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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The current and deferred components of income tax expense (benefit) were as follows:
For the years ended December 31,202420232022
Federal income tax
Current$4,986,000 $7,011,000 $7,912,000 
Deferred20,000 (1,360,000)(127,000)
5,006,000 5,651,000 7,785,000 
State franchise tax533,000 533,000 611,000 
$5,539,000 $6,184,000 $8,396,000 

The actual tax expense differs from the expected tax expense (computed by applying the applicable U.S. Federal corporate income tax rate to income before income taxes) as follows:
For the years ended December 31,202420232022
Expected tax expense$6,843,000 $7,498,000 $9,951,000 
Non-taxable income(1,399,000)(1,481,000)(1,756,000)
State franchise tax, net of federal tax benefit421,000 421,000 483,000 
Equity compensation(35,000)(27,000)(54,000)
Tax credits, net of amortization(253,000)(201,000)(203,000)
Other(38,000)(26,000)(25,000)
$5,539,000 $6,184,000 $8,396,000 
Deferred tax assets and liabilities are classified in other assets and other liabilities in the consolidated balance sheets. No valuation allowance is deemed necessary for the deferred tax asset. Items that give rise to the deferred income tax assets and liabilities and the tax effect of each at December 31, 2024 and 2023 are as follows:
 20242023
Allowance for credit losses$5,414,000 $5,380,000 
OREO7,000 — 
Accrued pension and post-retirement718,000 752,000 
Unrealized loss on securities available for sale11,343,000 10,520,000 
Unrealized loss on derivative instruments1,020,000 913,000 
Unrealized loss on securities transferred from available for sale to held to maturity12,000 15,000 
Restricted stock grants367,000 323,000 
Core deposit intangible25,000 29,000 
Investment in flow through entities141,000 99,000 
Other assets26,000 24,000 
Total deferred tax asset19,073,000 18,055,000 
Net deferred loan costs(2,826,000)(2,599,000)
Depreciation(2,253,000)(2,383,000)
Goodwill(371,000)(319,000)
Mortgage servicing rights(398,000)(457,000)
Unrealized gain on derivative instruments(1,062,000)(993,000)
Prepaid expense(292,000)(276,000)
Total deferred tax liability(7,202,000)(7,027,000)
Net deferred tax asset $11,871,000 $11,028,000 
The Company invests in low income housing and historical tax credit structures. At December 31, 2024 and 2023, the carrying value of these investments was $2,069,000 and $1,453,000, respectively, and is recorded in other assets. Total unfunded commitments related to the investments in tax credit structures totaled $2,826,000 and $670,000 at December 31, 2024 and 2023, respectively. The company expects to fulfill these commitments during 2025 and 2026. Amortization of the investments in these entities totaled $1,029,000 and $303,000 for the years ended December 31, 2024 and 2023, respectively, and is recognized as a component of income tax expense in the consolidated statements of income and shown as amortization of investments in tax credit structures on the consolidated statements of cash flows. The tax credits from the investments are estimated at $1,228,000 and $466,000 for the years ended December 31, 2024 and 2023, respectively, and are recorded as a reduction of income tax expense.
FASB ASC Topic 740, "Income Taxes," defines the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in a company's financial statements. Topic 740 prescribes a recognition threshold of more-likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. The Company is currently open to audit under the statute of limitations by the IRS for the years ended December 31, 2021 through 2024.