Note 12. Income Taxes

The provision for income taxes consists of the following for the years ended June 30, 2025 and 2024:


(In thousands)		2025			2024
Current expense:
Federal	$	3,238		$	2,075
State		996			49
Total current expense		4,234			2,124
Deferred benefit		(706	)		(74	)
Total provision for income taxes	$	3,528		$	2,050

The effective tax rate differs from the federal statutory rate as follows for the years ended June 30, 2025 and 2024:


	2025		2024
Tax based on federal statutory rate	21.00	%	21.00	%
State income taxes, net of federal benefit	2.14		(0.44	)
Tax-exempt income	(11.71	)	(12.61	)
Other, net	(1.25	)	(0.31	)
Total income tax expense	10.18	%	7.64	%

The components of the deferred tax assets and liabilities at June 30, 2025 and 2024 were as follows:


(In thousands)		2025		2024
Deferred tax assets:
Allowance for credit losses	$	5,531	$	5,272
Allowance for credit losses on unfunded commitments		474		334
Unrealized losses on securities		4,694		6,926
Other benefit plans		5,108		5,345
Lease liability		632		577
Other		382		94
Total deferred tax assets		16,821		18,548

Deferred tax liabilities:
Depreciation		1,204		1,188
Net loan costs		1,296		1,261
Real estate investment trust income		2,990		3,313
Lease right of use asset		610		554
Pension benefits		179		143
Other		-		-
Total deferred tax liabilities		6,279		6,459
Net deferred tax asset included in prepaid expenses and other assets	$	10,542	$	12,089

Income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of the evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company accounts for uncertain tax positions if it is more likely than not, based on technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgments.

The Company recognizes interest and penalties on income taxes, if any, as a component of the provision for income taxes.

As of June 30, 2025 and 2024, the Company did not have any uncertain tax positions. The Company does not expect to have any changes in unrecognized tax benefits as a result of settlements with taxing authorities during the next twelve months. At June 30, 2025, the Bank of Greene County had an unrecaptured pre-1988 Federal bad debt reserve of approximately $1.8 million for which no Federal income tax provision has been made. A deferred tax liability has not been provided on this amount as management does not intend to redeem stock, make distributions or take other actions that would result in recapture of the reserve. As of June 30, 2025, tax years ended June 30, 2022 through June 30, 2025, remain open and are subject to Federal, New York and Massachusetts State taxing authority examinations.

Historical Timeline

Fiscal Year	Filed
2025	Sep 5, 2025	Showing above
2020	Sep 11, 2020

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

GREENE COUNTY BANCORP INC Income Taxes Disclosure

Historical Timeline

About Income Taxes Disclosures

Other Available Disclosures