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INCOME TAXES (Tables)

12 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Provision for Income Taxes

The Company and its subsidiaries file a consolidated federal income tax return on a fiscal year basis. The provision for income taxes for the years presented below consisted of the following: 

			Fiscal Years Ended September 30,
(Dollars in Thousands)			2020						2019						2018
Federal:
Current			$	3,148					$	5,278					$	(4,023)
Deferred			(4,505)						(14,831)						5,895
			(1,357)						(9,553)						1,872
State:
Current			4,860						5,649						2,611
Deferred			2,158						530						634
			7,018						6,179						3,245
Income tax (benefit) expense			$	5,661					$	(3,374)					$	5,117

Components of Net Deferred Tax Asset (Liability)

The tax effects of the Company's temporary differences that give rise to significant portions of its deferred tax assets and liabilities were:

			September 30,
(Dollars in Thousands)			2020						2019
Deferred tax assets:
Bad debts			$	13,968					$	6,805
Deferred compensation			1,288						1,626
Stock based compensation			4,073						4,296
Valuation adjustments			5,343						6,596
General business credits(1)			37,888						27,935
Accrued expenses			2,155						3,767
Lease liability			6,798						—
Other assets			3,215						3,144
			74,728						54,169
Deferred tax liabilities:
Premises and equipment			(2,852)						(3,084)
Intangibles			(2,114)						(1,812)
Net unrealized gains on securities available for sale			(5,964)						(2,146)
Deferred income			—						(179)
Leased assets			(35,279)						(24,996)
Right-of-use assets			(6,550)						—
Other liabilities			(4,246)						(3,068)
			(57,005)						(35,285)
Net deferred tax assets			$	17,723					$	18,884

(1) The general business credits are investment tax credits generated from qualified solar energy property placed in service during the fiscal years ended September 30, 2020 and 2019. These credits expire on September 30, 2040.

Reconciliation of Total Income Tax Expense

The Company's effective tax rate is calculated by dividing income tax expense by income before income tax expense.

			Fiscal Years Ended September 30,
			2020									2019									2018
(Dollars in Thousands)			Amount			Rate						Amount			Rate						Amount			Rate
Statutory federal income tax expense and rate			$	24,151		21.0		%				$	20,568		21.0		%				$	14,082		24.5		%
Change in tax rate resulting from:
State income taxes net of federal benefits			5,444			4.7		%				5,000			5.1		%				2,461			4.3		%
162(m) disallowance			1,129			1.0		%				2,777			2.8		%				—			—		%
Tax exempt income			(1,212)			(1.0)		%				(2,714)			(2.8)		%				(6,968)			(12.1)		%
Nondeductible acquisition costs			—			—		%				—			—		%				1,295			2.3		%
General business credits			(22,284)			(19.4)		%				(27,126)			(27.7)		%				(3,948)			(6.9)		%
Tax reform			—			—		%				—			—		%				3,849			6.7		%
Amended Crestmark Bancorp historical tax return			—			—		%				—			—		%				(4,644)			(8.1)		%
Other, net			(1,567)			(1.4)		%				(1,879)			(1.8)		%				(1,010)			(1.7)		%
Income tax expense (benefit)			$	5,661		4.9		%				$	(3,374)		(3.4)		%				$	5,117		9.0		%

Reconciliation of Liabilities Associated with Unrecognized Tax Benefits

A reconciliation of the beginning and ending balances for liabilities associated with unrecognized tax benefits follows: 

			September 30,
(Dollars in Thousands)			2020						2019
Balance at beginning of fiscal year			$	368					$	434
Additions (reductions) for tax positions related to prior years			723						(66)
Balance at end of fiscal year			$	1,091					$	368

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