Income Taxes

12 Months Ended

Jun. 30, 2021

Note 10: Income Taxes

The Company and its subsidiary file income tax returns in the U.S. federal jurisdiction and the States of Illinois and Missouri. During the years ended June 30, 2021 and 2020, the Company did not recognize expense for interest or penalties.

The provision for income taxes includes these components:


	2021			2020
Taxes currently payable	$	2,196		$	1,654
Deferred income taxes		(162	)		(15	)

Income tax expense	$	2,034		$	1,639

A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax expense is shown below:


	2021			2020
Computed at the statutory rate of 21.0%	$	1,550		$	1,236
Increase (decrease) resulting from
Tax exempt interest		(8	)		(16	)
Cash surrender value of life insurance		(87	)		(57	)
State income taxes		540			441
Other		39			35

Actual tax expense	$	2,034		$	1,639

Tax rate as a percentage of pre-tax income		27.6	%		27.9	%

The tax effects of temporary differences related to deferred taxes shown on the consolidated balance sheets were:


	2021			2020
Deferred tax assets
Allowance for loan losses	$	1,880		$	1,776
Accrued retirement liability		703			677
Deferred compensation		508			468
Deferred loan fees		336			291
Postretirement health plan		170			264
Accrued vacation		61			66
MPF recourse liability		121			97
Deferred revenue Mastercard		19			23
Stock options—Directors		54			50
Restricted stock		—			11
Accrued professional services		23			18
Other		—			7

		3,875			3,748

Deferred tax liabilities
Depreciation		(687	)		(731	)
Mortgage servicing rights		(289	)		(204	)
Deferred loan expense		(177	)		(181	)
Unrealized gains on available-for-sale securities		(941	)		(1,940	)
Restricted stock		(8	)		—
Prepaid expenses		(76	)		(62	)

		(2,178	)		(3,118	)

Net deferred tax asset	$	1,697		$	630

Retained earnings at both June 30, 2021 and 2020, include approximately $2,217,000, for which no deferred federal income tax liability has been recognized. These amounts represent an allocation of income to bad debt deductions for tax purposes only. Reduction of amounts so allocated for purposes other than tax bad debt losses or adjustments arising from carryback of net operating losses would create income for tax purposes only, which would be subject to the then-current corporate income tax rate. The deferred income tax liabilities on the preceding amounts that would have been recorded if they were expected to reverse into taxable income in the foreseeable future were approximately $466,000 at both June 30, 2021 and 2020.

- 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.

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