INCOME TAXES (Tables)

6 Months Ended

Jun. 30, 2026

Income tax expense for the six months ended June 30, 2026 consisted of the following:


(dollars in thousands)	2026
Current federal	$	11,935
Deferred federal	(52)
Current state	136
Deferred state	326
Total income tax expense	$	12,345

Schedule of Differences Between Financial Statement Tax Expense and Amounts Computed by Applying Statutory Federal Income Tax Rate

Differences between financial statement tax expense and amounts computed by applying the statutory federal income tax rate of 21% to income before income taxes for the six months ended June 30, 2026 were as follows:


(dollars in thousands)	2026
Federal statutory rate	$	14,125	21.0	%
Effect of:
State and local income taxes, net of federal benefits	365		0.5
Tax credits, net of amortization and losses	30		0.1
Nontaxable or nondeductible items:
Tax exempt income	(1,738)		(2.6)
Bank owned life insurance	(571)		(0.8)
Long-term incentive plan and deferred compensation	0		0.0
Nondeductible compensation expense	59		0.1
Other nondeductible expenses	135		0.2
Other	(60)		(0.1)
Total income tax expense	$	12,345	18.4	%

Schedule of Deferred Tax Assets and Liabilities

The net deferred tax asset recorded in the consolidated balance sheet at June 30, 2026 and December 31, 2025 consisted of the following:


(dollars in thousands)	June 30, 2026		December 31, 2025
Deferred tax assets:
Bad debts	$	17,982	$	17,574
Pension and deferred compensation liability	2,581		2,430
Nonaccrual loan interest	535		1,403
Long-term incentive plan	2,716		2,685
Lease liability	2,917		2,370
Deferred loan fees	545		540
Net operating loss carryforward	1,531		1,900
Other	860		733
	29,667		29,635
Deferred tax liabilities:
Depreciation	5,117		5,333
Loan servicing rights	424		433
State taxes	1,026		1,096
Intangible assets	1,266		1,266
REIT spillover dividend	1,750		1,750
Prepaid expenses	1,189		1,155
Lease right of use	2,917		2,370
Other	267		247
	13,956		13,650
Valuation allowance	0		0
Net deferred tax asset	$	15,711	$	15,985