Income Taxes

3 Months Ended

Mar. 31, 2012

Income Taxes [Abstract]

Income Taxes

Note 9: 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:

	For the three-month period ended		For the nine-month period ended
	March 31, 2012	March 31, 2011	March 31, 2012	March 31, 2011
Income taxes
Current	$1,654,107	$611,950	$4,913,566	$1,601,407
Deferred	(648,000)	388,621	(1,146,145)	3,012,402
Total income tax provision	$1,006,107	$1,000,571	$3,767,421	$4,613,809

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

	March 31, 2012	June 30, 2011
Deferred tax assets:
Provision for losses on loans	$3,168,659	$2,889,770
Accrued compensation and benefits	297,511	168,375
Other-than-temporary impairment on
available for sale securities	261,405	261,405
NOL carry forwards acquired	161,949	169,005
Unrealized loss on other real estate	15,130	66,952
Other	-	-
Total deferred tax assets	3,904,654	3,555,507
Deferred tax liabilities:
FHLB stock dividends	188,612	188,612
Purchase accounting adjustments	1,026,095	1,828,472
Depreciation	552,633	525,096
Prepaid expenses	169,451	174,507
Unrealized gain on available for sale             securities	322,940	306,229
Other	170,717	187,820
Total deferred tax liabilities	2,430,449	3,210,736
Net deferred tax (liability) asset	$1,474,205	$344,771

As of March 31, 2012, 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		For the nine-month period ended
	March 31, 2012	March 31, 2011	March 31, 2012	March 31, 2011
Tax at statutory rate	$1,081,931	$1,012,711	$3,899,220	$4,579,986
Increase (reduction) in taxes
resulting from:
Nontaxable municipal income	(126,381)	(96,543)	(344,055)	(288,289)
State tax, net of Federal benefit	75,240	44,897	294,327	337,428
Cash surrender value of
Bank-owned life insurance	(24,201)	(23,394)	(72,804)	(70,574)
Other, net	(482)	62,899	(9,268)	55,258
Actual provision	$1,006,107	$1,000,571	$3,767,421	$4,613,809

Tax credit benefits in the amount of $73,000 and $219,000, respectively, were recognized in the three- and nine-month periods ended March 31, 2012, equal to the amounts recognized in the three- and nine-month periods ended March 31, 2011, under the flow-through method of accounting for investments in tax credits.