XML 43 R25.htm IDEA: XBRL DOCUMENT
v3.21.2

INCOME TAXES | 12 Months Ended
--- | ---
Sep. 30, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The Company and its subsidiaries file a consolidated federal income tax return on a fiscal year basis. The provision for income taxes were as follows:
| Fiscal Year Ended September 30,
(Dollars in Thousands) | 2021 |  | 2020 |  | 2019
Federal: |  |  |  |  |
Current | $ | 6,402 |  |  | $ | 3,148 |  |  | $ | 5,278 |
Deferred | (3,909) |  |  | (4,505) |  |  | (14,831) |
| 2,493 |  |  | (1,357) |  |  | (9,553) |
State: |  |  |  |  |
Current | 5,938 |  |  | 4,860 |  |  | 5,649 |
Deferred | 2,270 |  |  | 2,158 |  |  | 530 |
| 8,208 |  |  | 7,018 |  |  | 6,179 |
Income tax expense (benefit) | $ | 10,701 |  |  | $ | 5,661 |  |  | $ | (3,374) |
The tax effects of the Company's temporary differences that give rise to significant portions of its deferred tax assets and liabilities were:
| At September 30,
(Dollars in Thousands) | 2021 |  | 2020
Deferred tax assets: |  |  |
Bad debts | $ | 15,946 |  |  | $ | 13,968 |
Deferred compensation | 3,733 |  |  | 1,288 |
Stock based compensation | 3,314 |  |  | 4,073 |
Valuation adjustments | 4,111 |  |  | 5,343 |
General business credits(1) | 49,196 |  |  | 37,888 |
Accrued expenses | 2,780 |  |  | 2,155 |
Lease liability | 9,206 |  |  | 6,798 |
Other assets | 4,253 |  |  | 3,215 |
| 92,539 |  |  | 74,728 |
Deferred tax liabilities: |  |  |
Premises and equipment | (3,328) |  |  | (2,852) |
Intangibles | (3,032) |  |  | (2,114) |
Net unrealized gains on securities available for sale | (2,471) |  |  | (5,964) |
Leased assets | (46,355) |  |  | (35,279) |
Right-of-use assets | (8,877) |  |  | (6,550) |
Other liabilities | (3,303) |  |  | (4,246) |
| (67,366) |  |  | (57,005) |
Net deferred tax assets | $ | 25,173 |  |  | $ | 17,723 |
(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, 2021 and 2020. These credits expire on September 30, 2041 and 2040, respectively. As of September 30, 2021, the Company had a gross deferred tax asset of $2.7 million for separate company state cumulative net operating loss carryforwards, for which $2.7 million was reserved. At September 30, 2020, the Company had a gross deferred tax asset of $2.4 million for separate company state cumulative net operating loss carryforwards, for which $2.4 million was reserved. These state operating loss carryforwards will expire in various subsequent periods. In general, management believes that the realization of its deferred tax assets is more likely than not based on the expectations as to future taxable income; therefore, there was no deferred tax valuation allowance at September 30, 2021, or 2020 with the exception of the state cumulative net operating loss carryforwards discussed above. The table below reconciles the statutory federal income tax expense and rate to the effective income tax expense and rate for the fiscal years presented. The Company's effective tax rate is calculated by dividing income tax expense by income before income tax expense.
| Fiscal Year Ended September 30,
| 2021 |  | 2020 |  | 2019
(Dollars in Thousands) | Amount | Rate |  | Amount | Rate |  | Amount | Rate
Statutory federal income tax expense and rate | $ | 32,854 |  | 21.0 | % |  | $ | 24,151 |  | 21.0 | % |  | $ | 20,568 |  | 21.0 | %
Change in tax rate resulting from: |  |  |  |  |  |  |  |
State income taxes net of federal benefits | 6,452 |  | 4.1 | % |  | 5,444 |  | 4.7 | % |  | 5,000 |  | 5.1 | %
162(m) disallowance | 686 |  | 0.4 | % |  | 1,129 |  | 1.0 | % |  | 2,777 |  | 2.8 | %
Tax exempt income | (835) |  | (0.5) | % |  | (1,212) |  | (1.0) | % |  | (2,714) |  | (2.8) | %
General business credits | (26,945) |  | (17.2) | % |  | (22,284) |  | (19.4) | % |  | (27,126) |  | (27.7) | %
Other, net | (1,511) |  | (1.0) | % |  | (1,567) |  | (1.4) | % |  | (1,879) |  | (1.8) | %
Income tax expense (benefit) | $ | 10,701 |  | 6.8 | % |  | $ | 5,661 |  | 4.9 | % |  | $ | (3,374) |  | (3.4) | %
The provisions of ASC 740, Income Taxes, address the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the Consolidated Financial Statements. Under ASC 740, the Company recognizes the tax benefits from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination, with a tax examination being presumed to occur, including the resolution of any related appeals or litigation. The tax benefits recognized in the Consolidated Financial Statements from such a position are measured as the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company uses the flow through method of accounting for investment tax credits under which the credits are recognized as a reduction to income tax expense in the period in which the credit arises. During the fiscal years ended September 30, 2021, 2020, and 2019, $26.5 million, $20.5 million, and $27.1 million in investment tax credits were recognized as a reduction to income tax expense, respectively. The Company’s tax reserves reflect management’s judgment as to the resolution of the issues involved if subject to judicial review. While the Company believes that its reserves are adequate to cover reasonably expected tax risks, there can be no assurance that, in all instances, an issue raised by a tax authority will be resolved at a financial cost that does not exceed its related reserve. With respect to these reserves, the Company’s income tax expense would include (i) any changes in tax reserves arising from material changes during the period in the facts and circumstances surrounding a tax issue, and (ii) any difference from the Company’s tax position as recorded in the Consolidated Financial Statements and the final resolution of a tax issue during the period. The tax years ended September 30, 2018 and later remain subject to examination by the Internal Revenue Service. For state purposes, the tax years ended September 30, 2018 and later remain open for examination, with few exceptions. A reconciliation of the beginning and ending balances for liabilities associated with unrecognized tax benefits follows:
| At September 30,
(Dollars in Thousands) | 2021 |  | 2020
Balance at beginning of fiscal year | $ | 1,091 |  |  | $ | 368 |
Additions (reductions) for tax positions related to prior years | (314) |  |  | 723 |
Balance at end of fiscal year | $ | 777 |  |  | $ | 1,091 |
The total amount of unrecognized tax benefits that, if recognized, would impact the effective rate was $667,000 as of September 30, 2021. The Company recognizes interest related to unrecognized tax benefits as a component of income tax expense. The amount of accrued interest related to unrecognized tax benefits was $112,000 as of September 30, 2021. The Company does not anticipate any significant change in the total amount of unrecognized tax benefits within the next 12 months.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration