XML 47 R23.htm IDEA: XBRL DOCUMENT v3.25.0.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income tax expense (benefit) for each of the periods shown below consisted of the following:
Year ended December 31,Year ended December 31,
20242023
Current tax provision
Federal$2,742 $5,081 
State578 448 
3,320 5,529 
Deferred tax provision (benefit)
Federal496 (1,373)
State(1,235)(105)
(739)(1,478)
Change in valuation allowance1,118 1,822 
Total$3,699 $5,873 

The provision for income taxes differs from the amount of income tax determined by applying statutory federal income tax rates to pretax income as result of the following differences:
Year ended December 31,Year ended December 31,
20242023
AmountRateAmountRate
Tax expense at statutory rate$3,665 21.0 %$3,976 21.0 %
State income taxes, net of federal(519)(3.0)%271 1.4 %
Tax credits(210)(1.2)%— — %
Bank owned life insurance(162)(0.9)%(146)(0.8)%
Tax exempt interest(81)(0.5)%(52)(0.3)%
Change in valuation allowance1,118 6.4 %1,822 9.6 %
Other(112)(0.6)%2 0.1 %
Total$3,699 21.2 %$5,873 31.0 %
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 income tax purposes. The following is a summary of the significant components of the Company’s deferred tax assets and liabilities as of December 31, 2024 and December 31, 2023, respectively:
Year ended December 31,Year ended December 31,
20242023
Deferred tax assets:
Allowance for credit losses$5,361 $6,104 
Deferred loan costs/fees574 632 
Restricted stock231 184 
Economic performance accruals988 769 
Other real estate owned314 230 
Loan discounts218 304 
Lease liability276 426 
Net operating loss970 — 
Net unrealized losses on securities available-for-sale6,333 6,702 
Other199 22 
Deferred tax assets$15,464 $15,373 
Deferred tax liabilities:
Office properties and equipment(2,160)(2,132)
Federal Home Loan Bank stock(121)(119)
Core deposit intangible(788)(852)
Net gain on equity securities(715)(762)
Prepaid expenses(233)(230)
Mortgage servicing rights(940)(977)
Leases; right of use asset(209)(373)
Deferred tax liabilities$(5,166)$(5,445)
Valuation allowance(2,852)(1,822)
Net deferred tax assets$7,446 $8,106 
The Company regularly reviews the carrying amount of its deferred tax assets to determine if the establishment of a valuation allowance is necessary, as further discussed in Note 1 “Nature of Business and Summary of Significant Accounting Policies”, above. Management determined a valuation allowance of $2,852 was necessary at December 31, 2024, and a valuation allowance of $1,822 was necessary at December 31, 2023, due to changes in the realization of deferred tax assets due to a Wisconsin change in the non-taxation of loans under $5 million reducing the effective tax rate.
The Company’s income tax returns are subject to review and examination by federal, state and local government authorities. As of December 31, 2024, years open to examination by the U.S. Internal Revenue Service include taxable years ended December 31, 2021 to present. The years open to examination by state and local government authorities varies by jurisdiction.
The tax effects from uncertain tax positions can be recognized in the consolidated financial statements, provided the position is more likely than not to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized, upon ultimate settlement with the relevant tax authority. The Company applied the foregoing accounting standard to all of its tax positions for which the statute of limitations remained open as of the date of the accompanying consolidated financial statements.
The Company’s policy is to recognize interest and penalties related to income tax issues as components of other non-interest expense. The Company recognized no material expense on income tax related interest or penalties during any of the periods presented.