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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Taxes [Abstract] |
Income Taxes | Note 16 - Income Taxes The components of income tax expense are summarized as follows:
| Years Ended December 31,
|  | 2024 |  |  | 2023 |  |  | 2022
| (In Thousands)
Current income tax expense: |  |  |  |  |  |  |  |
Federal | $ | 4,529 |  | $ | 8,917 |  | $ | 12,323
State |  | 2,860 |  |  | 5,592 |  |  | 6,215
|  | 7,389 |  |  | 14,509 |  |  | 18,538
Deferred income tax benefit: |  |  |  |  |  |  |  |
Federal |  | 351 |  |  | (1,634) |  |  | (967)
State |  | (93) |  |  | (903) |  |  | (40)
|  | 258 |  |  | (2,537) |  |  | (1,007)
Total Income Tax Expense | $ | 7,647 |  | $ | 11,972 |  | $ | 17,531
The tax effects of existing temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities are as follows:
| December 31,
|  | 2024 |  |  | 2023
Deferred income tax assets: | (In Thousands)
Allowance for credit losses | $ | 10,176 |  | $ | 9,805
Benefit plans |  | 7 |  |  | -
Nonaccrual interest |  | 749 |  |  | 176
Benefit plan-accumulated other comprehensive loss |  | 10 |  |  | 166
Net operating loss carry forwards |  | 1,070 |  |  | 1,166
Lease liability |  | 3,756 |  |  | 3,806
Unrealized loss on securities |  | 2,149 |  |  | 2,860
Capital loss carryover (1) |  | 477 |  |  | 477
Deferred fees and costs |  | 782 |  |  | 1,168
Other |  | 2,077 |  |  | 3,002
|  | 21,253 |  |  | 22,626
Deferred income tax liabilities: |  |  |  |  |
Purchase accounting adjustment on premises and equipment acquired |  | 69 |  |  | 71
Right-of-use assets |  | 3,626 |  |  | 3,697
SBA servicing asset |  | 252 |  |  | 319
Borrowing modification |  | 125 |  |  | 282
Benefit plans |  | - |  |  | 44
|  | 4,072 |  |  | 4,413
Net Deferred Tax Asset | $ | 17,181 |  | $ | 18,213
(1) Tax benefit relating to capital loss on securities sold in 2023 which will expire in 2028. ‎ Note 16 - Income Taxes (continued) A summary of the change in the net deferred tax asset is as follows:
| Years Ended December 31,
|  | 2024 |  |  | 2023
| (In Thousands)
Balance at beginning of year: | $ | 18,213 |  | $ | 16,462
Effect of adopting ASU No. 2016-13 ("CECL") |  | - |  |  | (1,148)
Deferred tax benefit |  | (258) |  |  | 2,537
Other comprehensive income |  |  |  |  |
Available-for-sale securities |  | (618) |  |  | 355
Benefit plan |  | (156) |  |  | 7
Balance at end of year | $ | 17,181 |  | $ | 18,213
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. In making this assessment, management has considered the profitability of current core operations, future market growth, forecasted earnings, future taxable income, and ongoing, feasible and permissible tax planning strategies. If the Company was to determine that it would not be able to realize a portion of its net deferred tax asset in the future for which there is currently no valuation allowance, an adjustment to the net deferred tax asset would be charged to earnings in the period such determination was made. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and capital gains during the periods in which temporary differences are deductible and carry forwards are available. The Company believes it will generate sufficient future taxable income and taxable gains to realize the tax benefits related to the remaining net deferred tax assets in our consolidated statements of financial condition. In conjunction with the Company’s acquisition of IA Bancorp in 2018, the Company acquired a federal net operating loss carry forward of $8.7 million. This carry forward is available for use through 2035; however, in accordance with Internal Revenue Code Section 382, usage of the carry forward is limited to $459,000 annually on a cumulative basis (portions of the $459,000 not used in a particular year may be added to subsequent usage). At December 31, 2024 and 2023, the Company had approximately $5.1 million and $5.6 million remaining of this federal net operating loss carry forward available to offset future taxable income for federal tax reporting purposes. The following table presents a reconciliation between the reported income tax expense and the income tax expense which would be computed by applying the normal federal income tax rate of 21.0 percent to income before income tax expense.
| Years Ended December 31,
|  | 2024 |  |  |  | 2023 |  |  |  | 2022 |
| (In Thousands)
Federal income tax expense at statutory rate | $ | 5,517 |  |  | $ | 8,706 |  |  | $ | 13,253 |
Increases (decreases) in income taxes resulting from: |  |  |  |  |  |  |  |  |  |  |
State income tax, net of federal income tax effect |  | 2,186 |  |  |  | 3,704 |  |  |  | 4,878 |
Tax-exempt income |  | (13) |  |  |  | (30) |  |  |  | (63) |
Bank-owned life insurance earnings |  | (553) |  |  |  | (368) |  |  |  | (561) |
Other items, net |  | 510 |  |  |  | (40) |  |  |  | 24 |
Effective Income Tax Expense | $ | 7,647 |  |  | $ | 11,972 |  |  | $ | 17,531 |
Effective Income Tax Rate |  | 29.1 | % |  |  | 28.9 | % |  |  | 27.8 | %

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