SOUTHERN MISSOURI BANCORP, INC. Income Taxes Disclosure
NOTE 10: Income Taxes
The Company and its subsidiary files income tax returns in the U.S. Federal jurisdiction and various states. The Company is no longer subject to federal and state tax examinations by tax authorities for tax years ending June 30, 2019 and before. The Company’s Missouri income tax returns for the fiscal years ending June 30, 2016 through 2018 are under audit by the Missouri Department of Revenue. The Company recognized no interest or penalties related to income taxes for the periods presented.
The components of net deferred tax assets (included in other assets on the condensed consolidated balance sheet) are summarized as follows:
(dollars in thousands) |
| June 30, 2025 |
| June 30, 2024 | ||
Deferred tax assets: |
|
|
|
| ||
Provision for losses on loans | $ | 12,225 | $ | 12,159 | ||
Accrued compensation and benefits |
| 1,210 |
| 1,063 | ||
NOL carry forwards acquired |
| 24 |
| 30 | ||
Low income housing tax credit carry forward |
| — |
| 396 | ||
Unrealized loss on other real estate |
| — |
| 949 | ||
Unrealized loss on available for sale securities | 3,201 | 4,915 | ||||
Other |
| 552 |
| — | ||
Total deferred tax assets |
| 17,212 |
| 19,512 | ||
Deferred tax liabilities: |
|
| ||||
Purchase accounting adjustments |
| 2,604 |
| 2,452 | ||
Depreciation |
| 4,468 |
| 4,519 | ||
FHLB stock dividends |
| 120 |
| 120 | ||
Prepaid expenses |
| 586 |
| 705 | ||
Other |
| — |
| 529 | ||
Total deferred tax liabilities |
| 7,778 |
| 8,325 | ||
Net deferred tax asset | $ | 9,434 | $ | 11,187 | ||
As of June 30, 2025, the Company had approximately $110,000 in federal net operating loss carryforwards, which were acquired in the July 2009 Southern Bank of Commerce merger. The amount reported is net of the IRC Sec. 382 limitation, or state equivalent, related to utilization of net operating loss carryforwards of acquired corporations. Unless otherwise utilized, the net operating losses will begin to expire in 2030.
A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax expense is shown below:
For the year ended June 30 | |||||||||
(dollars in thousands) |
| 2025 |
| 2024 |
| 2023 | |||
Tax at statutory rate | $ | 15,539 | $ | 13,253 | $ | 10,387 | |||
Increase (reduction) in taxes resulting from: |
|
|
|
|
|
| |||
Nontaxable municipal income |
| (332) |
| (471) |
| (327) | |||
State tax, net of Federal benefit |
| 653 |
| 412 |
| 46 | |||
Cash surrender value of Bank-owned life insurance |
| (438) |
| (401) |
| (318) | |||
Tax credit benefits |
| (710) |
| (12) |
| (19) | |||
Other, net |
| 704 |
| 147 |
| 457 | |||
Actual provision | $ | 15,416 | $ | 12,928 | $ | 10,226 | |||
For the years ended June 30, 2025, 2024, and 2023, income tax expense at the statutory rate was calculated using a 21% annual effective tax rate (AETR). Tax credit benefits are recognized under the proportional amortization method of accounting for investments in tax credits.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Sep 11, 2025 | Showing above |
| 2024 | Sep 13, 2024 | |
| 2023 | Sep 13, 2023 | |
| 2022 | Sep 13, 2022 | |
| 2021 | Sep 13, 2021 | |
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.