| Income Tax Disclosure [Text Block] |
NOTE 16. INCOME TAXES
Income tax expense is displayed in the table below for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands).
| | | December 31, | |
| | | 2025 | | | 2024 | | | 2023 | |
| Current federal income tax expense | | $ | 5,071 | | | $ | 3,352 | | | $ | 3,971 | |
| Current state income tax expense | | | 260 | | | | 143 | | | | 129 | |
| Deferred federal income tax expense | | | (349 | ) | | | 659 | | | | (350 | ) |
| Total income tax expense | | $ | 4,982 | | | $ | 4,154 | | | $ | 3,750 | |
A reconciliation between reported income tax expense and the amounts computed by applying the U.S. federal statutory income tax rate of 21% to income before income taxes is presented in the following table for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands).
| | | December 31, | |
| | | 2025 | | | 2024 | | | 2023 | |
| | | Amount | | | Percent | | | Amount | | | Percent | | | Amount | | | Percent | |
| Federal income tax based on statutory rate | | $ | 5,856 | | | | 21.0 | % | | $ | 5,125 | | | | 21.0 | % | | $ | 4,290 | | | | 21.0 | % |
| State taxes, net of federal income tax effects(1) | | | 204 | | | | 0.7 | | | | 143 | | | | 0.6 | | | | 129 | | | | 0.6 | |
| Nontaxable or nondeductible items: | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax-exempt interest | | | (796 | ) | | | (2.8 | ) | | | (567 | ) | | | (2.3 | ) | | | (533 | ) | | | (2.6 | ) |
| BOLI impact | | | (417 | ) | | | (1.5 | ) | | | (741 | ) | | | (3.1 | ) | | | (297 | ) | | | (1.4 | ) |
| Other | | | 137 | | | | 0.5 | | | | 188 | | | | 0.8 | | | | 88 | | | | 0.4 | |
| Other | | | (2 | ) | | | — | | | | 6 | | | | — | | | | 73 | | | | 0.4 | |
| Total income tax expense and effective tax rate, as reported | | $ | 4,982 | | | | 17.9 | % | | $ | 4,154 | | | | 17.0 | % | | $ | 3,750 | | | | 18.4 | % |
| (1) | For the years presented, Alabama comprises the majority (greater than 50%) of the tax effect in this category. |
The Company records deferred income tax on the tax effect of changes in timing differences.
The net deferred tax asset was comprised of the following items as of the dates indicated (dollars in thousands).
| | | December 31, | |
| | | 2025 | | | 2024 | |
| Deferred tax liabilities: | | | | | | | | |
| Depreciation | | $ | (2,565 | ) | | $ | (2,674 | ) |
| FHLB stock dividend | | | (120 | ) | | | (90 | ) |
| Basis difference in acquired assets and liabilities | | | (988 | ) | | | (1,029 | ) |
| Operating lease ROU asset | | | (372 | ) | | | (428 | ) |
| Other | | | (158 | ) | | | (94 | ) |
| Gross deferred tax liability | | | (4,203 | ) | | | (4,315 | ) |
| | | | | | | | | |
| Deferred tax assets: | | | | | | | | |
| Allowance for credit losses | | | 5,623 | | | | 5,620 | |
| Unrealized loss on AFS securities | | | 9,666 | | | | 13,085 | |
| Deferred compensation | | | 1,145 | | | | 1,169 | |
| Basis difference in acquired assets and liabilities | | | 196 | | | | 201 | |
| Employee and director stock awards | | | 525 | | | | 534 | |
| Operating lease liability | | | 390 | | | | 448 | |
| Unearned loan fees | | | 333 | | | | 208 | |
| Other | | | 375 | | | | 170 | |
| Gross deferred tax asset | | | 18,253 | | | | 21,435 | |
| Net deferred tax asset | | $ | 14,050 | | | $ | 17,120 | |
The Company files income tax returns under U.S. federal jurisdiction and the states of Alabama, Florida, Texas and Louisiana, although the state of Louisiana does not assess an income tax on income resulting from banking operations. The Company is open to examination in the U.S. and the states of Louisiana, Alabama, and Florida for tax years ended December 31, 2022 through December 31, 2025; and Texas for tax years ended December 31, 2021 through December 31, 2025.
|