v3.26.1
Income Taxes
 6 Months Ended
Jun. 30, 2026
Income Taxes  
Income Taxes

10.

Income Taxes:

Deferred taxes (or deferred charges) as of June 30, 2026 and December 31, 2025, included in other assets, were as follows (in thousands):

​

​

​

​

​

​

​

​

​

June 30, 2026

  ​ ​ ​

December 31, 2025

Deferred tax assets:

​

​

​

 

​

​

Allowance for credit losses

​

$

825

​

$

783

Employee benefit plans' liabilities

​

 

4,023

​

 

4,028

Unrealized loss on available for sale securities, charged from equity

​

 

6,424

​

 

6,268

Loss on credit impairment of securities

​

 

423

​

 

423

Earned retiree health benefits plan liability

​

 

1,172

​

 

1,172

General business and AMT credits

​

 

17

​

 

17

State income tax net operating loss carryforward

​

​

736

​

​

771

Other

​

 

90

​

 

126

Valuation allowance

​

 

(423)

​

 

(423)

Deferred tax assets

​

 

13,287

​

 

13,165

Deferred tax liabilities:

​

 

  ​

​

 

  ​

Unearned retiree health benefits plan asset

​

 

240

​

 

240

Bank premises and equipment

​

 

1,745

​

 

1,883

Deferred tax liabilities

​

 

1,985

​

 

2,123

Net deferred taxes

​

$

11,302

​

$

11,042

​

Income taxes consist of the following components (in thousands):

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 

​

Six Months Ended June 30, 

​

​

2026

​

2025

​

2026

​

2025

Current:

​

​

​

​

​

​

​

​

​

​

​

​

Federal

​

$

176

​

$

280

​

$

623

​

$

538

State

​

​

—

​

​

—

​

​

—

​

​

—

Total current

​

​

176

​

​

280

​

​

623

​

​

538

Deferred:

​

 

  ​

​

 

  ​

​

 

  ​

​

 

  ​

Federal

​

 

3

​

 

(98)

​

 

(123)

​

 

(53)

State

​

​

(62)

​

​

63

​

​

19

​

​

135

Change in valuation allowance

​

 

—

​

 

—

​

 

—

​

 

—

Total deferred

​

 

(59)

​

 

(35)

​

 

(104)

​

 

82

Totals

​

$

117

​

$

245

​

$

519

​

$

620

​

​

​

​

​

​

​

​

Income taxes amounted to less than the amounts computed by applying the U.S. Federal income tax rate of 21.0% for 2026 and 2025 to income before income taxes and State income tax rate of 3.95% for 2026 and 2025.  The reasons for these differences are shown below (in thousands):

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

  ​ ​ ​

Three Months Ended June 30, 

  ​ ​ ​

​

Six Months Ended June 30, 

 

  ​ ​ ​

​

​

2026

  ​ ​ ​

​

2025

  ​ ​ ​

​

2026

​

​

2025

​

​

​

​

Tax

​

Rate

​

​

Tax

​

Rate

​

​

Tax

​

Rate

 

​

Tax

​

Rate

 

​

Taxes computed at statutory rate

​

$

213

​

21

%

​

$

312

​

21

%

​

$

601

​

21

%

​

$

666

​

21

%

​

Increase (decrease) resulting from:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

State income tax expense, net of federal effect

​

​

(49)

​

(5)

​

​

​

49

​

3

​

​

​

15

​

1

​

​

​

106

​

4

​

​

Tax -exempt interest income

​

​

(36)

​

(4)

​

​

​

(42)

​

(3)

​

​

​

(74)

​

(3)

​

​

​

(84)

​

(2)

​

​

Income from BOLI

​

​

(27)

​

(2)

​

​

​

(26)

​

(2)

​

​

​

(54)

​

(2)

​

​

​

(51)

​

(2)

​

​

Tefra disallowance

​

​

16

​

2

​

​

​

17

​

1

​

​

​

31

​

1

​

​

​

31

​

1

​

​

Federal tax credits

​

​

-

​

-

​

​

​

(48)

​

(3)

​

​

​

-

​

-

​

​

​

(48)

​

(2)

​

​

Other

​

​

-

​

-

​

​

​

(17)

​

(1)

​

​

​

-

​

-

​

​

​

-

​

-

​

​

Other changes in valuation allowance

​

​

-

​

-

​

​

​

-

​

-

​

​

​

-

​

-

​

​

​

-

​

-

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total income tax (benefit) expense

​

$

117

​

12

%

​

$

245

​

16

%

​

$

519

​

18

%

​

$

620

​

20

%

​

​

The primary sources of permanent differences are due to tax-exempt interest income earned on certain investment securities, bank owned life insurance, and federal tax credits.

During the three months ended June 30, 2026, the Company recorded current and deferred income tax expense (benefit) of $176,000 and ($59,000), respectively, or a net income tax expense of $117,000 and an effective rate of 12%.  During the three months ended June 30, 2025, the Company recorded current and deferred income tax expense of $280,000 and ($35,000), respectively or a net income tax expense of $245,000 and an effective rate of 16%.  The Company paid $520,000 and $380,000 in federal tax payments and no state income tax payments during the three months ended June 30, 2026 and June 30, 2025.

During the six months ended June 30, 2026, the Company recorded current and deferred income tax expense (benefit) of $623,000 and ($104,000), respectively, or a net income tax expense of $519,000 and an effective rate of 18%.  During the six months ended June 30, 2025, the Company recorded current and deferred income tax expense of $538,000 and $82,000, respectively or a net income tax expense of $620,000 and an effective rate of 20%.  The Company paid $520,000 and $380,000 in federal tax payments and no state income tax payments during the six months ended June 30, 2026 and June 30, 2025.

A valuation allowance is recognized against deferred tax assets when, based on the consideration of all available positive and negative evidence using a more likely than not criteria, it is determined that all or a portion of these tax benefits may not be realized. This assessment requires consideration of all sources of taxable income available to realize the deferred tax asset including taxable income in prior carry-back years, future reversals of existing temporary differences, tax planning strategies and future taxable income exclusive of reversing temporary differences and carryforwards.

As of June 30, 2026, the net deferred tax asset was $11,302,000.  As of December 31, 2025 the net deferred tax asset was $11,042,000.  

The Company has reviewed its income tax positions and specifically considered the recognition and measurement requirements of the benefits recorded in its financial statements for tax positions taken or expected to be taken in its tax returns. The Company currently has no unrecognized tax benefits that, if recognized, would favorably affect the income tax rate in future periods.