XML 34 R21.htm IDEA: XBRL DOCUMENT v3.25.4
Federal Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Federal Income Taxes Federal Income Taxes
Cash taxes paid for the year ended December 31:
2025
Federal$2,200 
Components of the consolidated provision for federal income taxes are summarized as follows for the years ended December 31:
202520242023
Federal tax expense$5,175 $2,819 $2,657 
Deferred expense (benefit)38 (310)1,008 
Income tax expense$5,213 $2,509 $3,665 
We did not have any income tax expense (benefit) in state or foreign jurisdictions.
Income tax expense for the year ended December 31, 2025 differed from the federal statutory rate applied to income before income taxes for the following reasons in accordance with ASU 2023-09:
2025
Amount% of Pretax Income
 U.S. federal statutory tax rate $5,066 21.00 %
 Tax credits
 Low income housing (1)
(181)(0.75)%
 Other (68)(0.28)%
 Nontaxable or nondeductible Items
 Tax-exempt interest (387)(1.60)%
 BOLI income (240)(0.99)%
 Other 53 0.22 %
 Other adjustments
 Deferred tax write off (2)
942 3.90 %
 Other 28 0.11 %
 Total $5,213 21.61 %
(1) Company has adopted proportional amortization for low income housing tax credits. Therefore, the tax credits category includes the tax credit and other tax benefits, net of the proportional amortization.
(2) Prior period adjustment relates to deferred tax assets no longer realizable due to statute expiration.
Income tax expense for the years ended December 31, 2024 and 2023 differed from the federal statutory rate applied to income before income taxes for the following reasons before the adoption of ASU 2023-09:
20242023
Income taxes at statutory rate$3,444 $4,585 
Effect of nontaxable income
Interest income on tax exempt municipal securities(490)(552)
Earnings on corporate owned life insurance policies(211)(193)
Other497 292 
Total effect of nontaxable income(204)(453)
Effect of nondeductible expenses93 86 
Effect of tax credits(824)(602)
Unrecognized deferred tax benefit— 49 
Federal income tax expense$2,509 $3,665 
The unrecognized deferred tax benefit recorded during 2023 related to a low income housing tax credit investment. The sale of this investment resulted in a capital loss carryforward that is unlikely to be recognized in the foreseeable future. As such, we
did not recognize a deferred tax asset as of December 31, 2025 and 2024 related to our low income housing tax credit investment.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for federal income tax purposes. Significant components of our deferred tax assets and liabilities, measured at the 21% statutory rate, included in other assets on our consolidated balance sheets, are summarized as follows as of December 31:
20252024
Deferred tax assets
Allowance for credit losses$2,928 $2,715 
Deferred compensation1,176 1,148 
Employee benefit plans236 112 
Core deposit premium and acquisition expenses— 764 
Net unrealized losses on AFS securities1,913 5,529 
Net unrecognized actuarial losses on pension plan10 105 
Life insurance death benefit payable576 497 
Contract incentives451 46 
Lease liability213 273 
Other505 494 
Total deferred tax assets8,008 11,683 
Deferred tax liabilities
Prepaid pension cost(310)(294)
Premises and equipment(1,571)(1,592)
Accretion on securities(552)(482)
Core deposit premium and acquisition expenses(813)(1,059)
Deferred loan costs, net(628)(699)
Right of use asset(213)(273)
Other(576)(190)
Total deferred tax liabilities(4,663)(4,589)
Net deferred tax assets (liabilities)$3,345 $7,094 
While we are subject to U.S. federal income tax, we are no longer subject to examination by taxing authorities for years before 2022. There are no material uncertain tax positions requiring recognition in our consolidated financial statements.
We recognize interest and/or penalties related to income tax matters in income tax expense. We do not have any amounts accrued for interest and penalties at December 31, 2025 and 2024 and we are not aware of any claims for such amounts by federal income tax authorities.