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INCOME TAXES
 12 Months Ended
Jun. 30, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The provision for income taxes is as follows:
At June 30,
(Dollars in thousands)202420232022
Current:
Federal$98,814 $89,839 $64,800 
State53,525 54,326 43,843 
152,339 144,165 108,643 
Deferred:
Federal17,501 (13,084)(5,600)
State15,633 (6,502)(3,800)
33,134 (19,586)(9,400)
Total$185,473 $124,579 $99,243 
The differences between the statutory federal income tax rate and the effective tax rates are summarized as follows:
At June 30,
202420232022
Statutory federal tax rate21.00 %

21.00 %21.00 %
Increase (decrease) resulting from:
State taxes—net of federal tax benefit8.90 %9.04 %9.13 %
Tax credits(0.58)%(0.45)%(0.44)%
Non-taxable income(0.08)%(0.03)%(0.09)%
Excess benefit RSU vesting(0.42)%(0.41)%(1.31)%
Other0.37 %(0.30)%0.90 %
Effective tax rate29.19 %28.85 %29.19 %
The components of the net deferred tax asset are as follows:
At June 30,
(Dollars in thousands)20242023
Deferred tax assets:
Allowance for credit losses$96,275 $64,655 
Lease liability21,400 22,654 
Accrued compensation9,783 7,564 
Stock-based compensation expense8,282 6,980 
Litigation accrual5,324 5,206 
Nonaccrual loan interest income
9,034 4,962 
Unrealized net losses on securities1,079 2,730 
Net operating loss carryforward1,160 1,484 
State taxes4,282 1,064 
Securities impaired273 267 
Total deferred tax assets$156,892 $117,566 
Deferred tax liabilities:
Basis difference in acquired loans
(78,034)— 
Operating lease right-of-use asset(19,406)(20,681)
Depreciation and amortization(4,679)(7,533)
Other assets—prepaids(2,183)(2,342)
FHLB stock dividend(852)(833)
Total deferred tax liabilities$(105,154)$(31,389)
Net deferred tax asset51,738 86,177 
Valuation allowance(70)(277)
Net deferred tax asset, net of valuation allowance1
$51,668 $85,900 
1 Net deferred tax asset, net of valuation allowance, is included in “Other Assets” in the Consolidated Balance Sheets.
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, 2024, the Company had a federal net operating loss carryforward of approximately $3.6 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 $2.7 million. Of this amount, $0.8 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, 2024, relating to a $0.6 million state net operating loss, the Company recognized a valuation allowance of $0.1 million. As of June 30, 2024 and 2023, 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 are as follows:
(Dollars in thousands)20242023
Balance—beginning of period$6,924 $4,975 
Additions—current year tax positions8,709 1,603 
Additions—prior year tax positions— 518 
Reductions—prior year tax positions(1,544)(172)
Total liability for unrecognized tax positions—end of period$14,089 $6,924 
As of June 30, 2024 and 2023, unrecognized tax benefits totaled $11.6 million and $6.0 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. During the fiscal years ended June 30, 2024 and 2023, the Company recognized a benefit of $0.1 million and an expense of $0.1 million, respectively, in interest and penalties. The Company had approximately $0.5
million and $0.5 million for the payment of interest and penalties accrued at June 30, 2024, and 2023, respectively. The Company will occasionally file amended returns to capture additional tax refunds. An amended return was filed to preserve a claim for refund. Due to the uncertainty involved in this claim, management recognized a 100% reserve against it during the fiscal year ended June 30, 2024.
The Company is subject to federal income tax and income tax of state taxing authorities. The Company’s federal income tax returns for the fiscal years ended June 30, 2023, 2022 and, 2021 and its state taxing authorities income tax returns for the fiscal years ended June 30, 2023, 2022, 2021 and 2020 are open to audit under the statutes of limitations by the Internal Revenue Service and state taxing authorities.