INCOME TAXES

12 Months Ended

Dec. 31, 2025

INCOME TAXES [Abstract]

INCOME TAXES

12. INCOME TAXES

The provision for income taxes consists of the following (in thousands):

	Year Ended December 31,
	2025		2024		2023
Currently payable	$	7,869	$	4,294	$	3,169
Deferred		797		1,771		595
Provision for income taxes	$	8,666	$	6,065	$	3,764

The following temporary differences gave rise to the net deferred tax asset and liabilities at December 31, 2025 and 2024, respectively (in thousands):

	2025			2024
Deferred tax assets:
Allowance for credit losses	$	5,439		$	5,449
Deferred compensation		704			648
Allowance for losses on available-for-sale securities		112			130
Interest on non-accrual loans		1,886			1,588
Incentive plan accruals		684			682
Other real estate owned		16			16
Unrealized losses on available-for-sale securities		3,733			7,061
Low income housing tax credits		-			15
NOL carry forward		898			1,458
Non-PCD loan interest rate		3,575			4,200
Right of use asset		2,263			2,120
Accrued vacation		301			308
Other		429			334
Total	$	20,040		$	24,009
Deferred tax liabilities:
Premises and equipment	$	(926	)	$	(745	)
Investment securities accretion		(652	)		(611	)
Loan fees and costs		(1,056	)		(933	)
Goodwill and core deposit intangibles		(2,736	)		(2,804	)
Pension and other retirement obligation		(119	)		(152	)
Low income housing tax credits		(17	)		-
Mortgage servicing rights		(120	)		(160	)
Unrealized gains on equity securities		(21	)		(3	)
Unrealized gains on interest rate swap		(522	)		(890	)
Borrowings fair value adjustment		(59	)		(254	)
Right of use asset		(2,226	)		(2,093	)
Other		(146	)		(165	)
Total		(8,600	)		(8,810	)
Deferred tax (liability) asset, net	$	11,440		$	15,199

No valuation allowance was established at December 31, 2025 and 2024, due to the certain tax strategies and anticipated future taxable income as evidenced by the Company’s expected earnings potential.

The total provision for income taxes is different from that computed at the statutory rates due to the following items (dollars in thousands):

	Year Ended December 31,
	2025					2024					2023
Provision at statutory rates on pre-tax income	$	9,500		21.0	%	$	7,115		21.0	%	$	4,531		21.0	%
Effect of tax-exempt income		(934	)	-2.1	%		(854	)	-2.5	%		(895	)	-4.1	%
State and local income taxes, net of federal income tax benefit (a)		150		0.3	%		172		0.5	%		62		0.3	%
Low income housing tax credits		(820	)	-1.8	%		(688	)	-2.1	%		(585	)	-2.8	%
Low income housing expense		755		1.7	%		339		1.0	%		399		1.8	%
Bank owned life insurance		(301	)	-0.7	%		(354	)	-1.0	%		(263	)	-1.2	%
Nondeductible interest		290		0.7	%		308		0.9	%		251		1.2	%
Nondeductible merger and acquisition expenses		-		0.0	%		-		0.0	%		247		1.1	%
Other items		26		0.1	%		27		0.1	%		17		0.1	%
Provision for income taxes	$	8,666		19.2	%	$	6,065		17.9	%	$	3,764		17.4	%

(a) Taxes in New York and New Jersey make up the majority of the effect of the state and local tax category.

Income taxes paid for 2025, 2024 and 2023 were $6,590,000, $2,826,000 and $5,130,000, respectively. The following table provides a breakdown of the payments by taxing entity as well as the 5% threshold used to determine whether further disaggregation of information is required (dollars in thousands):

Taxes Paid	2025			2024			2023
U.S. Federal Taxes	$	6,500		$	2,500		$	5,100
State and Local Taxes
New Jersey		35			320			-
New York		55			6			30
Total income taxes paid	$	6,590		$	2,826		$	5,130
Threshold %		5	%		5	%		5	%
Threshold amount	$	330		$	141		$	257

The Company prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. There is currently no liability for uncertain tax positions and no known unrecognized tax benefits. With limited exception, the Company’s federal and state income tax returns for taxable years through 2021 have been closed for purposes of examination by the federal and state taxing authorities.