Income Taxes

3 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Taxes

Note 10: Income Taxes

The Company files income tax returns in the U.S. Federal jurisdiction and various states.  The Company is no longer subject to federal and state examinations by tax authorities for fiscal years before 2008.  The Company recognized no interest or penalties related to income taxes.

The Company’s income tax provision is comprised of the following components:

	Three months ended December 31,		Six months ended December 31,
	2011	2010	2011	2010
Income taxes
Current	$1,815,252	$461,707	$3,259,459	$989,457
Deferred	(498,145)	2,623,781	(498,145)	2,623,781
Total income tax provision	$1,317,107	$3,085,488	$2,761,314	$3,613,238

The components of net deferred tax assets (liabilities) are summarized as follows:

	December 31, 2011	June 30, 2011
Deferred tax assets:
Provision for losses on loans	$3,096,537	$2,889,770
Accrued compensation and benefits	230,345	168,375
Other-than-temporary impairment on             available for sale securities	261,405	261,405
NOL carry forwards acquired	164,285	169,005
Unrealized loss on other real estate	20,196	66,952
Total deferred tax assets	3,772,768	3,555,507
Deferred tax liabilities:
FHLB stock dividends	188,612	188,612
Purchase accounting adjustments	1,447,095	1,828,472
Depreciation	506,101	525,096
Prepaid expenses	205,010	174,507
Unrealized gain on available for sale             securities	427,935	306,229
Other	276,805	187,820
Total deferred tax liabilities	3,051,558	3,210,736
Net deferred tax  asset	$721,210	$344,771

As of December 31, 2011, and June 30, 2011, the Company had approximately $515,000 and $668,000, respectively, of federal and state net operating loss carryforwards, which were acquired in the July 2009 acquisition of Southern Bank of Commerce.  The amount reported is net of the IRC Sec. 382 limitation, or state equivalent, related to utilization of net operating loss carryforwards of acquired corporations.  Unless otherwise utilized, the net operating losses will begin to expire in 2027. 

A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax is shown below:

	For the three-month period ended December 31,		For the six-month period ended December 31,
	2011	2010	2011	2010
Tax at statutory rate	$1,357,126	$2,944,958	$2,817,290	$3,567,275
Increase (reduction) in taxes       resulting from:
Nontaxable municipal income	(113,303)	(97,999)	(217,673)	(191,746)
State tax, net of Federal benefit	103,620	263,574	220,275	292,560
Cash surrender value of                   Bank-owned life insurance	(24,276)	(23,651)	(48,603)	(47,180)
Other, net	(6,060)	(1,395)	(9,974)	(7,670)
Actual provision	$1,317,107	$3,085,488	$2,761,314	$3,613,238

Tax credit benefits in the amount of $73,000 and $146,000, respectively, were recognized in the three- and six-month periods ended December 31, 2011, equal to the amounts recognized in the three- and six-month periods ended December 31, 2010, under the flow-through method of accounting for investments in tax credits.