v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The current and deferred components of income tax expense (benefit) were as follows:
For the years ended December 31,202520242023
Federal income tax
Current$6,859,000 $4,986,000 $7,011,000 
Deferred81,000 20,000 (1,360,000)
6,940,000 5,006,000 5,651,000 
State franchise tax605,000 533,000 533,000 
$7,545,000 $5,539,000 $6,184,000 
The actual tax expense differs from the expected tax expense (computed by applying the applicable U.S. Federal corporate income tax rate to income before income taxes) as follows:
For the years ended December 31,202520242023
 Rate  Expense  Rate  Expense  Rate  Expense
Pretax income from continuing operations$41,939,000 $32,584,000 $35,702,000 
U.S. Federal statutory income tax rate21.00%21.00%21.00%
Expected tax expense at statutory rate21.00 %$8,807,000 21.00 %$6,843,000 21.00 %$7,498,000 
Nontaxable or nondeductible Items
  Tax exempt income(5.76)%$(2,417,000)(7.18)%$(2,340,000)(6.23)%$(2,224,000)
  Nondeductible interest expense2.09 %877,000 2.88 %940,000 2.08 %743,000 
  Other nontaxable income and nondeductible expenses0.08 %32,000 0.09 %29,000 0.07 %24,000 
State and local taxes, net of federal tax benefit1.14 %478,000 1.29 %421,000 1.18 %421,000 
Tax credits, net of amortization
  Historical tax credits(2.99)%(1,252,000)(2.81)%(915,000)(0.26)%(92,000)
  Low Income Housing tax credits(0.66)%(275,000)(0.96)%(313,000)(0.98)%(350,000)
  Other tax credits(0.06)%(27,000)(0.08)%(27,000)(0.08)%(27,000)
  Amortization of tax credit investments2.96 %1,241,000 3.08 %1,002,000 0.75 %268,000 
Other0.19 %81,000 (0.31)%(101,000)(0.22)%(77,000)
Foreign tax effects— %— — %— — %— 
Effect of changes in tax laws or rates enacted in the current period— %— — %— — %— 
Effect of cross-border tax laws— %— — %— — %— 
Changes in valuation allowances— %— — %— — %— 
Changes in unrecognized tax benefits— %— — %— — %— 
Reported income tax expense17.99 %$7,545,000 17.00 %$5,539,000 17.32 %$6,184,000 
Effective income tax rate17.99%17.00%17.32%
State taxes in Maine made up the majority (greater than 50%) of the effect of the state and local income tax category.

Income taxes paid were as follows:
For the years ended December 31,202520242023
Domestic Federal Income Taxes Paid$5,100,000 $3,997,000 $5,100,000 
Domestic State Income Taxes Paid 570,000 530,000 521,000 
Total Income Taxes Paid$5,670,000 $4,527,000 $5,621,000 
Deferred tax assets and liabilities are classified in other assets and other liabilities in the consolidated balance sheets. No valuation allowance is deemed necessary for the deferred tax asset. Items that give rise to the deferred income tax assets and liabilities and the tax effect of each at December 31, 2025 and 2024 are as follows:
 20252024
Allowance for credit losses$5,476,000 $5,414,000 
OREO— 7,000 
Accrued pension and post-retirement689,000 718,000 
Unrealized loss on securities available for sale8,331,000 11,343,000 
Unrealized loss on derivative instruments905,000 1,020,000 
Unrealized loss on securities transferred from available for sale to held to maturity10,000 12,000 
Restricted stock grants349,000 367,000 
Core deposit intangible21,000 25,000 
Investment in flow through entities144,000 141,000 
Other assets22,000 26,000 
Total deferred tax asset15,947,000 19,073,000 
Net deferred loan costs(2,900,000)(2,826,000)
Depreciation(2,266,000)(2,253,000)
Goodwill(424,000)(371,000)
Mortgage servicing rights(348,000)(398,000)
Unrealized gain on derivative instruments(905,000)(1,062,000)
Prepaid expense(273,000)(292,000)
Total deferred tax liability(7,116,000)(7,202,000)
Net deferred tax asset $8,831,000 $11,871,000 

The Company invests in low income housing and historical tax credit structures. At December 31, 2025 and 2024, the carrying value of these investments was $3,224,000 and $2,069,000, respectively, and is recorded in other assets. Total unfunded commitments related to the investments in tax credit structures totaled $3,946,000 and $2,826,000 at December 31, 2025 and 2024, respectively. The company expects to fulfill these commitments during 2026 and 2027. Amortization of the investments in these entities totaled $1,253,000 and $1,029,000 for the years ended December 31, 2025 and 2024, respectively, and is recognized as a component of income tax expense in the consolidated statements of income and shown as amortization of investments in tax credit structures on the consolidated statements of cash flows. The tax credits from the investments are estimated at $1,527,000 and $1,228,000 for the years ended December 31, 2025 and 2024, respectively, and are recorded as a reduction of income tax expense.
FASB ASC Topic 740, "Income Taxes," defines the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company's financial statements. Topic 740 prescribes a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. The Company is currently open to audit under the statute of limitations by the IRS for the years ended December 31, 2022 through 2025.