v3.26.1
INCOME TAXES
 3 Months Ended
Mar. 31, 2026
INCOME TAXES  
INCOME TAXES
7.INCOME TAXES:

The income tax provision (benefit) consists of the following for the three months ended March 31:

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Three Months Ended

​

​

March 31, 

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​

2026

  ​ ​ ​

2025

Current

​

$

5,670

 

(187)

Change in valuation allowance

​

 

—

 

—

Deferred

​

 

6,775

 

1,537

Income tax provision

​

$

12,445

 

1,350

​

Effective Tax Rate Reconciliation

The following table reconciles the federal statutory income tax rate to the Bank’s effective income tax rate:

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Effective Tax Rate Reconciliation

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  ​ ​ ​

March 31, 2026

  ​  ​

December 31, 2025

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  ​ ​ ​

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  ​  ​

Amount

  ​ ​ ​

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  ​ ​ ​

Amount

Description

  ​  ​

%

  ​  ​

($)

  ​  ​

%

  ​  ​

($)

Federal statutory rate (21%)

​

21.0

%  

20,827

​

21.0

%  

98,436

Tax-exempt municipal interest

​

(9.1)

%  

(8,987)

​

(4.6)

%  

(21,447)

Bank-owned life insurance income

​

(3.6)

%  

(3,540)

​

(3.1)

%  

(14,374)

Change in valuation allowance

​

—

%  

—

​

(7.6)

%  

(35,439)

Other, net

​

4.2

%  

4,145

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0.5

%  

2,530

Effective income tax rate / provision

​

12.5

%  

12,445

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6.2

%  

29,706

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The Bank’s effective income tax rate differs from the federal statutory rate primarily due to tax-exempt municipal interest, income from bank owned life insurance, changes in the valuation allowance on deferred tax assets, and discrete tax items related to prior-year adjustments.

Income taxes paid, net of refunds:

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​

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​

​

​

​

​

  ​ ​ ​

March 31, 2026

  ​ ​ ​

December 31, 2025

Federal

​

$

—

​

$

23,000

​

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The composition of the net deferred tax asset consists of the following at March 31, 2026 and December 31, 2025:

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March 31, 2026

  ​ ​ ​

December 31, 2025

Deferred tax assets:

 

​

  ​

 

​

  ​

Net operating loss carryforward

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$

308,137

​

$

357,279

Allowance for credit losses

​

 

93,596

​

 

93,436

Net unrealized loss on available-for sale securities

​

 

30,262

​

 

27,329

Book/tax depreciation differences

​

 

22,506

​

 

18,586

Other

​

 

146,609

​

 

146,741

Total deferred tax assets

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$

601,110

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$

643,371

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​

​

​

​

​

​

Deferred tax liabilities:

​

 

  ​

​

 

  ​

FHLB stock dividends

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25,769

​

 

25,769

Other

​

 

15,352

​

 

53,771

Total deferred tax liabilities

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$

41,121

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$

79,540

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​

​

​

​

​

​

Valuation allowance

​

 

(45,450)

​

 

(45,450)

Net deferred tax asset

​

$

514,539

​

$

518,381

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The valuation allowance for deferred tax assets primarily relates to uncertainty regarding the utilization of net operating loss (“NOL”) carryforwards acquired in the merger with Home Building and Loan Company. The Internal Revenue Code imposes an annual limitation on the utilization of NOLs acquired in certain mergers, which restricts the amount of taxable income that may be offset in any given year. The NOLs subject to this limitation expire in years 2026 through 2034. Due to the interaction of the annual utilization limitation and the expiration periods, the remaining amount of acquired NOL carryforwards that is expected to be realizable totals approximately $1.0 million. During three months ended March 31, 2026, the Bank did not utilize these NOLs to offset taxable income.

At March 31, 2026, the Bank did not reduce its valuation allowance.

Certain bad debt deductions arising prior to 1988 are subject to special tax rules applicable to former thrift institutions. Deferred tax liabilities related to these deductions are recognized only if it becomes apparent that the related temporary differences will reverse in the foreseeable future. Management does not contemplate any actions that would cause these deductions to become taxable, and accordingly, no deferred tax liability has been recorded.