Income Taxes

12 Months Ended

Jun. 30, 2025

Income Taxes

Income Taxes

NOTE 10: Income Taxes

The Company and its subsidiary files income tax returns in the U.S. Federal jurisdiction and various states. The Company is no longer subject to federal and state tax 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 components of net deferred tax assets (included in other assets on the condensed consolidated balance sheet) are summarized as follows:

(dollars in thousands)	June 30, 2025		June 30, 2024
Deferred tax assets:
Provision for losses on loans	$	12,225	$	12,159
Accrued compensation and benefits		1,210		1,063
NOL carry forwards acquired		24		30
Low income housing tax credit carry forward		—		396
Unrealized loss on other real estate		—		949
Unrealized loss on available for sale securities		3,201		4,915
Other		552		—
Total deferred tax assets		17,212		19,512
Deferred tax liabilities:
Purchase accounting adjustments		2,604		2,452
Depreciation		4,468		4,519
FHLB stock dividends		120		120
Prepaid expenses		586		705
Other		—		529
Total deferred tax liabilities		7,778		8,325
Net deferred tax asset	$	9,434	$	11,187

As of June 30, 2025, the Company had approximately $110,000 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 year ended June 30
(dollars in thousands)	2025		2024		2023
Tax at statutory rate	$	15,539	$	13,253	$	10,387
Increase (reduction) in taxes resulting from:
Nontaxable municipal income		(332)		(471)		(327)
State tax, net of Federal benefit		653		412		46
Cash surrender value of Bank-owned life insurance		(438)		(401)		(318)
Tax credit benefits		(710)		(12)		(19)
Other, net		704		147		457
Actual provision	$	15,416	$	12,928	$	10,226

For the years ended June 30, 2025, 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 proportional amortization method of accounting for investments in tax credits.