Quarterly report [Sections 13 or 15(d)]

INCOME TAXES

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INCOME TAXES
 3 Months Ended
Mar. 31, 2026
INCOME TAXES  
INCOME TAXES

12. INCOME TAXES

The Company’s effective tax rate for the three months ended March 31, 2026 and March 31, 2025 was 21.0% and 19.0%, respectively. The increase in the effective tax rate for the three months ended March 31, 2026 is primarily due to the Sandy Spring acquisition, which resulted in additional state income tax expense due to an expanded footprint and an overall increase in the proportion of taxable income to tax-exempt income.

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As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact the Company’s view regarding the future realization of deferred tax assets. The Company’s valuation allowance was $7.8 million as of March 31, 2026 and December 31, 2025, respectively.

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The Company analyzed the tax positions taken or expected to be taken on its tax returns for the periods ending December 31, 2025, 2024, and 2023, and concluded the Company had no material liability related to uncertain tax positions in accordance with ASC 740, Income Taxes.