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Income Taxes

9 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

16.     INCOME TAXES

The following table presents a reconciliation between the reported income taxes for the periods presented and the income taxes which would be computed by applying the federal income tax rates applicable to those periods.  A federal income tax rate of 21% was applicable to the three and nine months ended March 31, 2019.  A federal income tax rate of 28% was applicable to the three and nine months ended March 31, 2018, which reflects the transitional effect of a reduction in the Company’s federal income tax rate from 35% to 21%.  The noted decrease in the Company’s federal income tax rate reflects the impact of federal income tax reform that was codified through the passage of the Tax Cuts and Jobs Act (the “Tax Act”) on December 22, 2017.

	Three Months Ended								Nine Months Ended
	March 31,								March 31,
	2019				2018				2019				2018
	(Dollars in Thousands)								(Dollars in Thousands)
Income before income taxes	$	15,722			$	7,639			$	44,944			$	22,025
Statutory federal tax rate		21	%			28	%			21	%			28	%
Federal income tax expense at statutory rate	$	3,302			$	2,139			$	9,438			$	6,167
(Reduction) increases in income taxes resulting from:
Tax exempt interest		(147	)			(180	)			(444	)			(529	)
State tax, net of federal tax effect		1,540				493				3,661				1,463
Incentive stock option compensation expense		12				35				68				107
Income from bank-owned life insurance		(421	)			(343	)			(1,000	)			(1,053	)
Disqualifying disposition of incentive stock options		-				-				-				(11	)
Non-deductible merger-related expenses		-				94				-				294
Other items, net		19				24				710				223
Impact of deferred tax rate adjustment		-				-				(820	)			3,486
Total income tax expense	$	4,305			$	2,262			$	11,613			$	10,147
Effective income tax rate		27.38	%			29.61	%			25.84	%			46.07	%

The tax effects of existing temporary differences that give rise to deferred income tax assets and liabilities are as follows:

					March 31,				June 30,
					2019					2018
					(Unaudited)
					(In Thousands)
Deferred income tax assets:
Purchase accounting					$	15,967			$	17,116
Accumulated other comprehensive income:
Defined benefit plans						247				228
Unrealized loss on securities available for sale						773				1,159
Unrealized loss on securities available for sale   transferred to held to maturity						196				249
Allowance for loan losses						9,781				8,676
Benefit plans						2,260				1,842
Compensation						1,230				1,751
Stock-based compensation						1,599				2,050
Uncollected interest						1,070				1,018
Depreciation						-				1,169
Charitable contribution carryover						408				899
Net operating loss carryover						964				2,564
Capital loss carryforward						802				656
Other items						626				509
						35,923				39,886
Valuation allowance						(981	)			(791	)
						34,942				39,095
Deferred income tax liabilities:
Deferred costs						1,662				1,551
Accumulated other comprehensive income:
Derivatives						4,414				8,961
Goodwill						4,609				4,385
Other items						75				444
						10,760				15,341
Net deferred income tax asset					$	24,182			$	23,754

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- References

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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

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