Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

12.INCOME TAXES

The provision for income taxes consists of:

	For the Year Ended December 31,
(In Thousands)	2024		2023
Current tax expense
Federal	$	716	$	81
State		140		4
Total Current tax expense	$	856	$	85
Deferred tax (benefit) expense
Federal	$	6,182	$	(3,187	)
State		348		(259	)
Total Deferred tax expense (benefit)		6,530		(3,446	)
Total tax expense (benefit)	$	7,386	$	(3,361	)

The tax effects of deductible and taxable temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities, respectively, are as follows:

(In Thousands)	December 31, 2024			December 31, 2023
Deferred tax assets:
Allowance for credit losses	$	6,516		$	6,009
Deferred compensation		965			757
Net fair value adjustment on acquired net assets		8,550			10,355
Net unrealized loss on debt securities		1,577			1,025
Net operating loss carryforwards		2,652			6,877
Lease liability		3,659			3,811
Other		697			1,175
Total deferred tax assets	$	24,616		$	30,009
Deferred tax liabilities:
Premises and equipment	$	(1,701	)	$	(1,867	)
Net unrealized gain on cash flow hedge		(347	)		(150	)
Right of use asset		(3,488	)		(3,611	)
Other		(214	)		(228	)
Total deferred tax liabilities		(5,750	)		(5,856	)
Net deferred tax asset	$	18,866		$	24,153

The Company also has a $12,627 net operating loss carryforward at December 31, 2024 of which $701 will begin to expire in 2029. The remaining $11,926 of net operating loss carryforward does not expire. The Company had no valuation allowance against its deferred tax assets in view of the Company's ability to realize the net deferred tax assets against future anticipated taxable income.

The reconciliation of the federal statutory rate and the Company's effective income tax rate is as follows:

	For the Year Ended December 31,
	2024							2023
(In Thousands)	Amount			% of Pretax Income				Amount			% of Pretax Income
Provision (benefit) at statutory rate	$	7,055			21.0		%	$	(3,219	)		21.0		%
Tax-exempt income, net of TEFRA disallowance		(190	)		(0.6	)			(162	)		1.1
State income taxes, net of federal income taxes		385			1.2				(202	)		1.3
Bank-owned life insurance		(343	)		(1.0	)			(155	)		1.0
Non-deductible merger expenses		—			—				387			(2.5	)
Revaluation of deferred taxes for state tax rates		—			—				(177	)		1.1
Other		479			1.4				167			(1.1	)
Actual tax expense (benefit) and effective rate	$	7,386			22.0		%	$	(3,361	)		21.9		%

The Company recognized no adjustment for uncertain tax positions or unrecognized income tax benefits for the years ended December 31, 2024 and 2023. The Company's policy is to recognize interest and penalties on unrecognized tax benefits in the provision for income tax expense in the consolidated statements of operation. The Company did not recognize any interest and penalties for the years ended December 31, 2024 and 2023. With few exceptions, the Company is no longer subject to U.S. federal, state, or local income tax examinations by tax authorities for years before 2021.