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INCOME TAXES | 12 Months Ended
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Jun. 30, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The provision for income taxes is as follows:
| At June 30,
(Dollars in thousands) | 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |
Federal | $ | 89,839 |  |  | $ | 64,800 |  |  | $ | 61,827 |
State | 54,326 |  |  | 43,843 |  |  | 37,037 |
| 144,165 |  |  | 108,643 |  |  | 98,864 |
Deferred: |  |  |  |  |
Federal | (13,084) |  |  | (5,600) |  |  | (5,562) |
State | (6,502) |  |  | (3,800) |  |  | (3,266) |
| (19,586) |  |  | (9,400) |  |  | (8,828) |
Total | $ | 124,579 |  |  | $ | 99,243 |  |  | $ | 90,036 |
The differences between the statutory federal income tax rate and the effective tax rates are summarized as follows:
| At June 30,
| 2023 |  | 2022 |  | 2021
Statutory federal tax rate | 21.00 | % |  | 21.00 | % |  | 21.00 | %
Increase (decrease) resulting from: |  |  |  |  |
State taxes—net of federal tax benefit | 9.04 | % |  | 9.13 | % |  | 8.70 | %
Tax credits | (0.45) | % |  | (0.44) | % |  | (0.59) | %
Non-taxable income | (0.03) | % |  | (0.09) | % |  | (0.09) | %
Excess benefit RSU vesting | (0.41) | % |  | (1.31) | % |  | (0.64) | %
Other | (0.30) | % |  | 0.90 | % |  | 1.07 | %
Effective tax rate | 28.85 | % |  | 29.19 | % |  | 29.45 | %
The components of the net deferred tax asset are as follows:
| At June 30,
(Dollars in thousands) | 2023 |  | 2022
Deferred tax assets: |  |  |
Allowance for credit losses | $ | 64,655 |  |  | $ | 59,045 |
Lease liability | 22,654 |  |  | 24,626 |
Accrued compensation | 7,564 |  |  | 2,533 |
Stock-based compensation expense | 6,980 |  |  | 5,101 |
Litigation accrual | 5,206 |  |  | 3,116 |
Non-accrual loan interest income | 4,962 |  |  | 2,608 |
Unrealized net losses on securities | 2,730 |  |  | 1,261 |
Net operating loss carryforward | 1,484 |  |  | 1,503 |
State taxes | 1,064 |  |  | 949 |
Securities impaired | 267 |  |  | 270 |
Total deferred tax assets | 117,566 |  |  | 101,012 |
Deferred tax liabilities: |  |  |
Operating lease right-of-use asset | (20,681) |  |  | (22,757) |
Depreciation and amortization | (7,533) |  |  | (8,838) |
Other assets—prepaids | (2,342) |  |  | (2,083) |
FHLB stock dividend | (833) |  |  | (842) |
Total deferred tax liabilities | (31,389) |  |  | (34,520) |
Net deferred tax asset | 86,177 |  |  | 66,492 |
Valuation allowance | (277) |  |  | (230) |
Net deferred tax asset, net of valuation allowance 1 | $ | 85,900 |  |  | $ | 66,262 |
1 Net deferred tax asset, net of valuation allowance, is included in the other assets line on the consolidated balance sheet. The Company records a deferred tax asset for net operating losses when the benefit is more likely than not to be realized. As of June 30, 2023, the Company had a federal net operating loss carryforward of approximately $3.7 million which is subject to an annual Section 382 limitation of $0.1 million. The federal net operating loss carryforward begins to expire in 2034. The Company has state net operating loss carryforwards of $3.7 million. Of this amount, $1.6 million is subject to an annual Section 382 limitation of $0.1 million for state purposes. The state net operating loss carryforwards begin to expire in 2035. The Company establishes a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized. As of June 30, 2023, relating to a $3.0 million state net operating loss, the Company recognized a tax effected valuation allowance of $0.3 million. As of June 30, 2023 and 2022, the Company forecasts sufficient future consolidated earnings to realize its remaining deferred tax asset and has not provided for an additional allowance. The reconciliation of the gross beginning and ending amount of unrecognized tax positions for the periods presented is:
(Dollars in thousands) | 2023 |  | 2022 |  |
Balance—beginning of period | $ | 4,975 |  |  | $ | 4,156 |  |  |
Additions—current year tax positions | 1,603 |  |  | 703 |  |  |
Additions—prior year tax positions | 518 |  |  | 347 |  |  |
Reductions—prior year tax positions | (172) |  |  | (231) |  |  |
Total liability for unrecognized tax positions—end of period | $ | 6,924 |  |  | $ | 4,975 |  |  |
As of June 30, 2023 and 2022, unrecognized tax benefits totaled $6.0 million and $4.3 million, respectively, that, if recognized, would favorably impact the effective tax rate. The Company does not anticipate resolution of any unrecognized tax benefits within the next 12 months. The Company accounts for interest and penalties related to income tax liabilities as a component of income tax expense. As of June 30, 2023 and 2022, the amounts accrued for interest and penalties were not material. The Company is subject to federal income tax and income tax of state taxing authorities. The Company’s federal income tax returns for the years ended June 30, 2022, 2021, and 2020 and its state taxing authorities income tax returns for the years ended June 30, 2022, 2021, 2020 and 2019 are open to audit under the statutes of limitations by the Internal Revenue Service and state taxing authorities.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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