INCOME TAXES

12 Months Ended

Dec. 31, 2025

INCOME TAXES [Abstract]

INCOME TAXES

14.  INCOME TAXES

The components of income tax expense (benefit) were as follows for the periods indicated (dollars in thousands):

	Year Ended December 31,
	2025			2024			2023
Current expense
Federal	$	16,105		$	14,184		$	16,192
State		520			440			381
Deferred expense
Federal		(1,023	)		(1,049	)		99
Total	$	15,602		$	13,575		$	16,672

Effective tax rates differ from the federal statutory rate of 21% applied to income before income taxes due to the following for the periods indicated (dollars in thousands):

	Year Ended December 31,
	2025						2024						2023
	Amount			Rate			Amount			Rate			Amount			Rate
Federal statutory rate times financial statement income	$	15,555			21.0	%	$	13,291			21.0	%	$	16,678			21.0	%
Effect of:
Tax-exempt income		(718	)		(1.0	)%		(701	)		(1.1	)%		(836	)		(1.1	)%
State taxes, net of federal benefit		411			0.6	%		348			0.6	%		301			0.4	%
Earnings from bank owned life insurance		(343	)		(0.5	)%		(326	)		(0.5	)%		(279	)		(0.4	)%
Non-deductible expenses		499			0.7	%		648			1.0	%		675			0.8	%
Other, net		198			0.3	%		315			0.5	%		133			0.2	%
Total	$	15,602			21.1	%	$	13,575			21.5	%	$	16,672			20.9	%

Income taxes paid, net of refunds received, were as follows for the periods indicated (dollars in thousands):

	Year Ended December 31,
	2025		2024		2023
Federal	$	16,721	$	12,104	$	19,102
State		472		431		286

Year-end deferred tax assets and liabilities were due to the following at year-end (dollars in thousands):

	December 31,
	2025			2024
Deferred tax assets
Allowance for credit losses	$	9,478		$	9,080
Deferred compensation		6,038			5,884
Leases		204			197
Other real estate owned		44			23
Nonaccrual loans		111			320
Unrealized gain on available-for-sale securities		14,708			19,273
Other		568			446
Total deferred tax assets		31,151			35,223
Deferred tax liabilities
Depreciation		(2,629	)		(2,457	)
Intangibles		(260	)		(401	)
Prepaid expenses		(625	)		(704	)
Mortgage servicing rights		(5,049	)		(5,521	)
Other		(2,155	)		(3,300	)
Total deferred tax liabilities		(10,718	)		(12,383	)
Net deferred tax asset	$	20,433		$	22,840

There was no valuation allowance for deferred tax assets recorded at December 31, 2025 and 2024 as management believed it was more likely than not that all of the deferred tax assets will be realized against deferred tax liabilities and projected future taxable income. There were no unrecognized tax benefits during any of the reported periods.

We file income tax returns in the U.S. federal jurisdiction. We are no longer subject to U.S. federal income tax examinations by tax authorities for years before 2022.