The Company and its subsidiary file income tax returns in the U.S. federal jurisdiction and the States of Illinois, Missouri, Indiana and Iowa. During the years ended June 30, 2022 and 2021, the Company did not recognize expense for interest or penalties.

The provision for income taxes includes these components:


	2022		2021
Taxes currently payable	$	1,825	$	2,196
Deferred income taxes		218		(162	)

Income tax expense	$	2,043	$	2,034

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


	2022			2021
Computed at the statutory rate of 21.0%	$	1,644		$	1,550
Increase (decrease) resulting from
Tax exempt interest		(11	)		(8	)
Cash surrender value of life insurance		(102	)		(87	)
State income taxes		570			540
Other		(58	)		39

Actual tax expense	$	2,043		$	2,034

Tax rate as a percentage of pre-tax income		26.1	%		27.6	%

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


	2022			2021
Deferred tax assets
Allowance for loan losses	$	2,007		$	1,880
Accrued retirement liability		714			703
Deferred compensation		557			508
Deferred loan fees		115			336
Postretirement health plan		33			170
Unrealized losses on available-for-sale securities		6,883			—
Accrued vacation		53			61
MPF recourse liability		50			121
Deferred revenue Mastercard		16			19
Stock options—Directors		54			54
Restricted stock		—			—
Accrued professional services		18			23
Other		22			—

		10,522			3,875

Deferred tax liabilities
Depreciation		(682	)		(687	)
Mortgage servicing rights		(417	)		(289	)
Deferred loan expense		(185	)		(177	)
Unrealized gains on available-for-sale securities		—			(941	)
Restricted stock		(32	)		(8	)
Prepaid expenses		(40	)		(76	)_

		(1,356	)		(2,178	)

Net deferred tax asset	$	9,166		$	1,697

Retained earnings at both June 30, 2022 and 2021, 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, 2022 and 2021.