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Note 8: Income Taxes | 3 Months Ended
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Sep. 30, 2018
Notes |
Note 8: Income Taxes | Note 8: Income Taxes The Company and its subsidiary files income tax returns in the U.S. Federal jurisdiction and various states. The Company is no longer subject to U.S. federal and state examinations by tax authorities for fiscal years before 2011. The Company recognized no interest or penalties related to income taxes. The Company’s income tax provision is comprised of the following components:
| For the three-month period ended
(dollars in thousands) | September 30, 2018 | September 30, 2017
Income taxes |  |
Current | $1,660 | $1,883
Deferred | 6 | 6
Total income tax provision | $1,666 | $1,889
The components of net deferred tax assets are summarized as follows:
(dollars in thousands) | September 30, 2018 | June 30, 2018
Deferred tax assets: |  |
Provision for losses on loans | $4,299 | $4,418
Accrued compensation and benefits | 568 | 708
NOL carry forwards acquired | 259 | 273
Minimum Tax Credit | 130 | 130
Unrealized loss on other real estate | 140 | 124
Unrealized loss on available for sale securities | 821 | 730
Losses and credits from LLC’s | 1,003 | 1,003
Total deferred tax assets | 7,220 | 7,386
Deferred tax liabilities: |  |
Purchase accounting adjustments | 1,125 | 949
Depreciation | 1,333 | 1,475
FHLB stock dividends | 130 | 130
Prepaid expenses | 86 | 98
Other | 54 | 327
Total deferred tax liabilities | 2,728 | 2,979
Net deferred tax asset | $4,492 | $4,407
As of September 30, 2018 the Company had approximately $1.1 million and $2.5 million in federal and state net operating loss carryforwards, respectively, which were acquired in the July 2009 acquisition of Southern Bank of Commerce, the February 2014 acquisition of Citizens State Bankshares of Bald Knob, Inc., the August 2014 acquisition of Peoples Service Company, and the June 2017 acquisition of Tammcorp, Inc. (Capaha Bank). The amount reported is net of the IRC Sec. 382 limitation, or state equivalent, related to utilization of net operating loss carryforwards of acquired corporations. Unless otherwise utilized, the net operating losses will begin to expire in 2027. A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax is shown below:
| For the three-month period ended
(dollars in thousands) | September 30, 2018 | September 30, 2017
Tax at statutory rate | $1,778 | $2,363
Increase (reduction) in taxes resulting from: |  |
Nontaxable municipal income | (73) | (139)
State tax, net of Federal benefit | 122 | 96
Cash surrender value of Bank-owned life insurance | (52) | (82)
Tax credit benefits | (68) | (224)
Other, net | (41) | (125)
Actual provision | $1,666 | $1,889
For the three month period ended September 30, 2018, income tax expense at the statutory rate was calculated using a 21% annual effective tax rate (AETR), compared to 35% for the three month period ended September 30, 2017, as a result of the Tax Cuts and Jobs Act ("Tax Act") signed into law December 22, 2017. The Tax Act ultimately reduced the corporate Federal income tax rate for the Company from 35% to 21%, and for the fiscal year ended June 30, 2018, the Company was administratively subject to a 28.1% AETR. U. S. GAAP requires that the impact of the provisions of the Tax Act be accounted for in the period of enactment and the income tax effects of the Tax Act were recognized in the Company’s financial statements for the quarter ended December 31, 2017, and for the twelve months ended June 30, 2018. The Tax Act is complex and requires significant detailed analysis. During the preparation of the Company's June 30, 2018 income tax returns, additional adjustments related to enactment of the Tax Act may be identified. We do not currently expect significant adjustments will be necessary, but any further adjustments identified will be recognized in accordance with guidance contained in Staff Accounting Bulletin No. 118 from the U. S. Securities and Exchange Commission. Tax credit benefits are recognized under the flow-through method of accounting for investments in tax credits.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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