Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

9.Income Taxes

The provision for income tax expense (benefit) consists of the following for the year ending December 31:

	2024			2023
Current federal expense (benefit)	$	(21	)	$	1,246
Deferred federal expense (benefit)		(116	)		(916	)
Total income taxes	$	(137	)	$	330

There was a receivable balance of federal income taxes of $374 and $425 at December 31, 2024 and 2023, respectively, which is included in other assets in the consolidated statements of financial condition.

Retained earnings at December 31, 2024 and 2023 included approximately $11 million accumulated prior to January 1, 1987 for which no provision for federal income taxes has been made. If this portion of retained earnings is used in the future for any purpose other than to absorb bad debts, it will be added to future taxable income.

The provision for federal income taxes differs from the amount computed by applying the federal income tax statutory rate of 21 percent on net income before income tax expense as indicated in the following analysis for the years ended December 31:

	2024			2023
	(dollars in thousands)
Federal expense based on statutory rate	$	(1,334	)	$	304
Increase (decrease) resulting from:
Increase in life insurance		(73	)		(64	)
Goodwill impairment		1,215			—
Tax credits and non deductible expenses		55			90
Income taxes	$	(137	)	$	330
Effective rate		2.16	%		22.81	%

For the years ended December 31, 2024 and 2023, the total income tax provision differs from the amount that would be obtained by applying the federal tax rate to income before taxes due to tax exempt interest and certain non-deductible expenses. The tax credits utilized are related to the Federal Rehabilitation credits which were obtained in 2021, and can be carried forward for up to twenty years, if needed.

The net deferred tax assets, recorded in the statements of financial condition in other assets, as of December 31, 2024 and 2023 consist of the following:

	2024			2023
Deferred tax asset:
Allowance for credit losses	$	1,311		$	1,303
Federal historic tax credits		342			520
Deferred Compensation		241			232
Intangibles		691			818
Unrealized loss on available-for-sale securities		4,309			4,091
Other		434			377
Subtotal		7,328			7,341
Deferred tax liability:
FHLB stock		(136	)		(84	)
Mortgage servicing rights		(226	)		(468	)
Premises and equipment		(1,373	)		(1,522	)
Unrealized gain on available-for-sale securities		—			—
Other		(82	)		(91	)
Subtotal		(1,817	)		(2,165	)
Deferred tax asset, net	$	5,511		$	5,176