055 $6,366 $4,284 
The following table presents a reconciliation of the recorded income tax expense to the amount of taxes computed by applying the applicable statutory Federal income tax rate for the periods indicated (as reported under ASU 2023-09, on a retrospective basis):
Year Ended December 31,
202520242023
($ in thousands)AmountRateAmountRateAmountRate
Federal statutory income tax
$11,023 21.00 %$7,621 21.00 %$9,085 21.00 %
Effect of:
State and local income taxes, net of federal tax benefit (1)
4,007 7.63 %2,775 7.65 %3,604 8.33 %
Tax credits:
Qualified affordable housing projects tax credit(798)(1.52)%(527)(1.45)%(492)(1.14)%
Nontaxable or nondeductible items
(31)(0.06)%(10)(0.03)%21 0.05 %
Other reconciling items:
Qualified affordable housing projects amortization1,027 1.96 %572 1.58 %451 1.04 %
Other(193)(0.37)%45 0.12 %(112)(0.25)%
Total
$15,035 28.64 %$10,476 28.87 %$12,557 29.03 %
(1)State taxes in California made up the majority (greater than 50%) of state and local income taxes, net of federal tax benefit for the years ended December 31, 2025, 2024 and 2023.
The following table presents the components of the net deferred tax assets recognized in the accompanying consolidated balance sheets as of the dates indicated:
December 31,
($ in thousands)
20252024
Deferred tax assets:
Allowance for credit losses on loans$9,685 $8,987 
Allowance for credit losses on off-balance sheet credit exposures
448 349 
Share-based compensation174 204 
Unrealized loss on investment securities2,044 3,930 
Operating lease liabilities5,511 5,478 
State tax benefit1,350 1,329 
Other804 598 
Total deferred tax assets20,016 20,875 
Deferred tax liabilities:
Depreciation on premises and equipment1,220 1,030 
Market adjustment on loans per Section 475 of the Internal Revenue Code
3,801 6,806 
Deferred loan origination costs724 636 
Operating lease assets4,978 5,063 
Other83 91 
Total deferred tax liabilities10,806 13,626 
Deferred tax assets, net
$9,210 $7,249 
The Company had no valuation allowance for deferred tax assets as of December 31, 2025 and 2024. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the temporary differences become deductible, management believes it is more likely than not that the Company will realize the benefits of these deferred tax assets, and a valuation allowance was not necessary as of December 31, 2025 and 2024.
The Company and the Bank are subject to U.S. federal and various state jurisdictions income tax examinations. As of December 31, 2025, the Company is no longer subject to examination by taxing authorities for tax years before 2022 for federal taxes and before 2021 for various state jurisdictions. The statute of limitations vary by state, and state taxes other than California have been immaterial to the Company’s financial results.

Historical Timeline

Fiscal YearFiled
2025Mar 16, 2026Showing above
2024Mar 13, 2025
2023Mar 12, 2024
2022Mar 9, 2023
2021Mar 4, 2022
2020Mar 11, 2021
2019Mar 9, 2020
2018Mar 18, 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.

Other Available Disclosures

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