Income Taxes (Tables)

3 Months Ended

Sep. 30, 2018

Schedule of Components of Income Tax Expense

Income tax expense consists of:



	Three Months Ended September 30,
	2018		2017
Current:
Federal	$	377	$	138
State	125		11
Total current expense	502		149
Deferred:
Federal	1,571		2,070
State	139		291
Total deferred expense	1,710		2,361
Total income tax expense	$	2,212	$	2,510

Schedule of Effective Income Tax Rate Reconciliation

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax

rate to income before income taxes as a result of the following differences for the periods indicated:



	Three Months Ended September 30,
	2018					2017
	$			Rate		$			Rate
Tax at federal income tax rate	$	2,100		21	%	$	2,746		34	%
Increase (decrease) resulting from:
Tax exempt income	(227		)	(2	)%	(277		)	(4	)%
Change in valuation allowance for deferred tax assets, allocated to income tax expense	—			—	%	(135		)	(2	)%
State tax, net of federal benefit	209			2	%	123			2	%
Change in deferred tax assets due to North Carolina corporate tax rate decrease	—			—	%	133			2	%
Other	130			1	%	(80		)	(1	)%
Total	$	2,212		22	%	$	2,510		31	%

Schedule of Deferred Tax Assets and Liabilities

The sources and tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at September 30, 2018 and June 30, 2018 are presented below:



	September 30, 2018			June 30, 2018
Deferred tax assets:
Alternative minimum tax credit	$	4,920		$	4,920
Allowance for loan losses	4,608			4,637
Deferred compensation and post-retirement benefits	9,297			9,400
Accrued vacation and sick leave	18			18
Impairments on real estate owned	502			495
Other than temporary impairment on investments	2,254			2,254
Net operating loss carryforward	7,369			8,635
Discount from business combination	2,600			2,605
Unrealized loss on securities held for sale	564			477
Stock compensation plans	1,956			2,271
Other	1,358			1,562
Total gross deferred tax assets	35,446			37,274
Less valuation allowance	(325		)	(325		)
Deferred tax assets	35,121			36,949
Deferred tax (liabilities):
Depreciable basis of fixed assets	(534		)	(566		)
Deferred loan fees	(468		)	(453		)
FHLB stock, book basis in excess of tax	(89		)	(89		)
Other	(3,088		)	(3,276		)
Total gross deferred tax liabilities	(4,179		)	(4,384		)
Net deferred tax assets	$	30,942		$	32,565