v3.25.4
INCOME TAXES
 12 Months Ended
Dec. 31, 2025
INCOME TAXES  
INCOME TAXES

13.     INCOME TAXES

The components of income tax expense were as follows (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the

​

For the

​

For the

​

​

Year Ended

​

Six Months Ended

​

Fiscal Year Ended

​

​

December 31,

​

December 31,

​

June 30,

​

​

2025

 

2024

 

2023

 

2024

Current tax expense

​

$

8,437

  ​ ​ ​

$

2,469

  ​ ​ ​

$

1,708

  ​ ​ ​

$

4,337

Deferred tax expense (benefit)

​

 

(2,235)

​

 

342

​

 

4

​

 

(188)

Total income tax expense

​

$

6,202

​

$

2,811

​

$

1,712

​

$

4,149

​

Income tax expense differs from the amount expected based on the federal income tax statutory rate due to the following (dollars in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Year Ended

​

​

For the Six Months Ended

​

For the Fiscal Year Ended

​

​

​

December 31,

​

​

December 31,

​

​

June 30,

​

​

 

2025

 

​

2024

 

​

2023

 

​

2024

 

​

  ​ ​ ​

Amount

  ​ ​ ​

Rate

  ​ ​ ​

​

Amount

  ​ ​ ​

Rate

  ​ ​ ​

​

Amount

  ​ ​ ​

Rate

  ​ ​ ​

​

Amount

  ​ ​ ​

Rate

  ​ ​ ​

Income before tax at the federal tax rate

​

$

5,563

​

21.0

%  

​

$

2,606

​

21.0

%  

​

$

1,748

​

21.0

%  

​

$

4,076

 

21.0

%  

State expense, net of federal benefit

​

 

420

​

1.6

%  

​

 

234

​

1.9

%  

​

 

62

​

0.8

%  

​

 

232

 

1.2

%  

Goodwill impairment

​

​

420

​

1.6

%

​

​

—

​

—

%

​

​

—

​

—

%

​

​

—

​

—

%

Tax-exempt income

​

 

(183)

​

(0.7)

%  

​

 

(81)

​

(0.7)

%  

​

 

(134)

​

(1.6)

%  

​

 

(249)

 

(1.3)

%  

Bank-owned life insurance

​

 

(103)

​

(0.4)

%  

​

 

11

​

0.1

%  

​

 

26

​

0.3

%  

​

 

66

 

0.4

%  

Other, net

​

 

85

​

0.3

%  

​

 

41

​

0.3

%  

​

 

10

​

0.1

%  

​

 

24

 

0.1

%  

Total income tax expense

​

$

6,202

 

23.4

%  

​

$

2,811

 

22.6

%  

​

$

1,712

 

20.6

%  

​

$

4,149

 

21.4

%  

​

​

The tax effects that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below (dollars in thousands):

​

​

​

​

​

​

​

​

  ​ ​ ​

December 31, 

​

 

2025

 

2024

Deferred tax assets

 

​

  ​

 

​

  ​

Allowance for credit losses

​

$

8,131

​

$

7,002

Net operating loss carryforward

​

 

144

​

 

144

Post-retirement benefit obligations

​

 

482

​

 

492

Unrealized losses on securities available for sale

​

​

—

​

​

835

Deferred compensation

​

 

83

​

 

77

Lease liabilities

​

​

1,070

​

​

1,276

Other

​

 

922

​

 

748

Total deferred tax assets

​

 

10,832

​

 

10,574

​

​

​

​

​

​

​

Deferred tax liabilities

​

 

  ​

​

 

  ​

Depreciation

​

 

(1,420)

​

 

(1,420)

Net deferred loan origination costs

​

 

(644)

​

 

(637)

Prepaid pension

​

 

(2,426)

​

 

(2,315)

Prepaid expenses

​

 

(293)

​

 

(293)

Unfunded defined benefit and postretirement benefit plan assets

​

 

(4,487)

​

 

(2,797)

Unrealized gains on securities available for sale

​

​

(480)

​

​

—

ROU assets

​

​

(995)

​

​

(1,197)

Other

​

 

(1,137)

​

 

(2,198)

Total deferred tax liabilities

​

 

(11,882)

​

 

(10,857)

Net deferred tax liability at end of year

​

$

(1,050)

​

$

(283)

​

Net deferred tax (liability) asset as of December 31, 2025 and 2024 are included in other assets in the consolidated statements of condition.

Management determines the need for a deferred tax valuation allowance based upon the realizability of tax benefits from the reversal of temporary differences creating the deferred tax assets, as well as the amount of available open tax carrybacks, if any. As of December 31, 2025 and 2024, no valuation allowance was required.

For the year ended December 31, 2025 income taxes paid was $9.3 million, of which $8.0 million was paid related to federal income tax and $1.3 million was paid related to state of New York income tax.  

For the year ended December 31, 2025 and fiscal year ended June 30, 2024, there were no amounts accrued and/or paid for interest and penalties.

For the six months ended December 31, 2024 and 2023, there were no amounts accrued and/or paid for interest and penalties.

As a thrift institution, the Company is subject to special provisions in the Federal income tax laws regarding its allowable bad debt deduction and related tax basis bad debt reserves. Deferred income tax liabilities are to be recognized with respect to any base-year reserves which are to become taxable (or “recaptured”) in the foreseeable future.

Under current income tax laws, the base-year reserves would be subject to recapture if the Company pays a cash dividend in excess of earnings and profits or liquidates. The Company does not expect to take any actions in the foreseeable future that would require the recapture of any base-year reserves.

A deferred tax liability has not been recognized with respect to the Federal base-year reserve of $9.3 million at December 31, 2025 and 2024, because the Company does not expect that this amount will become taxable in the

foreseeable future. The unrecognized deferred tax liability with respect to the Federal base-year reserve was $2.4 million at December 31, 2025 and 2024. It is more likely than not that this liability will never be incurred because, as noted above, the Company does not expect to take any action in the future that would result in this liability being incurred.

The Company is subject to routine audits of its tax returns by the Internal Revenue Service and New York State Department of Taxation and Finance. The Company is no longer subject to examination by either taxing authority for years before calendar 2022.