v3.26.1
Note 14 - Income Taxes
 12 Months Ended
Dec. 31, 2025
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 14 - Income Taxes

 

The components of income tax expense for the years ended December 31, 2025 and 2024 are as follows (in thousands):

 

  

2025

  

2024

 

Federal:

        

Current

 $(145) $652 

Deferred

  227   97 

Total federal

  82   749 

State, current

  240   441 

Total

 $322  $1,190 

 

The following table presents the reconciliation between the reported income tax expense and the income tax expense which would be computed by applying the normal federal income tax rate of 21% to income before taxes for the years ended December 31, 2025 and 2024, respectively, as follows (in thousands):

 

  

2025

  

2024

 
  

Amount

  

Rate

  

Amount

  

Rate

 

Federal income tax at statutory rate

 $135   21.0% $837   21.0%

State tax, net of federal benefit

  187   29.0   349   8.7 

Stock compensation expense

  25   3.9   26   0.6 

BOLI income

  (27)  (4.2)  (25)  (0.6)

Other

  2   0.3   3   0.1 

Total

 $322   50.0% $1,190   29.8%

 

The components of the net deferred tax asset at December 31, 2025 and 2024 are as follows (in thousands):

 

  

2025

  

2024

 

Deferred tax assets:

        

Allowance for credit losses

 $1,353  $1,360 

Deferred loan fees

  -   83 

Stock-based compensation

  26   16 

Interest on non-accrual loans

  96   119 

Total deferred tax assets

  1,475   1,578 

 

Deferred tax liabilities:

        

Bank premises and equipment

  (307)  (327)

Deferred loan fees

  (140)  - 

Intangible

  (36)  (32)

Unrealized gains on investment securities available for sale

  (1)  - 

Total deferred tax liabilities

  484   359 

Net Deferred Tax Asset

 $991  $1,219 

 

The net deferred tax asset at December 31, 2025 and 2024 of $991 thousand and $1.2 million, respectively, is included in other assets. No valuation allowance was established at December 31, 2025 and 2024, in view of the Company’s tax strategies and anticipated future taxable income as evidenced by the Company’s earnings potential. The deferred tax asset recognized is attributable solely to federal income tax purposes and does not represent a tax benefit for state or local income taxes.