Provision for Income Taxes
Provision for Income Taxes
(dollars in thousands)
For the year ended December 31
2017 2016 2015
$597 $635 $563
$597 $635 $563
$1,377 $385 ($555)
(555)
Current:
Federal
Total current
Deferred:
Federal
Total deferred
Provision for income taxes
Effective tax rate
1,377 385 $1,974 $1,020 2.7% 1.6% 0.0%
2017
$24,520
(494)
(22,754)
715
(13) 2016
$21,279
(710)
(19,538)
--
(11) 2015
$20,601
(1,765)
(18,719)
--
(109)
$1,974 $1,020
$8
Reconciliation of Taxes at Federal Statutory Rate to Provision for Income Taxes
(in thousands)
For the year ended December 31
Federal tax at statutory rates
Patronage distributions
Effect of non-taxable entity
Change in statutory tax rates due to the Tax Cuts and Jobs Act
Other
Provision for income taxes
$8
Deferred Income Taxes
Tax laws require certain items to be included in our tax returns at different times than the items are reflected on our Consolidated Statements of Income.
Some of these items are temporary differences that will reverse over time. We record the tax effect of temporary differences as deferred tax assets and
liabilities netted on our Consolidated Statements of Condition.
Deferred Tax Assets and Liabilities
(in thousands)
As of December 31
Allowance for loan losses
Postretirement benefit accrual
Accrued incentive
Accrued patronage income not received
AgriBank 2002 allocated stock
Accrued pension asset
Other assets
Other liabilities
Deferred tax assets, net
Gross deferred tax assets
Gross deferred tax liabilities
2017 2016 2015
$1,887
190
221
(292)
(317)
(581)
47
(200) $3,183
310
408
(285)
(513)
(593)
22
(200) $3,123
312
431
(168)
(513)
(299)
31
(200)
$2,717
$955 $2,332 $2,345 $3,923 $3,897
($1,390) ($1,591) ($1,180)
A valuation allowance for the deferred tax assets was not necessary at December 31, 2017, 2016, or 2015.
We have not provided for deferred income taxes on patronage allocations received from AgriBank prior to 1993. Such allocations, distributed in the form of
stock, are subject to tax only upon conversion to cash. Our intent is to permanently maintain this investment in AgriBank. Our total permanent investment in
AgriBank is $24.2 million. Additionally, we have not provided deferred income taxes on accumulated FLCA earnings of $703.5 million as it is our intent to
permanently maintain this equity in the FLCA or to distribute the earnings to members in a manner that results in no additional tax liability to us.
Our income tax returns are subject to review by various United States taxing authorities. We record accruals for items that we believe may be challenged by
these taxing authorities. However, we had no uncertain income tax positions at December 31, 2017. In addition, we believe we are no longer subject to
income tax examinations for years prior to 2014.
NOTE 9: EMPLOYEE BENEFIT PLANS
Pension and Post-Employment Benefit Plans
Complete financial information for the pension and post-employment benefit plans may be found in the Combined AgriBank and District Associations
2017 Annual Report (District financial statements).
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