FB Bancorp, Inc. /MD/ Income Taxes Disclosure
The provision for income tax expense (benefit) consists of the following for the years ending December 31:
|
|
2025 |
|
|
2024 |
|
||
Current federal expense (benefit) for continuing operations |
|
$ |
1,160 |
|
|
$ |
183 |
|
Deferred federal expense (benefit) for continuing operations |
|
|
(290 |
) |
|
|
12 |
|
Current federal expense (benefit) for discontinued operations |
|
|
(1,258 |
) |
|
|
(204 |
) |
Deferred federal expense (benefit) for discontinued operations |
|
|
665 |
|
|
|
(128 |
) |
Total income taxes |
|
$ |
277 |
|
|
$ |
(137 |
) |
There was a receivable balance of federal income taxes of $455 and $374 at December 31, 2025 and 2024, respectively, which is included in other assets in the consolidated statements of financial condition.
Retained earnings at December 31, 2025 and 2024 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:
|
|
2025 |
|
|
2024 |
|
||
Federal expense based on statutory rate from continuing operations |
|
$ |
1,011 |
|
|
$ |
358 |
|
Increase (decrease) resulting from: |
|
|
|
|
|
|
||
Increase in life insurance |
|
|
(74 |
) |
|
|
(73 |
) |
Tax credits, non deductible expenses, and other, net |
|
|
(67 |
) |
|
|
(90 |
) |
Income taxes from continuing operations |
|
$ |
870 |
|
|
$ |
195 |
|
|
|
|
|
|
|
|
||
Effective rate |
|
|
18.07 |
% |
|
|
11.44 |
% |
|
|
|
|
|
|
|
||
Federal expense based on statutory rate from discontinued operations |
|
$ |
(690 |
) |
|
$ |
(1,692 |
) |
Increase (decrease) resulting from: |
|
|
|
|
|
|
||
Goodwill and trade name impairments |
|
|
20 |
|
|
|
1,215 |
|
Non deductible expenses, and other, net |
|
|
77 |
|
|
|
145 |
|
Income tax benefit from discontinued operations |
|
$ |
(593 |
) |
|
$ |
(332 |
) |
|
|
|
|
|
|
|
||
Effective rate |
|
|
18.05 |
% |
|
|
4.12 |
% |
For the years ended December 31, 2025 and 2024, 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 from continuing operations, recorded in the consolidated statements of financial condition in other assets, as of December 31, 2025 and 2024, consist of the following:
|
|
2025 |
|
|
2024 |
|
||
Deferred tax asset from continuing operations: |
|
|
|
|
|
|
||
Allowance for credit losses |
|
$ |
1,353 |
|
|
$ |
1,311 |
|
Federal historic tax credits |
|
|
512 |
|
|
|
342 |
|
Deferred compensation |
|
|
272 |
|
|
|
241 |
|
Unrealized loss on available-for-sale securities |
|
|
2,100 |
|
|
|
4,309 |
|
Other |
|
|
552 |
|
|
|
434 |
|
Subtotal |
|
|
4,789 |
|
|
|
6,637 |
|
Deferred tax liability from continuing operations: |
|
|
|
|
|
|
||
FHLB stock |
|
|
(138 |
) |
|
|
(136 |
) |
Mortgage servicing rights |
|
|
(190 |
) |
|
|
(226 |
) |
Premises and equipment |
|
|
(1,510 |
) |
|
|
(1,373 |
) |
Unrealized gain on available-for-sale securities |
|
|
— |
|
|
|
— |
|
Other |
|
|
(50 |
) |
|
|
(82 |
) |
Subtotal |
|
|
(1,888 |
) |
|
|
(1,817 |
) |
Deferred tax asset, net |
|
$ |
2,901 |
|
|
$ |
4,820 |
|
The net deferred tax assets from discontinued operations, recorded in assets from discontinued operations in Note 2, as of December 31, 2025 and 2024, consist of the following:
|
|
2025 |
|
|
2024 |
|
||
Deferred tax asset from discontinued operations: |
|
|
|
|
|
|
||
Intangibles |
|
$ |
— |
|
|
$ |
691 |
|
Other |
|
|
26 |
|
|
|
— |
|
Deferred tax asset from discontinued operations, net |
|
|
26 |
|
|
|
691 |
|
The Company incurred a net operating loss (“NOL”) of $609 thousand for the year ending December 31, 2025 and is carrying a deferred tax asset of $128 thousand in the Company’s financials. The NOL was a direct result of net operating losses produced by the NOLA Lending Group which became discontinued operations in 2025. The NOL will be carried forward indefinitely and utilized by the Company subject to a 80% of taxable income annual usage limitation in each carryforward year beginning with 2026.
The Company generated net taxable income over the three prior year periods before 2025 inclusive of NOLA Lending Group’s continued operating losses. Due to the discontinuation of NOLA’s operations and the historical profitability of the Company, management has determined that it is more likely than not the NOL carryover will be fully utilized in future years. Consequently, no valuation allowance is deemed necessary to reduce the NOL deferred tax asset of $128 thousand.
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.