Income Taxes

3 Months Ended

Sep. 30, 2024

Income Taxes

Income Taxes

Note 9: Income Taxes

The Company and its subsidiaries file income tax returns in the U.S. Federal jurisdiction and various states. The Company is no longer subject to federal examinations by tax authorities for tax years ending June 30, 2019 and before. The Company’s Missouri income tax returns for the fiscal years ending June 30, 2016 through 2018 are under audit by the Missouri Department of Revenue. The Company recognized no interest or penalties related to income taxes for the periods presented.

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

	For the three-month periods ended
(dollars in thousands)	September 30, 2024		September 30, 2023
Income taxes
Current	$	3,377	$	3,487
Deferred		—		—
Total income tax provision	$	3,377	$	3,487

The components of net deferred tax assets (included in other assets on the condensed consolidated balance sheet) are summarized as follows:

(dollars in thousands)	September 30, 2024		June 30, 2024
Deferred tax assets:
Provision for losses on loans	$	12,640	$	12,159
Accrued compensation and benefits		823		1,063
NOL carry forwards acquired		29		30
Low income housing tax credit carry forward		297		396
Unrealized loss on other real estate		954		949
Unrealized loss on available for sale securities		2,972		4,915
Total deferred tax assets		17,715		19,512
Deferred tax liabilities:
Purchase accounting adjustments		2,473		2,452
Depreciation		4,288		4,519
FHLB stock dividends		120		120
Prepaid expenses		552		705
Other		1,038		529
Total deferred tax liabilities		8,471		8,325
Net deferred tax asset	$	9,244	$	11,187

As of September 30, 2024, the Company had approximately $131,000 in federal net operating loss carryforwards, which were acquired in the July 2009 Southern Bank of Commerce merger. 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 2030.

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

	For the three-month periods ended
(dollars in thousands)	September 30, 2024		September 30, 2023
Tax at statutory rate	$	3,325	$	3,494
Increase (reduction) in taxes resulting from:
Nontaxable municipal income		(106)		(108)
State tax, net of Federal benefit		85		164
Cash surrender value of Bank-owned life insurance		(109)		(96)
Tax credit benefits		(24)		(3)
Other, net		206		36
Actual provision	$	3,377	$	3,487

For the three-month periods ended September 30, 2024 and 2023, income tax expense at the statutory rate was calculated using a 21% annual effective tax rate (AETR).

Tax credit benefits are recognized under the deferral method of accounting for investments in tax credits.