Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Income Taxes

Schedule of Components of Income Tax Expense

(in thousands)	2025		2024
Current Tax expense:
Federal	$	6,360	$	5,439
State		2,234		2,047
	$	8,594	$	7,486
Deferred tax benefit:
Federal	$	(489)	$	(613)
State		(87)		(212)
	$	(576)	$	(825)
Provision for income tax expense for the year	$	8,018	$	6,661

Reconciliation of Federal Income Tax Rate to Effective Income Tax Rate

The reconciliation between the statutory federal income tax rate and effective income tax rate for the years ended December 31, 2025 and 2024 is as follows:

(in thousands)		2025			2024
		Amount	Percent		Amount	Percent
United States Federal statutory income tax	$	6,832	21.00%	$	5,718	21.00%
State and local income taxes, net of Federal income tax effect (1)		1,678	5.16%		1,405	5.16%
Tax credits:
Low-income housing tax credits ("LIHTC")		(770)	(2.37)%		(770)	(2.83)%
Non-taxable or nondeductible items
Bank owned life insurance		(296)	(0.91)%		(283)	(1.04)%
Other		(31)	(0.09)%		(33)	(0.12)%
Other adjustments:
LIHTC investment, net amortization and tax benefit		620	1.91%		621	2.28%
Other		(15)	(0.05)%		3	0.01%
Total	$	8,018	24.65%	$	6,661	24.46%

(1) Maryland state taxes made up the majority (greater than 50 percent) of the tax effect in this category in both 2025 and 2024.

Components of Deferred Tax Assets and Liabilities

(in thousands)	2025		2024
Deferred tax assets:
Allowance for credit losses	$	5,511	$	5,081
Deferred fees		128		137
Deferred compensation		1,317		1,233
Federal and state tax loss carry forwards		2,560		2,618
Low-income housing tax credits		299		367
Unrealized loss on investment securities		5,963		7,471
SERP		2,435		2,262
Depreciation		42		150
Lease liability		259		316
Other than temporary impairment on investment securities		359		413
Other real estate owned		446		53
Other		616		545
Total deferred tax assets		19,935		20,646
Valuation allowance		(2,560)		(2,618)
Total deferred tax assets less valuation allowance		17,375		18,028
Deferred tax liabilities:
Goodwill and other intangibles		(2,774)		(2,785)
Lease right-of-use asset		(204)		(248)
Pension		(5,514)		(4,743)
Derivative contract		(16)		(96)
Other		(137)		(167)
Total deferred tax liabilities		(8,645)		(8,039)
Net deferred tax assets	$	8,730	$	9,989

Schedule of income tax paid

(in thousands)		2025		2024
Federal	$	6,250	$	3,460
State and local
Maryland		1,730		1,580
West Virginia		500		270
Other		3		73
Total taxes paid	$	8,483	$	5,383