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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Schedule of Components of Income Taxes

The provision for income taxes consists of the following:

						December 31,
						2025						2024						2023
Current						$	2,395					$	3,623					$	876
Deferred						(18,096)						(1,357)						(4,353)
Total						$	(15,701)					$	2,266					$	(3,477)

Schedule of Effective Income Tax Rate Reconciliation

In December 2023, the FASB issued ASU 2023-09, which expands income tax disclosure requirements to include additional information related to the rate reconciliation of our effective tax rates to statutory rates. The Company adopted ASU 2023-09 on a prospective basis for the year ended December 31, 2025.

 

						December 31, 2025
						Amount									Percent
U.S. federal statutory tax rate						$	(10,682)								(21.0		%)
State and local income tax, net of federal tax effect 1						(1,189)									(2.3		%)
Effect of:
Tax credits						(206)									(0.4		%)
Nontaxable or nondeductible items:
Income from tax-exempt securities and loans						(3,497)									(6.9		%)
Other						(127)									(0.3		%)
Total						$	(15,701)								(30.9		%)

1 The states that contribute to the majority (greater than 50%) of the tax effect in the category include Indiana and Florida for 2025.

The reconciliation of taxes at the federal statutory rate to our provision for income taxes for the years ended December 31, 2024 and 2023, in accordance with the guidance prior to the adoption of ASU 2023-09, was as follows:

															December 31,
															2024						2023
Statutory rate times pre-tax income															$	5,784					$	1,037
(Subtract) add the tax effect of:
Income from tax-exempt securities and loans															(3,500)						(3,951)
State income tax, net of federal tax effect															47						(30)
Bank-owned life insurance															(262)						(215)
Tax credits															(110)						(168)
Other differences															307						(150)
Total income taxes															$	2,266					$	(3,477)

Schedule of Net Deferred Tax Assets

The net deferred tax asset at December 31, 2025 and 2024 consists of the following: 

						December 31,
						2025						2024
Deferred tax assets (liabilities)
Allowance for credits losses						$	13,181					$	10,824
Net unrealized losses on available-for-sale securities and hedged items						6,013						9,753
Fair value adjustments						(11,575)						(14,002)
Depreciation						(3,526)						(4,168)
Deferred compensation and accrued payroll						939						1,486
Loan origination costs						(1,550)						(1,533)
Prepaid assets						(1,365)						(916)
Net operating loss						22,453						9,962
Tax credits						2,459						1,956
Other						482						(309)
Total deferred tax assets, net						$	27,511					$	13,053

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

+ References

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-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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-Topic 740
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-Section 50
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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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-Topic 740
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-Name Accounting Standards Codification
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