INCOME TAXES

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company adopted ASU No. 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures ("ASU 2023-09") on January 1, 2025 on a prospective basis.

Cash Taxes Paid in Current Period

	Year ended December 31,
(dollars in thousands)	2025
Federal	$	4,210
States
Other	226
Foreign	—
Total	$	4,436

Income Taxes

The Company files tax returns in the U.S federal jurisdiction and required states. With few exceptions, the Bank is no longer subject to tax examination by tax authorities for years prior to 2022.

The provision for income taxes from continuing operations consists of the following components:

	Year ended December 31,
(dollars in thousands)	2025
Current
Federal	$	4,607
State	211
Total current tax provision	4,818
Deferred
Federal	1,699
State	365
Total deferred tax provision	2,064
Total tax provision from continuing operations*	$	6,882

*The Company does not have pretax income from continuing foreign operations or foreign tax expense.

Components of Tax Expense

	Year ended December 31,
(dollars in thousands)	2024
Current federal expense	$	4,808
Deferred federal expense	759
Federal income tax expense	5,567
Current state expense	136
Deferred state expense	(4)
State income tax expense	132
Provision for income taxes	$	5,699

Income tax expense for the years ended December 31, 2025, 2024 and 2023 differed from the federal statutory rate applied to income before income taxes for the following reasons in accordance with ASU 2023-09:

	Year ended December 31,
	2025
(dollars in thousands)
U.S. Federal statutory tax rate	$	7,379	21.00	%
State and local income taxes, net of federal income tax effect (a)	455		1.30
Nontaxable or nondeductible items
BOLI income	(373)		(1.06)
Tax-exempt interest	(491)		(1.40)
Other	(88)		(0.18)
Total	$	6,882	19.66	%

(a) State taxes in Georgia made up the majority (greater than 50%) of the tax effect in this category.

Income tax expense for the year ended December 31, 2024 differed from the federal statutory rate applied to income before income taxes for the following reasons before the adoption of ASU-09:

	Year ended December 31,
(dollars in thousands)	2024
Tax at U.S. statutory rate	$	6,209
Increase (decrease) resulting from:
State income tax expense, net of federal	104
Tax-exempt interest	(128)
Income in cash value of bank owned life insurance	(362)
Tax-exempt insurance premiums	(218)
Other items, net	94
Income tax expense	$	5,699

The tax effects of temporary differences result in deferred tax assets and liabilities as presented below:

	December 31,
(dollars in thousands)	2025		2024
Deferred Tax Assets
Allowance for credit losses	$	4,576	$	4,751
Lease liability	2,571		330
Net operating loss carryforwards	1,927		1,276
Tax credit carryforwards	937		688
Deferred compensation	296		233
Unrealized loss on securities available for sale	11,599		16,443
Restricted stock	122		178
Investment in partnerships	—		39
Unrealized loss on hedging investments	166		—
Nonaccrual interest	875		694
Allowance for unfunded commitments	236		203
Purchase accounting adjustments	1,575		—
Other	—		103
Total deferred tax assets	24,880		24,938
Deferred Tax Liabilities
Premises and equipment	1,462		659
Right of use lease asset	2,553		307
Purchase accounting adjustments	—		1,773
Core deposit intangible	1,095		120
Investment in partnerships	43		—
Unrealized gain on hedging investments	—		188
Other	145		—
Total deferred tax liabilities	5,298		3,047
Net deferred tax assets	$	19,582	$	21,891

Management assesses the realizability of deferred tax assets at each reporting period and considers whether it is more likely than not that a deferred tax asset will not be realized. The realization of a deferred tax asset is dependent upon the generation of future taxable income during periods in which the related temporary difference becomes deductible or realizable prior to its expiration. Management considers projected future taxable income, scheduled reversal of deferred tax liabilities, and tax planning strategies in making this assessment. Based on these considerations, management believes it is more likely than not that the deferred tax assets will be realized.

The Company does not have any material uncertain tax positions and does not have any interest and penalties recorded in the income statement for years ended December 31, 2025 or 2024. The Company files a consolidated income tax return in the U.S. federal tax jurisdiction.