Income Taxes (Tables)

6 Months Ended

Jun. 30, 2026

The components of the Company’s income tax expense (benefit) are as follows for the periods indicated below (dollars in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Deferred federal income tax expense	$	59	$	990	$	889	$	1,143
Deferred state income tax expense		8		131		117		151
Provision for Corporate Business Taxes	$	67	$	1,121	$	1,006	$	1,294

Reconciliation of Statutory Federal Rate to Effective Rate

The following is a reconciliation of the statutory federal rate to the effective rate, for the periods indicated below (dollars in thousands):

	Three Months Ended June 30,									Six Months Ended June 30,
	2026					2025				2026					2025
Computed income tax expense (benefit) at federal rate	$	812		21.0	%	$	564	21.0	%	$	1,099		21.0	%	$	(868	)	21.0	%
State and local income taxes, net of federal income tax effect^(B)		7		0.2	%		103	3.8	%		93		1.8	%		119		(2.9	)%
Nontaxable or nondeductible items
REIT income not subject to tax expense (benefit)		(752	)	(19.5	)%		454	16.9	%		(186	)	(3.6	)%		2,043		(49.4	)%
Provision for Corporate Business Taxes/Effective Tax Rate^(A)	$	67		1.7	%	$	1,121	41.7	%	$	1,006		19.2	%	$	1,294		(31.3	)%

(A)	The provision for income taxes is recorded at the TRS level.

(B)	The states that contribute to the majority (greater than 50%) of the tax effect in this category include California, Maryland and New York for 2026 and 2025, respectively.

Deferred Tax Assets and Liabilities

The Company’s consolidated balance sheets contain the following deferred tax assets and liabilities, which are recorded at the TRS level (dollars in thousands):

	June 30, 2026			December 31, 2025
Deferred tax assets (liabilities)
Deferred tax - mortgage servicing rights	$	(14,777	)	$	(11,580	)
Deferred tax - net operating loss		22,378			20,303
Deferred tax - other		116			-
Total net deferred tax assets	$	7,717		$	8,723