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Federal Income Taxes | 12 Months Ended
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Jun. 30, 2020
Income Tax Disclosure [Abstract] |
FEDERAL INCOME TAXES | NOTE I - FEDERAL INCOME TAXES Federal income taxes on earnings differs from that computed at the statutory corporate tax rate for the years ended June 30, 2020 and 2019, as follows:
(in thousands) |  | 2020 |  |  | 2019 |
Federal income taxes at the statutory rate |  | $ | (2,579 | ) |  | $ | 200 |
Increase (decrease) resulting primarily from: |  |  |  |  |  |  |  |
Cash surrender value of life insurance |  |  | (16 | ) |  |  | (15 | )
Deferred tax liability adjustment, net, resulting from Kentucky tax legislation |  |  | 14 |  |  |  | (63 | )
Goodwill impairment |  |  | 2,848 |  |  |  | -- |
Other |  |  | (3 | ) |  |  | 19 |
|  | $ | 264 |  |  | $ | 141 |
The composition of the Company’s net deferred tax liability at June 30 is as follows:
(in thousands) |  | 2020 |  |  | 2019 |
Taxes (payable refundable on temporary differences at estimated corporate tax rate: |  |  |  |  |  |
Deferred tax assets: |  |  |  |  |  |
General loan loss allowance |  | $ | 371 |  |  | $ | 363 |
Accrued expenses |  |  | 164 |  |  |  | 113 |
Fair value accounting adjustments on acquisition |  |  | 199 |  |  |  | 223 |
Nonaccrued interest on loans |  |  | 118 |  |  |  | 102 |
Other real estate owned adjustments |  |  | 17 |  |  |  | 16 |
Depreciation |  |  | 37 |  |  |  | 38 |
Charitable contributions |  |  | 12 |  |  |  | -- |
State net operating loss carryforward |  |  | -- |  |  |  | 170 |
Total deferred tax assets |  |  | 918 |  |  |  | 1,025 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Federal Home Loan Bank stock dividends |  |  | (981 | ) |  |  | (981 | )
Deferred loan origination costs |  |  | (33 | ) |  |  | (48 | )
Loan servicing rights |  |  | (24 | ) |  |  | (18 | )
Accrual to cash adjustment |  |  | (170 | ) |  |  | (127 | )
Fair value accounting adjustments on acquisition |  |  | (547 | ) |  |  | (552 | )
Total deferred tax liabilities |  |  | (1,755 | ) |  |  | (1,726 | )
Net deferred tax liability |  | $ | (837 | ) |  | $ | (701 | )
As discussed in Note A, in the fiscal year ended June 30, 2019, the Company recognized a tax benefit of $63,000 as a result of the tax legislation enacted by the Commonwealth of Kentucky in spring 2019. As a result of HB 458 on combined reporting, the Company recorded a deferred tax asset for the state net operating loss carryforward. The losses are expected to be utilized when the Company begins filing a combined Kentucky income tax return with the Banks. The loss carryforward expires beginning 2032. Prior to 1997, the Banks were allowed a special bad debt deduction, generally limited to 8% of otherwise taxable income, and subject to certain limitations based on aggregate loans and deposit account balances at the end of the year. If the amounts that qualified as deductions for federal income taxes are later used for purposes other than bad debt losses, including distributions in excess of accumulated earnings and profits, such distributions will be subject to federal income taxes at the then current corporate income tax rate. Retained earnings at June 30, 2020, include approximately $5.2 million for which federal income taxes have not been provided. The amount of unrecognized deferred tax liability relating to the cumulative bad debt deduction was approximately $1.3 million at June 30, 2020.

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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://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=84230637&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=116825942&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=84230637&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=116825942&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=84230637&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 + Details
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