Income Taxes

12 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Under generally accepted accounting principles, the Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates applicable to taxable income in the years in which those temporary differences are expected to reverse.

The table below provides a summary of the Company's tax assets and liabilities, including deferred tax assets and deferred tax liabilities by major source. Deferred tax balances represent temporary differences between the financial statement and corresponding tax treatment of income, gains, losses, deductions or credits.

	September 30, 2023		September 30, 2022
	(In thousands)
Deferred tax assets
Allowance for credit losses	$	46,191	$	47,426
REO reserves	300		329
Non-accrual loan interest	1,797		1,104
Deferred compensation	2,901		6,841
Stock based compensation	3,089		2,636
Lease liability	5,367		6,207
Other	2,804		1,329
Total deferred tax assets	62,449		65,872
Deferred tax liabilities
FHLB stock dividends	9,741		9,826
Valuation adjustment on available-for-sale securities and cash flow hedges	13,933		15,765
Loan origination fees and costs	11,471		10,918
Premises and equipment	18,155		20,132
Lease right-of-use assets	4,841		5,992
Equity investments	4,244		5,323
Acquired intangibles	4,798		4,116
Other	483		25
Total deferred tax liabilities	67,666		72,097
Net deferred tax asset (liability)	(5,217)		(6,225)
Current tax asset (liability)	13,696		2,920
Net tax asset (liability)	$	8,479	$	(3,305)

The table below presents a reconciliation of the statutory federal income tax rate to the Company's effective income tax rate.

Year ended September 30,	2023		2022		2021
Statutory income tax rate	21	%	21	%	21	%
State income tax	2		2		2
Other differences	(2)		(2)		(2)
Effective income tax rate	21	%	21	%	21	%

The following table summarizes the Company's income tax expense (benefit) for the respective periods.

Year ended September 30,	2023		2022		2021
	(In thousands)
Federal:
Current	$	58,667	$	50,854	$	53,820
Deferred	3,334		7,187		(8,468)
	62,001		58,041		45,352
State:
Current	4,425		6,600		5,584
Deferred	1,224		(934)		(1,413)
	5,649		5,666		4,171
Total
Current	63,092		57,454		59,404
Deferred	4,558		6,253		(9,881)
	$	67,650	$	63,707	$	49,523

Based on current information, the Company does not expect that changes in the amount of unrecognized tax benefits over the next 12 months will have a significant impact on its results of operations or financial position. The Company does not have a liability for uncertain tax positions as of September 30, 2023 or September 30, 2022.

The Company's federal income tax returns are open and subject to potential examination by the IRS for fiscal years 2020 and later. State income tax returns are generally subject to examination for a period of three to five years after filing. The state impact of any federal changes remains subject to examination by various states for a period of up to two years after formal notification to the states.