Income Taxes (Tables)

6 Months Ended

Dec. 31, 2018

Schedule of Effective Income Tax Rate Reconciliation

The following table presents a reconciliation between the reported income taxes for the periods presented and the income taxes which would be computed by applying the federal income tax rates applicable to those periods. A federal income tax rate of 21% was applicable to the three and six months ended December 31, 2018. A federal income tax rate of 28% was applicable to the three and six months ended December 31, 2017, which reflects the transitional effect of a reduction in the Company’s federal income tax rate from 35% to 21%. The noted decrease in the Company’s federal income tax rate reflects the impact of federal income tax reform that was codified through the passage of the Tax Cuts and Jobs Act (the “Tax Act”) on December 22, 2017.

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2018				2017		2018				2017
	(Dollars in Thousands)						(Dollars in Thousands)
Income before income taxes	$	14,417		$	6,398		$	29,222		$	14,386
Statutory federal tax rate		21	%		28	%		21	%		28	%
Federal income tax expense at statutory rate	$	3,028		$	1,791		$	6,137		$	4,028
(Reduction) increases in income taxes resulting from:
Tax exempt interest		(148	)		(177	)		(297	)		(349	)
State tax, net of federal tax effect		916			461			2,121			970
Incentive stock option compensation expense		28			37			56			72
Income from bank-owned life insurance		(290	)		(354	)		(579	)		(710	)
Disqualifying disposition of incentive stock options		-			(11	)		-			(11	)
Non-deductible merger-related expenses		-			200			-			200
Other items, net		38			113			690			199
Impact of deferred tax rate adjustment		77			3,069			(820	)		3,486
Total income tax expense	$	3,649		$	5,129		$	7,308		$	7,885
Effective income tax rate		25.31	%		80.17	%		25.01	%		54.81	%

Schedule of Deferred Income Tax Assets and Liabilities

The tax effects of existing temporary differences that give rise to deferred income tax assets and liabilities are as follows:

	December 31,			June 30,
	2018				2018
	(Unaudited)
	(In Thousands)
Deferred income tax assets:
Purchase accounting	$	16,887		$	17,116
Accumulated other comprehensive income:
Defined benefit plans		251			228
Unrealized loss on securities available for sale		2,313			1,159
Unrealized loss on securities available for sale transferred to held to maturity		212			249
Allowance for loan losses		9,838			8,676
Benefit plans		1,484			1,842
Compensation		1,787			1,751
Stock-based compensation		1,887			2,050
Uncollected interest		1,062			1,018
Depreciation		-			1,169
Charitable contribution carryover		632			899
Net operating loss carryover		927			2,564
Capital loss carryforward		763			656
Other items		586			509
		38,629			39,886
Valuation allowance		(946	)		(791	)
		37,683			39,095
Deferred income tax liabilities:
Deferred costs		1,685			1,551
Accumulated other comprehensive income:
Derivatives		6,521			8,961
Goodwill		4,578			4,385
Other items		207			444
		12,991			15,341
Net deferred income tax asset	$	24,692		$	23,754