Quarterly report [Sections 13 or 15(d)]

INCOME TAXES

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INCOME TAXES
 6 Months Ended
Jun. 30, 2026
INCOME TAXES  
INCOME TAXES

11. INCOME TAXES

The Company’s effective tax rate was 21.3% for the quarter ended June 30, 2026, compared to (13.2%) for the quarter ended June 30, 2025. For the six months ended June 30, 2026 and June 30, 2025, the effective tax rates were 21.1% and 11.9%, respectively. The increase in the effective tax rate during the 2026 periods was primarily driven by an $8.0 million income tax benefit recognized in the second quarter of 2025 related to the re-evaluation of the Company’s state net deferred tax asset following the Sandy Spring acquisition.

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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 $5.8 million and $7.8 million as of June 30, 2026 and December 31, 2025, respectively. The decrease in the valuation allowance was from an assessment of the Company’s ability to realize certain state tax attributes, through an increase in state taxable income.

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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.