Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes (Tables)

v3.26.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Income Tax Expense (Benefit)
At year-end, components of income tax expense (benefit) consist of the following:
(Dollars in thousands) 2025 2024
Current income tax expense:
Federal
 $ 225  $ 309 
State
 345  371 
Total current expense
 570  680 
Deferred income tax (benefit) expense:
Federal
(418) 622 
State
 (138) 22 
Total deferred (benefit) expense
 (556) 644 
Change in valuation allowance 9  1 
Total income tax expense (benefit) $ 23  $ 1,325 
Schedule of Effective Tax Rates
Effective tax rates differ from the federal statutory rate of 21% for 2025 and 2024 applied to income before income taxes due to the following:
2025 2024
(Dollars in thousands) Amount % of Pre-tax Income Amount % of Pre-tax Income
U.S. federal statutory income tax $ 1,703  21.0  % $ 2,826  21.0  %
State and local income tax, net of federal income tax benefit(1)
170  2.1  311  2.3 
Tax credits:
Low income housing tax credits(2)
(23) (0.3) (12) (0.1)
New markets tax credits(3)
(479) (5.9) (474) (3.5)
Changes in valuation allowances 9  0.1  1  — 
Nontaxable or nondeductible items:
Tax-exempt income, net
 (1,181) (14.6) (1,249) (9.3)
Bank owned life insurance
 (290) (3.6) (171) (1.3)
Other nondeductible items
 14  0.2  45  0.3 
Share-based compensation(4)
111  1.4  48  0.4 
Other, net (11) (0.1) -  — 
Income tax expense (benefit) at effective tax rate $ 23  0.3  % $ 1,325  9.8  %
(1) State taxes in Illinois make up the majority (greater than 50%) of the tax effect in this category.
(2) Net of amortization and tax losses.
(3) Net of basis reduction.
(4) Share-based compensation includes any excess benefits or shortfalls from vestings and exercises.
Schedule of Income Taxes Paid
Income taxes paid were as follows:
(Dollars in thousands) 2025 2024
Federal $ -  $ - 
State and local:
Illinois
 150  405 
Indiana
 -  10 
Total income taxes paid $ 150  $ 415 
Schedule of Deferred Tax Assets and Liabilities
At December 31, the components of the net deferred tax asset recorded in other assets in the consolidated balance sheets are as follows:
(Dollars in thousands) 2025 2024
Deferred tax assets:
Allowance for credit losses
 $ 5,024  $ 5,128 
Deferred compensation
 331  374 
Unrealized depreciation on securities available-for-sale
 13,139  18,319 
Net operating loss
 5,748  6,120 
Tax credits
 926  673 
Nonaccrual loan interest income
 214  173 
Share-based compensation
 131  267 
Unqualified deferred compensation plan
 50  60 
Accrued compensation
 301  241 
Purchase accounting
 693  548 
Deferred loan costs, net of fees
 472  432 
Lease liability
 3,791  3,916 
Capital loss carryforward
 378  - 
Other
 100  213 
Total deferred tax assets 31,298  36,464 
Deferred tax liabilities:
Depreciation
 (568) (874)
Prepaid expenses
 (479) (480)
Mortgage servicing rights
 (187) (217)
Deferred stock dividends
 (122) (122)
Goodwill
 (783) (701)
Partnership
 (138) (254)
Lease right of use
 (3,929) (4,124)
REIT spillover dividends
 (134) (125)
Other
 (64) (49)
Total deferred tax liabilities (6,404) (6,946)
Valuation allowance (72) (63)
Net deferred tax asset $ 24,822  $ 29,455